By Virginia Orenstein

Democracy is a political system founded on the principles of equality, representation and the collective will of the people. However, when extreme wealth inequality pervades a democratic society, a widening gulf between people and classes emerges, threatening to undermine these critical foundations. The concentration of vast resources in the hands of a few inevitably distorts political processes, gives power to the few rather than the many, erodes social cohesion and ultimately jeopardize the health and stability of democracy itself and all who live in one.

One of the most immediate and far-reaching consequences of extreme wealth inequality in a democracy is its impact on political representation. Wealth often translates into political influence and that translates into the power to shape the rules to favor the wealthy. Billionaires and large corporations can and often do leverage their financial power through campaign donations, lobbying efforts, and the funding of political action committees. This creates a system where the voices and concerns of the wealthy are amplified, while those of average citizens are marginalized or ignored.

Elected officials, consciously or unconsciously, become more responsive to the interests of their donors and powerful benefactors than to the broader electorate, because the campaign finance system created by the wealthy and powerful creates the need to look for large donations from those with resources. This imbalance can foster a sense of disenfranchisement among the general populace, leading to cynicism and a decline in civic participation and election or appointment of the rich to important offices.

Beyond direct political influence, extreme wealth inequality can also undermine the principle of "one person, one vote" by shaping the public discourse itself by heavily influencing or outright owning of the media. The economically powerful’s sway over the media, elite think tanks, and even educational institutions allows them to promote narratives and ideologies that serve their interests. This influence over public opinion makes it harder for average citizens to detect subtle biases and get a spectrum of opinions and facts that are not biased toward the interests of the rich. Without access to a broad spectrum of political and economic ideas and facts, it is almost impossible for citizens to make the informed decisions that democracy depends upon. A free marketplace of ideas can’t thrive when two or three big idea merchants control most of the tables.

Furthermore, extreme wealth inequality can lead to a weakening of social mobility and opportunity, which are vital for a healthy democracy. If access to quality education, healthcare, and economic advancement become increasingly tied to your social class or how much money you have rather than merit or effort, a rigid class structure can emerge. This can breed resentment and social division, making it difficult to build consensus and address shared challenges. A society fractured by vast economic disparities is less likely to engage in constructive dialogue and more prone to social unrest, which can further destabilize democratic institutions.

The bottom line is that extreme wealth inequality poses a profound threat to the integrity and functioning of democracy in the United States or elsewhere. By distorting political representation, manipulating public discourse, and eroding social cohesion, it can too easily transform a government of the people, by the people and for the people into a government and economy that primarily serves the interests of a privileged few.

Addressing this growing elite influence in the American political economy will require carefully crafted policy interventions which deliberately promote more fairness. We need to thoroughly reform campaign finance regulations, create tax and credit policies which do not favor the rich and create a society with far more equitable distribution of opportunities. By striving for a more balanced economic landscape, we can ensure that democracy thrives and becomes a tangible reality for all citizens no matter how much money they have.