Capitalism Feeds Struggle and Inequality

Richard Wolfe, May 2021, LA Progressive, FacebookTwitterPinterestRedditShare

Capitalism Feeds Struggle and Inequality

In France, the United States and beyond, capitalism justified itself by reference to its achievement or at least its targeting of equality in general. This equality included the distribution of wealth and income, at least in theory and rhetoric. Yet from the beginning, all capitalisms wrestled with contradictions between lip service to equality and inequality in their actual practices. Adam Smith worried about the “accumulation of stock” (wealth or “capital”) in some hands but not in others. Thomas Jefferson and Alexander Hamilton had different visions of the future of an independent United States in terms of whether it would or would not secure wealth equality later dubbed “Jeffersonian democracy.” There was and always remained in the United States an awkward dissonance between theoretical and rhetorical commitments to equality and the realities of slavery and then systemic racist inequalities. The inequalities of gender likewise contradicted commitments to equality. It took centuries of capitalism to achieve even the merely formal political equality of universal suffrage.

Capitalism Feeds Struggle and Inequality

Thus, there should be no surprise that U.S. capitalism—like most other capitalisms—provokes a widely troubling contradiction between the actual wealth inequality it produces and tendentially deepens (as Thomas Piketty has definitively shown) and its repeatedly professed commitment to equality. Efforts to redistribute wealth—to thereby move from less to more equal distributions—follow. Yet, they also disturbingly divide societies where the capitalist economic system prevails.

Wealth redistributions take from those who have and give to those who have not. Those whose wealth is redistributed resent or resist this taking, while those who receive during the redistributions of wealth develop rationales to justify that receipt. Each side of such redistributions often demonizes the other. Politics typically becomes the arena where demonizations and conflicts over redistribution occur. Those at risk of being deprived due to redistributions aim either to oppose redistribution or else to escape it. If the opposition is impossible or difficult, escape is the chosen strategy. Thus, if profits of capitalists are to be taxed to redistribute wealth to the poor, big businesses may escape by moving politically to shift the burden of taxation onto small or medium businesses. Alternatively, all businesses may unite to shift the burden of such redistributive taxation onto higher-paid employees’ wages and salaries, and away from business profits.

Recipients of redistributions face parallel political problems of whom to target for contributing to wealth redistribution. Will recipients support a tax on all profits or rather a tax just on big business with maybe some redistribution flowing from big to medium and small business? Or might low-wage recipients target high-wage workers for redistributive taxation?

All kinds of other redistributions between regions, races and genders display comparable strategic political choices.

Conflicts over redistributions are thus intrinsic to capitalism and always have been. They reflect but also deepen social divisions. They can and often have become violent and socially disruptive. They may trigger demands for system change. They may function as catalysts for revolutions. Because pre-capitalist economic systems like slavery and feudalism had fewer theoretical and rhetorical commitments to equality in general, they had fewer redistribution struggles. Those finally emerged when inequalities became relatively more extreme than the levels of inequality that more frequently provoked redistribution struggles in capitalism.

No “solution” to divisive struggles over wealth redistribution in capitalism was ever found. Capitalisms keep reproducing both theoretical and rhetorical appeals to equality as self-celebrations alongside actualities of deep and deepening wealth inequalities. Criticisms of capitalism on grounds of wealth inequality dog the system everywhere. Divisive social conflicts over capitalism’s unequal wealth distributions persist. Endless efforts to find and implement a successful redistributive system or mechanism continue. The latest comprises various proposals for universal basic incomes.

To avoid divisive social conflict over redistribution, the solution is not to distribute unequally in the first place. That can remove the cause and impetus for redistributive struggles and thus the need for endless and so far fruitless efforts to find the “right” redistribution formula or mechanism. The way forward is to democratize the decision about distributing wealth as it emerges from production. This can be accomplished by democratizing the enterprise, converting workplaces from their current capitalist organization (i.e., hierarchical divisions into employers—public or private—and employees) into worker cooperatives. In the latter, each worker has one vote, and all basic workplace issues are decided by majority vote after a free and open debate. That is when different views on what distribution of output should occur are articulated and democratically decided.

