The fundamental issue is why economies exist. The reasonable and naïve answer is so people may sustain themselves, be gainfully employed, and enjoy their lives.
Modern capitalism aims at an altogether different goal: relentless resource exploitation for profit. Under this system, humans are a disposable commodity, to be used and discarded when no longer needed; a costly cog in the machinery of revenue generation.
Economic inequity originates from the absurd idea that individuals own pieces of Nature – not just the fruits of their labors, but vast tracts of the planet which may be forever despoiled so that a man might make money. Capitalism is at root a rape: of both Nature and of other people.
Though slavery has been outlawed, modern employers do their best to find a substitute. 20% of American workers are bound by non-compete agreements that prohibit them for changing jobs to anyone the employer deems a competitor.
This perpetual indentured servitude is even required of low-wage workers who have no access to proprietary information. Over half of American fast-food workers are barred from going to work for another fast-food joint. Wages in states that allow non-competes are lower than those that do not.
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The nomadic lifestyle is not conducive to wealth accumulation. Once people domesticated themselves, along with edible plants and livestock, the equation changed: surpluses beget inequality. Agriculture created strata of resource access. Property was inherited generationally.
Even before cultivation became part of culture, inequity had started. The Natufians of the Levant were one of the first peoples to embark on the long transition to farming. Beginning ~14,500 years ago, early settlements were amid rich food resources. Those who staked claims to the best spots gathered surpluses which put them ahead. Agriculture reinforced an already-established status.
Since antiquity, the societal impact of wealth distribution has been a political issue. Inequality wanes in the aftermath of carnage and disaster, then waxes again as peace and stability return.
Industrialized economies produced vast inequities prior to the 1st World War. In 1910, 10% of European households controlled nearly 90% of all wealth. The top 10% captured over 45% of all income.
The wars and depressions between 1914 and 1950 dragged the wealthy down. With economic recovery, inequality roared back, as owners of capital inordinately prospered once again. By the end of the 2010s, wealth concentration and income inequity had reached the peaks of the early 20th century.
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Material inequality has been, and still largely is, ubiquitously accepted as reflecting a natural societal order. Only egalitarian philosophers have seen such inequity itself as a moral evil, and so take umbrage to the popular assumption.
The essence of morality is fairness. There are different perspectives on morality. Moral absolutists consider acts to be moral intrinsically. Other schools of thought judge morality in light of intent or consequence. Most people, and legalistic thought, consider intent when determining the morality of acts. Accidents are therefore without moral ramifications, whereas acts which intended to harm, but failed (and thereby of no consequence), are treated as criminal.
Because a market economy is considered by many to be a natural order without inherent intent to harm, commercial acts are commonly construed as moral; only attempted transactions which egregiously violate fairness are considered iniquitous, such as price-gouging. So, even though capitalism may inevitably deliver gross inequity, and by dint of consequence be unjust, few see the market system as immoral per se.
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The root of modern inequality lies in the relative returns of labor and capital. This is essentially an externality of the price mechanism. With a surplus of labor and a high demand for capital, those with a surfeit of funds reap rewards while workers toil for meager leftovers.
In some countries, those at the top of high-skilled, licensed professions, such as doctoring and lawyering, are quite well paid. More generally, worldwide, money flows into corporations, and especially to those who sit at the peak of its financial pyramid.
In 1950, the average American corporate CEO earned 30 times that of the average worker. In 2018 it was 330 times. In 2018, which was a good year for the American labor market, CEO pay increased at twice the rate of ordinary wages.
When the rate of return on capital exceeds the growth rate of the economy, as it generally does, wealth accumulates among the rich faster than working people could ever hope for from their wages; hence capitalism acts as an amplifier for inequality.
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Trickle-down economics has been the source of societal impoverishment. Inequality is the wellspring of property crime, and it takes a severe toll on the health of the underclass.
On average, wealthy Americans live over a decade longer than those in the lower class. Life expectancy in the US is dropping because of economic stress on the vast majority of its population.
A lot of social, educational, and economic resources are tied to neighborhoods. Geographically, American poverty is becoming more isolated and more concentrated.
Racism is a significant factor in American inequity. Despite ostensible legal equality, blacks and other minorities suffer abiding indecency from the white majority. This animosity affects education, employment, financing, housing, and other aspects of life. The economic consequences, which go back for centuries, are profound.
Nearly half of American children live in poverty. Impoverished American youth are the poorest in the developed world. Child hunger and lack of education are a recipe for wasted life potential and societal degradation.
Americans like to think of themselves as a prosperous country. That is a lie promoted by a plutocratic government.
Unemployment is at least 4 times what is reported. The figures are rigged to overstate employment.
The rigging of the economic game in the United States has been systematic and systemic. Income mobility – being able to ascend to a higher economic level from that experienced in childhood – dropped by half from 1940 to 1984, and its decline has accelerated since. The salutary American dream of economic mobility has passed into legend.
Mainstream media promotes a shiny prosperity that does not exist for most people. For them, the stories are aspirational: promoting a dream which is out of reach.
People don’t want to read about economic reality: it’s too depressing. If the public did know how badly they were being abused economically, governments would topple. To preclude that possibility in the US, the government vigorously tries to suppress voting by the poor.
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Inequality has never been eliminated in any society. So-called “communism” was a scam sold by ruthless revolutionaries to gullible plebs, who invariably were oppressed in the aftermath of the liberation from the previous regime. Any leveling that went on in the Soviet Union, China, or North Korea was barbaric, not civilized. The same applies to the supposed egalitarian spasm known as the French Revolution.
Man’s failure through history need not be humanity’s future. It had better not be. If the status quo continues, the pollution of industrialized capitalism will extinguish the human race by the end of the century.