Haiku Politics

Clive Crook, a writer for the Atlantic Monthly, is no socialist. On the contrary, he has largely been an apologist for the capitalist system; one article that he wrote for the magazine in 2005, for example, complains that capitalism gets an undeserved bum rap. And yet, interestingly enough, in the current issue of the magazine, he has written an article that serves as a devastating critique of modern capitalism. Crook points out that, in contemporary American capitalism, almost all of the productivity gains in the last few decades have gone towards giant salary increases for the richest people. Our increased productivity as workers is not, in other words, resulting in more income for us--it is only serving to pad the pocketbooks of the very wealthy.

Crook writes:

Between 1966 and 2001, median wage and salary income increased by just 11 percent, after inflation. Income at the 90th percentile...increased nearly six times as much--by 58 percent. At the 99th percentile..., the rise was 121 percent. At the 99.9th percentile..., it was 236 percent. And at the 99.99th percentile(...representing the 13,000 highest-paid workers in the American economy), the rise was 617 percent.

Crook points out that "the dramatic rise in the share of national income earned by the very rich is due not to the strength of their investment portfolios but to their growing share of labor income." What is going on here? According to Crook,

Productivity growth has always been seen as perhaps the single most important indicator of rising, broad-based prosperity. But remarkable growth in top-end pay, together with the relative constancy of labor's overall share of income, has an obvious implication: the highest earners are now capturing most of the gain in national income caused by economy-wide productivity growth.

It might be easy to blame all of this on the Bush administration. But Crook cites a study that found that this trend preceded George Bush. In fact, from 1997 to 2001--when Bill Clinton was president--"the top 1 percent captured far more of the real national gain in wage and salary income than did the bottom 50 percent."

This is the reality of modern capitalism--the rich get richer.

Posted by The Haikuist on Wednesday, August 23, 2006 at 10:01 AM | Permalink