No redistribution is required, necessitated, or provoked. Workplace members are free to reopen, debate and decide anew on initial wealth distributions at any time. The same procedure would apply to workplace decisions governing what to produce, which technology to deploy, and where to locate production. All workers collectively and democratically decide what wage the collective of workers pays to each of them individually. They likewise decide how to dispose of or allocate any surplus, which is above the total individual wage bill and replacement of used-up inputs, that the enterprise might generate.

Aparable can illustrate the basic point. Imagine parents taking their twins—Mary and John—to a park where there is an ice-cream vendor. The parents buy two ice creams and give both to Mary. John’s wails provoke a search for an appropriate redistribution of ice creams. The parents take away one of the ice creams from Mary and hand it to John. Anger, resentment, bitterness, envy and rage distress the rest of the day and divide family members. If affection and emotional support are similarly distributed and redistributed, deep and divisive scars result. The lesson: we don’t need a “better” or “right” redistribution; we need to distribute more equally and democratically in the first place.

Richard D. Wolff
Independent Media Institute, This article was produced by Economy for All, a project of the Independent Media Institute


Do Republicans Really Want More Poverty and Crime?


Republicans Really Want More Poverty

And you can bet your bottom dollar they’ll continue complaining about the crime that they’ve created, particularly in the election ads they’ll start running next year.

The Republican Party is running a huge scam right now, similar to the one they ran in 1992 when President George H.W. Bush was setting up phony cocaine busts across the street from the White House having achieved his position by running his infamous Willie Horton ad four years earlier.

Here’s the essential formula:

  • Increase levels of inequality in the country to the point where poverty and homelessness are a crisis.

When Democrats work to lift people out of poverty, it lifts the entire economy. As Republicans work to cut taxes on rich people and spending on poor people, it whacks the economy.

  • Do this with huge, trillion-dollar tax cuts for rich people so they get massively richer, while gutting social safety net programs and supports for working-class people like unions.
  • Poverty and homelessness increase, which produces an increase in crime, and that freaks out middle-class people—the majority of voters.
  • Then, build your political identity and campaign around being “tough on crime” while completely ignoring the fact that the poverty you helped create is largely responsible for much of that crime.
  • Blame the poverty-driven crime, instead, on “welfare” programs Democrats have put into place to try to soften the blow of the poverty caused by Republican policies.
  • Get elected, create more poverty; rinse, wash, and repeat.

This is not a new idea. Around 170 A.D. Roman Emperor Marcus Aurelius said, “Poverty is the mother of crime,” although he was actually trying to reduce both in the wake of others who’d made poverty and thus crime worse.

And then there’s inequality, which it turns out is at least as consequential as poverty as a driver of criminal behavior.

Years of research done by Richard Wilkinson and Kate Pickett of the Equality Trust in the U.K. found that as inequality goes up, so does crime—particularly violent crime.

As their research notes:

Rates of violence are higher in more unequal societies. This finding holds up in many different contexts, we looked at via different methodologies and after controlling for other determinants of crime such as low income, unemployment, and teen birth rates.

Small permanent decreases in inequality—such as reducing inequality from the level found in Spain to that in Canada—would reduce homicides by 20% and lead to a 23% long-term reduction in robberies.

Inequality, it turns out, may be an even more effective driver of violent crime then poverty. And the United States today is the most unequal society in the developed world.

This week while taking a walk in Portland, my wife Louise was attacked by a homeless man, who threw a water bottle at her and chased her down the street. He was almost certainly mentally ill as well as poor; programs for the mentally ill were mostly nuked by Reagan and have never recovered.

