Sunday, April 6, 2014

Addressing the Mal-Distribution of Wealth

© Charles D. Hayes

In an episode of The Daily Show, host Jon Stewart described reading an essay in Time magazine about healthcare and feeling as though he was moving along, gaining speed, and breaking the emotional sound barrier. I feel the same way about work and the subject of compensation. My dissonance has been growing exponentially for years. But now, beginning my eighth decade on this planet, I've had enough of the nonsense.

The hot air begins with the mantra of free-markets, arguments against a minimum wage, and the misguided notion that low taxes are the only way to expand the economy. First off, there is no such thing as a free market. Never has been, never will be. Nothing is without cost, which means nothing is free, whether it is measured in human stress or environmental damage, and the political muscle to add actual costs to commercial products simply does not exist. The hidden costs of using fossil fuels alone are mindboggling.

Markets create nothing: people do. Powerful people make decisions that affect everyone else. People with enough money to rig the system do so without hesitation. Many years ago, Friedrich Hayek warned that too much central planning would lead to serfdom. No doubt, he was right. But too little planning has the same effect.

In 1914, Henry Ford made his employees the generous offer of five dollars a day in wages and profit sharing. Business boomed. Commerce flourished because people who earn wages spend their money. The same stimulus happens today when the minimum wage is raised. And yet, the worn-out cry that raising the minimum wage will cost jobs is repeated endlessly. Those who shout it the loudest ignore the economic record. They think if they say it often enough and loudly enough, people will believe it. And sure enough, many do.

A few years after Henry Ford raised his employees’ wages, he instituted polices that made working at his automobile plant a living nightmare. The market didn't do this. He did. But you don't need a road to serfdom like that if people are born there.

The misattribution of virtue with its relation to labor has become so severe and so utterly distorted that most people pay no attention to the mass exploitation of wage earners and the fact that taxpayers subsidize the workers of some of America’s largest and most successful corporations. That entrepreneurs can exploit wage earners is taken as a God-given right. They call it freedom.

When Elizabeth Warren was running for her Senate seat, she was very articulate about what it takes to be successful in America. She argued that justice requires acknowledging the debt each of us owes to the system and the mass of individuals whose efforts make business possible. Our educational system, our judiciary, and our infrastructure both hard and soft, she reminded us, all are paid for by taxpayers.  

When you grow up in a world where overt exploitation is viewed as routine, it can seem normal. That's the trouble. I didn't grow up that way. In the 1940s and '50s, when I was young, there was a great deal of equity in working for wages. Ask yourself where in the hell the idea came from that men and women working full-time, at jobs that need to be done, in a country that routinely refers to itself as the greatest country on earth should live in poverty, while their employers live like royalty? Not only that, but how is it these workers have come to be called takers or parasites because they often require some kind of government assistance?

Elsewhere I have written extensively about how our politics is so entwined with our identity that we don't reason about political matters; instead, we relate. When we do this, we are oblivious to facts. When I was growing up, conservatives were a party to be admired for doing the right things for the right reasons. These days, however, they simply ignore the historical fact that raising wages acts as a stimulus. They issue dire warnings about a loss of jobs, and the identity-driven flock genuflects in agreement.

This arrogance ranges from mythic assumptions about Horatio Alger success stories to Ayn Rand's idiotic notion that the only moral virtue that really counts is selfishness. You can stack the reasons for raging inequality so high that we can't see over them, but for people who maintain the ability to see through pretentiousness, you can't make a credible case that ninety-nine percent of people in this country deserve to be serfs, while one percent live like monarchs.

Funny thing about Henry Ford: He thought of himself as a working man and hated the investor class, often referring to them as parasites. We tend to overlook the fact that one of the great rationalizations for going against the biblical injunction about the evils of usury and applying interest to lending and savings was that it enabled the rich to stay wealthy without working.

Another funny thing is how reality defies conventional Wall Street wisdom, which says keeping wages as low as possible is the only reliable path to profit.

Contradicting this view, Costco is beating the socks off its competition, while paying its employees more than two and a half times more than the competitors. Moreover, the company furnishes its employees with health insurance. The result is low-turnover, employee commitment, and increased public support expressed through exceptional customer loyalty. Somehow successes like these are overlooked by laissez faire advocates.  

What we have in America with our current wage and tax system is not fair and equitable compensation, nor is it the redistribution of wealth. What we have is the mal-distribution of wealth, motivated by identity politics, driven by arrogance, and made possible by the systemized planning of lobbyists who purchase power from politicians and then call it free market legislation.

Rub an ice-cube over your temples and think about this: Corporations have bought the right to employ people permanently in lifetime jobs at serf wages, with government subsidies, and they are able to deflect criticism by shouting clich├ęs and platitudes about freedom.

I grew up in a country that took pride in the virtue of work at a time when working wages offered enough financial security to live above and beyond poverty. It could happen again, but only after we break the emotional sound barrier of dissent. 

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