Town meeting or Monarchy?

Apologists for the USA routinely assert that the government is "democratic" -- that it is a government "of the people, for the people, and by the people". Modern progressives often bemoan the diminishment of democracy, hearkening back to a period (1950s-1970s) when "regular" citizens had a voice in government, and policymakers took heed of their interests. Skeptics of this progressive mythology, frequently point to white-male supremacism during this period, as well as the substantial differences in power that existed between white-male workers, managers, and the power elite. But still, the progressives adhere to this sunny view of the state, and demand that all right people should happily support "their" government.

A contrasting view is that the state is fundamentally elitist and exploitative, even in the USA. Here, the state was established by a narrow elite in order to subjugate the rest of society. With the state being structured around domination, it is fundamentally incapable of being democratic. Granted, the state does have some democratic aspects -- most notably elections, equality before the law, and civil liberties enshrined in the Constitution. However, these do not change the fundamental nature of the state, they just give it some procedural accountability and restrain the arbitrary use of power. Perhaps these concessions were made to gain broader support from the general populace, or perhaps they were established to mediate conflict among the elite, but either way they are a big improvement over absolute monarchies, totalitarian regimes, or naked kleptocracy.

These two views essentially treat the USA as either a scaled-up New England town-meeting, or a reformed monarchy. Perhaps the distinction is not too important, since the USA is clearly influenced by both traditions. Geniuses such as Thomas Paine and John Stuart Mill aimed to design institutions from democratic first-principles, but it looks to me that they were still trying to design something that functioned very much like the monarchies that they were familiar with. Even if town-meetings were being used as a starting point, it could be that the town-meeting does not scale up well; that coordinating with strangers requires the delegation of authority, and the desire for rapid, centralized decision-making is fundamentally elitist. During the foundation of the USA, democratic idealists were clearly in the minority, as most of the decision-makers arose from the colonial elite, and many championed elitist attitudes, even aside from racism and sexism.

Progressives seem to view that elitism as essentially receding into history, pushed aside first by Jacksonian democracy, then by the slow and ongoing extension of civil and economic rights to women and racial minorities. Yet many conservatives, perhaps stuck in the Jacksonian era, see a new nexus of elitism centered around the university network, which extends its influence into government by educating the ranks of bureaucrats and technocrats who are constantly telling regular folk how to live their lives. And of course, socialists consider the USA to be tightly controlled by the capitalist class.

Amidst all these conceptions of power and powerlessness, I find myself wondering "what is power for?" The nature of the state is clearly to create power differentials -- to allow one group of people to exert power over the rest of society. Why do we go along with that? Engles had a dream that once people gave up the idea of dominating and exploiting each other, the state would transform into a simple administrative agency, coordinating economic activity. However, the rejection of racism and sexism a generation or two ago has not made control of the state any less contentious -- if anything, Americans seem to be ever more strongly divided over who should control the state. Perhaps this reflects the aimlessness of the state -- it is no longer clear who the state is meant to dominate, so what is it's purpose? Perhaps we've moved from an era when the state acted as the executive committee for a broad, stable ruling class (white males), to an era of true democracy, where each election is an opportunity for one faction to establish themselves in a dominant position over the remainder of society.  Having established an institution that necessarily dominates people and redistributes their wealth through both direct and indirect mechanisms (e.g. taxes and copyrights, respectively), all of us are now perpetually at risk of becoming its next target.

Which brings me back to the initial question that motivated this post -- can "regular folk" (even those with Socio-economic status in the 70th percentile) exert reasonable control over the state? Can we choose more than one issue to base our votes on, or does trying to engage in the full range of political debate just sap our energy and diffuse our effectiveness? If we do choose one issue, is it just a matter of personal preference, whereby each of us focusing on a topic that motivates us, we end up covering all of the bases? Would that strategy allow the elite to easily pit us against each other, such that they can continue to systematically shift wealth to their own associates, while we tear at each other over the culture war. Or is there an issue or principal that can be elevated above all others, that can shift power back to the people? To me, the single issue seems to be "small government", or perhaps "small government socialism"