Reflections on Stiglitz article: “Of the 1%, by the 1%, for the 1%”

by Thomas (MAS)

A family member of mine recently sent me an article from Vanity Fair by economist Joseph Stiglitz about the problem of elite control within the united states.  While it’s refreshing that the article is talking about the problem to a mainstream audience, it stops short of delving deep enough the problem at a systemic level, and perhaps more importantly: doesn’t address the need for complete systemic change.  The broader points that Stiglitz brings up are also supported by the Economic Policy Institute- an economics resource that has some great research reports on the topic of how government policy has favored the elite- including: a report showing how the budget cuts proposed in comparison to the tax cuts given  and another showing how recently all economic gains have gone to the top 10% (with over 75% of those gains going to the top 1%)

But ultimately, it’s not just the top 1% (those making $350,000+) that are to blame, it’s the economic system that’s the problem. Income and wealth hold a lot of power in society, so we couldn’t really expect any other result from such unequal power relations.   This power is used to: increase their capacity for power (more capital), control the government, shape the media directly and indirectly through think tanks, destroy what remains of unions (or other popular and oppressed classes organizations of resistance), etc.  However, part of the the blame falls on all of us who make up the bottom 99 (or at least the bottom 80-90%) for allowing them to buy us off, manipulate us, pacify us, demoralize us, and attach us; all without significant push back… at least in the past few decades in the United States.  A lot of it is because we’ve been attacking each other as the source of the problem which keeps us distracted from what they’re doing (the classic “divide et impera” strategy).  But the problems that Stiglitz points to, shows that the only society that can actually be democratic is a classless society.  Otherwise the higher classes always control things through the power inherent in wealth.  The only solution is to participate in the class war that’s already going on-as Warren Buffet reminded us 2006:“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”– by actually fighting back.  Citigroup has no problem saying that the best way to operate in a Plutonomy (they can’t honestly call what we live in as a democracy) “…is to disregard the “mass” consumer and focus on the increasingly rich market of the rich.” The rich and their supporters see this, why are the rest of us ignoring it and allowing them to attack without figuring out how to defend ourselves?

If we were to equalize income now across the United States, the average family of four would take in $189,600 a year (according to the CIA world factbook 2010 estimate of $47,400 GDP per capita).  This doesn’t even take into account the fact that more should and could be employed, the unequal access to resources that could improve everyone’s productivity, or all the wasteful industries that shouldn’t exist because they don’t contribute anything productive to the economy (like those who “work”…er… gamble on the stock market who are taking home significant amounts of societies wealth without helping to build it).  If we were to equalize income worldwide, that number would be $44,800 for your average family of four (according to the CIA world factbook 2010 estimate of $11,200 GDP per capita).  However, wealth is created by a combination of the 3 factors of production (capital- tools, machines, buildings, etc; labor- mental & physical; and natural resources- land, metals, plants, etc.).  All of these factors are being utilized in ways that drastically underuse them due to the profit-driven competition between businesses and countries to horde them and the benefits from them for themselves.  Imagine how productivity would increase if there were a global redistribution of not just income but: infrastructure, capital resources, education, availability of work, trade secrets through cooperation, efficient and rational use of natural resources, ans so on.  It’s not far fetched to assume that your average family of four globally would be able to benefit by at least a doubling or tripling of the productivity (think of countries where around half the population is unemployed without access to capital, infrastructure, education, health care, etc- imagine if a global cooperation allowed these people access to all of this… think of how their economies would boom).  And this doesn’t even take into account the scientific, technological and innovational advancements when the whole world’s capacities would be unlocked through cooperation and opportunity for all people around the globe to contribute their full potential to the world.  And for those naysayers, who say that we need a class-based society to motivate people to create and develop the innovations needed to not ruin our environment or to make medical advances and so on recent reputable economic research says otherwise as does historical experience.

But the point is that our world will stay the way it is with all the war, hunger, poverty, death, and countless other problems- injustices actually- unless those of us in the “popular classes” (we don’t own the means of production and we don’t control the labor of others) don’t start to build the solidarity, movement, consciousness and organizations necessary amongst ourselves to fight for our interests (and the interests of all humanity).  It can’t be an individual struggle, it must be a collective struggle because our power is in our numbers and our solidarity with each other. Our interests are fundamentally opposed to the interests of those that control our economy and our governments at this time (the interests of the “elite classes” those who own and control the means of production, our labor and the globes resources).  Through that fight- with its gains and loses- we need to all build the bottom-up, directly-democratic, egalitarian, and anti-oppressive power, experience, consciousness and organizations that can eventually replace this inhumane, top-down, unequal system with one in which all people around the globe have equal freedom, equal voice and equally share in the fruits of our historically and globally-developed economy.