INEQUALITY

It is acknowledged that Adam Smith was the father of modern or classic economics. He articulated in his most important work, “The Wealth of Nations,” the positives of what today is called capitalism. But he was cognizant of the moral responsibility that came with the Industrial Revolution.

We, Americans should take to heart in this modern era a couple of his quotes as we as a nation begin to discuss in earnest the income inequality and poverty that exists in America today. Adam Smith, once stated,” No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.” He also put forth the idea that,”To feel much for others and little for ourselves; to restrain our selfishness and exercise our benevolent affections, constitute the perfection of human nature.” In a further telling remark, Smith added,” The disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect, persons of poor and mean condition is the great and most universal cause of the corruption of our moral sentiments.”

Are we not witnessing before our very eyes, this corruption as unemployment benefits are being denied. Social Darwinism is gaining popularity among Republicans. Social Darwinist of the 1870’s in England and America believed in natural selection and the survival of the fittest. For the wealthy they believed that they had been selected as the fittest and therefore their wealth should continue to increase while the poor deserved to see their poverty increase.

A society so constructed to where only the top 1 and 1/2 are wealthy is a recipe for anarchy and revolution. The social fabric would not be able to be kept together except by force under those circumstances.

It is interesting to take not of the fact that Australia with a minimum wage of $16 per hour was somehow able to avoid the Great Recession. Hmmmn!

These sentiments bring to mind the need to have an ethical discussion about today’s inequality. It is time to stop talking over each other and listen to one another for if we stop trusting each other and no longer have common purpose it would be most difficult regaining it.

One would think that the common logic of all boats rising helps all of us would be the goal of our elected representatives in Washington, D.C., but too many of them are more interested in being re-elected. They are more interested in lining their pockets at the public trough than they are interested in the national interest and the betterment of our country. And alas, too many of their supporters are only interested in increasing their own wealth and power.

It is not only a question of what is the moral thing to do but we need to address income inequality if we as a nation will survive as we know it. There will be real life consequences if we do not address the issue of income inequality head on.

Let us look briefly at the America we have lost. What did the years between 1945 and 1975 look like? American experienced unprecedented prosperity. People felt secure in their jobs and they had an expectation of social mobility.

Europe rose above the ashes and rubble strewn towns and cities to experience affluence.

What policies existed during that period and that do not exist today that can best explain the differences between today and yesterday?

The American economy had much higher levels of taxation. The economy depended on protection from foreign competition, we also had price supports, regulation, subsidies and government incentives, initiatives and guarantees. A lot of women could choose to stay at home because they did not have to work.

What do we have now that is different? We have much lower taxes, no protectionism and free trade. Women have to work so that families can survive financially and families have suffered as a result with high divorce rates and latch key children.

We no longer have job security, and pensions, and the great likelihood is that our children will not have a better life than we do. And this is progress? The rich are getting richer and the middle class is disappearing. Our economy suffers from the elevator rides. We are experiencing greater recessions and the prosperity that we are witnessing when the elevator of our economy is not going down is going primarily to the wealthy. We are experiencing either a boom or a bust cycle. We hear the words irrational exuberance or the tech bubble. Or in the last case the cause of the Great Recession was the near collapse of our financial system due to greed, and the failure of those in position to oversee what dangerous practices that were going on, well, they were either on a siesta or they conveniently looked the other way.

Another common factor during the period of 1945 to 1975 was that across the western world income disparity had shrunk substantially. This occurred in the frame of reference of the numbers, i.e., overall assets and annual income.

We used to have training for those workers who were put out of work due to new advances in technology and or age. It’s tough to be 50 years old and in the workplace. They just might replace you with a younger less experienced person because they won’t have to pay as high a wage to the new guy or women.

Now we have vulture capitalism where jobs are outsourced.. Companies look at the bottom line now, not what it will do to the goose that laid the golden egg, the American consumer.

Whoever believes that America is better off today than we were from 1945 to 1975, must have been smoking something.

There is nothing free about free trade when other countries might be doing better, but frankly who cares? We have been sold out for short-term profits. Do you care if China is doing better, while they gag on the smog?

We need a national conversation without the hyperbole and recriminations. We need to have a conversation, a serious one, about how do we improve the American standard of living and our way of life.

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