How Could Such a Rich Country as Ours Produce So Many Poor People?

The following is an excerpt Runaway Inequality: An Activist’s Guide to Economic Justice, by Les Leopold (Chelsea Green, 2015).

The United States is among the richest countries in all of history. But if you’re not a corporate or political elite, you’d never know it. In the world working people inhabit, our infrastructure is collapsing, our schools are laying off teachers, our drinking water is barely potable, our cities are facing bankruptcy, and our public and private pension funds are nearing collapse. We – consumers, students, and homeowners – are loaded with crushing debt, but our real wages haven’t risen since the 1970s.

How can we be so rich and still have such poor services, so much debt and such stagnant incomes?

The answer: runaway inequality – the ever-increasing gap in income and wealth between the super-rich and the rest of us.

This isn’t the first time that a tiny elite has gained extraordinary control over economic and political life. Ancient Egypt had the Pharaohs. Medieval Europe had feudal lords and kings. We Americans had industrial robber barons.

And today, we’ve got financial and corporate elites.

Runaway inequality is upending how we see ourselves and how we govern. It is upending the American Dream (the cherished idea that life gets better and better with each generation). And it is upending the practice of democracy and the very idea that each of us has roughly equal influence in governing our country.

It’s time to face up to runaway economic inequality – what causes it, what it’s doing to us, and what we can do about it.

This book has four aims:

For all the talk about economic inequality, most of us have no idea how bad it really is. It’s as if our native sense of justice won’t let us comprehend how outrageously unequal our economy has become and how much worse it’s getting day by day. Maybe we’re just too fair-minded to wrap our minds around the level of systematic greed that now permeates society’s top echelons.

We’ll look at just how wide the gap is between the super-rich and the rest of us, and how rapidly it is accelerating. A very small group of economic elites is accumulating more and more of the country’s resources while the rest of us stand still or fall further behind.

But the problem goes beyond how many dollars we have (or don’t): Runaway inequality is tearing apart the fabric of our society. The super-rich live in a world that no longer requires mutual reliance on common public services. Elites generally don’t use our schools, our roads, our airports. They don’t really care if our infrastructure collapses. We are cracking into two separate societies.

At the same time, the super-rich are able to park trillions of dollars far from the reach of the tax collector. By avoiding and evading taxes, with help from an army of lawyers and bankers, the rich are undermining the government services that the rest of us need. So our roads and bridges crumble, our environment becomes contaminated, our children crowd into our rundown schools. We pay a fortune out of pocket for higher education and poor quality health care. And some of us with darker pigmentation are targeted for arrest and fines in order to help fund local government, while also facing poverty and police violence.

Runaway inequality undermines the practice of democracy. As the rich get richer and richer, it gets easier and easier for them to buy political favors. They can twist the media, elected officials, and government agencies to do their bidding. They vote with their money, which makes a mockery of our democratic “one vote, one person” creed. We’ll see data showing that elected officials rarely act on the agenda most Americans support. Instead they represent the wishes of the affluent.

Using over 100 easy to read charts and graphs as well as text, we will demonstrate that as bad as you think it is, it’s worse.

We’ll take an honest look at how we compare to other developed nations.

Most of us still view our country through the lens of the American Dream and American “exceptionalism.” We see ourselves as leading the world in just about everything that is good and just. As virtually every politician likes to say, we are the shining light of freedom and prosperity, blessed by God.

Most Americans believe that the U.S. has the most upward mobility and highest standard of living in the world. We think that the U.S. is the fairest nation on Earth, offering the best prospects for everyday people. (And for anyone who isn’t moving up, it’s their own fault.)

But the facts in this book will undermine that perspective. While America may have had the most prosperous working class from World War II to 1980, it doesn’t anymore. In fact, today the U.S. is the most unequal country in the developed world. We have the most child poverty and homelessness. We have more people in prison than China and Russia. And Americans are less upwardly mobile than most Europeans.

We’ll see that our public services don’t stack up either. Our health care costs more, covers fewer people and produces worse outcomes. And we are nearly last among developed nations in energy efficiency and overall infrastructure.

No question about it, the top 1 percent never had it so good. But the rest of us are losing sight of the American Dream as runaway inequality accelerates.

From years of conducting economic workshops for adults, we’ve learned that having a clear overview of what is going on is remarkably empowering for people. When you can step back and see how it all fits together, the world makes more sense.

