Becoming Serfs

You know the statistics. Income inequality in the United States has not been this pronounced in over a century. The top 10 percent has 50 percent of the country's income, and the upper 1 percent has 20 percent of the country's income. A quarter of American workers struggle on wages of less than $10 an hour, putting them below the poverty line, while the income of the average CEO of a major corporation is more than 300 times the pay of his or her average worker, a massive increase given that in the 1950s the average CEO made 20 times what his or her worker made. This income inequality is global. The richest 1 percent of the world's population controls 40 percent of the world's wealth. And it is getting worse.

The richest 1 percent of the world's population controls 40 percent of the world's wealth. And it is getting worse.

What will the consequences of this inequality be economically and politically? How much worse will it get with the imposition of austerity programs and a new tax code that slashes rates for corporations, allowing companies to hoard money or buy back their own stock rather than invest in the economy? How will we endure as health care insurance premiums steadily rise and social and public welfare programs such as Medicaid, Pell Grants and food stamps are cut? And under the tax code revision signed by President Trump in December, rates will increase over the long term for the working class. Over the next decade, the revision will cost the nation roughly $1.5 trillion. Where will this end?

We live in a new feudalism. We have been stripped of political power. Workers are trapped in menial jobs, forced into crippling debt and paid stagnant or declining wages. Chronic poverty and exploitative working conditions in many parts of the world, and increasingly in the United States, replicate the hell endured by industrial workers at the end of the 19th century. The complete capture of ruling institutions by corporations and their oligarchic elites, including the two dominant political parties, the courts and the press, means there is no mechanism left by which we can reform the system or protect ourselves from mounting abuse. We will revolt or become 21st-century serfs, forced to live in misery and brutally oppressed by militarized police and the most sophisticated security and surveillance system in human history while the ruling oligarchs continue to wallow in unimagined wealth and opulence.

"The new tax code is explosive excess," the economist Richard Wolff said when we spoke in New York. "We've had 30 or 40 years where corporations paid less taxes than they ever did. They made more money than they ever did. They have been able to keep wages stagnant while the productivity of labor rose. This is the last moment historically they need another big gift, let alone at the expense of the very people whose wages have been stagnant. To give them a tax bust of this sort, basically reducing from 35 percent to 20 percent, is a 40 percent cut. This kind of crazy excess reminds you of the [kings] of France before the French Revolution when the level of excess reached an explosive social dimension. That's where we are."

When capitalism collapsed in the 1930s, the response of the working class was to form unions, strike and protest. The workers pitted power against power. They forced the oligarchs to respond with the New Deal, which created 12 million government-funded jobs, Social Security, the minimum wage and unemployment compensation. The country's infrastructure was modernized and maintained. The Civilian Conservation Corps (CCC) alone employed 300,000 workers to form and maintain national parks.

"The message of the organized working class was unequivocal," Wolff said. "Either you help us through this Depression or there will be a revolution."

The New Deal programs were paid for by taxing the rich. Even in the 1950s, during the Eisenhower presidency, the top marginal rate was 91 percent.

The rich, enraged, mounted a war to undo these programs and restore the social inequality that makes them wealthy at our expense. We have come full circle. Dissidents, radicals and critics of capitalism are once again branded as agents of foreign powers and purged from universities and the airwaves. The labor movement has been dismantled, including through so-called right-to-work laws that prohibit agreements between unions and employers. The last remaining regulations to thwart corporate pillage and pollution are removed. Although government is the only mechanism we have to protect ourselves from predatory oligarchs and corporations, the rich tell us that government is the problem, not the solution. Austerity and a bloated and out-of-control military budget, along with the privatization of public services and institutions such as utilities and public education, we are assured, are the way to economic growth. And presiding over this assault and unchecked kleptocracy are the con artist in chief and his billionaire friends from the fossil fuel and war industries and elsewhere on Wall Street.

"We've given a free pass to a capitalist system because we've been afraid to debate it."

The elites cook statistics to lie about a recovery from the 2008 global financial crash. To gather unemployment statistics, for example, government agents ask people two questions: Are you working? If they answer "yes" they are counted as employed even if they have a temporary job in which they work only an hour a week. If they say "no" they are asked if they have been looking for work. If they have not looked for work in the last four weeks they are magically erased from the unemployment rolls. And then there is the long list of those not counted as unemployed, such as prisoners, the retired, stay-at-home spouses and high school and college students who want jobs. Alternative facts did not begin with Donald Trump.

