More ramblings on inequality
If we want to understand what’s truly driving the global political economy, we have to keep our primary sight on inequality. It drives almost everything. As noted yesterday, the bottom 80% of the US population own essentially nothing – they’re truly modern day serfs who lack even the small tract of productive land held by their humble ancestors. Beyond wealth inequality, we should also look at income inequality, how annual purchasing power is distributed. It turns out the top 10% grab close to 60% of annual purchasing power, leaving just 40% of the pie to 90% of the population. Many in the top 10% grandly refer to themselves as “Job Creators”, an absurdly godlike self image at any time but especially so when poverty and unemployment are so high. Far better perhaps to call them “Misery Creators” since their greedy demands to live well at the expense of others is the underlying basis of our societal ills.
Economists tend to refer to our system as one of commodity exchange but that’s not a very helpful description when the vast majority have nothing of interest to offer the consolidated corporate titans who dominate global production and finance. They have nothing to exchange and their only means of survival is to humbly seek employment or strike out against very great odds with their own business. The key problem is that there can’t possibly be enough profitable employment or profits given such vast income inequities. Where can profit come from when all the purchasing power is confined to such small numbers? Outside of government spending, the only answer is endlessly rising private investment which is nothing more than a grand ponzi scheme that can never ultimately be successful.
Even if full employment could be reached with such vast income disparities, and it rarely can, we still would be left with a society not significantly different than serfdom or even a kind of slavery in which labor is rented rather than owned. Since purchasing power is almost completely owned by the upper decile or two, production is mostly for their benefit. We end up with a society in which the majority devote their lives to producing products and services that will only be enjoyed by their “betters”. They truly are the “working class” as compared to what we might call the “recipient class”. The endless call for “jobs” cloaks this critical issue – for whose benefit will the work serve? We can see the results of our system all around us – slums, crumbling infrastructure, inadequate medical care, poor nutrition, crime, prisons; all alongside mansions, yachts, corporate jets, corporate palaces, private security, and five star hotels. It’s not a pretty sight but that’s the reality of oligarchy, the natural outcome of any system of concentrated power.