To Save Democracy, We Need to Reimagine the Economy

It was almost Inauguration Day, and autocracy was in the air. Armed guards patrolled federal buildings; machine-gun-toting snipers perched on rooftops. As protests raged outside banks, leading pundits and politicians suggested ceding power to the President to restore order. One major outlet even famously declared itself “For Dictatorship if Necessary.”

The year was 1933. At the depths of the Great Depression, the American experiment felt like it was nearing its expiration date. President Franklin D. Roosevelt famously declined to take the dictatorial path. However, the moment proved a chilling warning: when the economy fails the people, many become willing to gamble with their freedom.

We have seen this fever before. In the 1890s, at the height of the Gilded Age, Southern states rewrote their constitutions to disenfranchise poor whites and Black citizens alike, specifically to crush the rising Populist movement. The common thread across these eras is stark economic inequality. In 1890, the richest 1% owned a quarter of the nation’s wealth. In 1928, they took home nearly a quarter of every dollar of income.

Today, wealth is even more concentrated. In 2026, the world’s 12 richest billionaires possess more wealth than the entire bottom half of the global population—roughly 4.1 billion people—combined.

Those of us dedicated to strengthening American democracy have long supported the hallmarks of a free and fair society, including a vibrant civil society, an independent press, quality civics education, and elections run with integrity. But unless we shift significant resources toward establishing economic justice, we will fail to address one of the most fundamental threats to our democracy.

How inequality erodes the ballot box

In a landmark analysis using data from the V-Dem Institute, scholars Eli Rau and Susan Stokes studied democratic backsliding in dozens of countries since the turn of the 21st century. Their conclusion was that income inequality is a “stunningly robust” predictor of democratic erosion. 

In an unequal society, the stakes of politics become existential. Nobel laureates Daron Acemoglu and James Robinson argue that when wealth is concentrated at the top, elites become willing to back undemocratic candidates to protect their assets from redistribution. Conversely, ordinary citizens, feeling that the system is rigged, become willing to overturn it entirely. This can create a vacuum filled by leaders who promise to dismantle the state rather than reform it, using distrust to concentrate power and shield themselves from accountability.

An age of instability

Two hundred and fifty years after our nation’s founding, we are entering a period of instability driven by technological dislocation. The promise that deregulation and privatization would lift all boats has proven true only for those with the biggest yachts. Today, the future of work looks increasingly like a digital panopticon. For instance, in many warehouses, workers are tracked by systems that monitor “Time Off Task” to the second. A report by the Center for Urban Economic Development at the University of Illinois Chicago has found that these platforms can contribute to serious injury rates at leading warehouse employers that are more than twice that of competitors. 

Furthermore, generative AI is not just changing jobs; it is imperiling them, particularly for women. According to an analysis by the National Partnership for Women & Families, while women make up 47% of the workforce, they account for 83% of workers in AI-vulnerable occupations. 

For instance, Nursing gig platforms have been found to pit essential workers against each other by offering shifts to those who bid the lowest hourly wage. Such techniques have been honed in the gig economy more broadly to algorithmically set different wages for different employees doing the same work. 

And some companies have been found to leverage what is referred to by some as “surveillance pay,” in which they adjust workers’ compensation in real time, automatically altering pay tiers and bonus structures in order to identify someone’s reservation wage—the absolute minimum they will accept. 

When your paycheck is determined by an opaque algorithm that pits you against your neighbor in a race to the bottom, the political agency required for a functioning democracy evaporates.

A blueprint for renewal

Protecting the ballot is hollow if we ignore the bank accounts of the voters who cast them. To safeguard our future, we must reimagine economic policy, and we must start by building solidarity through targeted universalism. Universal programs, like New York City’s 3-K early childhood education, bridge racial and class divides because everyone has a stake in their success. By rolling these out to lower-income areas first, the benefits reach those in need first, while still incentivizing everyone to support its success.

Equally vital is the restoration of countervailing power. The only historically proven check on corporate power is organizing, yet union density is around the lowest levels since the Great Depression. We must treat labor unions and tenant associations not just as economic actors, but as essential civic infrastructure. This must be paired with an effort to democratize the market by addressing monopoly power and promoting competitive market practices. Breaking the hold of tech and financial oligarchies, including a ban on algorithmic wage-setting, ensures that AI does not become a tool for gutting the middle class.

Finally, we must make government visible and palpable by ensuring the state actually delivers. We also need to construct a progressive tax code that prioritizes the dignity of employment, aligning marginal taxes on hiring and training workers with those on investing in equipment or technology. Our tax code shouldn’t favor buying software over hiring people. 

The architects of the new economy

The architects of this renewal are already at work. In Washington State, the National Domestic Workers Alliance successfully updated the Workers’ Bill of Rights, extending protections to a workforce that is disproportionately women of color who have largely been excluded for a century. In New York, delivery drivers secured a minimum wage increase from $5.39 to over $19 an hour. In the South, coalitions are securing legally-binding Community Benefits Agreements to ensure that the green energy transition includes union contracts and local hiring. And AI Now is mobilizing communities across the American South and Midwest to challenge massive data center projects that threaten to increase local utility bills and harm water supplies without providing reciprocal local economic benefits. These are not just labor wins; they are democratic victories. They prove that when people have a stake in the economy, they gain a stake in the system.

Throughout our history, American democracy has survived because we responded to inequality with bold structural shifts. The Gilded Age led to antitrust laws; the Great Depression spurred Social Security and codified the legal right to organize. We are at a crossroads once again. We cannot guard the ballot box while the economic ground beneath it gives way. We must build an economy that makes democracy possible. Whether our nation will flourish for another 250 years depends on whether we choose to build a country that works for the many or continue to serve the few.