(Is There a Mutual Road to Economic Democracy?)
Mind the Wealth Gap; what might we begin to do to close it?
The Office for National Statistics (UK) states that the top 10% of households are 850 times richer than the bottom 10%. It goes on to report that the richest 10% own 44% of national assets while the bottom 50% own less than a tenth of this amount.
Gar Alperovitz ( see link) says that the gap between the wealthy and the poorer sections of the population has grown to medieval proportions in the USA and as wealth as assets determines who has power, democracy there is being undermined. Here in Britain we are following them on the same path. Alperovitz states this will be reflected in the politics and power relationships which are now on the way to recreating something equivalent to what existed in feudal societies; an entrenched very wealth aristocracy dominating the majority as serfs. A modern person may revolt at being identified as a serf but as many are facing lower pay and underemployment are driven to live by borrowing as debtors they fall into the grip of obligation to the lenders, banks, financiers and mortgage providers.
Alperovitz says that in the USA 1% of the wealthiest own just under 50% of the wealth as assets and the wealthiest 5% own 70%. This he says will determine the power relationships within society. This development is result of 30 years of the politics and economics of neo-liberalism which seeks to shrink the state as a provider and safety net, which grew out of the New Deal, and privatize most services so that each individual is forced to buy whatever is needed or go without if they do not have the means. The result of this politics is the withering away of the labour unions which when stronger were an effective counterbalance to corporate capitalist interests. These go after maximizing profits at the expense of cutting costs and squeezing wages. This has also led to close down of many industries and their transfer abroad to areas of lower costs and social standards. As a consequence average wage earners have seen their wages flatline for the last thirty years while at the same time the top few percent of the wealthiest have seen their income and wealth shoot up. Much of their spare cash has then been recycled and invested to seek returns, much of this has ended up being the base for credit given as loans to the poorer sectors of the population. A contradiction was built into this relationship as the income of the working class and middle class is squeezed they cannot afford their loans. The result has been the partial collapse of the financial and banking system leading to the economic crisis. The banks have had to be bailed out by the state and the very people who have been squeezed and now further squeezed.
Alperovitz thinks that it will be difficult for the unions to stem this decline and pins his hope on the emergence of a host of democratic social enterprises as worker cooperatives, cooperative land trusts, credit unions, mutual funds, other cooperative forms, trade unions and sympathetic local government getting together to rebuild democratic commonwealths, which serve both individuals and their communities. As regards worker cooperatives he thinks that it is desirable that they are within a community relationship so that they do not just become self-serving entities. These developments he thinks are a potential and can only happen if people realize that they themselves have to start the process to construct a base of mutual self empowerment so as to build a dispensation more conducive to benign social and ecological ends, what he calls “evolutionary reconstruction.” These might be modest steps but are a beginning that can be done if people chose to do so; the politics might follow.
See Link to Gar Alperovitx’s web site