Franklin D. Roosevelt on Privileged Enterprise

Wealth Gap Series

Acceptance Speech for the Re-nomination for the Presidency

Excerpts Speech
27 Jun 1936

The age of machinery, of railroads; of steam and electricity; the telegraph and the radio; mass production, mass distribution—all of these combined to bring forward a new civilization. Out of this modern civilization, economic royalists carved new dynasties. New kingdoms were built upon concentration of control over material things. Through new uses of corporations, banks and securities, of labor and capital—all undreamed of by the fathers—the whole structure of modern life was impressed into this royal service.

The privileged princes of these new economic dynasties, thirsting for power, reached out for control over Government itself. They created a new despotism and wrapped it in the robes of legal sanction. It became privileged enterprise, not free enterprise. The political equality we once had won was meaningless in the face of economic inequality. A small group had concentrated into their own hands an almost complete control over other people's property, other people's money, other people's labor—other people's lives.

Our allegiance to American institutions requires the overthrow of this kind of power. In vain they seek to hide behind the Flag and the Constitution. In their blindness they forget what the Flag and the Constitution stand for.

Wealth Gap Correction - War

Wealth Gap Series

Capital in the Twenty-First Century by Thomas Piketty

2014, Excerpts

Inequality on the eve of WWI was as great as it had ever been. The two world wars played a central role in reducing inequalities in the twentieth century. It was the chaos of war, with its attendant economic and political shocks, that reduced inequality in the twentieth century. There was no gradual, consensual, conflict free evolution toward greater equality. In the twentieth century it was war, and not harmonious democratic or economic rationality, that erased the past and enabled society begin anew with a clean state.

The reduction of inequality that took place between 1910 and 1950 was above all a consequence of war and of policies adopted to cope with the shocks of war. A great wave of enthusiasm swept over Europe in the period 1945-1975. People felt that inequality and class society had been relegated to the past.

One major lesson is clear: it was the wars of the twentieth century that wiped away and transformed the structure of inequality. Today, in the second decade of the twenty-first century, inequalities in wealth that had supposedly disappeared are close to regaining or even surpassing their historical highs. The new global economy has brought immense inequities. Can we imagine a twenty-first century in which capitalism will be transcended in a more peaceful and more lasting way, or must we simply await the next crisis or the next war?

Racial Wealth Gap

Wealth Gap Series

The Ever-Growing Gap: Failing to Address the Status Quo Will Drive the Racial Wealth Divide for Centuries to Come
http://www.ips-dc.org/report-ever-growing-gap/
08 Aug 2016

In the last decade, we have seen the catastrophic economic impact of the Great Recession and an ensuing recovery that has bypassed millions of Americans, especially households of color. This period of economic turmoil has been punctuated by civil unrest throughout the country in the wake of a series of high-profile African-American deaths at the hands of police. These senseless and violent events have not only given rise to the Black Lives Matter movement, they have also sharpened the nation’s focus on the inequities and structural barriers facing households of color.

America’s Financial Divide: The Racial Breakdown of U.S. Wealth in Black and White
http://www.huffingtonpost.com/antonio-moore/americas-financial-divide_b_7013330.html
28 Jan 2016

The major sources of wealth for most of the super rich are inheritances and in life transfers. The big reason is racial differences in access to resources to transfer to the next generation. The practices of enslavement, violence, Jim Crow, discrimination and dispossession of property have kept generations of African Americans from accruing the type of wealth that whites in the top 1 percent have today.

Most famous of all New-Deal images is “After the Louisville Flood,” by photographer Margaret Bourke-White, which features black flood victims in line at a relief agency being virtually run down by the looming white family of the “American Way” billboard beside them

Billboard Series

Testimony of Abigail E. Disney

Wealth Gap Series

Speaking before the U.S. House of Representatives Financial Services Committee: Proposals to Strengthen the Rights and Protections for Workers
https://financialservices.house.gov/uploadedfiles/hhrg-116-ba16-wstate-disneyphda-20190515.pdf
15 May 2019

I am here to help shed light on the problem of excessive executive compensation and the injustice of the contrast between that compensation and the low wages and poor conditions of those that work at the bottom of the pay scale. These problems have been growing over the decades and will continue to worsen and have deeply negative consequences for our great nation.

I know a little something about the dynamics of money. I believe that there is such a thing as too much money. And, to be yet more heretical, I believe it is possible to say no to more. As an heiress with a famous last name I’ve been granted a free pass into the places where wealth is unapologetically flaunted. I’ve watched as, over the last few decades, the wealthy have steadily self-segregated into ever more restrictive and lavish spaces. In those spaces, even as they discuss the scourge of poverty, they guarantee that they will never have to look a gross inequity in the eye. In so shielding themselves, they have lost the ability to tolerate discomfort, and so work ever harder to keep their delicate sensibilities out of harm’s way.

