“The proprietors are rich, and very holy; â€¨but the wage they pay to these poor brothers and sisters of theirs is â€¨only enough to keep them from dropping dead with hunger. The work-hours â€¨are fourteen per day, winter and summer–from six in the morning till â€¨eight at night–little children and all. And they walk to and from the â€¨pigsties which they inhabit–four miles each way, through mud and slush, â€¨rain, snow, sleet, and storm, daily, year in and year out. They get four â€¨hours of sleep. They kennel together, three families in a room, in â€¨unimaginable filth and stench; and disease comes, and they die off like â€¨flies.”
â€“Mark Twain: â€œThe Mysterious Strangerâ€
Pure, unrestrained capitalism is as ugly as the most grotesque machinations of communist dictators. In order for capitalism to be an acceptable economic system, it needs much guidance; the type of guidance that comes from labor unions and government that is committed to social and economic justice, environmental protection, and human rights.
The class war is afoot, and the extremely wealthy are empirically winning.Â The top 1% own 42% of the wealth, the bottom 80%, just 7% of the wealth. In the mid-1970s, the top 1 percent received less than 10% of total income. By 2007, it had risen to 23.5 percent. This isn’t a war between rich and poor. It is between right and left.Â I donâ€™t believe the conservatives’ aim is the destruction of the middle class, nor is it their goal to cause an epidemic of medical bankruptcies or the extinction of polar bears. But I do think those are natural consequence if their ideology prevails.
Even though thirty years of declining marginal tax rates, deregulation of energy, banking, investment, insurance, and other industries, and a steady march towards entirely unrestricted trade have quashed the middle class and all but destroyed our economy, many still believe in supply side economics, the elimination of all trade barriers, and that during our most prosperous times, steeply progressive taxation was somehow on the wrong side of the Laffer curve.
Others adhere to a precept of Adam Smithâ€™s invisible hand â€“ that society is accidentally served better if we act in our own best interest, than if we purposefully attempt to do whatâ€™s best for society. It is a beautiful thing. No matter how many tens or hundreds or thousands of millions one makes, he can take comfort in the knowledge that the byproduct of his own indulgence eliminates more poverty and suffering than does philanthropy. I have no issue with laissez-faire so long as the rules of the game are properly fixed. Governments should not plan economies, they should construct fiscal and regulatory mechanisms that promote the general welfare of the population as a whole.
Union membership is a fraction of what it was a couple of generations ago (8% of workforce now, 35% in 1950), and real wages for workers have been flat for decades while executive pay has increased many hundred percentiles. Nevertheless, an idea that has burgeoned lately is that union overreach has made it necessary for our jobs to be euphemistically â€œoutsourcedâ€ to third world countries, and caused the national debt crescendo to unfathomable heights. In a world without trade barriers, and technology that allows industry to pitch factories in the middle of third world populations that will work for pennies an hour, no imaginable degree of wage concession on the part of U.S. workers will be sufficient for them to compete. In a perfectly free and global market economy, the prevailing wage is driven to subsistence, the planet to a state of inhabitability.
Wealth concentration and income disparity are at levels unseen in nearly a century, and on the rise. There is no FDR in our presidential pipeline, and the Supreme Court, in a fit of nearly unprecedented judicial activism, weighed in on Citizens United vs FEC, elevating the richest individuals and corporations essentially to the status of ruling class. The more money they have, the more power they wield over Congress, and the greater success they have in preserving and augmenting the very policies that are fueling the demise of the working class and widening the great divide between rich and poor.
In particular, the policy of low marginal tax rates for the rich is especially culpable. The halving of top marginal tax rates from 70% in the 1970â€™s to 35% is more than any other factor responsible for the corresponding increases in national debt and wealth disparity, and was a significant contributor to the orgy of Wall Street excesses that led to our financial collapse. So what does a Democratically controlled Congress do? It extends the Bush tax cuts for the rich. The fix is in, folks. The oligarchs are in control.
The political right’s mission is to eliminate unions, the minimum wage, public education, environmental protection, progressive tax rates, welfare, social security, equal rights for gays, reproductive rights, and even writs of habeas corpus, and they will look upon the attainment of those goals as necessary to make America strong and prosperous. They wonâ€™t be entirely successful, and America wonâ€™t revert to Twainâ€™s capitalism (although it will exist elsewhere so that Walmart can provide value to its customers), but simply playing defense, and as much as possible preserving the status quo, isnâ€™t sufficient. The status quo has us squarely on a path to plutocracy.
We may very well have reached a tipping point from which there is no recovery. I fear the return of a robust middle class is a lost cause. But then, perhaps lost causes, as Clarence Darrow surmised, are the only ones worth fighting for.