"You don't have to be a statistical genius to understand that over the last 10 years, a significant number of people gave up looking because it's too disgusting," Wolff said. "The jobs they were offered were inferior to what they had before or so insecure that it made their family life impossible. They went back to school, went into the illegal economy or began to live off their friends, relatives and neighbors."

"The quality of the jobs, the security, the benefits and the impact on physical and mental health have been cascading downward as the wages remain stagnant," he went on. "We're not in a recovery. We're in an ongoing decline, which, by the way, is why Mr. Trump got elected. This is happening to capitalism in Western Europe, Japan and the United States. This is why an angry working class is looking for ways to express and change its circumstances."

"Society has a responsibility to itself," Wolff said. "If the private sector can't or won't manage that, then the public sector has to step in. It's what [Franklin] Roosevelt said when he came on the radio: 'If there are millions of Americans who ask for nothing other than a job, and the private sector can't provide it, then it's up to me. Who else is going to do it?' If we cut back on welfare we are making people depend on the private sector. What happens to people thrown on a private capital sector that cannot and will not function in a socially acceptable way?"

"Instead of creating a middle class, it polarizes everything," he said of the inequality. "It allows the top executives to go completely crazy with their pay packages. They are paid beyond what's reasonable, beyond what their fellow capitalists receive in other parts of the world. There is a collapse of the ability to buy things. A company that saves all this money through a tax cut from Mr. Trump is not going to spend its money hiring people, buying machines, producing more. They're having trouble selling what they already produce. They're impoverishing the very people they sell to. What do they do with the money? They take it and pay themselves. They give themselves higher pay packages. They buy back their own stock, which they're legally allowed to do. It pushes the price of the stock up. Their [personal] compensation is connected to how well the price of the stock does. No jobs are created. No growth is created. The price of stock is going up even though the viability of the enterprise--because of the [company's] collapsing market--is shrinking."

"Capitalism is hollowing itself out," he said. "The capitalists refuse to face this because they are making money, for a while. That's the same logic as the monarchs before the French Revolution building the fantastic Versailles without understanding they were digging their own graves in those lovely gardens."

The elites divert attention from their pillage by blaming foreign countries such as China or undocumented workers for the economic demise of the working class.

"It's a classic ploy of crooked politicians stuck with a problem of their own making, blaming somebody else," Wolff said. "We take the poor 10 or 11 million immigrants in this country with questionable legal status and we demonize them. We scapegoat them. They couldn't possibly account for the difficulties in this economy. Throwing them out does not fundamentally change the dynamics of the economy. It's childishly easy to show this. But it's good theater. 'I am smiting the foreigner.' "

"Tariffs are another way to smite the foreigner," Wolff went on. "The tariff is a punishment of others. These days, the bugaboo is China. They are the bad ones. They are doing this. I'd like to remind people two or three things about these tariffs. One: Historically, they don't work very well. It's very easy to evade. For example, we put a tariff on steel from China. What do the Chinese do? They cut a deal with the Canadians or the Mexicans or the Koreans or the Europeans. Sell it to them, who resell it here. It's on the same ship coming here. It just has a different flag at the back. This is childish. It's well known."

"Number two: It's political theater," he said. "It doesn't change very much. For example, a good half of the goods that come from China come from subsidiaries of American corporations that went to China over the last 30 years to produce for the American market. You are smiting them by closing off their market. They're going to be angry. They're going to lose their investments. They're going to take corrective action. All of this is negative for the American economy. It's bizarre."

"Finally, the Chinese, their politicians being not that different from ours, will have to posture in return and retaliate," he said. "They're already targeting our farm products. It is chaos. The United States, when we were a young country, was accused by the British and the Europeans of stealing their technology and intellectual property. Never before has it been easier to communicate intellectual property than it is today. The Chinese have been doing their share of this as an up-and-coming economy. It's not new. It's not frightening. It's a part of how capitalism works. To suddenly get people outraged as if something special is going on, that's just dishonest."

There is no discussion in the corporate-controlled media of the effects of our out-of-control corporate capitalism. Workers struggling under massive debts, unable to pay for ever-rising health care and other basic costs, trapped in low-wage jobs that make life one long emergency, are rendered invisible by a media that entertains us with court gossip from porn actresses and reality television stars and focuses on celebrity culture. We ignore reality at our peril.

"We've given a free pass to a capitalist system because we've been afraid to debate it," Wolff said. "When you give a free pass to any institution, you create the conditions for it to rot right behind the facade. That's what is happening."