Wealth distribution and capitalism

Following is the second part of a chapter on inequality excerpted from Fred Goldstein’s upcoming book “Capitalism at a Dead End.” The first part, which appeared in last week’s issue of WW under the headline “Inequality, capitalism and socialist revolution,” took up “Capitalism and the roots of inequality.” This concluding section deals with “The character of wealth distribution [as it] flows from the mode of production.”

The fact of the matter is that inequality in distribution flows from the system of production for profit. Or, as Marxists put it, relations of distribution flow from relations of production. It is private property in the means of production and services that determines the distribution of social wealth. No amount of redistribution of wealth under capitalism, through government spending, union contracts or any other method, can overcome the class inequality that flows from the right of the capitalists to own not only the means of production, but all the products of production.

In this regard, an analysis that Karl Marx wrote in 1847 is helpful. Marx was trying to debunk the argument that labor and capital have a common interest in the growth of capitalism. The essay ”Wage Labour and Capital” was written based on lectures to class-conscious German workers who were first getting organized. Marx wrote:

“We have thus seen that even the most favorable situation for the working class, namely, the most rapid growth of capital, however much it may improve the material life of the worker, does not abolish the antagonism between his interests and the interests of the capitalist. Profit and wages remain as before, in inverse proportion.

“If capital grows rapidly, wages may rise, but the profit of capital rises disproportionately faster. The material position of the worker has improved, but at the cost of his social position. The social chasm that separates him from the capitalist has widened.

“Finally, to say that ‘the most favorable condition for wage-labor is the fastest possible growth of productive capital’ is the same as to say: the quicker the working class multiplies and augments the power inimical to it — the wealth of another which lords over that class — the more favorable will be the conditions under which it will be permitted to toil anew at the multiplication of bourgeois wealth, at the enlargement of the power of capital, content thus to forge for itself the golden chains by which the bourgeoisie drags it in its train.” (Marxist Internet Archive)

Much of Marx’s essay is devoted to showing that no matter what the relative condition of the workers is under the system of capitalist exploitation — whether they are higher paid or lower paid — even when they are in a good bargaining position because the boss needs them to keep expanding production, the workers constantly lose ground in relation to the capitalists, who grow immensely in wealth. So the systematic increase in inequality between the classes is built into the system of exploitation itself. Furthermore, the working class, at best, is forever confined to trying to “forge the golden chains by which the bourgeoisie drags it in its train.”

Marx then goes on to show that the so-called prosperity of the workers is a lie, because the bosses use every method to lower wages, even in so-called good times.

Capitalism in the age of the scientific-technological revolution and imperialist globalization has expanded and evolved by leaps and bounds since the days of Marx. The working classes in the imperialist countries are on a downward course and their wages are falling. They are losing ground not only relatively but absolutely.

Workers are no longer inching forward in their standard of living while the capitalists race ahead. Wages are going down. Conditions are getting worse. The bosses have engineered a worldwide wage competition between the workers in the centers of capitalism and the hundreds of millions of workers in low-wage countries. The bosses have used offshoring along with technology and the exploitation of immigrant workers to promote this competition. The global reserve army of unemployed and underemployed has grown to hundreds of millions. Workers are under pressure on every continent.

In the U.S. wages have been going down since the 1970s. (Perry L. Weed, “Inequality, the Middle Class & the Fading American Dream”) The gross inequality we see today arises from the absolute decline of wages. The lion’s share of new wealth goes to the financiers and corporate owners in increasing quantities of surplus value (unpaid labor) in the form of money.

It is urgent to try to reverse the absolute decline of the conditions of the proletariat and the oppressed. The fight against the growth of obscene inequality must continue and escalate.

Corporate wealth creates extreme personal wealth

But it is important to note that the obscene inequality in personal income pales in comparison to the corporate wealth controlled, not by the 1%, but a tiny fraction of the 1% who sit on the boards of directors of the banks and the giant transnational corporations. This is what Lenin called finance capital — the small group of corporations that control trillions in corporate wealth and most of the production of the world’s wealth.

A recent study shows that 147 corporations dominate 40 percent of the world’s corporate wealth. (“Financial world dominated by a few deep pockets,” ScienceNews, Sept. 24) Private ownership and control of vast corporate and financial wealth by the summits of the ruling class are what lie behind the inordinate personal wealth doled out to the CEOs of the Fortune 500 and the wealthy of the world — the administrators, stockholders and bondholders of capital and finance.

Thus the question is, shall we stop at the fight to lessen inequality under capitalism, shall we fight to help forge the “golden chains by which capital” drags labor, or shall we carry the fight against inequality to its ultimate conclusion and fight to break the chains of class domination altogether? Inequality between the classes can only be abolished by getting rid of the capitalist class altogether and the system of exploitation upon which all their obscene wealth is built.