Imagine, if you will, a length of rope, running through the center of a long metal pipe so that there’s some rope on either end. Let’s use the total length of the rope to represent an economy: all the material wealth that a nation generates. The amount of rope remaining on one side is the benefit to consumers; the amount of rope remaining on the other side is the benefit to workers. The pipe is the benefit to the owners.
Capitalism benefits the pipe. Government benefits the rope.
Left to its own devices, the investment community would increase the length of the pipe indefinitely, leaving no rope exposed at all. We see that every time we’ve have a colonial excursion, for instance: the money flows home to the wealthy in England, and the subjects get… well, they get the short end of the rope, don’t they.
“Back in the day, when America was great,” we were governed by wild-eyed Marxists like Harry Truman and Dwight Eisenhower, who tried to leave as much rope available as they possibly could. It was a pipe-shortening era, with extraordinary marginal tax rates at the top end of the scale and relatively low taxes for average workers. In 1960, the median family income was $5,500, and their Federal income tax rate would have been 20% on the first four grand and 22% on the remainder; on the other end of the scale, family income beyond $400,000 (about four and a quarter million dollars in current value) was taxed at 91%.
The results are clear. The Economic Policy Institute shows that in 1965, the average CEO/corporate president made twenty times as much income as the average employee; in 2021, that ratio was 399 to 1. For those at the top, it pays to elect people who make that pipe as long as it can possibly be. That’s the definition of oligarchy.
The great trick of the past sixty years has been that the lengthening of the pipe has mostly been toward one end. Wages have been stagnant or worse for decades, and employees are shed in massive waves of gigification. Whether you drive a cab or teach in college, you probably don’t have “a job.” But we’re all happy consumers, with our array of fancy coffees and artisan body wash and “free” internet content. Bad wages are the norm, but an eight-dollar carton of eggs will lose you an election.
And yes, capitalism as the engine of prosperity, blah blah blah whatever. Prosperity is the overall length of the ROPE, not the proportional length of the pipe. Don’t confuse the two.
All of the above is only economics. It only has to do with things that can be measured in dollars. (I had a teacher in grad school who spent his whole career studying spatial design in shopping malls. “I love shopping malls. There’s only one variable that matters: dollars per square foot.” A great example of a wicked problem artificially tamed.)
That’s the other thing that government attends to: things that can’t be measured in dollars. Things like health, and dignity, and beauty. I’ll close today by quoting Robert F. Kennedy (the real one, not the washed-out photocopy we’ve got now), speaking in 1968 at the University of Kansas.
But even if we act to erase material poverty, there is another greater task, it is to confront the poverty of satisfaction – purpose and dignity – that afflicts us all. Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things. Our Gross National Product, now, is over $800 billion dollars a year, but that Gross National Product – if we judge the United States of America by that – that Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman’s rifle and Speck’s knife, and the television programs which glorify violence in order to sell toys to our children. Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans.
Herb Childress 