How has discrimination changed over time? What does discrimination look like today? This chapter begins by highlighting severe and systematic acts of discrimination throughout American history. It then assesses contemporary discrimination through a range of audit studies and other methods and then delves into individual perceptions of discrimination.

Chapter 3 provides a review of democratic theory, moving from the “minimal conception” of democratic politics to democracy in its representative, constitutional, participatory, deliberative, and epistemic forms. The chapter offers a comparison of where America stands today among the world’s democracies and introduces the question of whether democracy carries the assumption of equality; it also reviews data on inequality throughout American history and on the more recent increase in inequality. We propose the idea that inequality is not extraneous to our democratic politics, but a direct result of it.

In Chapter 2, I discuss the moral foundation for capitalism provided by Adam Smith. The great philosopher of the Scottish Enlightenment is frequently invoked by economists as the father of their discipline, yet Smith’s life and writings have been widely distorted. In contrast to his popular caricature today, Smith was a moral philosopher of the highest caliber who incorporated important moral perspectives throughout his writings. Smith presented his moral theory based on social norms and culture in The Theory of Moral Sentiments and maintained it as the moral foundation for his economic theory in The Wealth of Nations. Smith’s moral theory is based on the principle of sympathy and the behavioral norms that arise due to past social experiences that reveal standards of right and wrong behavior. Similar to the other philosophers of the Scottish Enlightenment, he attributes moral judgment and the moral conscience to the impartial spectator, but he also reserves important roles for religion and moral codes such as the Stoic virtues. When nineteenth-century classical economists adopted narrow self-interest as the first principle of their discipline, therefore, they adopted a principle that Smith and the other Scottish Enlightenment philosophers had adamantly rejected.