Wonk Wednesday: It’s the Economy, Stupid

With the term ‘socialism’ being bandied about so freely these days, I thought it might be instructive to actually define the type of economy that exists in America today.  No, not capitalism… Nor communism.  Not even socialism….  Gasp!  A mixed economy.  Verbatim, courtesy of http://www.dictionary.com…

Socialism:  1. a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole 2. procedure or practice in accordance with this theory 3. (in Marxist theory) the stage following capitalism in the transition of a society to communism, characterized by the imperfect implementation of collectivist principles

Capitalism:  an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, especially as contrasted to cooperatively or state-owned means of wealth

Communism:  1. a theory or system of social organization based on the holding of all property in common, actual ownership being ascribed to the community as a whole or to the state 2. (often initial capital letter) a system of social organization in which all economic and social activity is controlled by a totalitarian state dominated by a single and self-perpetuating political party 3. (initial capital letter) the principles and practices of the Communist party 4. communalism

Mixed economy:  an economy in which there are elements of both public and private enterprise

Plutocracy:  1. the rule or power of wealth or of the wealthy 2. a government or state in which the wealthy class rules 3. a class or group ruling, or exercising power or influence, by virtue of its wealth

I included the last definition as a precursor to my forthcoming argument.  Yes, we have a mixed economy, one in which public and private enterprise co-exist, but I believe, as do many others, that the defining characteristic of this economy is its overwhelming bias to moneyed corporate interests.  These days people are using the term “corporatist,” but that is just a new term for an old game, one with its genesis in the Gilded Age of the late 1800s, with the creation of the modern industrial economy.  The plutocracy of today has spawned the protests of the Occupy Wall Street movement, and rightly so.

America now has income disparity on par with Mexico and the Philippines.  Half of American households, a household being two earners with two children, now make less than $50k annually.  Poverty amongst women and children has soared, along with the incomes of the wealthiest 1% of Americans.  CEO compensation has spiked to over 300 times that of the average worker… This should be recognized as a problem without the proponents of the argument, such as myself, being labeled ‘Socialists.’  Most of us do not object to capitalism– but we definitely object to the crony capitalist variety, as it destroys the fabric of our democracy through the denial of civil liberty.

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4 thoughts on “Wonk Wednesday: It’s the Economy, Stupid

    1. CBO addresses mobility as another measure to judge income inequalities, but does not use it in its analysis “Trends in the Distribution of Household Income Between 1979 and 2007” published in October with the chart used in my graphic. I understand your point that mobility is a mitigating factor in income disparities, but that does not alleviate the problem in outsize concentration of wealth in a minute segment of the population.

      Further, according to the Center on Budget Policy and Priorities (http://www.cbpp.org/cms/index.cfm?fa=view&id=1926):
      Although some families see their incomes increase over time, studies of income mobility have shown that the majority of low-income families continue to have low incomes for many years. A recent study of earnings mobility by Peter Gottschalk of Boston College and Sheldon Danziger of the University of Michigan found that in the early 1990s, 75 percent of the people whose incomes placed them among the poorest fifth of the population in one year remained in the poorest fifth of the population the following year. While income mobility is greater when a longer period of time is analyzed, Gottschalk and Danziger found that almost half of the young adults (those age 22 to 39) who were in the bottom fifth of the income distribution in 1968 still were in the bottom fifth some 23 years later, in 1991. Moreover, nearly three-quarters of those who were in the bottom fifth in 1968 were in the bottom two-fifths in 1991.(4)

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