Posts Tagged ‘class’

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It’s impossible to defend the grotesque—and growing—levels of inequality that characterize U.S. capitalism.

But, as they have throughout American history, some people still try. Their most common argument is that there’s nothing wrong with unequal outcomes as long as there is equal opportunity.*

Hmmm, not so much.

A recent study by a team of researchers led by Stanford economist Raj Chetty (pdf)—summarized and analyzed by Ben Casselman and Andrew Flowers—confirms that “where you come from. . .plays a major role in determining where you will end up later in life.”

Your starting point determines, for example (as in the figure above), how likely you are to have a job at age 30. Children from poor families are much less likely to work in adulthood than children from middle-class and upper-class families. Only about 60 percent of children from the poorest families are working at age 30, compared with more than 80 percent of children from higher-income families.

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It also determines your income at the age of 30: there’s a steady increase in income until the top few percentiles of parental income, when it spikes.**

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And, finally, it determines where you end up in the distribution of income (as the chart above measures not dollar incomes, but household income by percentile). Children from the richest 1 percent of families end up being, on average, in about the top third of households at age 30, while children from the poorest 1 percent of families end up in the bottom third at age 30.

It’s clear the United States suffers from an obscenely unequal distribution of income and wealth. It’s also characterized by a profoundly unequal distribution of opportunities.

 

*That line of argument suffers from three main problems: First, it presumes inequality only affects individuals, not society as a whole. In other words, it overlooks the effects of the concentration of income and wealth in the hands of a small group of individuals in terms of their ability to decide what happens not only in their own lives, but in the rest of society. Second, even if perfect mobility existed, making it to the top would still mean there’s a an even larger group at the bottom; that is, the existence of equal opportunity doesn’t undo or overturn the existing class structure. Third, it overlooks the extent to which unequal outcomes actually contribute—via household and neighborhood effects, government policy, education, and so on—to making equal opportunity an even more distant fantasy.

**As Casselman and Flowers explain, “This measures only wage and salary earnings, so it doesn’t factor in any other advantages these young adults might have, such as trust funds, lower student debt, or parental help with housing or other expenses.”

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In the summer of 2014, Ta-Nehisi Coates made headlines by announcing that he had changed sides and was now in favor of reparations to African-Americans (accompanied by an explanation of why, in contrast to four years earlier, he had changed his mind). Two weeks ago, Coates made headlines again by criticizing Bernie Sanders for opposing “reparations for slavery” (accompanied, a week later, by a defense of his critique of Sanders).

Needless to say, this is a sensitive debate, one that over time might contribute to the development of a progressive movement in the United States but also one that, at the present moment, threatens to undermine the fragile foundations of that movement. So, I want to step lightly and, instead of taking a firm position, merely raise a few issues for further discussion.

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The first point I want to make is that, notwithstanding the title of his original article in The Atlantic, Coates did not make a cases for reparations. He did make a case that the history of American democracy and capitalism is a profoundly racialized history, which stretches back to slavery, continues through the Jim Crow era, and persists to the present. It’s a history this nation persists in overlooking or forgetting—and its effects are profoundly present both in memory and in daily life today. No matter how many times we imagine a post-racial society, we are reminded of the racial disparities and injustices that have accompanied the emergence and development of all of our major economic, political, and social institutions. Coates’s essay provides eloquent testimony to at least some of that history—including, of course, the stark racial segregation of my own city.

But we also have to recognize the fact Coates did not make a case for reparations per se. Nowhere in his essay does he explain how a payment, no matter how large or small, from the United States government to the descendants of African and African-American slaves will actually undo the enduring legacy of racism in the United States.

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True, there’s an enormous racial wealth gap in the United States—between, for example, median white households and African-American (by a factor of 12) and Hispanic (by a factor of 10) households. Much of that wealth is in the form of housing. But that’s not where the bulk of the wealth in the United States has been accumulated. Rather, we’ll find it in the hands of a small group of wealthy individuals and large corporations—and reparations to the descendants of slaves will do little to close the gap between those at the top and the bulk of individual (whether African-American, Hispanic, or white) households.

