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Next to climate change, inequality is the burning issue of our time. In this regard, the evidence presented by Thomas Piketty, the United Nations and other sources is quite conclusive: the current rates of global inequality are unprecedented.
In his celebrated book Capital in the Twenty-First Century, Piketty marshals a massive amount of data to show that rising inequality has been the norm since capitalist growth took off in the eighteenth century. Now, he says, things are likely to become even worse.
The only period when there was a reversal of this flow, Piketty writes, occurred in the middle decades of the twentieth century, when what he calls “exogenous shocks”—such as wars and the social revolutions they triggered—forced capitalist elites to make economic concessions. These social compromises were largely mediated by Keynesian or social-democratic political regimes. By the last quarter of the twentieth century, however, inequality had resumed its onward march under democratic regimes implementing neoliberal policies.
Piketty’s remarks are unsettling to believers in democracy, which includes most of us. One of the things he seems to be saying, at least implicitly, is that democratic regimes—whose rise in the Global South paralleled the rise of neoliberalism in the North—don’t really work when it comes to containing economic inequality. Of course they enshrine formal political equality and institutionalize majority rule. But they are ineffective at bringing about greater economic equality.
My generation came of age—from the 1970s to the 1990s—fighting to oust dictatorships and bring about democracy in the Third World. One of our most potent arguments against authoritarianism was that it promoted the concentration of income in dictatorial cliques allied with transnational capital. We said that democracy would reverse this process of impoverishment and inequality. From Chile to Brazil to South Korea to the Philippines, fighting against dictatorship was a fight for both democratic choice and greater equality.
Yet the evidence now seems to clearly indicate that we were wrong. What Samuel Huntington called the “Third Wave” of democracy in the Global South went hand in hand with the spread of policies that hobbled the fight for greater economic equality from the outset.
Democracy and Land Reform
The Philippines offers a classic case study of the limits of liberal democracy. In the twenty-nine years since we overthrew the dictatorship of Ferdinand Marcos, many of us who fought for democratic institutions also prioritized agrarian reform, believing that this was the central project that would bring about more equality.