A viewer asked this question on 8/4/2000:
Is it just me, or is American capitalism turning into the equivalent of a modernized feudalism or aristocracy? Keeping in mind the following facts:
- The financial wealth of the top one percent of households in America now exceeds the combined wealth of the bottom 90 percent (I think that was 1990; probably 95% by now)
- The next richest 9% in America
* also* possess more wealth than the combined wealth of the bottom 90%. So two very superrich minorities there.
- From 1983-1997, only the top five percent of households saw an increase in their net worth while wealth declined for everyone else.
- About half the world survives on about $2 or less a day.
What can be done about this alarming trend? Why, in brief, does it exist? Won't the Republican agenda only propagate the problem?
Thanks for your time & God bless.
--Gabe
JesseGordon gave this response on 8/4/2000:
The statistic correctly cited is that RELATIVE wealth has declined, which is the same thing as saying that the "gap" between rich and poor got larger. The immense differences in wealth and income between the top earners and the majority of the country is the result of a growing gap in income.
Now, the question is, "is anything wrong with that?" The Republican idea is that "a rising tide lifts all boats. (that's the catch-phrase of Reagan's supply-side economics). That means that if he economy is growing, the poor benefit even if the rich benefit more.
Certainly that's true -- even the poor in America today are immensely better off financially than decades ago. Many poor people have cars, TVs, labor-saving devices, etc. -- that wasn't true decades ago. Poverty, while still present in America, is nothing like the real hopeless widespread poverty in countries where the average is $2 per day. And yes, I think we can credit overall economic growth for that.
But there's another side to measuring the economy. Ralph Nader is basing his presidential campaign on the theme that we should measure not only financial statistics like the ones you cite, but also on "human" statistics. You can read details at http://www.issues2000.org/Ralph_Nader.htm#Budget_&_Economy -- he addresses many of the issues that you do.
I'll avoid a political discussion by framing this as "political economy." Yes, it's wonderful when the economy produces wealth. But the distribution of that wealth DOES count -- because if the rich get too rich, the non-rich resent them. And if there's too much resentment, society is in trouble. I don't think America is on the verge of a revolution by any means, but there is resentment growing, as evidenced by Nader's (relative) popularity and Bill Gates' unpopularity.
What can be done? Well, you can tax wealth -- that would be redistributionist and would directly address your concerns. But that would go against the whole idea of a "rising tide" and destroy the incentives of producing wealth (i.e., capitalism). I'm not so sure that's a good solution (but Nader does!)
A better solution might be to pressure Bill Gates and his ilk to be more charitable. Ted Turner did just that (he gave $1 billion away and challenged other billionaires to do the same -- I call that Jane Fonda's legacy). Gates has been in the news lately for his Gates Foundation's gifts; perhaps that will set a trend for other zillionaires.
A viewer rated this answer:
I disagree with a lot of the answer from my colleague
Thanks, I agree. I will be sure to check out that website however. Thanks again.
--Gabe