I’ve seen what excess looks like in the form of the private planes parked chock a block at posh conferences about global warming, where no one so much as nods at the grotesque irony of such a thing. I’ve lain in the unnecessary queen size bed of a 737 big enough to carry hundreds but designed to accommodate no more than a dozen. I have seen it in 85 million-dollar mansions dotting the Hamptons—empty— I have watched children decked out in designer outfits expensive enough to fund a whole family’s healthcare for a year. It is time to pull back the curtain on this garish life and ask ourselves how high a handful should soar as the rest of us watch the American Dream collapse for a large majority of working people?

I have spoken up because I am uniquely placed. As an heir to Disney’s legacy and yes, no small share of its money, I feel a special responsibility to speak. I am also uniquely placed because I am not just any heir, and because Disney is not just any company. Disney is not US Steel. Nor is it Procter and Gamble, or Apple, or Chevrolet or any other iconic American brand. The Disney brand is an emotional one, a moral one, I would even say it is a brand that suggests love.

And when I call out the problem presented by any man, however brilliant, walking away with 65 million dollars after only grudgingly offering his own employees a wage that cannot support a single person much less a family, I know it will get a lot of attention, and hopefully jar a lot of sleepwalkers into consciousness.

I spoke out about Disney in spite of the fact that I am well aware that Bob Iger is by far not the worst offender as far as excessive compensation goes, but because I want to bring attention to the issue of inequality more broadly and to shine a light on all that we have gradually allowed ourselves to become accustomed to in the name of this fundamentalist version of capitalism we currently practice.

We need to change the way we understand and practice capitalism. We need to put people ahead of profits once and for all. Yes, leadership has a fiduciary obligation to their shareholders. But they also have a legal and moral responsibility to deliver returns to shareholders without trampling on the dignity and rights of their employees and other stakeholders.

It is time to say, “enough is enough.” It is time to bring a moral and ethical framework back to the way we discuss business. It is time for business leaders to recognize that they have altered the nature of this communal project we call the United States of America, and that now they must hold themselves accountable to their fellow citizens.

Inherited Wealth

Wealth Gap Series

Capital in the Twenty-First Century by Thomas Piketty

2014, Excerpts

Inherited wealth is a long term process. The advantage of owning things is that one can continue to consume and accumulate without having to work. It is not an insignificant thing when one country works for another and pays out a substantial share of its output as dividends and rent to foreigners over a long period of time.

When the rate of return on capital significantly exceeds the growth rate of the economy, then inherited wealth grows faster than output and income. It is inevitable that inherited wealth will dominate wealth amassed from a lifetime’s labor by a wide margin, and the concentration of wealth will attain extremely high levels – levels incompatible with the meritocratic values and principles of social justice fundamental to modern democratic societies.

Wealthy people are constantly coming up with new and ever more sophisticated legal structures to house their fortunes. Trust funds, foundations, and the like often serve to avoid taxes, but they also constrain the freedom of future generations to do as they please with the associated assets.

Accumulated Old Wealth

Wealth Gap Series

Capital in the Twenty-First Century by Thomas Pikett
2014, Excerpts

Foreign possessions became important in the period 1750-1800. It was the nineteenth century that British subjects began to acquire considerable assets in the rest of the world, in amounts previously unknown and never surpassed to this day. By the eve of WWI, Britain had assembled the world’s preeminent colonial empire and owned foreign assets. France was the second most important colonial power.

By the turn of the twentieth century, capital invested abroad was yielding around 5 percent a year in dividends, interest, and rent. A fairly significant social group was able to live off this boon. The rest of world worked to increase consumption by the colonial powers and at the same time became more and more indebted to those same powers.

France and Britain have always been countries based on private property; private wealth has always dominated public wealth. Private wealth in 2010 accounts for virtually all of national wealth in both countries: more than 99 percent in Britain and roughly 95 percent in France.

Wealth Gap

Wealth Gap Series

Capital in the Twenty-First Century by Thomas Piketty
2014, Excerpts

Physical reality of inequality is visible to the naked eye. Peasant and noble, worker and factory owner, waiter and banker: each has his or her own unique vantage point and sees important aspects of how other people live and what relations of power and domination exist between social groups, and these observations shape each person’s judgment of what is and is not just. There is a fundamentally subjective and psychological dimension to inequality, which inevitably gives rise to political conflict.

An economy and society cannot continue functioning indefinitely with such extreme divergence between social groups. The widening wealth gap raises many questions as to its long term consequences. The way this large divergence of income distribution has evolved demands an explanation.

The unlimited growth of global wealth inequality, which is currently increasing at a rate that cannot be sustained in the long run, ought to worry even the most fervent champions of the self-regulated market. It is an illusion to think that the laws of the market economy ensure that inequality of wealth will decrease and harmonious stability will be achieved.

 

 

Income Inequality