That they can reach so deeply into our society and culture while incurring relatively little critical attention is itself a measure of their ideological hegemony.
26 WEALTH, ADDICTION, AND POVERTY
In order that a select few might live in great opulence, millions of people work hard for an entire lifetime, never completely free from financial insecurity, and at great cost to the quality of their lives. The complaint made against this social arrangement is not that the very rich have so much more than the rest of us but that their superabundance and endless accumulation comes at the expense of everyone and everything else, including our communities and our environment.
Furthermore, the absence of money is what makes the have-nots and have-littles relatively powerless, depriving them of access to wider publics and severely limiting their influence over political life. As the gap between the corporate rich and the general populace grows, the opportunities for popular rule diminish.
One does not have to be destitute and jobless to experience the stress and scarcity of a corporate economy. Even people with fairly well-paying jobs can face cutbacks in pay, speedups, loss of seniority, layoffs, loss of health insurance and other benefits, run away housing and medical costs, and persistent debt. Economic insecurity and income inequality have increased considerably since 1978. Real wages (wages adjusted for inflation) have remained flat or have declined; labor unions are fewer and weaker; still greater subsidies and giveaways go to corporate America as the public sector increasingly supports the private sector; and massive cuts in taxes go to the superrich.
This picture is at variance with the accepted “trickle-down” ideology of modern capitalism which says that as the economy booms, and investments and profits increase, so do wages and general prosperity. As the pie gets bigger, we all get a larger slice. “A rising tide lifts all boats,” the saying goes. But in these days of reactionary ascendancy, a rising tide lifts all yachts and drowns many people.
In certain respects the political economy really is zero sum. No rent control means higher rents, more for the landlords, and less disposable income for the renters. Wage cuts for the workers means more for the owners. Conversely, more for the workers means less for the owners. Every dollar the employer has to spend on such annoying things as wages, benefits, occupational safety, and environmental protection, is one less dollar pocketed as profits.
The corporate ideology maintains that capitalism creates prosperity not poverty; just look at the prosperity of capitalist North America and capitalist Western Europe. But that is a very selective view of capitalism. I would argue the reverse: class wealth creates poverty. Put aside the fact that in the United States there are millions who live in hardship and serious want, let us look elsewhere. Quite simply, most of the world is capitalist and getting more capitalist, yet most of the world is poor and getting poorer. Capitalism works best in the poor countries, where wages are low, regulations and human services are paltry, and unions are weak or nonexistent; the result is that profit margins are higher than ever. Look at capitalist countries like Indonesia, Nigeria, Mexico, the Philippines, Haiti, Thailand, El Salvador, and so many others—all so capitalist and all so poor. Their populations get still poorer while a handful of transnational corporate investors get ever richer off them.
What is the imperative that propels wealthy individuals and their powerful financial organizations? In large part it is the desire, even the necessity, to accumulate still more wealth. “Accumulate, accumulate, accumulate,” as Marx put it. Why? Those who have billions of dollars, who have more money than they know what to do with, why would they want still more and more? There are several reasons:
First, wealth can become addictive. Fortune whets the appetite for more fortune. There is no end to the amount of money one might desire to accumulate, giving oneself over to the auri sacra fames, the cursed hunger for gold, the desire to possess more wealth than can be consumed in a thousand lifetimes of limitless indulgence.
Wealth buys every comfort and privilege that is available, elevating the possessor to the highest social stratosphere, an expression of the aggrandizing self, leaving one feeling almost invulnerable to time and mortality. Wealth is an extension of one’s existence beyond the grave. There is little desire to see your fortune dispensed or scattered after you depart from this world. Years ago a comedian wisecracked: “If I can’t take it with me, I’m not going.” The comment touches a real sentiment. If you can’t take it with you, the next best thing is to keep it going after you’re gone. The thought of breaking up one’s estate into, say, four smaller parts for one’s four offspring becomes painful. Worse, it is dangerous to the family’s standing. If one great family fortune is reduced to four relatively modest holdings, the family slips in social standing.
So there was invented the custom of primogeniture: the oldest son inherited the entire estate and kept it intact. The other sons had to make do with going into the upper echelons of the military, the church, or the diplomatic corps. The daughters were married off to other families of fortune whenever possible. Failing that, they were sent to the nunnery or left to live out their dreary days in the lonely comforts of the family manor. Such is the addictive nature of wealth, keeping all of it together, always adding to it, never subtracting. The family wealth is immortalized in order to secure the family name and fortune—though not necessarily the well-being of all family members.
In modern times things do not always work that neatly. Great fortunes can sometimes breed fractious family dynasties, as siblings and other relatives contest for a cut of the inheritance in messy clashes that spill into public view, a far cry from the older practice of primogeniture.
Another reason for the relentless accumulation of wealth is less psychological and more systemic. Even in today’s monopolistic oligopoly where a few corporate giants dominate each field of commerce and mergers are the rule, capitalism is still a potentially insecure system for the capitalist (as well as for everyone else). Markets change, new competitors with new technologies enter the fray, suppliers turn elsewhere, consumer tastes prove transient, investments backfire.
