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.
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