The means of the distribution of wealth is an important factor in any society, and the “redistribution” of wealth isn’t just a socialist or communist agenda, as some would have you believe. Redistribution of wealth works both ways – downward and upward. We have a finite pie (wealth) to distribute. What portion goes to the rich, and how much is left for the rest of us to distribute? Who decides?
When the rich get richer relative to the rest of us, that’s a redistribution of wealth. In the past thirty years , we’ve seen the most massive redistribution of wealth in our history. Upward. The rich have taken more and more of the pie, leaving less for the middle- and lower-class to share. Executive pay continues to rise, while the federal minimum wage hasn’t been raised in ten years. Some very wealthy people advocate a flat tax on income as the fairest way to tax. That may seem logical – if you’re rich – but the flat tax is a regressive tax that would result in even more of a redistribution of wealth to the rich. Progressive taxation (i.e. the more you make, the higher your tax bracket) shares the wealth more fairly. It can be used to create economic democracy in America.
The free market, we’re told, determines salaries. But the deck is stacked by the dealer in the casino of the American economy. In the private sector, the relative worth of a person’s labor is decided by the very people who stand to benefit most from having that power. They’ve created and sustained an inflationary spiral of executive salaries with the aid of an army of corporate lawyers and lobbyists, whose job it is to shape fiscal policy to the benefit of their employers.
It’s no accident that the rich in our country continue to prosper at the expense of the lower- and middle-classes, and top executives are frequently given bonuses on top of their exorbitant salaries. In 1978, CEOs might earn 38x more than their average employee’s salary. Today, CEOs have been estimated to “earn” over 300x the salary of their average employee. Even CEOs who have to resign in disgrace often get “golden parachutes” of millions of dollars – a reward for incompetence or malfeasance.
The perception managers of the Right have found that labeling someone with the L-word -liberal – doesn’t have the punch it once did. So now they use the S-word – socialist – to describe all people who don’t unquestioningly worship at the altar of laissez faire capitalism. It’s a continuation of their politics of fear, where liberal equals socialist equals closet communist.
In my opinion, Soviet communism inevitably collapsed because it was an unworkable system. It operated on the idealistic but false assumption that the one-party State, owning the means of production, would distribute the wealth fairly, because it’s an embodiment of the collective will of the people. It didn’t work out that way. Laissez faire capitalists, on the other hand, contend that the free market shouldn’t be regulated at all by the State, as supply-and-demand is an economic Law of Nature that shouldn’t be tampered with by governments. Socialists believe that the people should have a say in determining the relative worth of labor. Sure, some people should get more than others for their labor; but how much more? We needn’t leave it to the plutocrats to decide what is fair. We’re supposed to be a democracy.
A fairer distribution of wealth can be achieved within a democracy by a combination of effective government regulation of the market, and fair progressive taxation. Our current crisis came about because politicians – many of whom are themselves rich – decided that they could trust the richest capitalists to regulate themselves. Congress is a partially-owned subsidiary of the corporate state.
If we raise the highest tax brackets sufficiently, there would no longer be an incentive for a CEO to make hundreds of times more than the salary of his average employee, because most of the excessive remuneration would only generate revenue for the IRS. The capitalists who benefit most from being American citizens should be required to pay their fair share.
I believe than an important part of true democracy is economic democracy, which means that all workers get fair wages for their labor – a living wage. This means increasing the minimum wage substantially, and indexing it to inflation (i.e. it goes up automatically to keep up with inflation). Every full-time American worker deserves a living wage. Without a living wage, many workers are virtual wage slaves, sometimes forced to work two or more jobs to support their families, often one paycheck from homelessness. We can’t afford to let the rich get ever richer.