The competitive investment system requires constant expansion, from local to regional to national to international scope. The companies that grow are the ones most likely to survive. In 2006 Wal-Mart, the world’s largest retailer, reportedly was going to build a chain of five hundred outlets in China. “For Wal-Mart, China represents an opportunity to tap a vast and fast-growing market abroad at a time when the company’s sales are lagging elsewhere and it has run into obstacles to expansion at home.”4 In short, even the very biggest of corporations never feels perfectly secure unless they are accumulating in still greater quantities.
Of course there are exceptions. Some small companies with specialized markets and devoted clientele do well enough without perpetual growth. Still, global mergers and expansion are the general pattern. To remain in one place usually is to lose ground, not just relatively but absolutely, as competitors gain an edge that some day might prove fatal if carried too far.
In addition, one’s accumulated wealth is rarely totally safe. It might get expropriated or plundered by other forces: revolution, insurrection, invasion, natural disaster. Or it might be lost through devaluation, inflation, overproduction, insider looting, market crash, or some other failure to realize its value. The safest way to remain very rich is to get still richer, coming out on top, never on bottom. Given this rat race, the tendency is for wealth to be pursued without moral restraint. Like any addiction, or any systemic imperative, money is pursued in that singleminded way, with a disregard for what is right or wrong, just or unjust, helpful or harmful to others.
If the workforces of the world are being downsized and wages are stagnating, where will purchasing power come from? Who will buy all the goods and services produced by overworked and underpaid employees? This question is often asked. The elites are cutting their own throats, the argument goes, and sooner or later they will have to reverse thei
r policies as consumption diminishes. Indeed, a major preoccupation of the financial sector is overcapacity. There is overcapacity in Brazil, Indonesia, Japan, the United States, and numerous other countries. This is a real problem that capitalism chronically faces. But there are several mitigating factors.
First, though people may be working for proportionately lower real wages in the United States, more of them are working. Despite all the downsizing, millions of new but poorer paying jobs are being created every year. In many households, the collective family wage has been maintained because the male breadwinner (who might now have a poorer paying job) has been joined in the job market by his wife and one or two of the older children. Instead of going off to school or getting their own living quarters, the offspring stay at home because it is affordable, get a job, and contribute to the household income.
Second, we not only have the two- and three-job family but the two- and three-job person. People are working longer hours. Economists say that the average workweek is close to record levels. Overtime is more common, although time-and-a-half pay for overtime is becoming less common. In states like Texas, white-collar salaried workers in many firms are expected to stay well into the evening, come to the office on weekends, and put in an eighty-hour week if asked to do so. Workers are still buying things but they have to work harder and longer to do so. Of course, if you have to work harder to stay in the same place, you are not staying in the same place. In fact, you are losing ground, giving more of your life energy and labor power, but getting back relatively less in return.
Third, for the big-ticket items—durable-use goods like cars, refrigerators, and homes—there is installment buying. The consumer debt is climbing precipitously. Those with lots of extra money need to do something with it, so they lend it to those in need—at a price. Here is an area of poverty that is also a source of profit for rich creditors.
Fourth, the government keeps the economy going by massive deficit spending, a large chunk of which goes to the military. To make up for these deficits, the government borrows from rich financial interests at home and abroad. The accumulation of these yearly deficits is what we call the national debt, amounting to upwards of $9 trillion as of the end of 2006. Over the last two decades, the U.S. national debt has skyrocketed by 120 percent or so, mostly driven by conservative presidents: Ronald Reagan, George H. W. Bush, and his son, George W. Bush. The U.S. national debt is larger than the national debts of all Third World nations combined.
Conservatives like a big deficit because it represents an upward transfer of income from those who are eventually held responsible to pay it (the general public) to those who hold the notes on the debt (rich creditors). A massive national debt is a way of privatizing the public treasury. The bigger the debt, the larger the portion of the federal budget that finds its way back into the coffers of private creditors, as the government continues to borrow from those it should be taxing.
Fifth, demand is increasing among the very rich. Even during recent recession years, the sales of highly expensive jewelry, antiques, artwork, executive apartments, mansions, vacation homes, yachts, luxury cars, and fabulous excursions abroad boomed among upper-class clientele.
Sixth, there probably will always be some sort of middle-class consumption. In the United States there are some ten million professionals, upper and middle corporate managers and government bureaucrats, small investors, and small but successful entrepreneurs who do well enough. Even in a country like India, with a vast impoverished population of a billion people, there are some 80 million who might be designated as middle class, a consumer market much larger than the entire consumer population of most industrialized European nations.
Seventh, it should be noted that the present forced rollback in the United States started from a relatively high level of consumer abundance. With downsizing, the pie may expand at a slower rate or even get a little smaller, but if the plutocrats at the top keep getting larger and larger slices, they are not much troubled about sluggish demand.
