First Climate Change Denial, Now Income Inequality Denial

The steps people will take to protect their wealth and justify the good fortune of being wealthy seem boundless.  Climate change was denied for many years in order to preserve the status quo and avoid making necessary changes to the operation of the economy.  Reality has finally muffled that nonsense.  Now appears an attempt to minimize the degree of economic inequality that is inevitable in the form of capitalism now operating.  The Economist, usually a conservative proponent of conservative economic dogma has noticed a debate between opposing teams of economists over the rate at which income inequality is increasing in the USA (Why economists are at war over inequality).  They were thrilled to side with the team that claimed the income share of the top 1% has not been growing as quickly as most had assumed.  This led them to produce articles such as Welcome to a golden age for workers and A new age of the worker will overturn conventional thinking.  They even produced this image to promote the so-called “golden age for workers.”

 

 What is really going on?  The Economist recognizes that tallying income, and its inequality, is challenging.

“You might think that analysing trends in income inequality would be straightforward. Don’t people’s tax returns tell researchers all they need to know? But although tax returns are useful, they can mislead. Americans who are partners in a company, or hold investments, often have enough trouble estimating their own income. Now imagine trying to estimate the incomes of millions of people over several decades, accounting for overhauls to the tax code. Researchers then need to account for the 30-40% of national income that is not even reported on tax returns—including some employer-provided benefits and government welfare. Researchers’ methodological choices have huge effects on the results.”

It should also have been mentioned that income, or gain in wealth, that is fraudulently hidden from tax collection must also be estimated in order to be complete.  One should also recognize the general conclusion that economists, like other researchers, tend to find the results they initially expect to find. (“There are lies, there are damned lies, and there are statistics.”)

“Research by a trio of French economists—Thomas Piketty, Emmanuel Saez and Gabriel Zucman—has popularised the notion that American income inequality is soaring.”

“Others have cast doubt on the trio’s findings, however—notably Gerald Auten of the Treasury Department and David Splinter of the Joint Committee on Taxation, a nonpartisan group in Congress.”

Capitalism’s cheerleaders are thrilled to see the latter couple come up with a lower estimate of the income earned by the top 1% of income earners.

“All in all, they find that after tax, the top 1% command about 9% of national income, compared with the 15% or so reported by Messrs Piketty, Saez and Zucman.”

So, should anyone be surprised that there is uncertainty in determining the accumulation of wealth by the extremely wealthy, particularly when the goal of the wealthy is to avoid any taxable income.  And does the difference between 9% and 15% really matter?  Does it change anyone’s perspective on income disparities in our economy?  The disputed finding that really titillates capitalism’s boosters is the claim that the 9% level has been holding constant for a very long time.

“Whereas the trio conclude that the share of the top 1% has sharply increased since the 1960s, Messrs Auten and Splinter find practically no change.”

This assumption, plus the recent boost in income for the lowest wage earners as the demand for their services surged as we emerged from the pandemic, prompted capitalism boosters like The Economist to gloat about how the rising tide has been lifting all the boats.  The stagnant workers’ wages of the past 60 years are just a figment of the imagination.  Don’t mess with markets, they always know best.  The worst thing you can do for workers is to try and help them.

“If the blue-collar age endures, the effect will be profound. The idea that capitalism fails workers is so pervasive that it may explain why people consistently tell pollsters they are unhappy about the state of the economy—even as they themselves continue to spend freely and to benefit from low unemployment. The idea has shaped views on everything from the dangers of immigration and low-cost manufacturers, to the desirability of more handouts and higher tariffs.”

“The bonanza for workers, though, shows governments need not shackle markets for workers to do well—and that the best route to prosperity for all is to increase the size of the economic pie. If you fight too much over distribution, you risk bringing the golden age to a premature end.”

Is this something to be proud of, something to produce the glee The Economist exhibits?  What the claim of a stable share of the income by the wealthy means to the workers of the nation is that for many years the wealthy enjoyed much higher untaxable income than we had thought. 

Isn’t that delightful!  Don’t mess with anything when you are living in this “golden age.”

Capitalism and Patriarchy: Is Population Collapse Their Endpoint?

