Sunday, 15 March 2015

PART II: Inequality and the Crisis of Capitalism and Democracy

Attitudes of the Rich toward the Poor and Working Poor

The study of poverty throughout history in different societies shows that this is man-made and it can be limited if not eliminated completely assuming there is the political will to do so. However, the hierarchical social structure, the political economy and the privileged socioeconomic and political elites are not interested in eliminating poverty any more than they are interested in social justice. It is politically acceptable as it is profitable for capitalists worldwide and the state that sustains state-supported capitalism to perpetuate the existing social and economic structure. The result is that this system is responsible for keeping half of the world’s population living on less than $2.50 per day, and more than 80% of the world’s population living in nations where income gaps are becoming wider.

These facts about living standards are contrary to what the apologists of capitalism are preaching about a better life under capitalism and democracy. Pressed on this issue by the realities of inequality becoming wider despite the phenomenal expansion of capital, one standard answer is that there is no alternative to the existing system, again implying the condition of social inequality has always existed so it must always exist. If within capitalism exists the illegal narcotics and human trade, and everything from guns and gasoline to cigarettes and counterfeit watches, does this make the “shadow economy” (black market) natural as well? Is it natural for the world’s largest banks, from HSBC to Wells Fargo among many others to engage in money laundering for hundreds of billions of dollars for narco-traffickers among others moving capital around the world illegally? Because they are the back bone of capitalism, banks have fines imposed upon them and that is the extent of it, while the unemployed youth stealing from a small shop goes to prison for five years. We are indeed living a 21st century version of Victor Hugo’s Jean-Valjean hunted down for decades because of stealing a loaf of bread to feed a hungry child. 

It is ironic that the poorest 40% of the world’s poor own less than 5% of the world’s wealth amounting to a total of $73 trillion. In other words, 40% of the world’s population has less money than the market cap than just ten US multinational corporations. The irony is that governments, the media and of course businesses, and consultants constantly remind the public that we need more of the same regardless of the potential explosive social, economic and political consequences that accompany gross inequality. In short, accept the political economy and social structure rooted in social injustice as you would faith in God you must not question and only obey. The faithful are rewarded in the afterlife if they remain obsequious to religion, and so it will be for the world’s poor if they just hold on to the hope of rewards to come, assuming they keep the faith and support of capitalism and its institutions. For skeptics refusing to accept capitalism that has the majority of the people in the world living on the margins, the answer is that it is the fault of the individual and not the system.

 “America is full of slackers and deadbeats who won’t work!“ This was the title of a recently published article in the online business news program MarketWatch. Arguing that the real US unemployment rate is actually over 35% instead of 5.5%, the article blames not the capitalist system for generating unemployment and uneven development on the social and geographic scales, but 93 million people for not working. The article mentions that the contracting economic cycle that started in 2008 resulted in a sharp rise of structural unemployment. However, it blames the American people for their anti-work attitudes and not the absence of jobs in the market. This is not much different than the attitude of the apologists of capitalism in the 19th century when there was child labor, forced labor in the form of “workhouse or spike” and debtors’ prisons. Interestingly, bankers and governments of the EU in our time entertain the exact same attitudes about the southern European countries that have been under austerity from 2010 to the present as reflected in the MarketWatch article about US workers.

Blaming the college graduate who cannot find work in her field, the middle age man who is told he is too old to be competitive, the auto factory worker whose factory closed is typical of how media, businesses, and government, all integral part of the dominant culture, see the problem in the gap between the rich and the rest of society. This is not just in the US which is the Mecca of capitalism but around the world. Such attitudes have deep historical roots, though it is true that throughout the evolving history of capitalism the social fabric has evolve and conditions are better today than they were in the nascent phase of the market economy.

Life expectancy and the quality of life between rich and poor differed as much today as it did 300 years ago, as Fernand Braudel points out in his classic work Capitalism and Material Life 1400-1800. This separate demography for the rich is lost in the scale of our averages. In the Beauvaisis in the middle of the seventeenth century over a third of the children died every twelve months; only 58% reached their fifteenth year; people died on average at the age of twenty.” Peasants reached old age in physical appearance and deterioration by the age of forty owing to lack of proper diet and the subsistence life. On average the rich lived at least ten years longer than the poor and would have lived a great deal longer if they did not engage in excesses. Baudel is correct that the relativism in the rich-poor gap not just at the beginning of the capitalist world economy in comparison with our epoch, but even today between the US and Nigeria, for example makes a big difference. In other words, not just the poverty line demarcation but actual material life, to quote Braudel, makes a difference in the poverty of a New Yorker vs. a peasant in Kenya or one in the Philippines.  However, the same relativist argument does not hold true of the rich no matter where they live on earth, nor of the attitudes they entertain toward the poor.

