Inequality has become the topic du jour–and as with so many other topics Americans debate, what anyone means by “unequal” and if and why inequality matters depends on one’s perspective.
In a capitalist system, some people will do better than others. There is nothing wrong with that; the promise of a bigger reward for building a better mousetrap spurs innovation and benefits us all. It’s only when the disparity in rewards becomes disproportionate and especially when those rewards become disconnected from actual economic productivity that things get seriously out of whack.
When what people make is a reflection of their connections and/or the success of their lobbyists, it’s time to consider whether we still have a capitalist system, or whether what America currently has is corporatism–a system where power is exercised through large organizations in pursuit of their own economic agendas, to the detriment of the common good.
Capitalism creates opportunity; corporatism keeps it “all in the family,” exacerbating inequality. Consider the following statistics and draw your own conclusions:
Between 1947 and 1972, the average hourly wage, adjusted for inflation, rose 76%. Since 1972, it has risen 4%.
In 2011, the poverty rate for female-headed families with children was 40.9%
In 2009, CEOs of major corporations were paid a wage that was 269 times the average compensation of American workers.
Between 1979 and 2007, wages for the top 1% rose ten times as fast as those for the bottom 90%–156.2% versus 16.7%.
There’s much more, but you get the picture.
The question is, how do we return to a system where the market actually decides the winners and losers, rather than the oligarchs?