The Rise of Multiple Inequalities: Focusing on Interactions between the Political and Economic Spheres

Abstract

As a result of the global financial crisis, researchers have come to recognize that income inequality, political inequality, and inequality of opportunity are all rising concurrently, and that these increases are cumulative due to interaction effects between the inequalities. Further, through the realization that economic crises may result from interactions between the political and economic spheres — not just from interactions within the economic sphere itself — researchers have come to understand that the recent economic crisis and the current crisis of democracy are interrelated. This study analyzes how multiple inequalities and crises can develop concurrently by considering the interactions between the political and economic spheres. First, we examine how income inequality, inequality of opportunity, and political inequality are interrelated by building a model comprising two classes — the elite class and the ordinary-citizen class. Thus, this paper investigates the cumulative causal relationships among these types of inequality by examining mechanisms through which such inequalities can rise contemporaneously. Second, using this model, we find that, in contrast to the hypothesis posited by Meltzer and Richard (1981), when political inequality and inequality of opportunity increase at the same time, democracies may struggle to solve the problem of income inequality through the voting process.