Writer Jimmy Guterman takes society’s temperature and digs into the reasons we’re all talking about inequality.
Thomas Piketty’s Capital in the 21st Century is a book of our moment. It may be the most unlikely egghead highbrow bestseller since A Brief History of Time – and it’s a lot longer than Stephen Hawking’s slender guide. Piketty’s 577-page tome (685 with index) argues that economic inequality is increasing and that’s a bad thing. That argument is resonating at a time when politicians of all stripes in democracies on multiple continents are also arguing that economic inequality is increasing and that’s a bad thing. The politicians are responding to something that their constituents know already.
This fascination with economic inequality is not an immediate reaction to an external event, but it might be a delayed reaction, an instance of cultural post-traumatic stress. By many measures, the world economic crisis began seven long years ago. It may have taken that long for the shock to be understood; the recent arguments that accompanied the release of the memoir by former U.S. Treasury Secretary Timothy Geithner suggest that the wounds are still raw. But, just as the famous saying goes, “You don’t want a good crisis to go to waste,” will we let this increased interest in economic inequality turn into something useful or will it fade away?
Piketty’s book doesn’t define the moment so much as it is a symptom of the moment. U.S. Senator Elizabeth Warren is touting her new book, A Fighting Chance, which is part standard political autobiography and part moral outrage at inequality. (Among American politicians in the recent past, John Edwards may be the one who has spoken most frequently and movingly on the topic of inequality, but he is too damaged a public figure to carry that banner any more.) Two recent short-lived U.S. political movements, Occupy on the left and the Tea Party on the right, were built on the idea that there is something fundamentally unfair going on. They offered drastically different diagnoses, but they both saw the U.S. as irrevocably moving away from fairness.
And it’s not just in America that the rift is growing between the top 1% or so and everyone else. It’s a global issue. In Russia, 110 billionaires control 35 percent of the sprawling nation’s wealth (and 93 percent of the country have assets of less than $10,000). The global “race to the bottom” for labor costs leads to tragedies like last year’s Rana Plaza building collapse in Bangladesh, the deadliest garment-factory accident in history, the sort of event that can occur only if an economy’s modus operandi is to exploit the many for the needs of the few. Even countries once lauded for their relative economic equality, like Sweden, are seeing the richest of the rich grab a larger percentage of the nation’s wealth. The Gini coefficient, a measure of income inequality, shows there’s even more disparity between the rich and the poor now in South Africa than there was during apartheid. Perhaps the most vivid evidence of the global nature of global inequality is the new home, in Mumbai, of mogul Mukesh Ambani: a 27-story, 400,000-square-foot skyscraper, complete with a “health floor” and a full-size ballroom.
Of course, life has always been unfair. Utopian movements that promise to address this tend to either evaporate or morph into dystopias, as happened in the USSR. (To be fair, some argue that Piketty’s call for a global tax on wealth is Utopian, too.) Inequality has been a topic of best-selling books in the West at least as far back as the New Testament (the book of James in particular). The recent volumes by Piketty and his many comrades show that the inequality problem may have gotten worse in recent decades, but it has been bad, even worse than now, many times before. Inequality isn’t new. What is new is the attention it’s getting — and how quickly that recognition has moved rhetoric to policy. A national referendum in Switzerland has given shareholders more power in limiting executive pay. From a country whose wealth is based in large part on hosting the most opaque banks offered up by any democratic country, that’s an encouraging start.
The desire, if not yet the will, to reduce income inequality might also be a fad, but that doesn’t mean it’s a bad thing. Sometimes a fad can be a harbinger of change. Fads provide simple solutions that don’t necessarily address the nuances of complex problems (you’ll lose weight if you make only one change to your diet or behavior, your company will get bought out by Google if you follow these 10 laws of success), but they also shine a light on those problems.
So you can consider the current light being thrown on income inequality as the economic version of fashion, a change in hemline length that might make for a better world. It may seem ridiculous to compare something as elevated as economic research with pop culture, but they’re on the same continuum. It’s easy to make fun of well-meaning celebrities like Bono or Angelina Jolie who make inequality their public issue. It’s fair game to acknowledge that there’s some narcissism embedded in celebrity do-gooding. But the fact is that many, many more people know something about global issues of wealth and poverty because of celebrities. I don’t want to count on a rock star or a movie actor to lead a revolution, but I don’t want to bar them from the party either. Just because something starts as a fad doesn’t mean it has to remain a fad. Whenever a one-percenter acknowledges the problem and suggests a solution, be that one-percenter an entertainer, an astonishingly successful investor from Omaha, or a software entrepreneur who’s become the most important philanthropist of our time, a space for hope opens up.
Inequality is never going to go away. Redirecting a handful of super-rich toward the needs of the masses is only a small step in the right direction. But it is the right direction. Anything that can help turn around the massive, slow ocean liner we all live on, an ocean liner inching inexorably toward a waterfall, be it as weighty as Capital or as slight as a commodity item that gains some faddish meaning because it happens to be colored red, should be welcomed.