That this level of incendiary outrage has seeped into the mainstream media tells us that the bill for America’s gluttony of inequality is long overdue.
Two primary trends may be reversing: wage earners–labor–may be finally starting to regain some of the share of Gross Domestic Income (GDI) lost to capital over the past 54 years, and economic class identity that collapsed in favor of individual identity–enabling the siphoning of $149 trillion in GDI from labor to capital since 1970–may be reviving.
The two trends are intertwined: the cultural dominance of identity politics came at the expense of economic class identity, which effectively blinded us as a nation to the multi-decade transfer of wealth from wage earners to owners / managers of capital.
If we are wondering how the bottom 90% have lost ground, we can start with the social-cultural blindness to the collapse of class identity which enabled the dominance of capital politically, economically and socially, as manifested in the rise of globalization and financialization, the tools used to transfer income from labor to capital.
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Capital’s increasing share of domestic income was not pre-ordained; it was the result of specific policy decisions, starting with globalization’s downward pressure on domestic wages. The fancy term for forcing American workers to compete with other workers around the world whose cost of living is a fraction of ours is global wage arbitrage: capital shifted jobs to low-wage regions at will to increase profits at the expense of domestic wages.
This is the fundamental advantage capital has over labor: capital is globally mobile, labor is grounded in a particular place. Yes, workers can move around the world, too, but there are restrictions, both legal and in cost / sacrifice, as the effort and expense required to move from one country to another are significant.
Capital doesn’t care about a place or community; that’s up to the residents. If capital shifts overseas to lower costs / increase profits, well folks, make do with what’s left.
Financialization amplified capital’s dominance of the economy, for capital gained tremendous power as credit and leverage expanded capital’s scale and reach at the expense of domestic workers and communities.
It’s equally important to note that the corporate dominance generated by globalization and financialization also gutted small business and the local enterprises that provide the bulk of the jobs and cohesion in communities.
