Savage Inequality As No Big Deal

by Paul Street

Z magazine, September 2001

For those who read leading journals of "elite" opinion, there is little hidden about the real values of the ruling-class. Forthright discussion commonly occurs in those select venues, encouraged by editors' confidence that the masses are not paying attention and are incapable anyway of understanding the sophisticated discourse of the privileged. Take, for example, a recent thought-piece titled "Does Inequality Matter?" in the Economist (June 14, 2001), that venerable font of Anglo-American neo-liberal wisdom (its answer, by the way, is "Not Really"). Known for its combination of candor, conceit, and contempt for those who do not grasp the eternal beneficence of "free market" capitalism, the Economist tackles controversial topics but only in a way that leaves rich folks smug and satisfied. As in all ideological productions composed by and for society's opulent minority, the truthfulness of its claims regarding inequality are secondary to the needs of wealth and power.

Inequality? Certain facts of socioeconomic disparity in a world ruled by capital are too obvious and important not to be acknowledged in the Economist. "There are," the journal notes, "more rich people than ever before, including some 7 million millionaires and over 400 billionaires." Meanwhile, it adds, the gap between rich and poor " is rising, even in the industrialized countries where for much of the 20th century the gap had narrowed. In America, between 1979 and 1997 the average income of the richest fifth of the population jumped from nine times the income of the poorest fifth to around 15 times. In 1999, British income inequality reached its widest level in 40 years." There's much more that could be presented (starting with data from the annual United Nations Human Development Report) on widening inequality but the Economist cannot be accused of denying the phenomenon's existence.

But does it all "matter?" For those who believe in fairness and justice between and among human beings, the facts of global socioeconomic disparity are deeply disturbing in and of themselves because they violate basic principles of human decency. At the same time, egalitarians know, inequality deeply disables democracy. Core democratic ideals-"one person, one vote" and an equal distribution of policy-making influence -cannot flourish side by side with significant wealth inequality and poverty. Now we are learning that inequality is a significant cause of disease. Public health professor and MD Stephen Bezruchka and other researchers have shown that peoples' physical well being and life spans are negatively related to the extent of the "hierarchical structure of their society; that is the size of the gap between rich and poor."

These are clearly not the Economist's concerns regarding inequality. The journal's main apprehension is that during "bad economic times," when "the rich may lose the most money, but the poor lose their jobs, their houses, even their families," anger over inequality can cause the poor to also lose "their acceptance of the way the system works." When enough people lose their allegiance to "the system" (that is, to hierarchy), the magazine warns, society falls prey to "backlashes" that lead to such outrages as "trade protectionism, job guarantee schemes, extending welfare benefits even to the middle classes, and most notoriously, Draconian taxes on the wealthy. All such measures," the Economist intones, without evidence, " sap an economy's strength and make everyone worse off." With its possible negative policy impact on the fortunes of the few, the potential for lost consent to hierarchy on the part of the most downtrodden and not the admitted destruction of poor folks' lives is what the Economist identifies as the true "danger" posed by inequality.

But lest this "danger" cause undue alarm and thereby feed economic slowdown, the Economist gives three reasons why rich people can relax about inequality. First, anger over inequality is absent during periods of expansion, since a rising tide lifts all boats and "even the poor feel better off during good economic times." Second, since past periods of widening socioeconomic disparity coincided with the extension of "the franchise" to "the discontented," the magazine argues, the angriest victims of hierarchy possess a safe "channel through which to express their ire." Because it is "no longer necessary to create such channels" to "defuse" the threat of counter-productive popular resistance, the rich can relax. Third, the rich can be comforted by the fact that most of the arguments against inequality are "unjustified." According to The Economist, there are only two " ways in which anger about inequality could be justified." The first is when socioeconomic disparity is a result of barriers to equal opportunity-unjust obstacles of "class, race, creed or sex." The second is inequality that results from "power, even power initially gained in a meritocratic way," being "abused to raise prices or exclude competitors." Fortunately, the Economist finds, the leaders of our "liberal democracies" and "well-run companies" deal quite well with the "justified grievances about inequality" and "win the argument against unjustified ones." The real threat, the editors conclude, is not "injustice" but poverty, whose victims do not have grievances that can be "readily channeled and defused by democracy." "Helping the poor, the truly poor, is a much worthier goal than merely narrowing inequalities," concludes the Economist. This is a goal that can be accomplished to everyone's benefit, without taking wealth from its mostly rightful owners.

The argument is highly flawed. It wrongly assumes:

* The existence of effective democratic channels for popular discontent: the mere right of the non-rich to vote has long been significantly trumped by the power of big political money and the related thought-control machinery of the corporate media

* The absence of positive societal outcomes (past and present) from progressive taxation, welfare, trade protection, and social-democratic regulation

* The existence of anything approaching equal opportunity for all, regardless of class, race, sex, language, and creed

* The absence of any core and inseparable causal relation between inequality and extreme wealth at the top and poverty at the bottom

* The existence of social norms and agencies strong enough to keep the inequity-enhancing abuse of private power in reasonable check

But the Economists' biggest failure, mandated by its mission of serving "elite" interests, is its assumption that there is no justifiable criticism of unequal outcomes in and of themselves. Would the contrast between Bill Gates's net-worth ($58.7 billion at latest count) and that of a homeless, second generation welfare mother (zero) be any less grotesque and outrageous if Bill Gates (unimaginable as this scenario may be) had grown up in poverty and then somehow (miraculously in fact) faced no particular unjust barriers to equal opportunity? As Noam Chomsky has argued, "There's nothing remotely like equality of opportunity [in really existing society], but even if there were, the system would still be intolerable. Suppose you have two runners who start at exactly the same point, have the same sneakers, and so on. One finishes first and gets everything he wants; the other finishes second and starves to death." Even if it existed, equal opportunity would provide no justification for today's "winner-take-all" global society, in which a rising number of millionaires and billionaires co-exist and profit from the existence of a majority that "lives in shantytowns on the outskirts of the global village," to quote Chicago Tribune correspondent R.C. Longworth. The attempt to construct such a justification is exactly what we would expect from a journal that caters to the leading feeders at the trough of socioeconomic excess.

Paul Street writes and lives in Chicago, Illinois.

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