The wealth chasm: a dangerous cocktail

The street demonstrations of 2011 and 2012 are still fresh in our minds. Thousands of voices chanting, “We are the 99%!” and blockading the stock exchange have not left the psyche of American’s, and were successful in getting their message across. Before 2011, it was heard in whispers: “They have too much.” Now, it’s a shout. The rich are indeed doing very well for themselves. In fact, the wealth gap is almost unprecedented, except for right before the great depression, and the subsequent rebellion that shook the United States that ultimately resulted in the New Deal. (DeSilver, 2013) History doesn’t necessarily repeat, but we are seeing a world eerily similar to that which was in place before 1929: The rich hoarding all the money and anger simmering in the proletariat. Globally, the reaction against this sort of systemic looting of the people by the capitalist class is taking form and is becoming increasingly better organized and more violent. The global wealth gap is a combustible recipe for insurrection, and will result in a collapse of capitalism and the rise of radical left, and right wing ideologies if it is not fixed.

The wealth gap in the world is at astonishing levels. A simple browse of the news, or the Facebook feed of any liberal-leaning page will bring up statistics that would seem like they were made up if we weren’t bombarded by them at all times, and the data to back them up. According to William Domhoff of the University of California-Santa Cruz, the top 1% of earners in society own 50% of all investable assets combined. (Domhoff, 2013) This is harmful, because the top 1% in American society account for roughly 3.3 million people, while the other 300 million or so have to survive off of the other 50%, and most of the remaining capital is concentrated at the rest of the top 10% of American earners. This leaves very little for the bottom 90% to live off of, which is especially trying in a post recession America. Investments aside, the disparity in actual earnings is dramatic as well. In Arizona, the top 1% of income earners captured over half of all income growth, while the rest were left to spread out the increased wealth amongst themselves, resulting in modest gains in income relative to the top earners. (Sommeiller, Price 2014) This has left the average income earners, and those below them, fighting for only paltry gains in income and having to compete with the rising cost of living alongside their rarely increasing wages. This is producing a recipe for disaster, as people are then forced to find other ways to survive, and are calling for change that is no longer exclusive to the two party system that we are used to in the United States.

The basic idea of capitalist economics revolves around a simple phrase: “Supply and Demand.” The idea is that company x produces y, and Z buys it because they want to obtain Y. There is a problem, however, when Z can no longer afford Y and X goes out of business because of it. That is exactly the scenario that is about to unfold in the United States if wealth inequality is not fixed, and has unfolded across Europe as the fiscal crisis, and the resulting austerity measures, have bankrupted the population and subsequently bankrupted the employing class in places like Greece, Italy, and Spain, which are reporting staggering unemployment rates at around 30%. (BBC, 2014) The ensuing social chaos caused by such a crisis has resulted in riots, and calls for alternative forms of economics, and politics, or the absence of politics themselves. In Greece, riots led by huge anarchist groups have become commonplace, in their struggle to abolish capitalism and end nation-states once and for all. A political party known as SYRIZA (The coalition of the Radical Left) is polling as one of the leading parties, and threatens to take over the government altogether next time elections are held. They are an openly communist party. On the right wing, a neo-Nazi group called Golden Dawn pulled about 10% of the electorate in the last elections and entered parliament for the first time, despite their track record for brutality against immigrants. All of these things are indicative of the social climate in Greece, which has been produced by the fiscal crisis, which is really an IMF scheme to suck the wealth out of the Greek state for themselves. Additionally, the revolutions that rocked the Middle East in 2011 were largely the causes of unemployment and authoritarian practices by their governments, which convinced the people that there was no other option except to revolt. It may not be long before we see the same thing play out in Europe, and then America.

In America, we see the beginning of the reaction patterns as the economy has been in a slump since 2009, and there seems to be no end in sight to the life of bad wages, and precarious labor. In 2011, and 2012 the Occupy Wallstreet movement hit the United States, which began its critique at the demand for a restructuring of wealth that did not favor the top 1% as much. This was expressed in their chant which became ubiquitous: “We are the 99%!”, which in itself is a euphemism for Marxist class warfare. Over the course of late 2011- and early 2012 the protests spread, and the more police brutality that was thrown at them, the more radical the movements became. The protests organized a general strike on May 1st of 2012, which ended in rioting that struck the West Coast, and put Seattle in a state of emergency. The roots of the growing insurrection against capitalism in America can be traced back to the articulation of the wealth gap, and since it is not solved we can logically expect more of it in the future. We are also seeing the radical right wing take power, which was especially visible just a couple of weeks ago as they organized their first nationwide protest in a while, with the “White Man March” which called for the protection of white heritage and culture, intertwined with racist ideology, of course. These are both reactions to the problems of economic crisis under capitalism, which will only multiply with the continuation of economic crisis.

The wealth gap has not just caught the attention of left leaning protesters, but was even the subject of a NASA funded study to determine what would happen if the issue persisted. The results were not good for advocates of unbridled wealth accumulation. The study concluded that wealth inequality would produce social unrest that, when combined with climate catastrophe, would destroy Western Civilization. (Ahmed, 2014) This is in line with common sense, as problems stemming from wealth inequality would only be exacerbated by climate catastrophe. For example, access to proper shelter is being diminished by the rise of wealth inequality, amid such things as food prices rising due to diminishing crop returns from severe drought. This is a recipe in itself for social unrest as people vie for food that is too expensive for them to afford comfortably, and housing that is becoming increasingly expensive. In Arizona, we experience the rising cost of electricity as well, as the hotter it gets (and it is, thanks to global warming) the less efficient electricity becomes and the more expensive it becomes. This is having a very negative effect on people just trying to get by, and is making it more difficult to survive every year that we go through this crisis. Until there is a mass redistribution, and a rethinking of the ethics of capitalism, or its outright abolition, we will be plagued by these problems which will only get worse year after year.

In conclusion, wealth inequality is a problem that has to be fixed. We are seeing the beginnings of the logical consequences of people that are being pushed to the brink due to the lack of access to basic necessities, such as food, and shelter, the latter of which has been made worse by the irresponsible foreclosure practices of the major banks in the United States. If we continue down the path we are headed on, we will realize a situation in which the people simply have no more money to buy the products that a consumer based lifestyle expects of them, and find very few options left except to take their problems to the streets, and cling to ideologies and solutions that no longer fit in with the status quo. We could see a situation like Greece where marginalized sections of the population are calling for hardline communism, or outright fascism. Already, in marginalized countries like Ukraine, we are seeing the politics of the citizenry resemble those of the deeply impoverished Weimar Republic of Germany before the Nazi’s took power in the 1930s, If there is to be no solution from the ruling class, then the people will find it themselves, just as they did when they stormed the Bastille in France during the revolution, or when they stormed the winter palace in 1917 to depose the Tsar. The people always find a solution when the social contract is broken.