Zinn: Class System

Howard Zinn – Excerpts

In a highly developed society, the Establishment cannot survive without the obedience and loyalty of millions of people who are given small rewards to keep the system going: the soldiers and police, teachers and ministers, administrators and social workers, technicians and production workers, doctors, lawyers, nurses, transport and communications workers, garbagemen and firemen. These people - the employed, the somewhat privileged - are drawn into alliance with the elite. They become the guards of the system, buffers between upper and lower classes. If they stop obeying, the system fails.

One percent of the nation owns a third of the wealth. The rest of the wealth is distributed in such a way as to turn those in the 99 percent against one another: small property owners against the propertyless, black against white, native-born against foreign born, intellectuals and professionals against the uneducated and unskilled. These groups have resented one another with such vehemence and violence as to obscure their common position as sharers of leftovers in a very wealthy country.

Photograph: Jimmy Sime, 1937, Toffs and Toughs

The Constitution as an Economic Document

Constitution Series

An Economic Interpretation of the Constitution of the United States by Charles A. Beard, 1913, Edited Excerpts

The primary objective of government is making rules which determine the property relations of members of society. The law is concerned with the property relations of men and the processes by which the ownership of property passes from one person to another. Different degrees and kinds of property inevitably exist in modern society; class and group divisions based on property lie at the basis of modern government; and politics and constitutional law is inevitably a reflex of these contending interests.

The concept of the Constitution as a piece of abstract legislation reflecting no group interests and recognizing no economic antagonisms is entirely false. It was an economic document drawn with superb skill by men whose property interests were immediately at stake. Nationalism was created by a wielding of economic interests that cut through state boundaries. The southern planter was as much concerned in maintaining order against slave revolts as the creditor in putting down desperate debtors.

The Constitution is essentially an economic document based upon the concept that the fundamental rights of property are anterior to government and morally beyond the reach of popular majorities. The Constitution was the work of a consolidated group whose interests knew no state boundaries and were truly national in their scope. The members of the Philadelphia Convention which drafted the Constitution were immediately, directly, and personally interested in, and derived economic advantages from, the establishment of the new system.

The opposition to the Constitution almost uniformly came from non-slaveholding farmers and from debtors.  No popular vote was taken directly or indirectly on the proposition to call the Convention which drafted the Constitution. A large property-less mass was, under prevailing suffrage qualifications, excluded at the outset from participation in the work of framing the Constitution. It is pretty conclusive that the Constitution was not the product of “we the people,” but of a group of economic interests which expected beneficial results from its adoption.

 Bush's State of the Union Address January 2008

The strength -- the secret of our strength, the miracle of America, is that our greatness lies not in our government, but in the spirit and determination of our people. (Applause.) When the Federal Convention met in Philadelphia in 1787, our nation was bound by the Articles of Confederation, which began with the words, "We the undersigned delegates." When Gouverneur Morris was asked to draft a preamble to our new Constitution, he offered an important revision and opened with words that changed the course of our nation and the history of the world: "We the people."

Franklin D. Roosevelt on Privileged Enterprise

Wealth Gap Series

Acceptance Speech for the Re-nomination for the Presidency, Excerpts

http://www.presidency.ucsb.edu/ws/?pid=15314

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.

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

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 Piketty, 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. 

Capital vs Income

Wealth Gap Series

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

Capital

“Capital” and ‘Wealth” are used interchangeably. Capital is defined as the sum total of nonhuman assets that can be owned and exchanged on some market. The total wealth owned at a given time. “National capital”, or “national wealth”, is the total market value of everything owned by the residents and governments of a given country. National wealth = private wealth + public wealth

Income

Income is a flow. The quantity of goods produced and distributed in a given time period, assume annual. Wages and output.

Capital/Income Ratio

B Ratio = Capital/Income

The principal destabilizing force is when the rate of return on capital, r, is significantly higher for long periods of time than the rate of growth of income, g. The inequality r>g implies that accumulated wealth grows more rapidly than income, capital reproduces itself faster than income increases. The conditions are ideal for an “inheritance society” characterized by both a very high concentration of wealth and a significant persistence of large fortunes from generation to generation.

The rate of return on capital – generally 4-5 percent – has throughout history always been distinctly greater than the income growth rate and is a powerful force for an unequal distribution of wealth.

In the developed countries today, the capital/income ratio varies between 5 and 6.