 It is indisputably true that human societies produce fewer offspring as they grow wealthier.  This is not surprising for there are many reasons why this is likely.  What is disturbing is that this trend has continued to the point where most societies are no longer producing enough children to maintain their populations.  This trend is near universal in highly developed countries, with individual nations exhibiting various levels of decline.  Where once experts worried about the world producing too many people, now they are concerned with there being too few to continue the societies and economies that have been created.  Projections of population decline indicate the world’s population could fall as fast as it rose in the twentieth century and reach nearly zero in the twenty-second.  The term “population collapse” has entered the realm of public discourse.

What is troubling today is not that such a collapse is likely, but rather, the reasons people stopped having a sustainable level of births.  It takes a birth rate of about 2.05 per female to sustain a population.  In some countries, particularly those in Asia, the rate has fallen to around half that value.  South Korea and China are projected to have populations near half their current values by the end of the current century, a startling result.  What is it about the societies we are living in that causes women to have fewer or no babies?

First of all, women, across the globe, have more control over initiating or terminating pregnancies.  They are also more involved than ever in the economies of the world as individuals with unique self-fulfilling goals: education, career advancement, social standing, and income level.  Jessica Winter addressed the reasons why a woman might choose to not have any more children in The Morality of Having Kids in a Burning, Drowning World.  It has become common to hear opinions on whether one should bring additional children into a world seemingly heading for climate catastrophe.  Winter concluded that while that is a worthy concern, it was not necessarily the dominant cause of declining births.  She favored the conclusion that such decisions ended up based on a set of concerns.

“…as the result of a complex and extremely familiar interplay of factors. These include not only climate anxiety but also financial constraints, the demands of work and career, health risks (and the gross racial disparities that go with them), sexism (and the racism that compounds it), and a persistent imbalance in the division of domestic and emotional labor in heterosexual partnerships.” 

One can parse this list of concerns into a claim that women are concerned about their status as workers in the kinds of capitalist societies we have fallen into, as well as their status as females in our persisting patriarchal culture.  The fact that we can assign falling birthrates to the decisions of women indicates they already secured a degree of freedom from the constraints that held them in bondage for several millennia.  Further progress can be expected as they proceed to demonstrate their equality, if not superiority, to males in an economy that has little use for traditional male attributes.  There seems something terribly wrong with societies that create conditions that preclude maintaining their population.  Of interest here are the economic and social factors that have rendered children a burden rather than a fascinating and fulfilling aspect of life.

Humans are animals.  It is doubtful that any other species produced a society that results in members consciously deciding that their society is not one in which it is appropriate to produce offspring..  Animal societies do have means of controlling population growth when resources are scarce, but the human response is occurring when resources are, if anything, overabundant.  This is a bizarre situation which, in retrospect, we were warned about. 

When European invaders arrived to colonize the American continents, they brought with them cultures developed over centuries of domination by religious and monarchical rulers.  They were highly hierarchical with everyone knowing their place: who they had to obey and who they didn’t obey.  They required religions, police forces, and prisons to limit personal liberties so that society could function.  In the process, they encountered peoples who had developed an entirely different view of life, one which they considered far superior to that of the Europeans.  A good documentation of this social collision in the French and English regions was provided by David Graeber and David Wengrow in The Dawn of Everything: A New History of Humanity. 

What the Europeans discovered were societies that had no prisons and no laws except those that the individual people decided to obey.  Leaders were those who were most capable of convincing others that they had the best proposals.  Their terms in office terminated when that status ceased to exist.  Punishment for an action that harmed another was imposed not on the offender, but on his extended family.  That family and that of the persons abused would negotiate compensation sufficient to eliminate any desire for revenge.  The French Jesuits had to admit that this peculiar system worked rather well in keeping the peace.  Males and females had specific responsibilities within a society, and each had control over their tasks.  Women also had control over their bodies.  Unmarried women had sexual liberty; married women could easily gain a divorce.  The natives did not use money.   They were not strictly an egalitarian society; wealth could accumulate to the most industrious, but it could not be used to purchase power over another; rather, it was used to acquire praise for the generosity shown in sharing it with others.  People in need were to be assisted. 

The American natives had no interest nor any tolerance for the type of lives lived by the French, and they had the eloquence to make the case that their way of life was superior.  The authors illustrate the indigenous critique with this insight.

“…the whole apparatus of trying to force people to behave well would be unnecessary if France did not also maintain a contrary apparatus that encourages people to behave badly.  That apparatus consisted of money, property rights and the resultant pursuit of material self-interest.”

“The French had more material possessions…[the Natives] conceded; but they had other, greater assets: ease, comfort, and time.”

