Do you want to know how the economy works these days? Consider the rewards of Starbucks CEO Howard Schultz, who likes to think of his company as a paragon of the socially engaged corporation. In fiscal year 2013 Schultz personally gobbled up $149.8 million in realized compensation for his efforts, thanks no doubt to the army of low-paid Starbucks “baristas” that earn an average $9.31 an hour.
All the money flowing Schultz’s way includes not only salary, but multiple stock awards and options, non-equity incentives, and so on. Other members of the Starbucks executive elite also take in millions of dollars in acquired personal wealth. Just something to ponder next time you’re spending a lazy afternoon at the coffee shop reading the philosopher Proudhon’s writings on capitalism as a form of thievery.
Then there’s Nike Corporation, Oregon’s pride and joy in tax avoidance. Fiscal year 2013 saw the company generate $25.3 billion in global revenue. Yet, incredibly, Nike pays state taxes in Oregon only on sales of its products within the state, thanks to a 30-year deal worked out in late 2012 with bipartisan support in the state legislature. It’s justified by legislators with the excuse that “socially responsible” Nike could act on its threat to move operations elsewhere. Instead, Nike promises to create 500 jobs, which the group Good Job’s First calculates will eventually cost Oregon taxpayers about $4 million per job. Intel Corporation has worked out a similar tax deal.
This is how capitalism works. If you happen to be a capitalist, of course, it’s a charmed life. Indeed, even when things go bad, they turn out good. In fact, during the economic downturn of recent years the only “New Deal” was for the Wall Street super-rich, the very group responsible for crashing the economy. For the rest of us, however, the so-called economic recovery has been more Recovery Lite. Case in point: The new “post-recession” jobs responsible for lowering the unemployment rate since 2009 on average pay 23 percent less than the jobs they replaced, according to a recent report by the U.S. Conference of Mayors and IHS Global Insight. No wonder real earnings for the majority of Americans have been falling since 2007, as Federal Reserve Data shows.
A Bright, Shining Telegenic Moment
It is indeed a sign of the Orwellian unreality of our times when a period of economic “recovery” actually corresponds with an increase in inequality. In his 2014 State of the Union address, President Obama acknowledged corporate profits and stock prices were at record levels, while average wages continued to stagnate. “The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by—let alone get ahead,” noted the President. “And too many still aren’t working at all.”
Unfortunately, the State of the Union address has become little more than a glorified Toastmasters speech, one more in the series of telegenic moments that comprises the modus operandi of modern politics. There were already reports by mid-year that the White House was backing away from talk about “income inequality.” Why? It was certainly not because of any sudden trend toward lessening inequality.
As the Washington Post detailed in a July 4 report, the White House wanted to shift its focus instead toward the more “politically palatable” theme of “lifting the middle class.” The latter included raising the minimum wage (a little) and closing the gender pay gap.
According to the Post, Democratic polling had indicated the “inequality” theme wasn’t resonating with the public quite as much as more economic growth-oriented rhetoric. With mid-term elections looming, White House advisors were concerned there was limited political capital to be earned touting “economic populism.” They were also worried about being charged with promoting—God forbid!—class warfare.
“Income inequality is much more a term of art than a term of everyday politics, and public-opinion polling has borne that out pretty quickly,” a Democratic pollster told the Post. “I think it doesn’t have a personal immediacy and there are lot of other things that speak to income inequality that are much more immediate and much more tangible and much more real to people.”
Yes, like actually doing something! Reading this you have to wonder whether Martin Luther King, Jr. ever consulted opinion polls to determine the strategic trajectory of the civil rights movement? But if the public is less than inspired by the White House’s commitment to social justice, maybe it’s just because so many people have given up taking any of the beltway rhetoric, no matter from what party, seriously.
A Poverty Not of Money, But of Political Will
All these inadequacies in the fight against inequality and poverty reflect not a lack of money or resources, but political will. The Republican Party has been drinking the tea of right-wing extremism for some time now, a brewing pot of misdirected middle-class frustrations and bitterness toward immigrants, Blacks, and basically anyone except those actually responsible for the nation’s deteriorating prosperity. As for the Democrats, you can only take so much rhetoric before it becomes clear it’s all a distraction designed to obscure the cozy relationship between Democratic politicians and Wall Street capitalism.
Was it just a few short years ago that President Obama rode into office on a groundswell of grassroots enthusiasm? Remember the campaign rallies of 2008, the football stadiums resonating with wild enthusiasm for the “change we can believe in,” the joyous scene at Chicago’s Grant Park when it was announced that Obama had won the presidency?
In those days everyone from Colin Powell to Tom Hayden was calling Obama a “transformational” figure. Indeed, many progressives saw Obama’s campaign inspiring the next generation of youthful activism. This turned out to be inadvertently true, to the extent that anger and disappointment three years into Obama’s first term in 2011 led to the activist outburst of Occupy Wall Street.
The grassroots enthusiasm for the 2008 Democratic campaign spoke of the people’s desire for real change. Unfortunately, what they got was the politics of moderation in all things. A clear path to a just, progressive future does not lie along this path. Are we all supposed to be singing the praises of the White House now because after six years the official unemployment rate is finally below six percent? Talk about diminished expectations!
With millions underemployed and underpaid, and every working person vulnerable to the next inevitable economic downturn, it is clear that the present economic system cannot provide genuine security to the majority of the people. Nor can it even pretend to be democratic when concentrated wealth so thoroughly dominates in politics and economics.
Indeed, by what stretch of the imagination is capitalism really successful? Is it because this wonderful system has eliminated the scourge of war? Of nationalist hatred and neo-colonial exploitation? Of racial, gender, and class inequality? Is capitalism successful in Haiti? Or Mexico? Or Detroit? Actually, even in the midst of staggering poverty and failures of economic policy, for a privileged few it is. And that is the problem. Even in the best of times, capitalism really only works for a minority of people.
Let’s Hear it for the Idealists
Despite endless grounds for cynicism, there are reasons to be hopeful. In cities across the country now we are witnessing a rebirth of dissident activism, as tens of thousands protest the culture of institutionalized, sanctioned brutality shown by police and the criminal justice system toward minorities. Elsewhere, inspired by the Fight for $15 campaign in Seattle and in other cities, a movement for economic justice among low-paid workers is spreading nationwide.
Indeed, everywhere we see examples of spirited, courageous activism, from Chicago teachers to young climate change activists, organizing in ways that can only inspire optimism that, if the future is not guaranteed, at least the fight is on.
As Albert Einstein wrote in his 1949 essay, Why Socialism? it is the economic anarchy of capitalist society that is the real source of society’s problems. For Einstein and other socialists, a society run by an oligarchy of private capital is incapable of being a healthy democracy. Our vision instead is of a society where everyone has the right to a job and a livable wage, where full employment is economic policy. It’s a vision of a democratized workplace defined by strong, representative unions, and for an eventual end to the top-down, authoritarian model of the modern private capitalist corporation.
Our vision is of a world free of the violent scourge of militarism that torments modern life, one in which the weapons of warfare have been transformed into the proverbial plowshares of peace and prosperity. This is a socialist vision of a society guided by the deepest values of human solidarity, equality and concern for others, one that values the community over private profit.
As we enter 2015, let us hope that critical thinking among activists and others about capitalism and its limits deepens and flourishes. And let us hope the voices of ordinary people for a more humane and fair existence continues to find expression in the streets, challenging the 1 Percent and their rotten edifice of concentrated economic and political power. Their time on the stage has long expired.
Special thanks to Carl Finamore for his thoughtful ideas on this topic.