The Widening Gap Between Rich and Poor----and How Socialists Will Need to Respond in the 21st Century

The gap between rich and poor in America is the widest in 70 years, according to a new study published by the Center for Budget and Policy Priorities.

The research, based on newly released figures from the non-partisan Congressional Budget Office shows that the top 1% of Americans, approximately 3 million people, earn an average of $862,000 each (after tax) or $1.3 million before tax. While more than 110 million Americans are in the bottom 40% of the income distribution, with income averages of $21,350 each year.

According to IRS data, the wealthiest 1% of Americans earned 21.2% of all income in 2005, while the bottom 50% earned 12.8% of all income, with the gap widening each year with increases for the rich and decreases overall for the poor. Academic research suggests the rich last had this high a share of total income in the 1920’s.

Scholars attribute rising income inequality to technological change, globalization and advances in communications, which favor those with more skills.

The Center for budget and Policy Priorities also stated that the income going to the richest 1% has gone up 300% in the past twenty years, while income of the poorest 40% went up by a mere 11% over the last 20 years.

The question confronting socialists in the 21st century is how to face this situation and respond appropriately to it. The difficulties are not primarily intellectual in nature.

Socialism has always preached about this disparity of incomes in America ’s capitalistic society, and has had to combat the status quo who has disparaged socialism effectively in order to secure their power and control.

Michael Newman, in his book on Socialism, states that socialism “needs to persuade ordinary people if it is to regain the initiative.” And a key element is to demonstrate that the basic aspects of the socialist doctrine are still relevant in the 21st century. The inequality of income is not due to merit of effort, as capitalism would like everyone to think, but is embedded in the economic structures of our society. While some individuals can rise about poverty on their own, the overwhelming majority cannot. Thus, it is the system and not the individuals where the fault lies.

Just because we make more money than our grandparents does not mean that people are better off today. Poverty should be measured in relation to the wealth of contemporary society, rather than by historical standards.

Newman also states that structural inequality between the rich and the poor countries of the world is far greater than within just the capitalistic core (i.e. America ).

The United Nation’s annual human development report in 2003 showed that 54 countries saw average income decline during the 1990’s. 21 countries experienced a more absolute decline, not just in terms of income, but also in terms of life expectancy and literacy as well. The previous decade only showed 4 countries with such a drastic decline.

Poverty that exists in much of the world is one of absolute destitution, the lack of food, drinking water, basic sanitation, healthcare and education. 1% of the world’s population now receives as much income as the poorest 57%, while the income of 25 million richest Americans is the equivalent of almost 2 billion of the world’s poorest people. Newman says that global inequality might appear to be more urgent than in America , but it is misleading to set one kind of inequality against another.

Socialists have also condemned this inequality based on the degree that possibilities of human development are so uneven and arbitrary, plus the injustice of unequal power and unequal possibilities for fulfillment, and artistic and intellectual creativity. Yet recognizing this critique of capitalism is not enough. People know that poverty and inequality exist on a massive scale, but this does not make them socialists. Many in society do not believe that capitalism is to blame. Thus, one sure task for socialism in the 21st century is to clearly demonstrate the extent of capitalism’s responsibility for poverty and inequality, and that their solutions can only be partial.

This, however, still would not lead people to turn to socialism. Newman says it is far easier to make the case against “poverty” than against “inequality.” Even corporate leaders are uncomfortable about poverty, but they would be less likely to accept “equality” as a targeted or sought-after value. They, instead, would argue that it is more important to reward those with extra talent, energy and ambition. Everything would be based on merit, according to the corporate leaders in a capitalistic society.

However, while the socialists would expect the wealthy and powerful to reject equality as a value, they would have higher expectations for the majority of the population to favor equality. Yet, socialism faces an uphill battle in this arena, also, Newman says. There is little sign that this value is currently widely shared by the majority population as well.

Therefore, while equality must remain a core value within socialism, it would seem that socialists have to still push and prod and evaluate societies by using as its criteria, these core values, while also addressing the other elements that may create more understanding and acceptance in the long run.

If socialists expect to be more effective in their message, and to lessen the widening gap and disparity of incomes, and of the larger problem of poverty globally, then it will need to be more accepting of addressing the non-socialist issues in society as well.

Brian Moore for President
Socialist Party, USA
Candidate
www.votebrianmoore.com
Tel: 352-686-9936

CC: Rozzo-Chairman Emeritus