Inequality reinforces authoritarianism and creates a “vicious cycle” that decks democracy

The Freedom House report underscores how inequality and authoritarianism reinforce each other. Researchers have found that when people are unable to improve their economic situation through hard work they may come to believe the system is "rigged" against them. Many become more likely to support authoritarian, populist leaders who promise to do things like "drain the swamp" and "make America great again."

"The central message of populist movements has historically been that the common people are being exploited by a privileged elite, and that radical institutional change is required to avoid such exploitation," as a United Nations report described last year.

But more often than not, authoritarian leaders wreak havoc upon their countries' economies. Using data from 133 countries, for instance, a 2019 study found that economies are more likely to shrink under dictatorships than to expand. A separate study found that countries shifting from an autocratic to a democratic regime received a 20% GDP boost in the years following the change.

Their distrust of experts among authoritarian leaders often leads to poor economic judgment, as when Turkish President Recep Tayyip Erdogan's move to restrict interest rate hikes caused the value of the Turkish lira to collapse. They tend to enrich themselves and their inner circles at the expense of everyone else - Trump's well-documented self-dealings while in office are a case in point. Embezzlement and corruption are considerably more common in dictatorial governments than they are in democracies.

In the end, countries enter a vicious cycle where a deteriorating economy leads to authoritarian rule, which causes economic conditions to decline even further. In a prior era, such an outcome would be inconceivable in the United States, the "shining city on a hill" that other nations looked to for inspiration and guidance.

But now, Freedom House is just one of many democracy watchdogs warning that authoritarianism is on the march here. If history is any guide, we will all be poorer for it. As Supreme Court Justice Louis Brandeis said, "We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both."