We’ll work hard at presenting that big, wide view, because most of us never have a chance to see it. You just can’t get an accurate picture of the economy as a whole through the everyday media or the jumble of internet sources. We hear snippets about stock markets, government debt, trade, unemployment and inflation. What we don’t hear about is the context, substantive explanation, or critical questioning about why any of this is happening and how it relates to our daily lives.

Most of all, the media turns a blind eye to the fact that we live in a capitalist system. We’re never allowed to get outside that box so we can look at it and see how it ticks. So we never hear about the fundamental conflict that capitalism creates between the needs and wishes of privately owned corporations and our health and well-being – or the well-being of the planet that sustains us. We don’t hear about how the corporate owners’ and financiers’ insatiable drive for profits is eroding our standard of living. Yet these conflicts are key to understanding our new era of runaway inequality.

The picture of the economy that nearly all of us share turns out to be wrong. We are told in many different ways that the economy is like a complex machine that functions beyond the reach of human control. This machine metaphor frames our view of the economic world: It makes us think that everyone is just doing their thing in the machine, and that we each get what we deserve, more or less. It obscures the reality that there is, in fact, a fundamental conflict between employees and owners, between the rich and the rest of us.

The big picture we’ll present makes a lot more sense than the chopped up version that bombards us each day. Yes, the economic system is complex and yes, it is very hard to control. But its fundamental direction is set by humans who serve particular interests. We will see how powerful people chose to dramatically change the economy’s direction a generation ago, and how working people have been paying the price ever since. Runaway inequality is not an act of God. It is the result of a system designed by and for wealthy elites.

We offer this, our most ambitious goal, with the utmost humility: We aim to help build a broad-based movement for economic and environmental justice.

Right now, we lack a robust mass movement with the power to reclaim our economy and our democracy to make it work for the 99 percent.

Instead, we have thousands of individual groups working on every issue from fracking to a living wage. We have unions fighting for their members and worker centers fighting for immigrant rights. We have protests ranging from Occupy Wall Street to Black Lives Matter to climate justice. We have hundreds of progressive websites and journals to cover all this activity. But we do not have a coherent national movement with a clear and bold agenda that links us together.

We will show that runaway inequality is at the root of many of the problems we face, including the meteoric and disastrous rise of the financial sector, defunding of the public sector, environmental destruction, increased racial discrimination, the gender gap in wages and the rise of our mammoth prison population. And we will posit that if we share a clear understanding of runaway inequality – and the basic economic situation we face – we can begin to build a common, broad-based movement for fundamental economic justice that will take on America’s economic elites.

The political system will not move unless we organize on a mass level like the Populists did over a hundred years ago, like the trade union movement did in the 1930s and like the Civil Rights movement did in the 1950s and 1960s.

Some liberal economists and politicians appeal to the self-interest of the super-rich. They argue that the rich would be (even) better off if they would just allow a fairer distribution of income and wealth. We disagree. Expecting the wealthy to help us secure basic fairness is a losing proposition.

Economic elites will only give up power and wealth when they’re forced to do so by a powerful social movement.

So this book has far-reaching but difficult to achieve goals. It outlines an economic analysis and economic solutions that can connect us and enable us to build a broad, common movement. Such a common economic analysis does not by itself bring us together. But it will be very hard to create a powerful mass movement without one.

To achieve these goals the book is divided into four parts:

Part 1: Causes of Runaway Inequality analyzes how wealth is extracted from all of us by Wall Street.

Part 2: The Decline of American Exceptionalism examines America’s ranking on key economic and social issues in comparison to other developed nations.

Part 3: Separate Issues, Common Cause shows the major impact of runaway inequality on a series of issues that often are viewed independently.

Part 4: Solutions reviews a range of policies and actions that will be needed to bring more economic and social justice to America.

In the end this book makes one essential point again and again. Runaway inequality comes at a steep price. The money that enriches the few is extracted from all that we hold dear – our public life, our incomes, our health and the education of our children. It is making poor the richest country on Earth. . . . Until we do something about it.

Les Leopold is the director of the Labor Institute in New York. His latest book is Runaway Inequality: An Activist’s Guide to Economic Justice (Chelsea Green, 2015). For bulk orders contact him at LesLeopold@aol.com.

Les Leopold is the director of The Labor Institute and author of How to Make a Million Dollars an Hour: Why Hedge Funds get away with siphoning of America’s Wealth (Wiley 2013)

This piece was reprinted by EmpathyEducates with permission or license. Grateful, we thank the Author, Les Leopold for his kindness, quality research, observations, and enduring efforts to bring equality to fruition.