Marx on the income gap
Published Apr 4, 2007 10:58 PM
The growing polarization between rich and poor, between the capitalist class and
the working class, was eloquently described by Karl Marx and Frederick Engels
in the Communist Manifesto some 160 years ago. Perhaps no part of the Manifesto
has received more ridicule and scorn from capitalist apologists and ruling
class economists than the so-called “theory of increasing misery of the
And yet today, in the richest imperialist power on the planet, when the number
of billionaires is greater than ever and corporate profits are at record highs,
poverty is skyrocketing. On virtually every international social
index—nutrition, infant mortality, health care, education,
homelessness—the U.S. ranks at the bottom of the industrial world.
A new report on income inequality confirms the trend. Looking at recently
released IRS data on incomes, the New York Times (March 29) reports that the
gap between rich and poor grew significantly last year, with the top 1
percent—-those making more than $348,000 a year—-receiving their
largest share of the national income since 1928. The top 10 percent, those
making more than $100,000, also reached a level of income share not seen since
before the Depression.
While total reported income in the United States increased almost 9 percent in
2005, the most recent year for which such data was available, the overall
increase hides the fact that this is all attributable to the rich getting
richer. For the bottom 90 percent, incomes dropped 0.6 percent.
Incredibly, the new data show that the richest 300,000
Americans—one-tenth of 1 percent of the population—devoured as much
of the national pie as the bottom 150 million, or half the country! “Per
person,” writes the Times, “the top group received 440 times as
much as the average person in the bottom half earned, nearly doubling the gap
And these tax-based figures are no doubt understated, since the Internal
Revenue Service estimates that it is able to accurately tax 99 percent of wage
income but can capture only about 70 percent of business and investment income,
most of which flows to upper-income individuals. Nor does this data take into
account decades of cutbacks in benefits and government services that the rich
just don’t have to worry about. No millionaire need complain when health
care, child care, welfare or education spending gets cut.
And there is no end in sight to these trends, with the Bush administration
promising tax cuts to millionaires that average over $150,000 a year.
In summary, the analysis cited by the Times shows that the richest 1 percent
received 21.8 percent of all reported income in 2005, up from 19.8 percent in
2004, and more than double their share of income in 1980.
These trends all confirm the economic prognosis given by Marx and Engels almost
two centuries ago, writing at a time when the capitalist system was young and
developing, unlike today when it is senile and decrepit.
Yet news reports about the income gap, while exposing the injustice and
hypocrisy of the system, do not focus attention on the real source of the
problem. It is not the distribution of income per se. And the well-meaning
efforts of liberals and social reformers to trim the excesses of the income
gap, to tweak the tax policies of the capitalist government so that the rich
get a little less and the poor get a little more, will not solve the
Marx showed that the real problem is the private ownership of the means of
production. As long as the lifeblood of the economy, its vital resources,
factories and technology are owned by a tiny group of individuals, as long as
production is governed by the law of capital accumulation and not the needs of
society as a whole, poverty, injustice and capitalist crisis will remain and
Today, with the myriad problems of war, poverty and the environment, it is
patently clear that the needs of society for peace and security are at odds
with the private ownership of the means of production. Workers produce
everything; the ruling class produces nothing. The only way society can move
forward is to transfer the means of production from private ownership to the
collective hands of all the workers and oppressed. It will take a revolution to
do that, but that’s much more likely to happen than passing a camel
through the eye of a needle.
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