Inequality has been the hot topic among economists and political analysts in the United States since the crisis.
In the US wages have stagnated over the last 40 years even as productivity has increased, which is another way of saying that Americans are working harder but getting paid less. Unemployment remains stubbornly high even though corporate profits and the stock market are at or near record highs. Assets in the form of stocks and real estate are doing very well.
The top 1 percent of incomes own almost 50 percent of asset wealth, and the top 10 percent own over 85 percent of it.
It doesn’t surprise socialists but study after study shows that American policymakers operate almost purely on behalf of wealthy interests. Nor are we surprised that recent polls show that the American rich want policies that encourage the growth of asset values while lowering their own tax rates, and are especially keen on outcomes that favor themselves at the expense of the working class.
So why isn’t the 99 percent in open revolt? The answer lies in part because the top 1 percent have done an excellent job disguising the upward transfer of wealth by making the rest of us think we are better off than we actually are while enriching themselves in the process. Slowly but surely we are seeing through the charade.
Because capital can consume only a small portion of its income, the lion’s share will be reinvested. The return on each additional investment further increases capital’s share of national income. The capitalist investors who garner huge rewards for doing nothing, gets ever-wealthier and smaller in number. The result is built-in inequality. This condition is thus not static; the disparity will continuously widen and concentrate increasing wealth in fewer hands. This dynamic is the way capitalism has to work. There is no question of policy “mistakes” or a malfunctioning system. Growing inequality ‘is not the consequence of any market “imperfection”. Once capital is in place, it must expand itself faster than output and total income increase. With capital necessarily concentrated at the top, not only will income continue to be driven upwards, but an ever-increasing percentage of income will congeal in the hands of the very few. The wealthy need not move a muscle to accomplish this. Inequality will increase forever because capital is capital. So much for the so-called rewards of supposed meritocracy.
If capital’s growing share of total income and total production grow faster than the economy, and that fortune can be bequeathed to capital’s heirs, the tendency will be for an ever-larger share of the nation’s wealth and income to be in the possession of not merely “wealthy households,” but dynasties. That is, the predominant form of wealth becomes inherited wealth. B inherits wealth from A, and in turn bequeaths it to C. But what B bequeaths to C is greater in value than what he inherited from A. Likewise, what C bequeaths to D will be greater than what was passed on to him by B. The series goes on infinitely. And keep in mind that we are talking not merely about absolute stores of economic value, but shares, ever-larger shares, of total national income/output. Inheritors of what will have become dynastic wealth will resemble the rulers of nations like Kuwait and Saudi Arabia, where the nation is in fact a fiefdom, the private property of a family. The owners of that great wealth have done something to deserve their fortune. The justification that the rich have what they have because they“work harder or more efficiently than the poor” becomes patently false.
Why should we be at all surprised that the system exists in order to enrich the wealthy at the expense of the rest? After all it’s called Capitalism, not Laborism or Workerism. Capitalism simply doesn’t function in the interests of the majority of people. Instead, Capitalism has operated very nicely for the plutocrats and oligarchs. They have never done so well, never had greater riches and never before had virtually complete control of the State. They have created a kleptocracy.
Adapted from here and here
In the US wages have stagnated over the last 40 years even as productivity has increased, which is another way of saying that Americans are working harder but getting paid less. Unemployment remains stubbornly high even though corporate profits and the stock market are at or near record highs. Assets in the form of stocks and real estate are doing very well.
The top 1 percent of incomes own almost 50 percent of asset wealth, and the top 10 percent own over 85 percent of it.
It doesn’t surprise socialists but study after study shows that American policymakers operate almost purely on behalf of wealthy interests. Nor are we surprised that recent polls show that the American rich want policies that encourage the growth of asset values while lowering their own tax rates, and are especially keen on outcomes that favor themselves at the expense of the working class.
So why isn’t the 99 percent in open revolt? The answer lies in part because the top 1 percent have done an excellent job disguising the upward transfer of wealth by making the rest of us think we are better off than we actually are while enriching themselves in the process. Slowly but surely we are seeing through the charade.
Because capital can consume only a small portion of its income, the lion’s share will be reinvested. The return on each additional investment further increases capital’s share of national income. The capitalist investors who garner huge rewards for doing nothing, gets ever-wealthier and smaller in number. The result is built-in inequality. This condition is thus not static; the disparity will continuously widen and concentrate increasing wealth in fewer hands. This dynamic is the way capitalism has to work. There is no question of policy “mistakes” or a malfunctioning system. Growing inequality ‘is not the consequence of any market “imperfection”. Once capital is in place, it must expand itself faster than output and total income increase. With capital necessarily concentrated at the top, not only will income continue to be driven upwards, but an ever-increasing percentage of income will congeal in the hands of the very few. The wealthy need not move a muscle to accomplish this. Inequality will increase forever because capital is capital. So much for the so-called rewards of supposed meritocracy.
If capital’s growing share of total income and total production grow faster than the economy, and that fortune can be bequeathed to capital’s heirs, the tendency will be for an ever-larger share of the nation’s wealth and income to be in the possession of not merely “wealthy households,” but dynasties. That is, the predominant form of wealth becomes inherited wealth. B inherits wealth from A, and in turn bequeaths it to C. But what B bequeaths to C is greater in value than what he inherited from A. Likewise, what C bequeaths to D will be greater than what was passed on to him by B. The series goes on infinitely. And keep in mind that we are talking not merely about absolute stores of economic value, but shares, ever-larger shares, of total national income/output. Inheritors of what will have become dynastic wealth will resemble the rulers of nations like Kuwait and Saudi Arabia, where the nation is in fact a fiefdom, the private property of a family. The owners of that great wealth have done something to deserve their fortune. The justification that the rich have what they have because they“work harder or more efficiently than the poor” becomes patently false.
Why should we be at all surprised that the system exists in order to enrich the wealthy at the expense of the rest? After all it’s called Capitalism, not Laborism or Workerism. Capitalism simply doesn’t function in the interests of the majority of people. Instead, Capitalism has operated very nicely for the plutocrats and oligarchs. They have never done so well, never had greater riches and never before had virtually complete control of the State. They have created a kleptocracy.
Adapted from here and here
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