There is an old saying that, “The rich get richer while the poor get poorer.” That old saying is backed up by a recent Rand Corporation study. It concluded that from 1975 to 2023 there was a transfer of wealth from the least affluent ninety percent of the population to the most affluent one percent in the United States. That amount totaled about seventy-nine trillion dollars.
The Rand Corporation used three factors to come up with their conclusion. One was the tremendous growth in the U.S. economy since 1975. Then, there was inflation that reduced the buying power of working people. Then, there was a decline in the share of the economy owed by the least affluent 90% of the population. This decline went from about 65% in 1975 to about 45% in 2023. According to my calculations, this meant that if working people had an equivalent wealth as we did in 1975, everyone in the least affluent 90% of the population would have about $250,000 more assets.
The billionaires of the world had many schemes that allowed them to take this vast amount of money.
Health Care
During the years 1975 to 2023 about 700 hospitals closed their doors. While this was happening, drug companies were making a fortune selling astronomically expensive drugs. Opioids were some of the most lucrative selling drugs. Opioids also caused millions of people to become addicted to drugs. Now, drug addiction is one of the leading causes of death.
President Trump has been murdering people on boats sailing in the Caribbean Sea. He claims that he is saving the lives of 20,000 people for each person he’s murdered. Yet he offers no evidence that these people are trafficking drugs. The President hasn’t been saying anything about the fact that large numbers of people became addicted to drugs after using legal opioids prescribed by doctors.
I live in Philadelphia and this city offers a good example of how the affluent are gouging out huge amounts of money from health care. At the same time as 700 hospitals closed their doors. The University of Pennsylvania Hospital and Jefferson Hospital have invested billions of dollars in new health care buildings. We can speculate that the money used to put up these buildings came from banks, or investment companies. Those investors will expect interest payments on their investments every month.
Temple University Hospital is also located in Philadelphia. Temple isn’t making the same investments as the other two hospitals. One reason is that Temple has the more hospital beds than the other two hospitals in the city. This means that the investors in health care see that financing beds in hospitals isn’t the best way to make money. They would prefer to invest in the most lucrative specialties. This, so patients can see a doctor and leave in a hurry.
Education
Back in 1972 I attended Rutgers University. At that time the tuition for a New Jersey resident was $200 per semester. Today that same tuition is $11,619. So, imagine if a worker had an annual wage of $10,000 in 1975. If that worker had the same wage increase as the price increase for tuition at Rutgers, their annual wage would be about $580,000. Clearly most of us don’t even know anyone who has that salary.
Back in 1975 the United States was one of the primary manufacturing nations in the world. In those years there were plentiful jobs for engineering graduates.
Today China is the leading manufacturing nation in the world. So, engineers have no problem in finding work there. In the United States students are gravitating towards degrees in business administration. This is because those jobs are more lucrative than the engineering jobs. Because of the astronomical cost of education, university students have a real incentive to major in the most lucrative specialties. However, while engineering is necessary for industrial production, business administration is about maximizing corporate profits.
Racism
The overall decline in the standard of living has been the most brutal with respect to the least affluent 20% of the population. Because of the institutionalized racist discrimination in this country, Black and Latino people have been disproportionately affected. This means there are fewer resources for health care, education, and housing in those areas. More people rely on substandard mass transit systems. Access to fresh food in supermarkets is more difficult to obtain.
In the past, when the economy was growing, there was a labor shortage. So, there were incentives to attract workers from other countries to come here. Now as the economy is in a downturn, politicians in the democratic and republican parties are targeting workers for deportation. Immigration and Customs Enforcement (I.C.E.) officers are raiding homes and workplaces to apprehend wealth producing workers so they can be deported.
While racist attitudes aren’t as open as they used to be among workers, many workers do not understand the need to advance the demand of equal rights for everyone. However, when we look at the $79 trillion gift working people gave to the most affluent, we see how the driving force for racist discrimination is the tenacious drive to maximize corporate profits.
Problems with the Rand Corporation study
In my opinion, there are a few problems with the study by the Rand Corporation. One is that corporations profit from the working class all over the world. This is the driving force behind the fact that about 80% of the world’s population lives on $10 per day. So, the $79 trillion that the most affluent one percent took came from workers all over the world.
The other problem is about all the enterprises that add nothing to the value of goods and services we all need and want. However, those enterprises add to the overall cost of living. I’m talking about banks, insurance companies, advertising agencies, landlords, and corporate law firms. Most of the skyscrapers in the large cities house these enterprises and these are visual aids to the exploitation of the working class.
The cost of these enterprises in included in the prices we pay, yet goods and services are in no way better because of the existence of these enterprises. So, when we look at this reality, I believe we can say that the working class gave up a lot more than $79 trillion in the last fifty years.
Is there another way?
Reading this blog, someone might ask the question. How could that $79 trillion be used in a more meaningful way? From the capitalist point of view, this is a meaningless question. The former Prime Minister of Britain, Margaret Thatcher, explained this with the following words. “There is no other way.”
The author Francis Fukuyama wrote a book where he argued that we are living with “the end of history.” In other words, the political economic system that took $79 trillion away from working people is the best humanity is capable of.
I happen to be a communist. While many people support aspects of socialism, most people aren’t ready to participate in a movement that puts another political economic system in power. So, why do I advocate for this perspective?
Karl Marx and Frederick Engels developed a philosophy they called dialectical materialism. This way of thinking is different from the formal logic we were all raised with.
We would all like to believe that if we save our money, one day we might be able to purchase the things we need, as well as some of the things we want. Then one day we might be able to retire.
Dialectical materialism argues that society doesn’t conform to preconceived ideas. Rather our reality is a continuous battle between contending forces.
This explains why there was an economic upturn in this country for about thirty years after the Second World War. Then, as the economy here stagnated, and the Chinese economy erupted. So, while Chinese manufacturing dominates the world today, we can anticipate a sharp downturn in that economy as well.
Marx and Engels also exposed the weakness of the capitalist economy in their Communist Manifesto published in 1848. They argued that the disease of capitalism is the crisis of “overproduction.” In other words, there comes a time when workers are not buying the capitalists are selling. Then, producing commodities is no longer profitable.
In the 1990s I experienced this when an automobile plant I worked in closed its doors. The company terminated the jobs of about 2,500 workers. The newspaper reported that the reason given for this shutdown was “excess capacity.” What the newspaper didn’t report is that Marx and Engels predicted this in the Communist Manifesto in 1848.
In the capitalist framework correcting wealth inequality is about giving workers more money. However, socialism isn’t only about a redistribution of wealth. Socialism is about making human needs and not profits the top priority.
In other words, a socialist government would make it their top priority to provide for the needs of everyone all over the world. Rather than merely giving people money, that government would establish lifetime rights for all our needs. Goods and services would be routinely made of the highest quality. The production process would operate in harmony with the environment. The goal would be to give everyone lifetime rights to food, clothing, housing, health care, education, transportation, communication, and exposure to culture that would include art, music, theater, film, literature, sports, and recreation.
As our standard of living continues to deteriorate, I believe millions of workers will begin to demand fundamental change. Understanding that transformative change is indeed possible I believe workers can be won to the perspective of making this a world where young people can begin to live and flourish in the world.
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