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Capital Has Divorced the Working Class

In the last few years, a number of polls have shown higher favorability ratings for socialism and lower ratings for capitalism, especially among the young. It’s worth asking how our experience of capitalism today might lead people to lose faith in this arrangement of our lives. 
First, let’s clarify what capitalism is. What is capital? It is that portion of our wealth that is not being used for immediate consumption, but which can be used to produce the goods and services we consume. In the system we call capitalism, capital is owned by private individuals and institutions – such as banks, corporations, insurance companies, and mutual funds. The owners of capital put that wealth where it can earn the greatest return, whether that be into building apartment buildings and office complexes, into the production of food and clothing and electronics, or into stocks and bonds. They are under no obligation to invest their capital into projects that will benefit the public unless that’s where the greatest return on their investment would be.
F. Scott Fitzgerald once wrote, “"Let me tell you about the very rich. They are different from you and me.” Aside from the effect being rich has on one’s personality, a capitalist is different from you and me in not having to work for a living, but instead being able to determine whether, and how, the rest of us work and live. If capital finds it profitable to invest in production that requires workers, then some of us can work and live – within the limits of our wages and our work schedule. If the capitalist finds he or she can do better by putting their capital into interest-bearing bank accounts or shares in Google or American Airlines, then that capital does nothing for you and me. 
Now this is obviously a system of inequality and exploitation, though its cruelty has been somewhat mitigated by the State under pressure from the labor movement. But even though it is obviously unjust and undemocratic that so few, i.e. the very rich, should have the economic power to control the lives of the rest of us, we have been persuaded to go along with it for two reasons. First, we have been sold the fantasy that capitalists earned their capital by hard work and ingenuity, and that therefore anyone can grow up and become a capitalist. It’s not that this never happens, but it’s almost as rare as winning the lottery, and most wealthy capitalists inherited their money and social position.
The second, and more important, reason we have put up with capitalism is our trust in a kind of bargain we are supposed to have with capital. In return for letting the owners have their riches, and the enormous power that goes with them, capital will provide us with jobs, putting us to work making the goods and services we want and need. This idea is invoked whenever the Republicans refer to capitalists as “job creators” as they plead for further tax reductions for their wealthy supporters. We are supposed to believe that they will use the extra money they get from paying lower taxes to buy plants and equipment and raw material for us to work on in return for wages. Politicians justify cutting environmental and labor regulations on corporations on the premise that such regulations kill jobs. Another part of this implicit social contract with capital is that capital will, through taxation, help to support the infrastructure necessary to produce stuff with a large labor force: education and transportation.  
Lately, however, capital has not been keeping its part of the bargain. According to economic historian Robert Brenner, the economy today is doing worse than at any time since the Great Depression.[1] Gross National Product has been in a long decline for several decades and especially since 2008. Labor productivity, the amount each person is producing, has fallen every decade since 1973. Why? Because capital has not been investing.
But wait!  The stock market is at an all-time high, and the rich are far richer than ever. The top 1% is now getting about 25% of the national income, while before 1980, the richest 1% got only 8 to 10 percent of it. So how in the world are those at the top doing so well if the economy is doing so badly and those with capital are not putting their money to work?
The simple answer is theft. The just-mentioned date of 1980 should ring a bell: that’s when Ronald Reagan was elected and politicians, led by Republicans with Democrats soon to follow, began to implement the policies we now call neo-liberalism. It began with a massive shift of the tax burden from corporations and the highest tax brackets to the rest of us, together with an assault on wages and the unions that kept wages up. Financial deregulation followed enabling people with lots of money to invest in elaborate financial schemes that drove up the stock market and the paper value of real estate. Then when the bubble burst in 2008, the government of the corporate state bailed out the bankers and financiers, leaving them whole and the rest of us to our own devices. This many-pronged scheme for stealing from the poor and giving to the rich, which is the essence of neo-liberalism, also includes turning over resources that used to belong to all of us to the rich through privatization. Thus education, water, policing, military work, and incarceration have been taken away from the public and turned into the private property of corporations run in the financial interests of their stockholders. 
Politicians and corporate spokespeople still talk as if every break given to the rich will enable them to create more jobs, but it’s a lie. Every new dollar they get goes into money-making schemes, like hedge funds, that have nothing to do with real production or creating jobs. The contract between capital and the working class is a dead letter. Capital has no further interest in the viability of the working class, and that’s why they don’t mind a health-care system that will let millions more die. The mass of the working class is surplus population and can be allowed to sink into illness, drug addiction, opioid oblivion and death while the rich live in their gated enclaves guarded by private security forces.
It’s time to give up the fantasy that what’s good for capital is good for all of us. Capitalism is a toxic system that can maintain itself only by subterfuge and force. It can no longer meet the terms of our bargain with it, bad as that was. It’s time to organize with the goal of taking back the wealth that has been stolen from us and to conceive and build a world that is organized, not for the advantage of a few, but for the benefit of all of us.
Presented on the Old Mole Variety Hour 
September 11, 2017
Audio here





[1] Interview with Suzi Weissman  in a Jacobin Podcast.
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