What the authors referred to as the “Indigenous Critique” would include the claim that the American Natives had a society better able to protect individual liberties and was better at providing gender and economic equality.  These notions would be intriguing for the intellectuals of Europe, as well as for the colonists themselves.  James W. Loewen reports on how early colonials viewed the Natives’ lifestyles in Lies My Teacher Told Me: Everything Your American History Textbook Got Wrong. 

Loewen provides this quote from the illustrious Benjamin Franklin.

“No European who has tasted Savage Life can afterwards bear to live in our societies.”

Couple that with these observations.

“Historian Gary Nash tells us that interculturation took place from the start in Virginia, ‘facilitated by the fact that some Indians lived among the English as day laborers, while a number of settlers fled to the Indian Villages rather than endure the rigors of life among the autocratic English.  Indeed, many white and black chose to live an American Indian lifestyle.  In his Letters from an American Farmer, Michel Guillaume de Crevècoeur wrote, ‘There must be in the Indians’ social bond something singularly captivating, and far superior to be boasted of among us; for thousands of Europeans are Indians, and we have no example of even one of those Aborigines having from choice become European.”

“Europeans were always trying to stop the outflow.  Hernando de Soto had to post guards to keep his men and women from defecting to Native societies.  The Pilgrims so feared Indianization that they made it a crime for men to wear long hair.  ‘People who did run away to the Indians might expect very extreme punishments, even up to the death penalty,’ Karen Kupperman tells us, if caught by whites.  Nonetheless, right up to the end of independent Native nationhood in 1890, whites continued to defect, and whites who lived an Indian lifestyle, such as Daniel Boone, became cultural heroes in white society.”

Intriguing as the Native lifestyle might be, societies, willingly or not, directed themselves at obtaining “more material possessions” rather than “ease, comfort, and time.”  Could there come a time when the quest for more things would go too far?  Robert Skidelsky and Edward Skidelsky asked just that question a few years ago in the book How Much Is Enough?; Money and the good life (2012).

The authors make the argument that society should have used the wealth created by economic growth to satisfy its material needs and then transition to a mode in which the goal of greater wealth would be replaced by the goal of greater “leisure.”  The term leisure does not connote inactivity.  Rather, the authors define leisure as the time necessary to pursue “the good life.”  This is the equivalent to the American Natives’ goal of having “ease, comfort, and time.”  

The authors take their starting point from an essay by Keynes in 1930 predicting that enough wealth could be created by about 2030 to enable this transition to a life of little work and much satisfying leisure.  They also suggest our embrace of capitalism was a Faustian bargain made in hopes of attaining this good life.

“Keynes understood that capitalist civilization had, at some level of consciousness, undertaken to license motives previously condemned as ‘foul’ for the sake of future reward.  It had struck a bargain with the forces of darkness, in return for which it would secure what earlier ages could only dream of—a world beyond the toil and trouble, violence and injustice of life as it actually is.” 

Enough wealth has been created to provide the kind of society envisaged by Keynes, but there has been no mechanism for such a change, and little interest.

We are using the term capitalism here to represent a system whereby new products must be developed for consumption by the population whether they are needed or not.  If a potential product exists, a need for it will be created.  A continuous flow of such products is needed to continue increasing wealth and drive the motivation to develop more wealth.  This system is supported by technical developments that rapidly contribute to product development.  Change comes ever faster.  Economic security is fleeting for most.  This economic model can go unstable—and probably already has.  Growth has environmental and social implications but there is no way to regulate it to provide benign results.  Technology can develop faster than society can grasp its implications and respond.

This system develops two types of workers.  One is involved in the development of products and technologies where change is rapid and financial rewards can be great.  The second provides the basic services that society requires if it is to function; here the rewards are limited, and long hours must be worked to provide sufficient income.  Both types of workers can look at their situation and claim there is no time or no money to raise a child.

One can look forward to raising a child if one has ease, comfort, and time for the experience.  To change our economic model to provide those factors will require some sort of shock that demands a new model that recognizes what “enough” is and plans to maintain that “enough” while stabilizing society and providing a new wealth distribution rather than growing its economy.  Unfortunately, or perhaps fortunately, there are plenty of potential shocks out there: population collapse itself, climate catastrophes, pandemics, chemical poisoning of we humans and the environment, another world war, artificial intelligence…the list grows.