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How Inequality Kills

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The Global March of Neoliberalism: The World Inequality Report 2018

Contrary to the assumptions of left-liberal commentators, neoliberalism is not merely a bad policy adopted by “greedy” elites. It is in fact a fundamental systemic rejection of the post-laissez-faire settlement put in place in just about all of the developed capitalist countries after the Second World War. Out with the legacy of the New Deal and the Great Society and forward with what is essentially a resurrection of 1920s capitalism. Because capitalism is a globally integrated system, if neoliberalism exists on a significant scale anywhere, it must exist everywhere. It is thus a “New World Order,” a phrase deployed by G. H. W. Bush and Adolf Hitler.

Neoliberalism is an eminently rational arrangement for the capitalists and their political cronies who instituted it. The system is called capitalism, not laborism, because it was forged for centuries and is presided over by those whose overarching objective is to maintain a settlement that serves the interests of owners of capital. Adam Smith’s tome is called The Wealth of Nations, not The Income of Nations or The Wages of Nations. The bottom-line priority of those who own society’s most valuable asset, its means of production, is that society be organized around the continuous increase of wealth, especially the wealth and income of its wealthiest. The welfare state foils that project. The evidence is unambiguous: after the Depression and during the great expansion of the Golden Age, we witnessed the unprecedented: the share of national income flowing to the one percent continued to fall by an increasing percentage each decade during the ‘30s, ‘40s, ‘50s, ‘60s and early ‘70s. (1) These were the only years in American history when an essential feature of State policy was to increase social services benefitting the working class and redistribute income from the wealthiest to those who do society’s work. And these were also the only years in the history of the republic that featured ongoing and increasing downward redistribution. This was the result of New Deal and Great Society social legislation, and the power of labor unions. Hence, from the perspective of the enlightened capitalist, the legacy of these policies must be reversed.

The World Inequality Report  2018

The undoing of social democracy must be effected on a global scale. Because one of the principal effects of neoliberalism is the remarkable growth of inequality, Thomas Piketty and associates have produced the World Inequality Report  2018, assessing the growth of worldwide inequality. (2) They conclude that “income inequality has increased in nearly all countries,” and that “rising inequality… can lead to various sorts of political, economic, and social catastrophes.” Inequality is lowest in Europe, where social-democratic economic policy is strongest, and has increased rapidly in North America, where the top 10 percent cop 47 percent of national income. The divergence in inequality levels is particularly extreme between Western Europe, which, as noted, retains significant vestiges of welfare state policy, and the United States, whose social democratic policies are the stingiest among the developed capitalist countries. The share of national income of the top 1 percent in both regions in 1980 was about the same, close to 10 percent. By 2016 it had risen slightly, to 12 percent in Western Europe, while in the United States it soared to 20 percent, while the share of the bottom 50 percent decreased from more than 20 percent in 1980 to 13 percent in 2016. Between 1980 and 2016 the global 1 percent captured twice as much of the growth in income as the bottom 50 percent. What’s more, Credit Suisse reports that as of 2015 the richest global 1 percent had accumulated more wealth than the rest of the world put together. (3) In the same year, a mere 62 individuals had accumulated as much wealth as is held by the bottom 50 percent of humanity. (4)

The World Inequality Report reminds us that  “economic inequality is largely driven by the unequal ownership of capital..,” as we should expect in capitalist countries. Capital can be either privately or publicly owned. With neoliberalism’s idolatry of the private and ongoing decimation of the public, we are not surprised to learn that “since 1980, very large transfers of public to private wealth occurred in nearly all countries… While national wealth has substantially increased, public wealth is now negative or close to zero in rich countries. Arguably this limits the ability of governments to tackle inequality; certainly it has important implications for wealth inequality among individuals.” The situation is graver still if we acknowledge, as the authors of this study apparently do not, that governments in the capitalist countries have no intention to “tackle inequality.” Quite the contrary. What we are witnessing is the bipartisan effort to “starve the beast.” As the study puts it, “Over the past decades, countries have become richer but governments have become poor.” The net public wealth (public assets minus public debts) of the most aggressively neoliberal advanced countries, the United States and the UK, “has even become negative in recent years.” “The balance between private and public wealth is a crucial determinant of the level of inequality.” In their summation, the authors conclude that ‘In a future in which “business as usual” continues, global inequality will further increase’.

The whole picture draws out the implications of Thomas Piketty’s demonstration that it belongs to the nature of capitalism that more and more private wealth tends to concentrate in fewer and fewer hands. (5) The plutocrats pass their booty on to their progeny, so that an increasing portion of total wealth is inherited. Indeed, as of today between 50 and 70 percent of U.S. household wealth is inherited. (6) If this continues, it is a matter of arithmetic that the U.S. is headed for rule by dynasty.

