March 06, 2013

Americans Have No Idea About the True Wealth Inequality in this Country!

In my Comparative Politics class, we're discussing political economy these days and it's been an eye-opener for most, because what people think of reality, well, it isn't!

First, let's say that the purpose of civil society is to provide benefits to its members. In order for the political system to work for the benefit of the people--the common people, the majority of whom are in the middle class--it is best to pick a regime that has this foundation principle. In modern societies, this is a liberal-social democracy.

Liberal, because it safeguards and promotes individual rights and freedom. Social, because it provides a social safety net--services people need. Democracy, because it allows for popular participation and a government of-by-for the people.

A system needs legitimacy to be stable and for longevity. The modern state--a creation of the 18th-19th centuries--provided benefits but also a new narrative, myths, practices, and activities that turned people into citizens. Citizens who had obligations to the state but also benefits. Notions of patriotism and nationalism were forged out of this new reality. This has helped cohesion, elevated pride in one's country, and motivation.

If the system and the government are to work for the people, then we have to ask what, does this mean?  Well, I'm sure there are many views on this, but let me suggest a few items: happiness (yes, individually defined), good health, leisure, education, long life, less stress, stability, peace, clean environment, decent shelter, affluence, access to opportunity, economic mobility, justice, etc, etc.  This is the mission statement of a modern, advanced country. Obviously, this was not the mission of older systems, like the Old Regime.

In order to achieve the mission statement, societies/governments/rulers engaged in redistribution of resources and wealth.  Usually it was from the bottom up. This was not good unless you were a member of the elite. These members made all sorts of arguments (including might makes right) in favor of keeping their privileges. And, their appetite was insatiable. Louis the 14th needed more gold for his lavish palaces. Our modern super wealthy and their shills, most of the Republicans, have drawn the line that no tax increases, no matter how modest, should be applied to the upper classes.

 When Reality Escapes the American People

The Occupy Wall Street with its signs, "We're the 99%", brought needed attention to the upper 1% of the economic elites. Yet, the real magnitude of the problem is still unknown to the American people. The power of the myth, the cultural and political forces have managed to create a strong illusion. 

This illusion includes a good dose of patriotism and nationalism, but in a perverted way. "We're # one!"  Others are risking life and limb to get here. Look at the great things we've achieved, and still do. The American dream is alive! You can make it, like Bill Gates, Michael Jordan, and so many others. With hard work and a bit of luck anyone (most?) will make it ..big!  

It's hard to argue against the tendency to compare ourselves to societies far worse than ours. Somehow comparisons to other societies that have better outcomes aren't being made. Yes, there are several societies that have a better distribution of the economic pie, where people live longer, are healthier, more educated, have more leisure, live is safer environments, and report greater levels of happiness. Their political economies are, however, adjusted differently than the US.

As I speak with many students, I hear that they expect to be rich someday. Likewise, many ordinary Americans think they'll be rich one day, or at least part of the upper middle class. But, statistically speaking, this won't happen. 

Unfortunately, the reality isn't very rosy. The Economist, the Wall Street Journal--to name a couple pro-capitalist publications--have pointed out that economic mobility in the US has fallen behind western Europe! 

In a democracy where public opinion is important, where decisions are made based on people's perceptions, it matters greatly whether the public really knows the facts. 

For decades, studies have been consistent as to this public perception about economic reality in the US. People are asked what a fair society would be like. Then they're asked what they think the US is like in wealth distribution. Their guess is terrifyingly wrong!

Watch this video and forward it to everyone you know. 

 Wealth Inequality in the US

Who could have guessed it, that the top 1% control 40% of the wealth. That the bottom 80% of Americans have only 7% of the wealth, while the other top 19% own 53% of the wealth. Mind bungling.

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