In search of a working economy
Robert Alvarez | Tuesday, September 17, 2013
The American economy no longer works for the benefit of the nation and never will so long as capitalism is the heart of our economic system. In theory, the stock market should be indicative of the health of the economy, but for a while now I have trained myself to tune out the news of economic recovery that focuses on the rising points of the stock market. It’s meaningless. Or at least, it is meaningless for the bottom 93 percent of this nation; between 2009 and 2011 (the latest available data), the bottom 93 percent saw its wealth drop 4 percent. In that same period, the top 7 percent – people more likely to own large amounts of stock assets – saw its wealth increase 28 percent (according to the Pew Research Center). For those people, a rising stock market is very good. But taking the perspective of the majority here, you’ll forgive me if I disagree with the idea that the stock market is indicative of the economic health of our nation.
This dichotomous economy has been perpetuated by the myth that what is good for the upper class is good for all classes (And let me also end the myth that we live in a classless society. I think people know this, but whenever class is brought up, people tend to get defensive. Rich people, I’m not attacking you. Your wealth is not a sin. Your wealth does, however, have implications for the well being of the wider economy. I’m trying to discuss how we can remedy that). Anyway, the idea that what is good for the wealthy is good for all is wrong. It assumes the capital accumulated by the wealthy will be reinvested in the lower classes. The investor class will invest in things in which they can foresee a return, this is true; however, wage or benefits investment is rarely seen as having a return on investment. Rather, wages and benefits are usually seen as taking away from profits, resulting in their perpetual minimization.
One might respond by claiming the market pays what it can bear and this justifies vastly unequal wages. Or, worse yet, that the investors deserve to be sole beneficiaries of the profit of a company; after all, the lower workers have already received their wages.
However, these viewpoints assume the market can bear only one specific wage, when in reality, the market can bear a variety of wages. Wages are largely an ethical decision. CEOs make absurd amounts of money because our current economic culture finds it ethically permissible; they took the risk of investment, they get the returns. If someone is upset with his or her current pay grade, he or she should work harder to get the higher wage. However, this mindset assumes the 99 percent can become the 1 percent. This is impossible. The 99 percent exists because there is a 1 percent and the 1 percent exists because there is a 99 percent. Or, the 64 percent exists because there is a 36 percent. Same idea. All players in an economy are mutually dependent upon each other. It is just that people receive wages proportional to their responsibility in the company; it is unjust that lower-wage employees never see the fruits of their labor (i.e., their cuts of the profit).
This is the great immorality and malaise of our modern capitalist system: that it is permissible for one class to pursue wealth at all costs. This is not an economy that works for the 100 percent; it is an economy that works for the 1 percent and only the 1 percent. The current system is systematized greed. Gordon Gekko might say greed is good, but I have 3000 years of ethical thought that says otherwise.
At this point, there is a historical attack on my argument that says, “Yes, this capitalism is based on greed, but this greed has also brought more people out of poverty than anything in the history of the world. Therefore, it is the best we’ve got.” True, the growth in global wealth in the past 200 years has been outstanding; this was not due to greed, though. I claim mankind benefited from capitalism insofar as it deviated from the central tenet of greed. Unfortunately, due to the size and scope of our modern world, we have created a kind of structural anonymity that makes it more conscionable to be greedy, which has lead to the exacerbation of this problem. Furthermore, this kind of historical criticism assumes on a historical basis that capitalism is the best of all possible systems. This, however, is impossible to prove historically because that claim deals in a superlative that goes beyond the realm of history into the realm of ideals.
Private wealth is not wrong. The pursuit of wealth is not wrong. Greed is wrong. And so long as our economic system espouses greed as its greatest virtue, we will continue to live between economic bubbles with growing inequality. If we wish to have a more just and prosperous society, we must turn our eye to the common good – the good that benefits all – rich, poor and middle class. Perhaps then the American economy will begin working.
Robert Alvarez is a a senior political science major living in Zahm House. He welcomes all dialogue on the viewpoints he expresses. He can be reached at firstname.lastname@example.org
The views expressed in this column are those of the author and not
necessarily those of The Observer.