The Wealth of Nations

The pursuit of life, happiness, liberty and justice are cornerstones of our country. Our Constitution affirms that the Government’s role is to form a “more perfect” (not “a perfect”) union. It affirms for the general welfare of ourselves and for our posterity. But the most important aspect of all this, is the phase “We the people”. There are no qualifications of “We”. The wellbeing of “we the people” for all is clearly the directive. It is true the Constitution is not an economic system. However, whatever economic system the country implements does not supersede the Constitution nor result in the abandonment, disregard, or nullification of the wellbeing of “we the people”.   

Since 1980 labor unions and the benefits they provided or influenced, the “middle class” (which can be defined as the 40% of the population which had about 40% of the nation’s wealth. The balance: 50% of the population had virtually no wealth, while the remaining 10% had almost 60% of the wealth) have been under attack. Since then the country has seen the accelerated transfer of the nation’s wealth to a very small minority of the country and that level now approaches that of the eras before WWI. Only the disruptions of WWI and II, and other factors, allowed the wealth distribution of the developed nations (not only the U.S.)  to develop (1945-1980) a strong “middle class”. This “middle class” was atypical because there is no inherit mechanism (to put it simply) to keep the top owners of wealth from increasing their disproportionate share of the wealth of a country. The decisions to promote strong universal education, GI Bill for higher education, progressively high top bracket tax rates, strong worker voices – unions – were historically atypical but implemented after WWII as mechanisms to alleviate the natural accumulation of wealth and the increase in inequality.

Since wealth begets more wealth, the top concentration of it will always outperform lesser amounts. Without mechanisms, inequality of wealth naturally increases. Wealth has no bounds (up to the point of a popular revolution) as it aims at historic levels. Since those with high wealth have the means and motive to protect it by amplifying their influence, red herrings of “illegal immigration”, “foreign competition”, “technology” and distractions of terrorism and fear have hidden the issue of massive wealth transfer and the inherit problems it creates. The underlying problem of excessive inequality is the distortion, if not the elimination, of democracy, the permanence of dynastic families and industries, and the inability to ensure the wellbeing of “we the people”.

Public service unions (as private company unions before them) are indeed on the chopping block, it was inevitable. They have lost the political voice of their defenders – the same people who benefited from the mechanisms of middle class promotions and protections. Ironically, unions will also be condemned to death (or at least the benefits) by people that already lost their own benefits, convinced that they are stealing their wealth. The return of strong unions, by themselves, will not be enough to counter the multinational issues of inequality.

Only when people realize that that they have been voting against their own interest, when they understand that wealth transfers to the top must be regulated for the nation’s common good, when they demand financial transparency both in governing, international capital flows, taxation and banking can the nation’s wealth be shared more equitably. It should not be expected that those who benefit from the current arrangements will be inclined to change it. On the contrary, they have much to defend and the means to do so. Even if a person was lifted up within a system that included strong unions, access to higher education and a deference to all employees, it cannot be assumed that they then would steadfast defend such a system if it delivered them into positions divorced from those concerns.

There are people who can and do work against and speak about the growth of inequality. I believe that more will come forth as “we the people” see the effects of growing inequality. A more perfect union is always a work in progress, as long as we have those who are willing to work at it.  

(Note: many of the details of inequality, and specifics, came from the books by Thomas Pikitty, Jane Mayer, Robert Reich, Daniel Yergin, Joseph Stiglitz and others.)

Addendum: The above was written before the 2020 pandemic, covid19, severely disrupted the world’s economy. As of now, May 2020, it is impossible to know the long range effects on the inequality dilemma written about above. The last major disruptions, 1914-1945 had effects lasting almost 50 years. Pre pandemic, 1980-2020, inequality was growing although it wasn’t clear that major changes were imminent. Will this be the impetus for policy changes?

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