One perk of being a professor is that I get a chance to talk to experts in other fields about various issues. Recently I was discussing the matter of income inequality in America in the context of both historical empires and recent events in the Middle East.
No doubt some folks will accuse me of being a “professional leftist” or engaging in “class warfare” by discussing such matters. However, I will show that my goal is not to cause class warfare but rather to argue how it can be avoided. My motivations are grounded both in morality and patriotism.
Income inequality in America has increased significantly since the middle of the 1970s. Those Americans in the lower 80% have seen a reduction in their share of the big economic pie. In stark contrast, the top 1% has seen its slice expand over 120%. Now the top 10% of Americans earn roughly 75% of all the income. As such, 90% of Americans only get 25% of the pie. As is often said, the rich get richer and the poor get poorer.
Not surprisingly, some folks will argue that this is a good thing or at least fair. People can speak about trickle down economics and claim that the rich earned their income. I will not argue any of this here. Rather, I will focus on the consequences of this concentration of wealth.
While there are many factors that lead to the fall of empires, there are at least two that are directly linked to income disparities. The first is that the disparity in income is harmful to the general body of society. To use an analogy, society is very much like a human body (which is nicely illustrated by the cover of Hobbes’ Leviathan). It has various parts that make it up and these parts have varying degrees of importance. However, all need resources to survive. In the case of the body, if some organs receive the vast majority of the resources while the others do not receive enough, then those parts of the body will weaken, wither away or even die. In some cases, such as with fat, this is fine and even desirable. However, in other cases this can be very bad indeed and lead to the death of the whole. The same applies to the political body: its parts need enough resources to survive otherwise this can spell the death of the body.
Assuming this is correct, it follows that extreme income inequality is actually a threat to the entire society. Even if the extremely rich argue that they earn every cent, this does not change the fact that such concentration of wealth can prove to be rather harmful.
One obvious reply is that it is not the concentration of wealth that is the big worry. Rather, the worry is that the other parts of the body have enough resources to keep going. As such, there could be great inequality in income while the body as a whole does well.
This is, of course, a reasonable reply. Obviously enough, we are currently in a situation of massive inequality, yet the body as a whole certainly seems healthy enough. No doubt the Romans said the same thing. However, this does not entail that the inequality is not harmful nor does it entail that inequality can continue to grow without leading to harms to the political body as a whole.
Some might suspect that I will call for a redistribution of wealth and are ready to lash me with the whip of socialism. However, I do not advocate forced distribution of wealth via socialistic means. Rather, what is needed is a more equitable tax system and an economy that is more open to competition. Currently the state often serves the needs of the established wealthy very well and protects them. This leads, as it always has, to an ever increasing concentration of wealth. This is not due to a “free market”, but largely due to a market that is manipulated by politicians who are guided by those who hold this wealth. See, for example, the state of Wisconsin.
A second factor is that citizens need to believe (correctly or incorrectly) that they have a stake in society. When citizens believe they no longer have a stake or something to gain, they tend to “check out” of society. This can begin with simply electing not to vote and can end in actual rebellion.
Income, obviously enough, plays a significant role in this belief. True, propaganda can be used to convince people that they have a stake in society and people can also believe they have a stake based on factors other than income. However, income is still an important factor as shown by the situation in the Middle East.
The countries in the Middle East that have been rocked by revolution have many factors in common. One of these is that that wealth is highly concentrated. Others include the fact that unemployment was high and opportunities where low. Naturally, the repressive nature of the states is also a critical factor. However, the economic inequality has clearly been a major driving force.
Interestingly enough, the folks at Fox News, such as Glenn Beck, have claimed that the events in the Middle East are comparable to the protests in Wisconsin. Interestingly enough, Beck was right to make the comparison. The people in the Middle East realized that the system was favoring a small, wealthy minority and had little or nothing to offer the majority. Hence, they checked out of the system and rebelled. In the case of Wisconsin, people are seeing that the state government is beholding to the Koch brothers and is intent of serving the interests of the wealthy minority at the expense of the many. Hence, people are protesting. Obviously, the Middle East is a far more extreme situation, but many of the core causes are the same.
Currently, most Americans have good reasons to stay checked in, even though many people do not vote. However, the concentration of wealth and the economic situation means that more people will have less reason to stay checked in. The pundits at Fox, the forces behind much of the Tea Party and others are doing their best to keep people convinced that corporate greed and selfishness are virtues and are in the best interest of the people. They are also working overtime to brand any suggestions that the inequality is a problem as “class warfare” or socialism. Some people do buy into this propaganda. Hence, you see lower income people rushing to defend corporations, the rich, and the free market despite the fact that the system ensures that they will remain in the lower classes. It is indeed a brilliant trick to get such people to passionately defend the rich and rail against those who would do things to make the situation of the middle and lower classes better. However, as Lincoln said, one cannot fool all the people all the time.
I do not, of course, see the solution to the problem in socialism. Rather, what is needed is a means to ensure that the good aspects of capitalism remain in play while ensuring that the concentration of wealth does not reach the point where too many people are checking out. At that point, as has been seen throughout history, a society collapses, is conquered or falls into rebellion. I do not want to see any of these happen here, hence I believe that income inequality must be addressed.
Interestingly enough, the really rich also have an interest in an adequate distribution of income After all, they need a society around them to provide stability, order, products for them to consume and people to work for them. Presumably some of the rich also have a sense of patriotism and community as well. As such, it would seem that everyone has a good reason to ensure that the concentration of wealth does not hit the tipping point.