And research from the Equality Trust shows that inequality is associated with mental illness; as societies become more unequal, mental illness increases. The data holds all over the world.

Nonetheless, the GOP continues to promote policies that increase inequality and thus increase violent crime and mental illness, while blaming it all on Democratic welfare programs.

And Republicans believe them. A 2014 Pew poll found that while 90% of Democrats want the government to do something about inequality only 45% of Republicans think anything should be done.

And now they’re all over the media being positively hysterical, wringing their hands, about a post-Covid bump in crime during a time when eight million jobs have literally vanished from the American job market and will almost certainly not come back any day soon.

Republicans find this particularly easy to get away with because American media is mostly owned and run by very wealthy people and the “talent” we see on TV are almost exclusively, themselves, multimillionaires. Such folks are rarely comfortable talking about poverty and its relationship to inequality, although they’re fine discussing crime anytime the GOP brings it up.

The same is true of most Republican politicians, funded as they are by billionaires, as Rep. Alexandria Ocasio-Cortez (D-N.Y.) pointed out last July.

“Republicans are all upset that I’m connecting the dots between poverty and crime,” Ocasio-Cortez tweeted. “I know most of them haven’t experienced or seen these issues firsthand, but I have. This may be hard for them to admit, but poverty and crime are highly linked, both violent and nonviolent alike.”

This blindness hits the entire economy. When Democrats work to lift people out of poverty, it lifts the entire economy. As Republicans work to cut taxes on rich people and spending on poor people, it whacks the economy.

Investment strategist Sam Stovall pointed out, in a USA Today article by Doug Stanglin, that “every Republican president since Chester A. Arthur (1881-85) had a recession during his administration.”

Stanglin notes that Clinton “averaged 3.7% [economic growth] over eight years,” while, “of the post-World War II presidents, only Truman, at 4.8%, Kennedy at 5.2%, and Johnson at 5.1% scored higher average growth rates. By contrast, Reagan averaged 3.5%, Carter 3.3%, Nixon 3.1%, Bush I, and Ford 2.2% and Bush II 1.65%.”

Republicans, however, not only are not interested in discussing inequality or poverty and the relationship of both to violent crime, they even have a handy rejoinder to anybody who wants to talk about crime, particularly crime committed in minority neighborhoods.

For them, it’s not inequality or even poverty that leads to crime, particularly violent crime: it’s “character.” And “character,” more often than not, is simply a stand-in reference for “racial minorities” or, at best, “poor people.”

They know it like a mantra because they’ve been saying it for years. Poverty is just fine. Don’t worry about it. It’s not causing crime; you can just look at those folks and see their criminality. As my right-wing colleague talk show host Dennis Prager asserts, “It is not material poverty that causes violent crime, but poor character.”

Trump’s administration even claimed to reverse the arrow of causation, arguing that poverty is caused by violence, and therefore we don’t need to give poor people money.

Trump’s administration even claimed to reverse the arrow of causation, arguing that poverty is caused by violence, and therefore we don’t need to give poor people money but, instead, we need to throw more cops at them. “But to break the cycle of poverty,” he said in March of 2017, “we must also break the cycle of violence.”

Of course, they’re wrong. Taking this out of the American political and social context altogether, a study published by the National Institute of Health (NIH) about the impact of poverty in China is instructive.

The study looked at two years of homicides across China and found that “poverty and low income levels” are “positively related to homicide rates.”

But don’t expect the Republicans to wake up any day soon. This is just science, after all. They will never, ever vote to raise taxes on the billionaires and corporations that own them. And they’ll never work to use tax money to reduce poverty and inequality in America. Crime, after all, helps them beat Democrats.

Nor do they want to restructure our society in a way that gives working people the power to demand higher wages and better working conditions (unions), thus reducing both poverty and inequality.

And you can bet your bottom dollar they’ll continue complaining about the crime that they’ve created, particularly in the election ads they’ll start running next year.

Thom Hartmann
Common Dreams