Democracy and Poverty
May 6th, 2009 | Published in Economics idea
For rich people to accumulate and maintain their wealth in countries with democratically elected governments, poor people must believe that they would be worse off without them. This is because the poor outnumber the rich and could elect a government that prevents excessive accumulation of wealth if it would help them.
The threat that prevents the poor from demanding a greater share of the wealth produced in a country is job losses. The poor can’t demand a greater share because the rich own the businesses that employ them. The rich can always pack up their businesses and move them somewhere else, taking people’s jobs with them.
If we want a more equitable society where the gap between the rich and the poor is small, the economic system can’t rely on the rich providing jobs to the poor. We can’t rely on the rich performing an essential economic function.