The poor shall always be with us, says the Bible. Indeed, that will be so—as long as the superrich also are with us. For wealth and poverty do not just exist in an unfortunate but innocent juxtaposition. They endure in a close dynamic interrelationship. Wealth creates poverty and relies on it for its own continued existence. Without slaves how could the slaveholder live in the lavish style to which he is accustomed? Without serfs or overworked peasants, how could the lord be to the manor born? Without the working poor, how could the leisurely rich make do? With no underprivileged, who would be privileged? As Gilbert and Sullivan said, “If everybody is somebody, then nobody is anybody.”
Economic downturns, or what is popularly known as “hard times,” are not unmitigated gloom, at least not for the giant transnational corporations. During recessions, smaller competitors are weeded out, unions are weakened and often broken, and a reserve supply of unemployed workers grows in number, further helping to depress wages. And depressed wages increase profit margins. In recessions, profits rise faster than wages; indeed, in the severer slumps, wages are not likely to rise at all.
The idea that all Americans experience good and bad times together should be put to rest. Even as the economy declines, rich investors grow richer by grabbing a still bigger slice of whatever exists. During recent recessions, corporate profits rose to record levels, as companies squeezed more output from each employee while paying less in wages and benefits.
Former Secretary of the Treasury Nicholas Brady once remarked that recessions are “not the end of the world” and “no big deal.”5 Certainly not for Brady, who rested comfortably on a handsome fortune, and certainly not for his wealthy associates, who welcomed the opportunity to acquire bankrupted holdings at giveaway prices. Brady and friends understood that the comfort and prosperity of the superrich require an abundant supply of those who, spurred by the lash of necessity, toil as servants on rich estates, tend the country club grounds, serve the banquet luncheons, work the mines, mills, fields, and offices, performing a hundred thankless and sometimes health damaging tasks for paltry wages so that Brady and company can live in the style to which they are accustomed.
Worse still, poverty is not just a material condition. It is not just about income levels, consumption patterns, and employability—as some middle-class economists seem to think. For those who have known it firsthand, poverty is an encompassing oppression. It permeates and muddies all other life experiences. Not having enough money for food or rent; not having a place to live, sleep, and bathe; not being able to get needed medical care; these are not just material hardships, they are conditions that stress the soul and damage the spirit. And in an increasingly industrialized and urbanized society organized around high consumption and high prices, the poor find even less opportunity to create pockets of sustenance and survival.
Although they are getting ever wealthier, today’s superrich are paying fewer taxes, if any at all, while the poor see their limited resources cut back further and their hopes grow dimmer. With free-market globalization, the same pattern emerges abroad. Poverty is spreading as wealth accumulates in ever greater concentrations. Again, it is no coincidence. Wealth battens on poverty.
In most instances, working people are not the authors of their own oppression but victims of the inequities and iniquities of corporate coteries whose consuming need for more and more accumulation creates the tragedies of history, big and small, personal and global.
27 MONOPOLY CULTURE AND SOCIAL LEGITIMACY
In the realm of governance, the economically dominant class is also the politically dominant. Lest this assertion be dismissed as a tired Marxist shibboleth, we should note that throughout much of the seventeenth, eighteenth and early nineteenth centuries, leading bourgeois theorists and philosophers saw the linkage between wealth and political hegemony, and readily accepted it as a necessary and desirable social feature. The English political philosopher John Locke wrote in 1689: “The great and chief end of Men’s uniting into C
ommonwealths and putting themselves under Government, is the Preservation of their Property.”6 Adam Smith wrote in 1776: “The necessity of civil government grows up with the acquisition of valuable property.” And “till there be property there can be no government, the very end of which is to secure wealth, and to defend the rich from the poor.” Civil authority, Smith went on, “is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all.”7 (Parenthetically we might remind ourselves that from ancient Athens to today the historic purpose of democratic government has been the reverse, to protect the poor from the rich.)
The framers of the U.S. Constitution understood the class nature of the state. In 1787, while ostensibly cobbling together a representative republic, they repeatedly asserted that an essential purpose of governance was to resist the “leveling tendencies of the masses” and to secure the interests of affluent property holders against the competing demands of small farmers, artisans, and debtors. In short, they wanted a stronger state in order to defend the haves from the have-nots.8 In Federalist No. 10, James Madison wrote that “the most common and durable source” of divisions and conflict within a polity “has been the various and unequal distribution of property [wealth]. Those who hold and those who are without property have ever formed distinct interests in society” and “the first object of government” is “the protection of different and unequal faculties of acquiring property,” so that those who possess great wealth are not hampered in any way by those who do not. That is not the only function of government, according to Madison, but it is “the first object.”
The state power of the dominant economic class, however, never stands alone. A class that relies solely on the state’s police and military to maintain its rule is never really secure. As Napoleon once said, one can do anything with bayonets except sit on them. Behind the state is a whole supporting network of doctrines, values, myths, and institutions that are not normally thought of as political. The state, as Antonio Gramsci noted, is “only the outer ditch behind which there [stands] a powerful system of fortresses and earthworks.”9 These auxiliary institutions help create the ideology that transforms a ruling-class interest into a “general interest,” justifying existing class relations as the only natural and optimal—albeit not perfect—societal arrangements. Hence, along with monopoly capital we have monopoly culture. In other words, modern corporate capitalism is not just an economic system but an entire social order.
Contrary Notions Page 22