Class exploitation at the root
In a 67-page paper issued in January of this year the IMF reported:
“In the United States, the share of market income captured by the richest 10 percent surged from around 30 percent in 1980 to 48 percent by 2012, while the share of the richest 1 percent increased from 8 percent to 19 percent. Even more striking is the fourfold increase in the income share of the richest 0.1 percent, from 2.6 percent to 10.4 percent.” (New York Times op-ed, Charles Blow, March 14)
Similar warnings were issued by the British Oxfam at the recent Davos World Economic Forum in Switzerland when it published a report showing that the 85 richest people in the world had as much wealth as the bottom half of the entire world’s population. (Los Angeles Times, Jan. 20)
Statistics leave out class and oppression
These dramatic figures need to be exposed widely and ways must be found to fight against this horrendous development. But the capitalist economists state things in a purely statistical way, without any class description, or description of the inequality between oppressed and oppressor. In this way their reports actually conceal both the underlying problem and the solution.
The workers and the oppressed are not defined by their percentage of income or wealth but by their class condition of exploitation — just as the rich are not defined by a percentage but by their position as capitalist exploiters.
The problem of economic inequality begins with the inequality between classes, the capitalist class and the working class. It extends to national, race and gender inequality. Under capitalism, wealth flows from the bottom to the top. These are the starting points in addressing this question.
What the workers and the oppressed need to know is that it is not the top 1 percent of the population that has 19 percent of the income. The top 1 percent is part of the capitalist class that has 19 percent of the income. The same goes for the top .1 percent and the top .05 percent, etc. And workers need to know that the bottom 80 percent is the working class. (The professional, managerial and entrepreneurial middle class is sizable, but this article deals with the basic classes in U.S. capitalist society, the workers and the capitalists.)
Furthermore, the nature of this wealth and the sources of this wealth must be clearly explained in Marxist terms. The income of the capitalist class, in all percentage categories, whether it is the top 1 percent or the top 20 percent, or any percentile, is income derived from wealth in private property — that is, ownership of the banks, the factories, the mines, the stores, the hospitals, the fields, etc.
The income of the rich comes in the form of profits from an individually owned corporation, from dividends on stock held in a corporation, from interest on bonds or loans, from rent on real estate or intellectual property. That is what the income of the capitalist class consists of, however rich they may be.
And where does this income come from? Direct profits of a privately held corporation come directly from the workers who work for the individual owner. Dividends, which are paid on shares of stock, are nothing more than a portion of the profits from a corporation. And where do the profits from a corporation come from? From the unpaid labor time of the workers who are exploited by that corporation.
Interest on bonds and rent to a landlord are also paid out of the surplus value, that is, the unpaid labor of the workers. So all forms of income of the rich, profits, interest and rent, come out of the hides of the multinational working class.
So no matter how you slice it, the entire edifice of capitalist wealth and income in the U.S. comes from capitalist exploitation. It is all paid to the upper echelon of society, the 1 percent or any other percent, from the sweat of the workers.
Workers have little to no ‘wealth” but lots of debt and poverty
Now consider the “wealth” of the bottom 50 percent or the bottom 80 percent or whatever percent you want to pick. The working class in the U.S., for example, is officially about 155 million and actually includes millions more who are not counted.
What does their so-called “wealth” consist of? At best, it consists of a house, perhaps a car, clothes, furniture, etc. If they are lucky, some workers have a pension and small savings. But along with this “wealth” they have mortgage debt, auto loan debt, credit card debt, student loan debt, etc. And much of their so-called wealth, such as a house or a car, really belongs to the banks until the loans are fully paid. So when you subtract the debts from what the workers own, they have very little, if anything left over.
Of course, there are millions of workers and oppressed people who are unemployed and dispossessed, including the 2.5 million prisoners in the U.S., who have nothing or less than nothing. For them there is no such thing as “wealth” of any kind, but only grinding poverty.
And where does the so-called wealth of the workers come from? For those who are employed, it comes from wages or salaries, from the sale of their labor power to the exploiters.
Wages are what the bosses pay the workers so that they can stay alive and keep coming back to work week after week, month after month, year after year — and also raise children who can eventually replace them.
The figures on growing inequality are startling. Vast, growing economic inequality is not new. But there is a renewed interest in it from some voices in the ruling class.
Why are the bankers and bosses so worried about the steep rise in inequality? It is because as economic inequality increases, the masses will be left with so little money to spend, that the capitalists will not be able to sell their goods and services. Then capitalist growth will be choked off, profits will decline, and the system will grind to a halt. Unemployment will rise and there will be social upheaval.
Fred Goldstein is the author of “Low-Wage Capitalism” and “Capitalism at a Dead End,” which has been translated into Spanish as “El capitalismo en un callejón sin salida.”