How Neoliberal Austerity Kills

There is decisive evidence that neoliberalism’s widening inequality tends to generate uncommon rates of physical and mental health disorders. (7) A Princeton study found that middle-aged non-Hispanic white Americans suffered a great increase in mortality between 1998 and 2013. (8) This was the first such case in American history. The increase is entirely concentrated among persons with a high school degree or less, a reliable criterion of poverty. Among whites with any college experience, mortality rates have declined during this period. And disease is not the issue. The predominant causes of death are suicide, chronic alcohol abuse and drug overdoses. Paul Krugman has noted that these statistics mirror “the collapse in Russian life expectancy after the fall of communism.” (9) The Princeton study labels these mortalities “deaths of despair.” It is noteworthy that among the population in question, wages have fallen by over 30 percent since 1969. (10) In a detailed study of the health effects of austerity, based on data from the Great Depression, Asian countries during the 1990s Asian Financial Crisis, and European countries suffering austerity policies after the 2008 crisis, researchers found that the more austerity was practiced in a country, the more people became ill and the more people died. (11)

Homicide and murder are also strongly related to inequality. The World Bank reports that inequality predicts about half of the variance in murder rates between the U.S. and other countries and the FBI notes that of U.S. murders for which the precipitating reason is known over half stem from the agent’s sense that he had been “dissed.” (12) Persons shoot someone who has cut them off in traffic or beat them to a parking spot.

In connection with the high number of homicides associated with dissing, i.e. challenging a person’s sense of self-respect or personal worth, the psychologist and neuroscientist Martin Daly documents the intimate connection between inequality and loss of personal and social status. He shows that inequality predicts homicide rates “better than any other variable.” (13) In America, status is determined by how much a person has, and having is a matter of the standard of material living one enjoys, competitively conceived in terms of how one compares with others. And the admired standard is one’s level of material comfort, determined for the non-wealthy by a good job and the ability to support a family or the ability to enjoy a comfortable and independent standard of living as a single person. These makers of social status and self-respect are unavailable to those at the lower ends of the income hierarchy and the unemployed. Self-respect is one of men’s (and most homicides are male-on-male) most prized goods, and self-respect, as much as income and wealth, is unequally distributed. In a society where there are structurally determined winners and losers, if one is a loser one’s social reputation is all one has, all one can brandish, in order to maintain a sense of self-respect and personal worth. A diss is a blow to both social reputation and self-respect, and if one has nothing else, the threat looms disproportionately large.

While gang murders are not the majority of murders by the poor, they display in stripped-down form the way in which dissing translates to a social put-down and social denigration makes for personal humiliation and devaluation. The disser becomes a deadly rival. The research I cite in this essay shows that this syndrome is by no means limited to gang culture.

Most recently, David Ansell, a physician and social epidemiologist, has demonstrated in an exhaustive study that the acceleration of inequality between high and low socioeconomic groups over the past three decades has resulted in higher mortality rates for the poorest strata of the working class. He concludes that “[I]nequality triggers so many causes of premature death that we need to treat inequality as a disease and eradicate it, just as we seek to halt any epidemic.” (14) Capitalism, in its post-welfare-state form, kills.

Notes.

(1) Piketty, Thomas and Saez, Emmanuel (2006) “The Evolution of Top Incomes: A Historical and International Perspective,” American Economic Association: Papers and Proceedings, 96, No.2 May

(2) Alvaredo, Facundo; Chancel, Lucas; Piketty, Thomas; Saez, Emmaneul and Zucman, Gabriel (2017) World Inequality Report  2018  http://wir2018.wid.world/files/download/wir2018-summary-english.pdf

(3   (3) Credit Suisse (2015) ‘Global Wealth Databook 2015’. Total net wealth at constant exchange rate (USD billion). http://publications.credit-suisse.com/tasks/render/file/index.cfm?fileid=C26E3824-E868-56E0-CCA04D4BB9B9ADD5

(4) Hardoon, Deborah (2017) “An Economy For the 99 Percent,” Oxfam Briefing Paper    https://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-economy-for-        99-percent-160117-en.pdf

(5) Picketty, Thomas (2014) Capital in the Twenty First Century Harvard University Press

(6) Roth, Steve (2017) “Insanely Concentrated Wealth Is Strangling Our Prosperity” Evonomics

(7) Wilkinson, Richard and Pickett, Kate (2010) The Spirit Level. New York: Bloomsbury Press; Ehrenreich, John (2016) Third Wave Capitalism. Ithaca: Cornell University Press, 40, 44-5, 47-8, 50, 155-162

(8) Case, Anne and Deaton, Angus (2015) “Rising morbidity and mortality in midlife among white non-Hispanic Americans in the 21st century,” Proceedings of the National Academy of Sciences of the United States. September 17

(9) Krugman, Paul (2015) “Heartland of Darkness,” The New York Times.  November 4

(10) Cooper, Ryan (2015) “Why Poor White Americans Are Dying of Despair,” The Hill.  November 6

(11) Stuckler, David abd Basu, Sanjay (2013) The Body Economic  Why Austerity   Kills. New York: Basic Books

(12) Szalavitz, Maia (2017) “Why Inequality Predicts Homicide Rates Better Than Any Other Variable” Evonomics 

(13) Daly, Martin (2016) Killing the Competition  Economic Inequality and Homicide. New York: Routledge

(14) Ansell, David (2017) The Death Gap: How Inequality Kills. Chicago: The University of Chicago Press, p. vii

 

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Alan Nasser is professor emeritus of Political Economy and Philosophy at The Evergreen State College. His website is: www.alannasser.org.  His latest book is Overripe Economy: American Capitalism and the Crisis of Democracy. He can be reached at: nassera@evergreen.edu

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