Throughout history, the attitudes of rich people toward the poor were never characterized by a willingness to change the system that causes gross social inequality. Kindness and compassion toward the poor are sentiments rarely associated with the rich, but rather by a sense of aloofness at best, contempt at worst. Studies of attitudes of the rich toward the poor generally indicate a disdain of the former toward the latter, despite claims of living in a democracy that somehow entails “equality” when all around us there is nothing but inequality. Despite the obligatory rhetoric of political correctness in the age of mass politics and mass communication, the structure that sustains inequality remains. As long as officials, businesses, the media and private citizens say and write the politically correct thing, there is no need to change the root causes of social injustice in society. . (See Larry Bartels, Unequal Democracy: The Political Economy of the New Gilded Age).

The worldview of the rich is based on paternalistic attitudes and differs sharply from that of the rest of the population that has no privileges in society and its institutions, presumably based on equality for all. The attitudes of the rich toward the poor have historical roots in the early Industrial Revolution when the Protestant work ethic became an integral part of explaining why a few were blessed with wealth and the many, presumably unworthy sinners that God does not favor, were destined to a life of meager living. Although historically religion molded the attitudes of the masses toward the rich, in our modern era of mass communications secular ideologies have played a dominant role in manipulating public opinion.
The ideological justification for the rich appropriating wealth because the political economy promotes it is something we find concealed behind the rhetoric of individual competition. But how much competition was there at the time that Adam Smith was writing or even today, when the state has always been the pillar of support for businesses, and in all cases if such support is no longer the system will collapse. The myth of “free competition” is constantly contradicted by the role of the state in the marketplace.

To elevate themselves above the masses of the poor, the bourgeoisie attribute to themselves ambition and a keen sense of business savvy combined with a diligent work ethic. This is all in theory. Naturally, the classical liberal view that prevails across the world today is a Western construct that many in the Western and non-Western world have challenged. An integral part of the Western colonial legacy passed on to Africa as well as other parts of the non-Western World, the classical liberal ideology and value system rooted in materialism and individualism is among the exports along with commodities and services. The ugly reality is that capitalism prevails by force, direct or indirect, subtle or obtrusive, at home and especially in distant lands where markets, raw materials and cheap labor are the goals of the imperialist. (see Chinweizu, The West and the Rest of Us).

The value system of individualism imbedded in the capitalist ethics is at the core of the Western Euro-centric world and diametrically opposed to collectivism of non-Western cultures. The same value system also clashes with Christian communitarian ethics within the Catholic Church reformers and especially with Liberation Theology coming mostly from Latin American intellectuals and politicians after the Cuban Revolution. The attempt to view Catholicism through the plight of the poor as Jesus Christ experienced according to the New Testament posed a frightening prospect for conservative and liberals alike because it entailed a challenge to the social structure and elites that the Church protected by distracting the masses with the promise of spiritual salvation. The last thing that the political and financial elites want is a segment of the institutional structure, in this case the church, projecting the image that communities can have a conscience and social responsibility, contrary to classical liberal ideology.  Of course, it is not at all the case that communities lack conscience and social responsibility, but that the hegemonic cultural values of atomism prevail over any collectivist mode of thinking.

Desensitized toward the poor and their wretchedness, the rich are aloof of the masses in society in general. One reason for the aloofness is their belief that society belongs to them while the poor merely serve, at best, and take up space, at worst. These attitudes prevailed in 19th century England, as much as in early 20th century US, as they do today among the wealthy throughout the world. The policy that the rich have advocated toward the poor has always been one of government adopting punitive measures against the poor and to protect the rich against the poor whose socioeconomic condition could drive them to criminal activity. After all, the wealthy have always argued that the poor are the burdensome parasites of society and government must not raise taxes to sustain them in life.

This is a theme that a number of European and American novelists explored in the 19th and 20th century. It is also something we see in sociological studies that are more scientific from the classic work by Henry Mayhew London Labour and the London Poor, until contemporary studies based on extensive empirical research of the laboring poor from North America to China, from Brazil to India. While before the age of mass politics and democracy there was no need to go through the motions of democracy and equality, today with all the talk of freedom and equality one must pay lip service to social justice because it is the politically correct thing to do, while essentially engaging in practices not much different than robber barons of 19th century factories and coal mines.

Capturing the spirit of materialism, the lifelong preoccupation of amassing wealth as a cultural phenomenon, Jules Henry made the following argument in the mid-1960s amid the Vietnam War when both Japan and Western Europe had fully recovered from the effects of WWII and adapted the American cultural values of devoting one’s life to wealth accumulation as a way of life.  “I am much concerned with our national character in a culture increasingly feeling the effects of almost 150 years of lopsided preoccupation with amassing wealth and raising its standard of living…When we realize that the rest of the world has the same orientation, a study of what has happened to the American national character may give some insight in what to expect in other parts of the world …”Jules Henry, Culture Against Man 

While Jules Henry took the long view making broad sociological observations about the diffusion of American culture, it is only the hegemonic culture and values that have prevailed around the world, not America’s sub-cultures and values that reflect various minority groups from African-American to native-America, from ethnic minorities to religious ones. The only exception is the commercialization of sub-culture co-opted by the hegemonic culture and becoming an integral part of the mainstream. In other words, everything from music and mode of dress to dance and art that reflects the subculture becomes co-opted and part of the hegemonic culture once it is commercialized. Therefore, the hegemonic culture always has the greatest influence even if it not a reflection of the broader masses of a nation, presenting itself as all-inclusive of sub-cultures.