Now, to give Coates his due, perhaps he is more interested in the investigation of the consequences of that racist legacy, a public airing and discussion that would be provoked by a full-scale debate about reparations (which would come from passing Congressman John Conyers Jr.’s HR 40, the Commission to Study Reparation Proposals for African Americans Act), and that’s fine. Let us, as a nation, finally come to grips with both the history of American racism and of the racial disparities and injustices that are so much a part of our recent history—from discriminatory subprime mortgages through unequal rates of unemployment and incarceration to racially biased police violence.

Or, alternatively, Coates might reframe the debate about reparations and begin to write about who actually gained from racist policies and practices over the course of U.S. history. If he did, he’d end up with a very small group of slaveowners, landowners, and capitalists (along with a larger, but still relatively small, group of overseers, merchants, and managers) who benefited from the labor performed by a much larger group of slaves, sharecroppers, and wage-workers. He might also add the institutions—including many colleges and universities—that grew from the proceeds of slavery and the slave trade, sharecropping, and capitalist enterprises. Those are the groups and institutions he might want to look at for reparations.

But, if he did, Coates would also discover that the wealth accumulated by a tiny minority of those at the top stemmed from activities that have also employed white (and Hispanic and other) tenants and workers. They’ve all been plundered—whether at work and in attempting to secure adequate housing, by private employers and bankers and through government policy—and, in that sense, are all due reparations.

No, it certainly hasn’t been the same—the same treatment, the same outcomes—for different racial and ethnic groups. Not by a long shot.

The problem is, reparations might not solve that problem of social theft for any of those groups, as it took place over the course of U.S. history and as it still exists today. In fact, we have to recognize, those gaps are getting larger—for whites, blacks, Hispanics, and everyone else.

As I see it, nothing short of a radical change in the way our economy is organized will overcome those gaps. That’s what conservatives and liberals have no interest in but is exactly what Coates and Sanders should be talking about—with one another and with everyone else in the country as this political campaign moves forward.

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The folks at BlaqSwans [ht: sm] set out to map what they consider to be the emerging post-capitalist paradigm associated with peer-to-peer movements and some of the key thinkers, both precursors and current influences, of those movements.

Here are the three things they confirmed when they assembled the map:

  • There is much more to this transition that the greenwashing offered by Uber and Airbnb, which are actually not peer-to-peer. This is precisely why we deliberately reused the shape of a honeycomb popularised by the “Collaborative Economy Honeycomb” infographic. It lists startup companies claiming to be part of that ‘sharing economy’, when many really are unbridled capitalism trying to further optimise the existing ‘selling economy’ – nothing wrong with selling but let’s not call it ‘sharing’ with the ethical claims usually attached to it.
  • The intellectual work of theorising this new economy has now reached a critical mass that is too often overlooked by ‘mainstream’ economists, observers, and policy makers who treat it as fringe.
  • Put together, the practical initiatives run at the grassroots level offer a credible sustainable alternative contradicting the eventual perception that the post-capitalist paradigm is a utopia dreamt up by isolated hippies. On the contrary, it is now possible to shop food regularly outside of mass retailers’ distribution networks, it is possible for a major French city like Grenoble, or Barcelona in Spain to be run by grassroots movements, and it is possible for farmers to produce in a biodynamic and commercially viable way to escape the vicious cycle of pesticides and high yields.

While the Community Economies Collective is not cited as an influence, there is a great deal of overlap between their work and the post-capitalist paradigm mapped above.

BlaqSwans also mapped what they consider to be the current capitalist paradigm in the following way:

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The two maps are a very good start. However, I’d like to see more attention to issues of class, especially the way the surplus is appropriated, distributed, and utilized within the current capitalist paradigm and how the problem of the surplus is being managed differently within the emerging postcapitalist paradigm.

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John Lennon (on the B side of “Imagine”) thought that life was hard, “really hard.” I can understand that.

But is modeling inequality really all that hard?

Paul Krugman seems to think so, at least when it comes to the size or personal distribution of income. That’s his excuse for why mainstream economists were late to the inequality party: they just didn’t know how to model it.

And, according to Krugman, not even Marx can be of much help.

Well, let’s see. It’s true, Marx focused on the factor distribution of income—wages, profits, and rent, to laborers, capitalists, and landowners—because his critique was directed at classical political economy. And the classical political economists—especially Smith and Ricardo—did, in fact, focus their attention on factor shares.

