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The Political Roots of Widening Inequality


#1

The Political Roots of Widening Inequality

Robert Reich

For the past quarter-century I’ve offered in articles, books, and lectures an explanation for why average working people in advanced nations like the United States have failed to gain ground and are under increasing economic stress: Put simply, globalization and technological change have made most of us less competitive. The tasks we used to do can now be done more cheaply by lower-paid workers abroad or by computer-driven machines.


#2

This was written for The American Prospect whose readership is unknown to me. All of what Reich says here is well known to regulars on this site.

But the conclusion he reaches in the last paragraph should be amended to include the 99% of the entire human race, not just Americans. And what Reich is really pointing to ,whether he realizes it or not, is revolt and revolution. The political avenue is completely blocked off from the 99% in America because the political class is completely captured by wealth. With TPP and TTIP it is game over, not just for Americans but for all of the non-wealthy on this festering rock.

If revolt and revolution come under the heading of "politics," then I agree with him.


#3

Wonderful article and salient points covered, Mr. Reich. Although your prism is economics, I would add that the amount of money gushing into the U.S. War Department is also a factor in the New Austerity. However, every point you made is valid, incisive, and necessary.

In relation to this quote:

"It has allowed America to cling to the meritocratic tautology that individuals are paid what they’re “worth” in the market, without examining the legal and political institutions that define the market. The tautology is easily confused for a moral claim that people deserve what they are paid."

Informed C.D. readers should know--and recognize--that paid shills are pushing this same Talking Point in these threads. The most obvious one, to date, is "Voice of Reason."

The following shows the power of horrors like the Koch Brothers and why they so vigorously fund the moral likes of Paul Ryan and Scott Walker:

"The real difference was that GM workers a half-century ago had a strong union behind them that summoned the collective bargaining power of all autoworkers to get a substantial share of company revenues for its members. And because more than a third of workers across America belonged to a labor union, the bargains those unions struck with employers raised the wages and benefits of non-unionized workers as well. Non-union firms knew they would be unionized if they did not come close to matching the union contracts."


#4

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#6

Professor Reich has written a very thorough explanation of what has gone wrong but, as an economist, he stays within the confines of his own expertise. Meantime on this site, Jon Queally describes the mass extinction brought on by the effects of climate change produced by the same economic forces that created the economic inequity described by Reich. Bill McKibbin, in his brief article, rejoices in the candidacy of Bernie Sanders because of his commitment to climate as well as economic issues - and I agree completely. It is time for Professor Reich and other Democrats who share his passion to stand up and endorse Sanders. Vague calls for citizens to become politically active need to be replaced by a solid campaign to defeat Hillary Clinton and build a solid, coherent movement combining economic and climate sanity. No more lesser-evilism.


#7

The only solution is dismantling the system called Capitalism where money consumption and the I rule over all and implementing a system of socialism based on localism preservation and community.

Our First Nations peoples have a lot to teach us about that.


#9

Reich also tells us that the 1% advocate smaller government, when its just the opposite.

Jimmy Carter was the last DC politician to constrain the growth of government...all others have expanded it, mostly by directing public resources to programs that benefit the 1% at the expense of the 99%. The 1% only object to bigger government that benefits the 99%.

Although Ronny Raygun continues to be widely praised for his serial smaller government platform (actually rhetoric), during his two terms Raygun EXPANDED government as much as FDR did (to benefit the 1% at the expense of the 99%,contrary to FDR) and created more debt and deficit than all of his 38 predecessors combined.


#10

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#14

Yup, I always wondered if it Marx simply never existed in his mind, or it is deliberate avoidance, but even as the conditions he talks about positively scream for a Marxian analysis. Instead, he simply continues to insist that all we need is a few tweaks to return us to that Beaver-cleaver working-class past, while not recognizing that to the degree workers were better off 5 decades ago (and they were where I live - even if the cost was filthy air and dead rivers), it was a consequence of a convergence of political-economic conditions that are simply not going to recur - the inexorable dialectic of capitalist economics simply does not work that way! It is like wishing for physical laws to take a different form!

The way forward is, well, to more forward - toward the synthesis that will arises out of the worn-out philosophic bankruptcy of Capitalism. What shape this synthesis will take cannot be known for certain - only that we must organize-organize-organize!

