A Billion Dollars Isn’t What It Used To Be


One of the metrics of success in a mature capitalist economy is the number of billionaires present in its ranks. This term, billionaire, is the defining adjective of our time. Billionaire hedge fund manager, billionaire real estate developer, billionaire media mogul, billionaire investor, billionaire tech innovator. Where does it go from here?

Asked and answered. Quoting from Credit Suisse’s 2013 Global Wealth Report:

“Two generations ahead, future extrapolations of current wealth growth rates yields almost a billion millionaires, equivalent to 20% of the total adult population. If this scenario unfolds, then billionaires will be commonplace, and there is likely to be a few trillionaires too — eleven according to our best estimate.”

There’s a new word in there for us. Let’s see what that rising tide does for the little boats. In their recently released 2016 report, they find that,

“We have further established that wealth inequality, measured by the share of the wealthiest 1% and wealthiest 10% of adults, as compared to the rest of the world’s adult population, continues to rise. While the bottom half collectively own less than 1% of total wealth, the wealthiest top 10% own 89% of all global assets.”

This doesn’t sound good. Are the boats of the poor somehow unaffected by the tide?

Included is a chapter with the catchy title, The bottom billion. The subheading reads,

“This chapter looks at the bottom half of the global wealth distribution, giving particular attention to those in the bottom 20%, who currently number around one billion adults. Members of the bottom billion were once predominantly poor people in developing countries, but a significant and growing number are now found in the richest countries. Furthermore, the net worth of those in the bottom billion is increasingly likely to be negative, as credit easing generates larger personal debts.”

Further in the chapter this appears:

“While the unemployed are over-represented among the wealth poor, the majority of those in the bottom wealth quintile are either employed or retired. Being well educated reduces the chances of being wealth poor, but it does not offer complete protection. In particular, it is not uncommon to find well-educated young people in the bottom wealth quintile. Although this is largely a consequence of young people being at the beginning of their life-cycle of wealth accumulation, it also reflects poorer job prospects in recent years and mounting student debt in some countries.”

If this sounds familiar it’s because it’s a good description of what is taking place in the US. A significant and growing number of poor people are now found right here, in America. The rich get richer and the poor get poorer. Maybe not exactly but the old sayings have staying power.

As a comment on how our capitalist system functions through our institutions to provide an equitable social system, there are severe contradictions. This didn’t suddenly happen. It has always been the case that the nation’s ruling elites together with the Congress were wealthier than the common person. Some would make a good case for that.

What’s changing since the 1970’s and the demise of the labor movement is the accelerated pace of the wealth gap, with nothing in sight to check the systemic shifting from bottom to top. Capitalism is not to blame. It is simply doing what it does, has always done, and will continue to do. Further wealth disparity between owners and workers.

While there have been many studies analyzing the relationship between military expenditures and economic growth, fewer have dealt with the relationship between military expenditures and income inequality, though there are some interesting forays into this subject.  This is especially important because both of our two ruling parties, whatever their differences, each agree on increasing military spending.

Some of the ways military spending may be correlated positively with rising income inequality include:

1) Military spending may be at the expense of income equalizing work and social programs; 2) The taxes to support military spending may disproportionally affect middle classes; 3) The degree to which emphasis on military spending is reflective of the use of violence as a means of social control, with the brunt of the reactionary atmosphere felt especially by working classes.

This imprecise reckoning omits competing ones but the three relevant points provide a good start in the argument. American capitalism and American militarism are not distant cousins. They live under the same roof.

The United States is on an uncertain trajectory, with a host of internal conflicts. It’s getting harder for Washington to fool most of the people most of the time. The public has started — just started — to lose trust in its institutions. With the obvious public solution close at hand, and ignored, how long will it take for the pressures of alienation and disaffection to create so much unrest that socialism will appear as a preservative? Asked but not answered.

James Rothenberg views U.S. foreign and domestic policy from a left perspective. He can be reached at [email protected]  


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