That was Marx’s goal in the chapter on the Trinity Formula: to show that what the classicals thought were separate sources of income to the three factors of production all stemmed from value created by labor. Thus, for example, laborers received in the form of wages part of the value they created (“that portion of his labour appears which we call necessary labour”); the rest, the surplus-value, was divided among capitalists (“as dividends proportionate to the share of the social capital each holds”) and landed property (which “is confined to transferring a portion of the produced surplus-value from the pockets of capital to its own”).

It is really just a short step to show that, in recent decades (from the mid-1970s onward), both that more surplus-value has been pumped out of the direct producers and that investment bankers, CEOs, and other members of the 1 percent have been able to capture a large share of that mass of surplus-value. That’s how we can connect changing factor (wage and profit) shares to the increasingly unequal individual distribution of income (including the rising percentage of income going to the top 1, .01, and .001 percents).

See, that wasn’t so hard. . .

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Special mention

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Sidney W. Mintz, a renowned cultural anthropologist who focused on the Caribbean rural proletariat and linked Britain’s insatiable sweet tooth with slavery, capitalism, and imperialism, died on Sunday at the age of 93.

The son of a restaurateur and an amateur chef himself, Professor Mintz was best known beyond the academy and his own kitchen for his Marxian perspective on the growing demand for sugar in Britain, beginning in the 17th century.

In his view, that hunger shaped empires, spawned industrial-like plantations in the Caribbean and South America that presaged capitalism and globalization, enslaved and decimated indigenous populations, and engendered navies to protect trade while providing a sweetener to the wealthy and a cheap source of energy to industrial workers.

“There was no conspiracy at work to wreck the nutrition of the British working class, to turn them into addicts or ruin their teeth,” Professor Mintz wrote in “Sweetness and Power.” “But the ever-rising consumption of sugar was an artifact of interclass struggles for profit — struggles that eventuated in a world market solution for drug food, as industrial capitalism cut its protectionist losses and expanded a mass market to satisfy proletarian consumers once regarded as sinful or indolent.”

He added, “No wonder the rich and powerful liked it so much, and no wonder the poor learned to love it.”

For me, Mintz’s work was important for many different reasons: the importance of history in making sense of food, economic and social relations, and commodity exchange; a conception of capitalism as a global system; and a focus on capitalist and noncapitalist class structures and class struggles in both the North and the South. Perhaps most important, he turned traditional economic determinism on its head by arguing that the consumption of sugar, tea, and other commodities and their social importance in eighteenth-century Great Britain shaped British colonial policy and the production of those commodities throughout the empire.

Mintz’s work was also an important inspiration for one of my recent courses, Commodities: The Making of Market Society.

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Americans hold on to lots of cherished—but ultimately outmoded—ideals. One of them is, the United States is a middle-class nation.

As it turns out, according to a new study by the Pew Research Center, we’re not. Not anymore.

After more than four decades of serving as the nation’s economic majority, the American middle class is now matched in number by those in the economic tiers above and below it. In early 2015, 120.8 million adults were in middle-income households, compared with 121.3 million in lower- and upper-income households combined, a demographic shift that could signal a tipping point.

The middle-class has declined both as a percentage of the U.S. population (from 61 percent in 1971 to less than 50 percent in 2015) and in terms of its share of national income (from 62 percent to 43 percent over the same period).*

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And that hollowing-out of the American middle-class is not a new phenomenon. It has proceeded steadily for more than four decades.**

The question is, in the midst of the current political debate, will the decline of the United States as a middle-class nation be used as a source of fear or as a spur to the kinds of real changes that will finally end the exclusion of workers from benefiting from the wealth that is created and deciding how the economy should be organized?

 

*To be clear, Pew defines “middle-income” households as those with an income that is 67 percent to 200 percent (two-thirds to double) of the overall median household income, after incomes have been adjusted for household size. There’s nothing standard about that definition. Another possibility is to look at households making 50 percent higher and lower than the median, which would mean the average middle-class annual income is $30,000 and $80,000.

**This CBS Moneywatch [ht: ja] article on Pew’s study includes an online tool to see where you are in the distribution of Americans by income tier.