Pittsburgh Mayday March - Today! Steps off at 6:00PM. Station Square - south end of Smithfield Street Bridge. http://paactionrising.org/2015/03/27/may-1-2/


#15

A bit of a correction is on order. I inadvertently implied above that pollution was a price for the good union industrial jobs of the old pre rust-belt days. This of course is NOT true, the whole field of pollution reduction technology that arose only because of the CWA and the CAA has been a big job-creator. I meant to simply say that the Pittsburgh Union Steelworker and coal miner middle-class (until the 1980s Raygun catastrophe) enjoyed good-paying jobs, but the air and water sure was polluted back in those days.


#16

Too many believe the growth of inequality is a result of market forces.

Maybe, but those forces have been directly influenced through political action. The plan to turn the country rightward and dismantle the New Deal was laid out in the Powell Memo a generation ago.


#19

Your heart may be in the right place, Robert, but your brain has a long ways to go. Right now you should be doing NOTHING but SCREAMING BLOODY MURDER about FAST TRACK!


#20

"[The] Democratic Party is just as corrupt as the Republicons [sic], both controlled by the Wall Street Empire."

This is a logical fallacy called affirming the consequent. If p, then q; q; therefore, p.

If I am in Kansas, then I am in the US.
I am in the US.
Therefore, I am in Kansas. (The conclusion is false because I could be in any of the other 49 states.)

If the Democratic Party is just as corrupt as the Republicans, both controlled by the Wall Street Empire, then things will happen that I don't like.
Things happen that I don't like.
Therefore, the Democratic Party is just as corrupt as the Republicans, both controlled by the Wall Street Empire.

If the Democratic Party is controlled by Wall Street, why did FDR's fellow 1%'ers call him a traitor to his class? Why is it that the Democrats are responsible for all social welfare legislation since the days of FDR: Social Security; extending Social Security to spouses and dependents; unemployment insurance; a minimum wage; Medicare; Medicaid; and the ACA? Republicans opposed all of these social welfare programs.


#21

"It has allowed America to cling to the meritocratic tautology that individuals are paid what they’re “worth” in the market, without examining the legal and political institutions that define the market."

Reich confuses tautology with question begging. A tautology is a statement where the subject and predicate mean the same thing. " All bachelors are unmarried men." is a tautology because bachelor means unmarried man. All tautologies are self-evident propositions because the predicate does not convey any new information about the subject.

Saying individuals are paid what they are worth begs the question: "Are individuals paid what they are worth?" You can't simply assume what you are trying to prove is true.

The problem with capitalism is not that the theory on which it is based is defective and Marxist economics is better. The problem with capitalism is that there is no way under capitalism to answer questions of justice (moral questions). If humans act out of rational self-interest and the invisible hand of the market produces justice, then the great inequality in the distribution of wealth capitalism produces is just by definition. Surely, this is nonsense. When all that motivates humans is self-interest, the result is "greed is good" (Gordon Gekko in the movie "Wall Street") and "selfishness is a virtue" (Ayn Rand).

Marx doesn't have this problem because his economics is based on a theory of justice: "from each according to his ability; to each according to his need."

The problem with market economics is that all market economists assume humans are rational economic actors. Behavioral economists have tested this hypothesis and found that when it comes to money, humans are as irrational as they are when it comes to sex. There is even a biological basis for this conclusion. The same pleasure centers in the brain that motivate humans to seek out sexual partners also motivate humans to seek out wealth.

The problem in society today is that too many people misread the history of this country and think that liberty is absolute ("Give me liberty or give me death."). Our Founding Fathers certainly did not think this. The Constitution states clearly that two important functions of government are to establish justice and provide for the general welfare. Although the Constitution was written before Bentham and Mill came up with utilitarianism (the definition of justice is the greatest good for the greatest number), I have no doubt our Founders would have agreed with this notion of justice. Too many libertarians today think it is the greatest good for me and the hell with you.


#22

Fine piece of critique you made there JonnyJames.

Of alternative economic thinkers there is also James Robertson, who wrote the below lovely little easy reading book. It is published as part of the E. F. Schumacher Foundation, who was another wonderful economic thinker by the way. You can read a bit about the content of the book here:
http://www.intsangano.com/third-core-article-critique-of-economics.html
Robertson, J. 1998. Transforming Economic Life: A Millennial Challenge. Devon: Green Books.


#23

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#24

A bit sharp of a rebuke, but not entirely unwarranted.
Analysis and publications apart, what has Reich done within his "party" and the administrations he served in, to change course or to wake up the minions?
Has he ever pushed for a new, or at least altered, agenda to change the nation's course from moving in the direction that he described above?