 As Antonio Gramsci, (Prison Notebooks) argued, it is not the case of a national culture, but of the hegemonic culture under the social structure that determines the value system in society. The hegemonic culture and values in the US can be found just as easily in Paris and Rio de Janeiro, in Moscow and Mexico City where there are a few wealthy people enjoying the status of privileged elites and influencing society’s destiny. Cultural diffusion is largely in the domain of the hegemonic culture of core countries within the world capitalist system and not sub-cultures. Needless to say, a billionaire in New York, let us say Michael Bloomberg naturally enjoys not only economic influence in New York but throughout the US and much of the world. This is because Bloomberg molds public opinion by owning media outlets, whereas all of the workers and middle class people combined in New York do not have the influence of this one man who was also former mayor of the city. 

In 2014, the world’s 80 richest people had more wealth than 3.5 billion people on the planet, reflecting the extreme socioeconomic inequality that capitalism has been perpetuating after centuries of promising to make everyone rich and not just a handful of people. According to the researchers compiling these statistics, by the end of 2015, the wealthiest one percent of the people will own more wealth than 99% of the world’s population. Amid such enormous wealth concentration, the problem for the wealthy, the governments whose policies account for accumulation of wealth, and the apologists of this political economy is to convince 99% of the world’s population that capitalism is the solution and poverty the fault of the individual lacking the “proper character traits and mental capacity”.  Besides political ideology of classical Liberalism, neo-liberalism, conservatism, Libertarianism, and varieties of right wing and centrist and center-leftist ideologies, religion is also used to justify the political economy of inequality. 

The extraordinary thing about the rich is their disdain for the poor is only matched by the admiration the poor entertain for the wealthy. According to a Pew Research survey, those with the greatest financial security are convinced that the poor have it easy because they receive government benefits without providing anything in return to society. Again, we see the theme of the poor as parasites because of the few crumbs they collect in a debilitated welfare state, rather than the rich enjoying the benefits of a corporate welfare system. Furthermore, the wealthy insist that government cannot and must not do more to help the poor who are simply a burden on the budget, thus on the public debt. They do not mention that $2.5 trillion is currently held outside the US by corporations and individual refusing to repatriate the money because they are evading taxes. Nor do they mention the tax loopholes in off-shore accounts and illegal transactions that result in massive drain of income for the state.

Billionaire real estate investor Jeff Greene stated on CNBC that the press misquoted him about his disdain of the poor.  "What I said was, 'the global equalization of wages and technology, which is growing at an exponential pace, has killed so many millions of jobs in America and other Western economies and it's going to kill them at an even faster pace going forward.' I said, 'we have our work cut out if we want to build a real economy, an inclusive economy that I grew up in, that I want to see for all Americans.'"
This attitude of contempt for the poor and the working poor is not just an American phenomenon, but a global one, reflecting the values of our civilization that sees nothing more in life as valuable than wealth accumulation at any cost to social justice.  Do the super rich and the politicians who pursue policies maintaining a system of social injustice have any moral, social or political responsibility for those dying of poverty around the world because of capital accumulation and concentration? The answer is absolutely not because they blame the individual and not the system that maintains an unjust society. When we consider that there are millionaire and even billionaire politicians across the world, then it becomes even more understandable why the disdain toward the middle and lower classes.

In the “The World As I See It”, Albert Einstein writes: “I am absolutely convinced that no wealth in the world can help humanity forward, even in the most devoted worker in this cause…Money only appeals to selfishness and always tempts its owners irresistibly to abuse it. Can anyone imagine Moses, Jesus or Gandhi with the money-bags of Carnegie?” A product of the Age of Reason with profound confidence in the rationalist tradition, something his contemporary Sigmund Freud did not share, Einstein pointed out the obvious about the sickening affect of wealth in human beings, to say nothing of the misery it causes those who lack it because it is concentrated.   

A child will die of hunger by the time it takes the average person to finish reading this sentence. If state-directed corporate welfare capitalism is to squeeze more out of labor and further erode middle-class living standards, it necessarily entails that poverty will increase and the rich-poor gap widen. This is in contrast to what the apologists of the non-existent “free market” economy are promising as they continue to espouse even greater wealth concentration despite one percent of the world’s richest people owing more than half of the world’s wealth. 

One could argue that this is a reflection of the capitalist value system and more specifically the callous attitude of the rich toward the poor as a reflection of America’s culture just as F. Scott Fitzgerald describes in the Great Gatsby. However, values were not very different a century before F. Scott Fitzgerald when Alexis de Tocqueville was gathering material for his book about American society.
“As in the ages of equality no man is compelled to lend assistance to his fellow-men, and none has any right to expect much support from them, everyone is at once independent and powerless… His independence fells him with self-reliance and pride among his equals; his debility makes him feel from time to time his want for some outward assistance, which he cannot expect from any of them because they are impotent and unsympathizing.” (Alexis de Tocqueville, Democracy in America, II, 786)

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