The Corruption of Liberal and Social Democracies

Abstract

This paper compares and contrasts two leading forms of corruption affecting democracies -- plutocracy and partyocracy -- and argues that they are central for explaining rising economic inequality and rising political inequality. The academic and popular debate over neoliberalism tends to admit that privatization, austerity, and rising economic inequality are hardly popular with most citizens. Popular dissatisfaction with democracy in the forms of widespread cynicism and low voter turnout are evident. And the state of democracy itself has been connected to rising economic inequality by Thomas Piketty, who repeats throughout Capital in the Twenty-First Century that today’s levels of inequality are not inevitable, much less natural. Wealth transfers from the state to the private sector, from labor to capital, and an overall legal panorama favorable to elite wealth accumulation require that the participatory and representative facets of democracy be kept in check. Beyond suitable material conditions, inequality also requires a justificatory ideology. The law of political finance can help connect the dots. Legal patterns in the financing of campaigns and political parties point to two distinct forms of oligarchy in play: plutocracy, representing the decay of liberal democracy, and partyocracy, representing the decay of social democracy. Together, these legal forms of corruption appear to have co-opted democracy’s values and outputs, paving the way for neoliberalism. Or, they might quite simply be products of neoliberalism itself. Either way, they are intimately connected to the overall global crisis of democratic government and must, therefore, be exposed.