More Fodder for Marx

by

This chart has been making the rounds over the last day or so:

Distribution of Average Income Growth

It is a graph depicting the distribution of average income during periods of economic expansion, and it differentiates between the incomes of the top 10% of earners (the red bar) and the bottom 90% (the blue bar). What does this mean? During an expansion, one expects incomes to grow, and this graph illustrates who is benefiting from the growth. Up until the 1980s, the growth of incomes during expansions tended to benefit the bottom 90%. So, for instance, in the expansion from 1949-1953, 80% of the growth in income went to the bottom 90% of income-earners.

Matters are quite different in recent expansions. In the recent expansion (2009-2012) incomes for the bottom 90% actually dropped, and all of the growth in income went to the top 10% of wage earners. If these data are accurate, then, the recent expansion has not actually been an expansion for the vast majority of earners. For further discussion of the chart, see here.

This, of course, is potential fodder for a would-be Marxist. What it shows is that, notwithstanding the ideology that constantly talks about the ways in which capitalism benefits everyone, it is clear that it does not. The working class is not benefiting at all, and ultimately (Marx would argue), this inequality is systemic. Liberals tend to argue that the recent growth of income inequality is a function of poor governmental policy (especially tax policies that benefit the wealthy). Marx disagrees. It’s not bad tax policy that ultimately leads to inequality. Rather, inequality is ultimately and in the long run unavoidable (that would mean, by the way, that a Marxist would have to explain away the earlier expansions that benefited the bottom 90%. Specifically, a Marxist would have to show that those expansions go against the normal tendencies of the capitalist system–that they were anomalies. This might not be too difficult, since those earlier expansions took place in the context of the post-WWII era, where the U.S. had essentially no economic competitors).

Advertisements

One Response to “More Fodder for Marx”

  1. skylifesw Says:

    Marxists are quite right in believing that inequality in a capitalist system is unavoidable. But my doubt, which is also many other’s doubt, would be whether turning into a more Marxist system is at all critical. I believe there are always things that we could do to minimize the inequality. As you may know, the extreme equality manifested in Marxist system can be problematic too, and it was never really implemented correctly in some states.
    I am not sure, but I feel like the figure showing the distribution of income in recent years is shockingly discouraging for the working class that they become less incentivized to work. They might think the profit they made through hard work that generated economic expansion has all gone to the bourgeoisie. Until this situation is reversed, they will not simply benefit the bourgeoisie, and they won’t seek economic expansion.
    It is interesting to know that in some places, the government gives out money directly to citizens in tax rebate schemes. The government directly transfers certain amount of money to the citizen’s bank accounts.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: