Last week I attended a book launch at the London School of Economics on behalf of Liam Byrne, a Blairite Labour MP, who has written a book, Inequality of wealth. Byrne was a stalwart of the Blair and Brown Labour governments in the UK and most famously known for his quip when handing over his role in the UK government’s finance ministry to the winning Conservatives in 2010 with a note saying that “I’m afraid there is no money”. (ho, ho). An ex-tech entrepreneur, Byrne now heads up the UK parliament’s Business Select Committee and will probably be in the Labour Cabinet if Labour wins office at the end of this year.
Byrne reckons that the social mission of the UK Labour party is for ‘equality’ and ‘fairness’, not for any radical transformation of the economic structure of the capitalist economy i.e. socialism – in this sense, he represents the ‘moderate’ wing of the party, or you might say, the current dominant pro-capitalist wing.
In his professed mission for equality, he tells us in his book about the shocking levels of inequality of wealth (and income) that exist in modern Britain. Byrne presents us with lots of factoids about inequality – some of which are confusing and incorrect – but no matter, something must be done, because “the inequality of wealth is toxifying our politics and our society. It’s destroying our economy, and it’s about to get 10 times worse.” The feeling is, he notes, like the very last days of Rome. “The average wealth of a Roman aristocrat was about one and a half million times that of the average income of the Roman citizen. But in the last Sunday Times rich list, the wealth of the [Indian-born, London-based billionaires] Hinduja brothers was about 1.2m times the average earnings in our country.”
He is concerned about tax avoidance schemes for the rich. “It’s wrong that someone who [thanks to capital gains on investments as well as his salary] makes £2m a year, like Rishi Sunak (current UK premier), is paying half the rate of tax of a senior teacher” – although he holds out little hope that a Labour government will do anything about this if it takes office at the end of this year.
Inequality is going to get worse, he reckons. The ‘baby boomers’ are about to die and five and a half trillion pounds of wealth is going to get transferred down the generations. “Some people are going to inherit millions and others are going to inherit care bills. Generation Z is about to become the most unequal generation for half a century, and we would be naive to think it isn’t going to have political consequences. Wealth inequality is at the heart of the new populism.” And populism is very worrying to Byrne as it threatens democracy. Growing inequality threatens to cause a break-up of the existing democratic order.
At the LSE launch, Byrne said he aimed to find ‘a middle way’ to rectify things between the view that nothing can be done and the view that some revolutionary transformation of the economic structure was needed, which the electorate would not accept. What were his policies for his ‘middle way’ to greater equality? What we want, Byrne said, was a “wealth-owning democracy” – a phrase recalling Thatcher’s ‘property-owning democracy’, which actually kickstarted the sharp rise in UK inequality in the 1980s. The phrase also echoes the position of the current Labour leader, Keir Starmer, who pledges to make Labour “the party of home ownership”.
In the UK, 65% are home owners with some 38% having mortgages. It seems we already have a property-owning democracy which has not led to a reduction in extreme inequality. Nevertheless, apparently the answer to reducing inequality of wealth is for everybody to get a home that they can call their own. As the Conservative ‘intellectual’, David Willetts puts it: “There is a myth that somehow young people are not aspirational. If you look at people’s aspirations, they want to own their own home, to have a decent job with a decent wage, and be able to afford to raise their kids — young people are not young Marxists.”
Byrne’s aim is that everybody should get on the ladder to owning their own home (presumably with a mortgage) and also have some savings to invest for their retirement. To do this, a government should give every young person £10,000 to kick their careers off; the government should establish a sovereign wealth fund to build up funds (what for Byrne did not explain); and there should be fairer taxation eg income from capital gains should be taxed at the same rate as income from work. Byrne even flirts with the idea of a wealth tax on the very rich that could bring in billions for the economy and for redistribution. But that was basically it. Moreover, all these ‘radical’ measures to reduce inequality of wealth would have to be slowly introduced over “three parliaments” (I make that 15 years!), so that electorate gradually got used to the policies!
The packed LSE audience along with Byrne’s fellow speakers (a professor of sociology and somebody from the Rowntree Trust, an anti-poverty research institute) had no criticism to make of the Byrne programme. So let me make just a few.
What Byrne never talked about was why there was such inequality of wealth and income in the UK and in all the other countries of the world? Why are the rich rich and why are the poor poor? Surely, there is something endemic to the capitalist economies that explains this permanent inequality. In several posts and papers, I have discussed the underlying causes of inequality; Byrne does not do so, it’s just there and shocking and we need to do something about it before it explodes into revolts.
But here is the policy problem. If inequality is endemic to capitalism, then what is needed are policies prior to redistribution. It is not a question of trying to redistribute excessive wealth from the rich to the rest of us through taxes and/or closing up evasion loopholes and tax havens etc. That might help a bit, but the underlying generation of the forces of inequality would remain untouched. Pre-distribution policies are needed. Byrne advocated only one – better jobs with better pay for those at the bottom of the ladder. How that was to be achieved given the state of the UK economy (and other capitalist economies) was not explained. He also seemed to suggest raising the social security minimum level to take people out of poverty – again how that was to be implemented was not explained.
Byrne noted the disparity of wealth between London and the regions. The latest IPPR North ‘State of the north’ report found that “While England’s average wealth per person grew from around £226,300 in 2010 to £290,800 by 2020, regional inequalities in wealth have widened. For instance, the gap per head between the average wealth per person in England overall and the North stood at £71,000 in 2020, almost double the gap in 2010, at around £37,300 (ONS 2022a in 2023 prices). The gap between levels of wealth in the North and Midlands, and the rest of England is growing. Overall in England, the wealthiest 10 per cent hold almost half of all wealth. Nearly half of wealth is found in the South where 40 per cent of the population reside against a fifth of wealth being found in the North where around 30 per cent of the population live, with the remainder in London and the Midlands.”
It’s clear why. The rich live in London and the south mostly, the most important means of production and finance are based in London, and the best jobs that pay the best are in London. What is Byrne’s answer to this? Give the regional mayors more money to spend, taking central government funds away from London. This would solve little – especially given that some of the poorest boroughs in England are in London!
The point is that post distribution policies will do little to change the underlying inequality of income and wealth. That would require a radical shift in the ownership and control of that wealth i.e. public ownership of the banks and large companies and public investment directed towards social need, not profit. But such policies are anathema to those like Byrne, seeking the ‘middle way’.
That also applies to policies like a wealth tax or a minimum tax on corporate profits – policies strongly advocated by leading inequality economists (Thoman Piketty, Emmanuel Saez and Gabriel Zucman) based at the Inequality Lab in Paris. Gabriel Zucman and his colleagues have provided invaluable data on the scale of inequality globally between countries and within countries. Zucman is a leading campaigner for reducing inequality globally.
Last week, he was invited by the G20 finance ministers meeting hosted by Brazil to present the case for for a coordinated minimum tax on the super-rich. Zucman addressed the ministers and reckoned that “there was strong support for the idea that we need new forms of cooperation to tax the super rich, increase tax progressivity, and fight inequality This in itself is a historic development — for too long these issues have been ignored.” Zucman was commissioned by the G20 ministers to come up with detailed policy measures to tax the super-rich. But what are the chances of this ever being implemented through global cooperation? As Zucman said: “it may take years to get there for the super-rich. But it’s in our collective interest to act fast, because what’s stake is not only the future of global inequality – it’s the future of globalization and the future of democracy.”
I am not attacking the genuine efforts of Zucman and others to find ways of reducing inequality. And the recent attack on their analysis of rising inequality of income in the US by some US government economists has been proven bogus. But will such redistribution ever be adequate even if implemented? And won’t such policies be watered down to accommodate vested interests (the rich) to the point that they do little to reduce inequality.
Over the last 80 years, inequality of income and wealth in the major economies has only got worse.
The World Inequality Report (WIR) shows that the world has become more unequal in wealth in the last 40 years. In 2021,“after three decades of trade and financial globalisation, global inequalities remain extremely pronounced … about as great today as they were at the peak of Western imperialism in the early 20th century.” The global concentration of personal wealth is extreme. According to the WIR, the richest 10% of adults in the world own around 60-80% of wealth, while the poorest half have less than 5%. According to the UBS Global wealth report, 1% of all adults in the world own 44.5% of all personal wealth, while more than 52% have only 1.2%. The 1% are 59m, while the 52% are 2.9bn.
If you own a property to live in and, after taking out any mortgage debt, you still have over $100,000 in net assets, you are among the wealthiest 10% of all adults in the world. That’s because most adults in the world have no wealth to speak of at all. And apart from the phenomenal rise of China, personal wealth and power remains in the rich bloc of North America, Europe and Japan with add-ons from Australia. Just as this bloc rules over trade, GDP, finance and technology, it has nearly all the personal wealth.
In the 21st century, inequality of wealth has risen significantly. Indeed, the wealth of the 50 richest people on earth increased by 9% a year between 1995 and 2021, with the wealth of the richest 500 rising by 7% a year. Average wealth grew by less than half that rate, at 3.2% over the same period. Since 1995 the top 1% took 38% of all additional global wealth in the last 25 years, whereas the bottom 50% captured just 2% of it. The rise of the so-called middle class income group in the graph below is mostly due to China’s reduction of poverty levels. The top 0.01% of adults increased their share of personal wealth from 7.5% in 1995 to 11% now. And the billionaire population increased their share from 1% to 3.5%.
Tony Atkinson was the founding father of modern research into inequality – somebody who clearly should have got a Nobel (Riksbank) prize in economics before he died. In an address, Where is inequality headed?”, Atkinson pointed out that the biggest rises in inequality took place before globalisation and the automation revolution got underway in the 1990s.
Atkinson pinned down the causes of inequality to two. The first was the sharp fall in direct income tax for the top earners under neoliberal government policies from the 1980s onwards. But the second was the sharp rise in capital income (i.e. income generated from the ownership of capital rather than from the sale of labour power). The rising profit share in capitalist sector production that most OECD economies generated since the 1980s was translated into higher dividends, interest and rent for the top 1-5% who generally own the means of production.
Piketty, Saez and Zucman in their latest paper on US inequality of income find that “the stagnation of incomes for households in the bottom 50 percent is particularly noteworthy given the growth for those in the top 1 percent. In 1980, the bottom half received about 20 percent of national income; by 2014, their share had declined to 12 percent. For the top 1 percent, the picture is exactly the reverse: In 1980, they received 12 percent of national income; in 2014, they received 20 percent.” And they conclude: “Given the massive changes in the pre-tax distribution of national income since 1980, there are clear limits to what redistributive policies can achieve.”
Indeed. Marx considered that any distribution of the means of income and wealth was only a consequence of the of the ownership of production. The capitalist mode of production rests on the fact that the material conditions of production are in the hands of non-workers in the form of property in capital and land, while the masses are only owners of their personal condition of production, of labour power. Capitalists accumulate profits as capital.
As Ian Wright has put it: “Firms follow a power law distribution in size. And capital concentrates in the same way. A large number of small capitals exploit a small group of workers, and a small number of big capitals exploit a large group of workers. Profits are roughly proportional to the number of workers employed. So, capitalist income also follows a power law. The more workers you exploit the more profit you make. The more profit you make the more workers you can exploit.” This is the reason for rising inequality: when there are no checks on capital accumulation. Wright sums it up: “the fundamental social architecture of capitalism is the main cause of economic inequality. We can’t have capitalism without inequality: it’s an inescapable and necessary consequence of the economic rules of the game.”
Michael Roberts Blog 
I think we should not call those who have got a mortgage to buy a house, home owners. Legally, they might indeed be home owners. But they are not really home owners since they are on debt and till they repay that debt, they do not entirely own their home. Calling them home owners is fallacious, and contributes to false consciousness. Do you agree?
I agree
Thank you, Dr. Roberts for your wonderful insights into the (often nefarious) workings of capitalism.
In many ways I am extremely sympathetic to this view. But there are rather concrete problems.
First, increasing home buyers do own part of their house, it’s called the equity. Awareness of this material interest is not precisely false consciousness.
Second, there is also the issue of the potential “capital” gains from an increase in real estate values. Economically and in many ways politically, this constitutes a material interest crossing against a purist definition of workers as someone with zero income-bearing property, blurring the class lines with the petty bourgeoisie. For instance, many small farmers had massive bank loans and could only realize the genuinely large gains the same way as home owners, by selling, perhaps when parent(s) died. Most people do not simply vote their bank balance at the moment they enter the polls, they consider issues for their families as well, just as they often think about the long term interests of friends and even fellow citizens generally, the nation.
Third, if property values decline their equity declines, again a material interest that to that degree aligns all home “owners” with the petty bourgeois. In my opinion this is very limited, but losing what you think you already have seems to enrage people much more than never having anything, so it matters very much politically. (Yes, I still strongly suspect Trumpery appeals to the petty bourgeois very much because of this.) But, playing the “If I was a reformist, what would I do first?” game, making banks pay property taxes on their real estate loans looks very tempting. (Probably been reading too much Michael Hudson though.)
Fourth, until the banks pay property taxes on “their” part, then home buyers can see a material interest shared with “other” bourgeois who suffer from taxation. The theory that taxes are the only form of exploitation may not be formally articulated, not even by professional economists. But it is in practice an unspoken but still universal premise in politics in the US, where it is never a problem of low wages or involuntary unemployment.
Fifth, the point about exploitative interest rates exacted by banks is often true. But typically this kind of secondary form of exploitation is criticized as an alternative to the primary form of exploitation, namely, the extraction of surplus value. Insofar are home buyers focus on this politically, they are aligning with petty bourgeois seeking “fair” trade. (I suspect denying the primacy of the extraction of surplus value is essential to reformist politics, but maybe that’s just me.)
Sixth, retirees who have paid off their house loan have effectively greater incomes.
I get the point about false consciousness, because overall these things are secondary in effect. But simply demanding most people should simply admit to themselves they are not undertaxed, they are (or were their working lives) underpaid, that they had jobs not careers and that their families are not climbing the ladder to the top, is demanding they admit they are not “temporarily embarrased millionaires,” but…losers. That is the gravest insult of all, no?
Awesome comment, Steven!
Across Europe and the US the middle class is enraged, they’re squeezed and falling off a cliff. But never make the mistake to look for revolution allies there, will never happen. They’re of course turning to the outright fascists, or other right-wing parties like here in Europe that are basically pushing the same messages.
Violence is very much in the air, but scapegoating immigrants and islam will probably not be enough. So the war drums beat very loud. This is really happening, comrades. Again. And this time around we’re very much alone. Apart from you fellows across the internet, I don’t know a single marxist around me. Hope you are luckier.
Of course one who, for various reasons, has an imaginary inflated image of themselves and their condition is going to feel insulted or all sorts of other things by realising what their condition actually is. The system also wants people to have this imaginary image of themselves. In this case, for example, the system prefers people to perceive themselves as homeowners instead of paying rent to the bank to live in a house and keep working quite a lot. But still, the breaking of this imaginary image that many people have about themselves is a precondition for people to pursue their material interests and improve the quality of their lives.
Daniel I would rephrase, never look to the SES middle strata or the overlapping petty bourgeois for leadership. For one thing, the haute bourgeois is generally not particularly talented as an individual and needs to hire middling folk or petty bourgeois as strategists and publicists! Yet I would remind everyone that historically fascists and cryptofascists simply do not win the majority of the electorate. Trump has never won a vote and this is no accident. But the thing is, all bourgeois democracies are designed to put protection of property at the core of the state, as the very definition of freedom, regardless of the self-flattering image of democracy as the rule of the people. That’s why so many democracies have “undemocratic” features as a kind of backstop (and in practice why the military is so often the ultimate arbiter.) The middle SES or overlapping petty bourgeois are by the contradictory social position necessarily inconsistent, wavering, prone to illusions, ideologically incoherent, fearful, and as we have all seen often backwards, religious, complacent except about what advantages they do have (all ascribed to their own individual merit, of course.)
But most of this is true about the oppressed as well. Indeed, it is quite similar in many ways to the old opposition between a narrow craft unionism and a mass industrial unionism. Or the “conflict” between the employed and the unemployed. A policy of blanket condemnation of all middling SES or overlapping petty bourgeois is quite similar in many ways to blanket condemnation of all trade unions that aren’t, well, basically carrying out the policy of the party doing the condemnation.
I think it will still be easier to replace a conformist trade union bureaucracy than the bourgeois state’s bureaucracy. And for the same kinds of reasons, it will be, still, easier, to convince that even if grandpa has a house that’s paid off, socialism will still be better for the grandkids. One of the reasons for political leadership is to deal with the problems imposed by the unreliability of the middle SES or overlapping petty bourgeois And the unreliability of the middling SES or overlapping petty bourgeois is why this party needs to be class independent, all the more so because that instability is partly rooted in objective material interests. That rules out moral suasion, especially any version that consists soley of denunciation of them as individuals.
Lazaros Giannas I agree wholeheartedly that most of the middle SES and overlapping petty bourgeois will in the end find material rewards from a better society. And I also believe that even they will in the end find a kind of psychic premium from a saner society. Historically, the time when large numbers of people rejected the “ideas” that poverty is the result of lack of character, that unemployment is due to inferiority, that what little you do have is earned, that only the deserving should be helped, that fair competition will give just rewards, that taxes are exploitation, that government shouldn’t provide services, that we are one nation, that classes are demagogy and on and on and on…the main time is during deflationary crises and attendant mass unemployment. That’s why the bourgeois strategists have lavished so much care on home ownership (or made gestures at it.) And why the inability to deliver causes such political disruption and will rip the veils from the eyes of so many. But whatever form it takes, real world catastrophe will do the bulk of the work in persuading the more advantaged masses of their real place in this society. The problem is whether the catastrophe will be common ruin and the unwelcome discovery too late.
But there are those who really do think that the middling SES are not just overlapping with the petty bourgeois, but that these are essentially the same thing, and even more, that they are all identical in their class interests. Any shortfall in material rewards presumably is more than made up for it by the little oppressors being so delighted by imperialism for fun, the relative scarcity of profits doesn’t matter? Everybody is Golden Billion or something like that. The tacit premise is that bourgeois democratic nations, if they are deemed imperialist, are no longer class societies with class struggle. But there is a class harmony, all united in oppression of someone else. The logical conclusion that the annihilation of everybody in a handful of countries would bring paradise on Earth is usually avoided explicitly. Only the morally superior and enlightened souls that are willing to sacrifice everything for the oppressed for no material reward but only a psychic reward of righteousness are suitable, though it’s hard to say what the actual real world role of these saints is to be.
And there’s another “but,” something highlighted by the little subthread about the misleading wealth pyramid standard to economics. Namely, the very phrase the middling SES or overlapping petty bourgeois can cover a multitude of sins, not to mention, sinners. The notion there is a top and a bottom but “we” are in the middle and that’s a lot of us, if not the majority, is false. In any meaningful sense, there is no top or bottom and even the middle is highly stratified. A retired teacher who’s paid off their house is not in any meaningful sense the same SES as an automobile dealership owner who’s paid for his daughter-in-law to run for Congress, or a pharmacy owner who’s bought up building after building in the local town however small or a bank president or a coal operator who can run for the Senate on his own dime. Formally, this kind of person is nevertheless middling SES but petty bourgeois not all members of middle SES are. That’s why I’ve been drawing the distinction, by the way. In rural and suburban areas, the dynamics of politics, where low population density weakens the power of the workers, means when this group breaks to the right, it has an outsize effect on political power. Again, the true strength of the workers is solidarity. And that means in rural or suburban areas, they are weaker and such areas thus tend to be, almost by definition right wing. Add in unequal representation as in the US, you’ve got a serious threat even nationally.
The point seems to be that there is no way out of the capitalist dynamic, wealth concentration, polarisation, included outside of a revolutionary process. All the schemes about nationalise, tax, state control etc leave the current political structures intact which is contrary to what Marx came to accept. The working class cannot simply lay their hands on the ready made state apparatus and weild it for its own purpose. The necessity of proletarian dictatorship raises its head. What is this? Is it what the Stalinists, only partially critiqued by the Trotskyists, attempted to sell us, the dictatorship of the party-state? Or is it something else, that set out by Lenin in State and Revolution, the heritage defended by the Communist Left, the power of the workers own “democratic” organs, the workers’ councils, all officials elected and subject to imediate recall. Here is the issue, the question of power, this has to be settled before we can talk of socialist transformation.
It is not a case of a mass party taking over through the current democatic channels, it is a case of the workers councils rising through intense class struggle and the abolition of the present political structures only fit for running capitalism.
How about reviewing this book for The Political Quarterly? Deadline before the end of May Length 1000-1200 words
The Political Quarterly, founded in 1930 by Leonard Woolf, is read by journalists, MPs, civil servants, academics etc, so, please, avoid jargon and excessively specialised language. Since we try, not always successfully, NOT to be an academic journal, we pay a (small) fee: £100.
I would be delighted if you accepted
Donald
Prof. Donald Sassoon Literary Editor, The Political Quarterly 108 New River Head 173 Rosebery Avenue London EC1R 4UR Join our mailing listhttps://zen.us9.list-manage.com/subscribe?u=b91b660e105666c4bb8aa399c&id=f021709038 and get a monthly digest of our best articles, straight to your inbox.
Michael rightly says that large, capitalist companies, employ many workers and make huge profits, while, small companies employ few of them. So large companies make a lot more profits than small ones. He also confirms, that profits have risen during the last 30 to 40 years. What about the tendency of profits to fall? This phenomenon reminds me of what David Harvey recently stated, namely that the mass of profits, the wealth and power generated through this mass is more important nowadays than the rate of profit.
We should draw a sharp distinction between inequality based on wealth and inequality based on income. The latter having a greater effect and being more consequential. For example a person owning their property maybe in the top 10% but if their income is low they may not be able to heat it. In any case measuring wealth is mug’s game. For example the market cap of US stock markets is equal to 50% of global GDP. My advice to you is to focus on income not wealth when measuring inequality.
Here is one reason why. In the USA measured by retail sales the top ten percent of income earners spend as much as the bottom eighty percent. As they are less effected by movements in interest rates, it helps explain the so called resilience of US consumers.
The problem with your rationalization is that power comes from wealth, not income.
An iron ore baron doesn’t control politicians and policy because he has a USD 10 million monthly income, but because he controls supply of iron, upon which the State and, for what matters, most of “civil society” (the independent middle class workers and the rest of the capitalist class) depend on to merely exist.
Money is here merely the expression of capitalist power, but it is not the whole story. The means of production explain (“non-liquid wealth”, non-income) the whole story. The financial sector (e.g. market cap) is merely fictitious capital, i.e. capital in a purely legal form.
BTW, home mortgages, which most people need to become homeowners, are assets generating $$ on the books of banks, whose profits flow to people at the top of the pyramid. So it goes.
Those center-left intellectuals invoke the protection of “democracy” in order to legitimize their theories.
The problem with democracy is this: it doesn’t have a material base, it is just an idea. Humans cannot live only with democracy.
But setting that aside, what legitimates democracy over every other governance system possible are two axioms:
If majority of the people wasn’t infallible and universal, then democracy would just be the dictatorship or the tyranny of the majority over the minority, a poliarchy. No wonder then that modern-day liberals define “democracy” as the preponderance of the will of the majority with the guarantees and protection of the interests of the minority. But what if the interests of the minority are antagonist to the interests of the majority.
Another problem is that, if we take democracy in its absolute, philosophical, logical sense, then the people should be every living human being on Earth, not just the citizens. That would mean even the illiterate, the too ill to vote (including those in coma and in terminal stage), the children and even the newly born should have the right to vote. After all, the people must be universal, not historical: it is either everybody or not everybody; it can’t be both at the same time. That, obviously doesn’t happen in the really existing democracy, so we know democracy doesn’t exist in the real world.
So, the conclusion must be only one: democracy, as defined by its legitimizing arguments, never existed and will never exist. It will always be an ideal used as an instrument to legitimize really existing social relations. This also means that the “People” doesn’t exist: you’re either this or that class; only class struggle exists.
“The problem with democracy is this: it doesn’t have a material base, it is just an idea.”
But I disagree entirely, the class struggle is the “material base.” There is the internal competition between the members of the ruling class interacting with the need for a state to defend property in general, against other states and against subordinate classes. I think historically the amount of democracy often went hand in hand with the ruling class need for loyal soldiers. (As I recall, a couple of less famous political scientists not so long ago did a popular book on this, by the way.)
And these two “axioms” also seem to me to be incorrect. The first should be I think, that no claim for one group of people to be the true citizens on any grounds can be proven to be justified. No invidious distinction of persons has ever succeeded in identifying a superior group, ever. Democracy’s assumption that healthy adult citizens are equal (=/=identical!) is necessarily correct. People cannot be ranked into superior and inferior on any intelligible scale. Even property franchises have been proven to be unworkable despite the superficial objectivity and feasibility of measuring property. Not only does time change real property and eventually render obsolete any previous measures, some losers in the internal ruling class competition will inevitably appeal to higher layers of the disenfranchised. No oligarchy can maintain itself without change, not even ancient Sparta. (By contemporary standards of ancient Hellas, Sparta was extraordinarily stable but in the long run, no.)
The notion that democracy necessarily includes majority rule is not universally accepted in the first place. Literally, the proposed second axiom is simply unfactual, not foundational. But the notion that the people has to be infallible is a moralizing claim. The “real” justification for majority rule is that the majority is the side that would be likely to win and therefore it is much saner to count the heads, not weigh them. If the ship seems to be sinking in the storm, the passengers taking over is not justified by saying the majority is infallible by definition. Morally they think they are defending their lives against incompetence. (They may even be correct on occasion?)
This omits that democracy is a state form and thus is inseparable from class struggle, as is the state. Bourgeois states defend bourgeois property at home and abroad. That’s why omitting the third axiom, that security of property is the freedom of the citizen, falsifies the analysis.
@ stevenjohnson
Your argument is not rigorous because, in class struggle, what decides is force, while in democracy, what decides is the majority of the vote. There is absolutely no relation between the two — which is empirically demonstrable, because there was class struggle in non-democracy systems both in the past and the present.
–//–
You can absolutely postulate a democracy that is perfectly practical, e.g. parliamentary democracy, representative democracy, republican democracy, direct democracy etc. etc. — but, without those two axioms, you can only claim democracy to be just another system, not better, not worse than any other system.
vk there may be language issues here. Force is not a synonym of violence, not in economics nor necessarily in politics. Class struggle at the point of production is always decided by the balance of forces, but not necessarily by violence. Force is not just violence, or the threat of violence, or even the fear of violence, force is also social necessity. Lack of personal property and the need to live are the force. This ambiguity in your argument is the lack of rigor. But the kind of force needed to extract labor from slaves or goods and services from serfs is not the same kind of force used in democracies. And in ancient democracies or republics, the limitation on the role of violence against other citizens was also different from the use of violence in, say, pastoralist empires too, so it is entirely unclear what is empirically demonstrated by violence in other forms of class society.
The objective measure of the superiority of democracy, ancient and modern, lies in how much less violence between citizens there is in such societies once they are established and while they last. That’s why democratic socialists and bourgeois democrats reject revolution in principle. The fact that all bourgeois democracies were consolidated in revolution or created by or in imitation of bourgeois democracies with a revolutionary heritage is simply denied. I still do not think your two axioms would serve as a moral justification for bourgeois democracy and I still think omitting the third axiom, property is liberty, falsifies the nature of bourgeois democracy.
The superiority of bourgeois democracy of course is not a universal under any axioms, however. There is no universal in social systems. Bourgeois democracy was objectively a great advance (and historically is associated with social advances in ancient democracies and republics, by the way.) But that was the past, and what was once the road forwards has come to its end. I’m not quite sure why condemning democracy for not being universal helps anything. The people who love the justification of class rule by voting are not going to accept the justification of a workers’ state by the creation of social economy, no matter how much it fulfills the needs—that is, the will, of the majority. As I said, the notion democracy is the rule of the majority is not, not, not universally accepted!
@ stevenjohnson
I’ve never read any such definition of democracy = less violence possible. You should treat this definition as your own, and not established theory.
Either way, it still falls into the two axioms, because you still have absolute democracy = no violence, no-democracy = absolute violence, and every other system in between, from the less to the more democratic. Besides, there is the empirical problem of this definition, because you can’t prove that, througout History, more democratic systems were less violent — the only logical way out would be to fall into the definition stated here, that is, that the less violent system is, by definition, more democratic — but that would just be idealism (the category of no-violence taking the place of the Sacred, of God).
So, you are wrong when you state that we can measure democracy. We don’t have a history of “body count” since ancient times. The only argument you could have is one that actually proves Marx is once again correct: that more people than ever were born during capitalism, which more than compensated for the countless deaths it caused, so, at the end of the day, it was “democratic” because of the net result. But if a mode of production is capable of generating and accomodating a bigger population, then it is evidence of the development of the productive forces, not of the idealist march of Democracy through History.
vk There is still a language barrier. It is exceedingly common to define “democracy” as less violence. But the more common phrasing is, “the rule of law,” or sometimes “independent judiciary/trial by jury” or maybe even “rights,” political, civil and human. Aside from anything else, the notion that the private wars in feudal epochs weren’t objectively more violent needs a great deal of justification. I can’t even imagine how anyone can truly justify the claim that equal legal rights for previously enslaved people didn’t ameliorate violence either. The notion that the elites playing Game of Thrones with each other is just the same as elites rigging elections strikes me as less than insightful. You’re inadvertently close to saying shooting down demonstrators is democratic in principle. I think you have definitely implied that no one can distinguish a government that came to power by violent means is indistinguishable from one that was elected.
Most important the unspoken third axiom of democracy, the property is freedom (well, security of property is freedom,) still holds. Denying this axiom still falsifies the nature of democracy, which is so many respects boils down to a society where anyone’s money, everyone’s money, regardless of age, sex, race, religion, is as good as any other citizen’s and all that truly matters is, how much?
Well, perhaps vk‘s English is after all better than mine? In the last sentence of the first paragraph, either cross out “no one can distinguish” or the “in” in “indistinguishable.”
You cannot hire good proofreaders these days.
@ stevenjohnson
It doesn’t matter how much you think your argument is: the concrete fact is that you cannot measure violence throughout History in order to develop a ranking of the most to the least democratic systems. The data simply doesn’t exist (and it never existed). At the most logical, mathematical level, it is still your own personal opinion.
The concept of peace, in Western philosophical tradition, is tied to the strong and centralized State, not to individual freedom. The most illustrative case is Thomas Hobbes’ Leviathan, but it is pertinent to highlight here that the greatest theories of the State throughout Western History are invented in eras of exceptional anarchy and wars (Plato, Hobbes, Morus, Machiavelli).
The association of a strong State to greater levels of violence may be a fabrication of WWII and the Cold War, where the concept of Totalitarianism was tied to the concept of a strong and centralized State, which was then tied to mass (industrial) killing. Again, not only is this “theory” empirically dubious, but it is a very recent ideological innovation in Western History.
But if we are going to get absolutely philosophical, then your logic is still idealist: why are less violent systems better than more violent systems? You just substituted the “sacred” with the idealist category of no-violence (but you still have to explain, in purely idealist terms, why no-violence is the sacred). The same logical dilemma would apply if we substitute “no-violence” with “individual freedom” or “equality of money” (you are just substituting the names of the categories within the same theoretical system: democracy = no-violence = individual freedom = [equality] of money).
vk No one has to invent a numerical scale. I would not dare to say that Israel is more bourgeois-democratic than Iran…but I would dare say that both are more bourgeois-democratic than the Kingdom. Nor could I dare to say sixteenth century Netherlands was more democratic that sixteenth century England. But I do dare say both were more bourgeois-democratic than the Russian or Ottoman empires. I think you are mistaken when you dare to say, even implicitly, there is no difference because it can’t be quantified.
You seem to have forgotten that the relationship between bourgeois-democracy and the haute bourgeoisie has always been a decidedly fractious one. Indeed at the beginning the successful bourgeois wanted to buy landed property and a title and have their families join the aristocracy, leaving the petty bourgeois to lead (ultimately, to mislead, i.e., use) the masses, in a heterogeneous class coalition, to create freedom in spite of the old regime. The bourgeoisie did not manage to give the franchise to women till the twentieth century! The apologists for capitalism/imperialism want to explain that it is capitalism, not revolution, that made bourgeois democracy but they lie. And they also lie when they claim the social and economic and political advances were painless excretions of the free market, rather than revolution.* I do not agree that denying these social and economic and political advances in the past is useful. Nor is it true. If you insist on being crude (as you seem to be) it’s why capitalism conquered the world, not the other way round. Even though you can’t see any particular advantage to civil peace within a state, the world has.
The strongest states are those with the strongest class foundations, and those historically are the bourgeois-democracies/republics. Or even, in ancient times why the Roman Republic defeated the Carthaginians? Why the Athenians and Spartans prevailed for so long over their opponents? [Yes, the Spartans were a kind of democracy, however strange—look up the term “ephors” and remember two kings is half the monarchy, not twice.) Hobbes’ Leviathan really was a case of reality exploding a philosophy. Machiavelli in Discourses on Livy was arguing, futilely, for a republic with an armed people, not a monarchy, precisely because it was a stronger state.
“…why are less violent systems better than more violent systems?” Because unless you distinguish in favor of the victors in violent systems, more people live better lives. More is better because people are basically equal in my personal and idiosyncratic opinion however unjustified by logic and mathematics. Private wars between lords, civil wars between aristocratic house, random murders by kings and priests and bandits/soldiers (usually overlapping categories before strong bourgeois democracies so far as I can tell) were bad for the people then. And I think they were bad for the development of the productive forces as well. You might as well ask, why are systems that develop the productive forces better? But instead, saying violent systems are better? What are you thinking?
*Yes, revolutions are horrible because of the violence. But there is also the daily “violence” of the old order, which is simply not counted because the victims of that don’t matter. In the end, the only thing worse than a revolution is not having a revolution. That’s why being anti-revolution is still counter-revolutionary. The issue of course, is whether or not there is still a way forward. I believe the Marxian critique of political economy (which is why I read this blog!) shows that way forward means the abolition of capitalism and its replacement, the details of which are to be found by the movement and experience of the masses in life or death struggle.
[Economy comment]
The “everybody must own a home” argument used by those British scholars would not work in capitalism because that would rise the value of labor power.
If every worker has a home and has all of his or her subsistence necessities saciated socially (i.e. consistently, forever) by the State or whatever other superstructural entity, then this level of material development would be the new “ground zero” of the free flow of labor power in the labor market. But since this new ground zero would be a higher ground zero than the previous ground zero, that would mean the worker would have, inherently, more leverage against the capitalist in the labor market than in the previous state — i.e. the value (therefore, the price) of the labor power would rise.
It is easy to visualize this process from a microeconomic/psychological point of view: the farther above an individual worker is from his or her subsistence level, the less “desperate” he or she is to find a new job, that is, the the stronger is the “safety net”, the fluffier is the “cushion”; the bolder he or she is to negotiate a raise and/or better working conditions (e.g. shorter hours; more home office hours; maternity/paternity leave; paid vacations, etc.).
The labor power value rises, the profit rate falls — and the irony of this is that it would not only not be a countervailing factor for the Tendency of the Profit Rate to Fall, but actually be an accelerating factor, it would hasten the fall of the profit rate. Those anti-inequality intellectuals are unconsciously asking for an acceleration of the demise of capitalism. This fatal mistake by them (because they are, ultimately, pro-capitalist; they are capitalism’s noble counselors) arises from the fact that they believe in a version of undercomsumption theory, which pressuposes the assumption that captialism is now profiting more than ever instead of less than ever.
So, the ideal scenario for capitalism is to impoverish more and more the working class. The more the working class is close to its subsistence limit, the less value of the labor power, the higher the surplus value, the higher the profit rate (if we fix the rate of fixed capital). So, the last thing a British capitalist would want is for every British person to own a home — that would be a nightmare scenario for the British capitalist class.
Evidently, the unavoidable failure of these anti-inequality intellectuals will prove further that Marx was — once again — correct: the middle class is an aberration of the capitalist system, its only two essential classes are the working class and the capitalist class. Thus the tendency is for the proletarianization of the middle class, not for the middleclassization of the working class.
VK if you are referring to private renting where those renting are paying off the landlords mortgage plus plus, the rent exceeds the paying off a mortgage you are wrong about the value of labour power. If you are referring to subsidized public housing you are right.
If the home is mortgaged, then this is a case where fictitious capital exploits the worker directly, in which case the rate of exploitation rises because the cost of subsistence rose without any rise in wages.
However, this only true if only a given portion, a minority, of the working class is able to mortgage a home: if that became universal, that is, if mortgaging a home became an inseparable part of the working class’ subsistence, then the logic would still be the same, the difference being an extra step would be added to the process (the mortgage would be transferred in the form of rising wages to the capitalists).
But we know mortgaging a home is not part of the susbsistence of the working class and will never be. Capitalism has a much more efficient and effective way of converting the working class’ necessity to live in a home into the costs of its subsistence: rent.
If rent in a given region rises, the wages of the region do indeed rise. A worker in New York will receive a higher wage for the same labor power as a worker in Arkansas — the only difference is that the cost of living (of satisfying the subsistence of the worker) in New York will be higher than in Arkansas. The rate of exploitation and productivity of labor are assumed here to be the same in order to analyze only the subsistence of the worker.
Perhaps this objection is correct too. But I’m not altogether certain the iron law of wages is the foundation of Marxian political economy, much less the corollary of absolute immiseration of the working class. I rather thought the historical and moral component of what is regarded as subsistence reflected the possibility of capitalist economic development actually improving in the long run the material conditions of humanity as a whole, however unevenly. And that the increasing inability of capitalism/imperialism to do this really is a damning charge by Marxists. It’s why the Manifesto had some kind words for the capitalists’ past, along with criticism. And even in the short run it’s not clear how trade unions or the labor movement generally could improve anyone’s lot, much less play a role in the socialist movement. Of course, I may have entirely misunderstood Wage-Labor and Capital?
Anyhow, so far as I can tell, of course it is possible that, like any commodity, labor power can sometimes be purchased at an exchange value above its value, just as sometimes it is purchased at an exchange value below. The theoretical implications seem to me to be, profit incentives for an either/or: Either capital is exported to cheaper labor zones or cheaper labor is imported. So far as I know this is empirically plausible.
And to get even more detailed, mortgages, whether private or public, are not so far as I know, fictitious capital, not in principle. The house is still a use value. and not just a legally enforceable claim on anticipated revenues. Mortgage backed securities really do have a powerful claim to be fictitious but what exactly have they to do with the average homeowner’s investments? On the other hand, it seems to me that consumer credit card debt really does have a claim to be fictitious capital, those loans really do simply anticipate future revenue and the only asset backing these loans is essentially legal, which is why “reform” of the bankruptcy laws was so big a deal to Obama and Biden back in the day. Well, also the prevailing honesty of so many people. There are secondary forms of exploitation involved, such as so-called usurious interest rates or exclusion from loans or fake charges and arbitrary penalties. But however important these may be in socioeconomic stratification, the primary form of exploitation is still I think, the extraction of surplus value. The richer the society, the greater the role of relative surplus value?
By the way, the threat of losing the house is a very significant threat so it is not even clear to me that one can simply assert that paying a mortgage gives you leverage in wage bargaining.
@ stevenjohnson
This is the opposite of the iron law of wages. It is perfectly possible that, in a capitalist society, owning a home becomes the reality of every single individual of the working class — Marx’s theory doesn’t speak against that in any way.
What Marx states is that every universal material benefit to the working class becomes part of the worker’s subsistence level (and, reversely, every universal material loss becomes an erosion of this level). The concept of subsistence is mobile according to Marx.
There are three “caveats”, so to speak, to this mobility that are absolute limits to capital: 1) if the working class’ subsistence level rises, it is a direct hit to the capitalist class’ mass of profit and thus its profit rate; 2) the absolute upper limit to the rise of subsistence level of the working class is the profit rate, and its absolute lower limit is the level of self-reproduction of the working class and 3) the working class always reproduce itself simply, that is, C – M – C where C=M=C (emphasis on the word “class”: some individual workers or group of workers may be able to save money and thus accumulate some wealth, but, as whole, the working class has to exist under the process of simple reproduction).
So yes, the capitalist class may, in theory, treat its working class like kings (e.g. Switzerland), but they must have in mind that this raises its level of subsistence, which falls like a hammer to their mass of profits and profit rates. Indeed, since it directly subtracts their mass of profits, rising the level of subsistence of the working class is literally the worse thing that could happen to capitalism; it may happen in some (small) countries for a limited amount of time, but it can’t last.
vk Can’t argue with “This is the opposite of the iron law of wages,” even though I’m not sure what the pronoun refers to? Not being a Marxist I got confused and thought somebody (perhaps it was me?) was arguing a version of it. Sorry.
Re Fig. 1, still inclined to think the pyramid levels should be either proportional to total wealth divided by total population (given an inverted pyramid, true) or the vertical thickness of the levels should be proportional to the income range (which would leave the top level looking like a radio antenna, yes) and the horizontal width of the level should be proportional to the percentage of the population (leaving the base of the pyramid almost fifty times wider.)
When you write “That would require a radical shift in the ownership and control of that wealth i.e. public ownership of the banks and large companies, and public investment directed towards social need, not profit.” someone might ask (and they do ask):
What do you mean a shift in the ownership? How? Would you (the government) just take it from those who currently own them? By force? They will simply grab what their owners own? It doesn’t seem very realistic. And even if it does, it’s not fair!
What would you say to those questions / objections? At least as far the first one is concerned, would the government simply take them under its control? Simply nationalising them?
The ‘wealth pyramid’, with its segments determined by percentage of population by number, fails to convey well the wealth of the tiny sector on top, or the large segment at the bottom. Different visualisations are needed. The graph here https://www.visualcapitalist.com/wealth-distribution-in-america/ , and even the table in the article, are much better at quickly showing wealth distribution (in that case in America, rather than globally).
The same site has an alternative global weath pyramid at https://www.visualcapitalist.com/global-wealth-distribution/
The subject of the blog itself and most of the comments seem to me just academic, rhetorical exercises. Equality has to be defined materially, socially, and historically as an equitable division, within a particular social order, of socially produced wealth.
The particular social order in which the question of inequality must be framed today is the colonial/imperial order, inherited after WW2 by the United States. Here the inequality in the distribution of wealth is self-evident. The Global South has 80 percent of the global population and produces about 80 percent of the global wealth, but consumes only about 20 percent of it. The inverse is true of the Global North, which has 20 per cent of the global population, but consumes 80 percent of global wealth. This inequality of wealth between the Global South and the present fascistic “democracies” of the Global North, has, as always, been maintained with extreme violence.
That’s because the concept of equality is academic. There is no such a thing in Marx’s theory.
Marx himself was very clear: communism wasn’t a pretty idea that would make everybody (but the capitalists) happy and feel good about themselves, but the concrete, the only materially possible solution to the given conditions of capitalism. It is the polar opposite of an utopia.
Communism is the quintessential practical “ideology” (praxis); it is everything opposite of what the postmodern philosophers and sociologists have been touting for the last 30 years (i.e. leftism and revolution as “utopia”/”sweet defeat”).
That’s because the concept of equality is academic. There is no such a thing in Marx’s theory.
I think I understand what VK intends, that Marx’s critique is not of inequality per se where the remedy is equitable allocation or legal equality. Nevertheless the examination of equality, and the coincidence of equality with both property-holding and exploitation is fundamental to Marx.
First and foremost, Marx begins his investigation into commodities from the apparentreality of equality in exchange. He peels back that practical and yet formal equivalence to expose the determining unequal exchange that yields surplus value. And even that inequality stems from specific equality of time. In the Poverty of Philosophy Marx states
“it presupposes that simple labour has become the pivot of industry. It presupposes that labour has been equalised by the subordination of man to the machine or by the extreme division of labour; that men are effaced by their labour; that the pendulum of the clock has become as
accurate a measure of the relative activity of two workers as it is of the speed of two locomotives. Therefore, we should not say that one man’s hour is worth another man’s hour, but rather that one man during an hour is worth just as much as another man during an
hour. Time is everything, man is nothing; he is, at the most, time’s carcase“
Marx also discusses pre-capitalist concepts and practices of equality in his ethnological notebooks.
In any and all cases, communism isn’t necessarily an utopia, but it is hardly the polar opposite of utopia–no more than scientific socialism is the “polar opposite” of Fourier’s socialism of desire.
You miss my point, which wasn’t to define a utopian state of “equality”, but to frame, historically, the inverted share of socially produced wealth between the global north and south(as the primary cause of capitalism’s permanent state of war) within the present global social order. The bourgeois data on the blog’s topic of “inequality” typically skirted this issue, and most commentators went along with this, including you.
Factually speaking, the US did not inherit the colonial/imperialist scheme, it undermined the colonial powers and devised a new free trade imperialism under “Bretton Woods” rather than a simple gold standard, etc. That’s why it was a novelty when Trump suggested just taking the oil (he meant Iraq.)
It’s doubtful there should be scare quotes around “democracies” even the Global North democracies. Of course they are democracies, it’s just that bourgeois democracy is like old milk, a health hazard instead of food.
Most states of the Global North have not used extreme violence, and only the US has used nuclear weapons. The ways in which Sweden and Switzerland and Italy and Germany have used violence to get their wealth is entirely unclear (which is why there is so much debate on imperialism.) I have my own ideas but I will spare any readers this burden for once. You may thank me later.
It’s not clear what is meant by “fascistic?” Again, you may thank me later.
I did not think I was an ally of US billionaires, inasmuch as my personal index card program is “Kill all the billionaires!” I am nearly as dismayed to find that Marxists are allies of, say, the Shinawatra family, who of course are Global South just as much as Carlos Slim. It’s not clear that Republic of Korea billionaires aren’t Global South too or for that matter the House of Saud.
vk I’m pretty sure that the Critique of the Gotha Program addressed issues of equality. Also I’m really quite puzzled as to what the point of socialism is if equality has nothing to do with it? Disdaing the goal of everybody feeling good and being equally happy, seems to be denying that reforming everyone’s manners so that nobody’s feelings are hurt isn’t Marxism, but it’s not clear to me mandm said anything like that.