The Politics of Inequality: A Political History of the Idea of Economic Inequality in America

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I say something is black, Rusty will swear that it is white. I say it is white, Rusty says it is black. I don't think he knows if he is Arthur or Martha actually. Stuffed Olive, You have abvoiusly not heard of Fanny Mae and Freddy Mac and the loans that banks were forced to give to poor people who couldn't pay to make Bill Clinton and the DemocRtas feel good. It was that toxic debts moving through the system and governments of the left borrowing too much that caused the GFC. It was not the system itself, but abuse of it and lack of proper redress that caused the problems. The Wall Street money boys have been resisting change i.

Comments (549)

It seems as though we are falling under the spell of witch doctors who have all the answers. Instead of taking the time to make the difficult answers more and more we are going along with the ideas of the so called experts Mr Reith included. If we didn't mindlessly follow these so called experts then we would not have this categorisation of people. Each person would have their own opinion and we would be more of a true society. We all have the ability to make decisions- the trouble is that we are chastised when we do by big business for not toeing the line.

As a country which has a high proportion of university graduates one wonders whether the allocation of time given to free market economics needs to be reevaluated. Students are brainwashed by it- just as in North Korea they are brainwashed that the Kims are the salvation to all. Free market economics and the Kims go hand in hand. There is another factor not mentioned, and that be the role of the banks, up to the IMF, BIS and those that are able to create new money from inside the City. Should a government own assets and employ staff, for example, in prison systems, there is no 'profit' to be captured by investors, and no lending required by bankers.

Thus the push down from the London Bankers et al, has been for privatisation, where the Serco types borrow big and gain lucrative government contracts to provide services. Since the bankers own the Sercos, it's a double bonus with an a profit stream from the loans, and profits from their shareholdings. And since the private providers are motivated by profit, repeat customers are profitable, so there is an actual disincentive to provide effective rehabilitation programs. There are some things that governments do better than private enterprise, but the US has a habit of overthrowing such governments, and there's money to be made in doing that too.

The ugly truth is that people are paid what they are worth, not what they want. That's why youth unemployment is so high i. That's not to say we should not commit ourselves to fighting poverty by social policy, education, the taxation system and responsible unionism. But the employer, whether private or government owned, cannot pay people more than what they are worth.

If they do, they will go out of business. And it's this market driven allocation of scarce resources that makes capitalism, for all its problems, the best system yet developed to distribute scarce resources in the most efficient and productive manner. And it's this efficiency that is most prominent in raising living standards, as evidenced by China in recent decades. Mind you, I think the Walmart worker's union has a lot to answer for if Walmart management is asking Walmart customers to provide charity to Walmart workers!

Clearly the collective value add is very positive and therefore, there is great scope for a pay rise! The problem is that Walmart has constantly waged war on unions, and actively intimidates employees against joining with tactics such as employing professional union-busters, pre-emptive closure of stores about to be unionised.

Walmart actually hired a consulting firm, Alpha Associates, to develop a union avoidance program. Walmart's industrial history is littered with lawsuits, unfair dismissal cases and even allegations of bribery in some overseas stores. To blame unions for not achieving much is hardly fair when Walmart does everything within its power to avoid dealing with them But then the Tory view is always to blame the low-paid for their own situation, rather than the morally bankrupt greed-merchants who are exploiting them.

I'll defer to your obvious solid knowledge of the inner workings of Walmart industrial relations. And you emphasize my point, that a responsible union movement that secures sustainable wages and conditions based on productivity, is vital to the capitalist system and in turn, to alleviating poverty. A responsible government will support the existence of said unions as a lever to raise the living standards of the worker without biting off the hand that feeds it.

Of course, the extreme fringes within both the union movement and business might enjoy short-term wins, but in the medium to long term I suspect their efforts will be counterproductive to their own self interest. And if they're rational, they won't pursue the extreme course of action. A responsible union movement should be one that has nothing to do with politics, but one that acts as a welfare agency for its members. Pavo, Real Labor already knows that.

He is not clueless. He and the other three above have been greatly disturbed by this article and as a result they resorted to use a different tactic to defend their capitalist system by replying to an imaginary far right commenter above. They're pretending to be the middle-of-the-road style gurus to deceive people and to dampen the impact of the hard facts presented in the article above.

Good luck to them! They didn't fool me. Who is Walmart's employee's union? No use blaming the union if governments, particularly Conservative governments, are always trying to find ways to demonise them! Woolworths and Coles are always looking for ways to cut wages and penalty rates, and now are demanding that Abbott follow their lead! Trouble is, small business are the sacrificial pawns for the big two, and when, or if, they get their way, small business is dead in the water!! How do you know what an aged care worker, or a meteorologist, or a firefighter are "worth"?

How do you measure their "productivity"? The economy is not so simple. If that were the case, and consistently so, how do the owners of walmart, along with the owners of other businesses make any money? The real ugly truth, Real-Labor, is that people are paid what the boss says is the going rate for that job. So do you think that the situation where in countries like the USA, UK and Australia where the gap between rich and poor is getting measurably wider, that people's productivity is not meeting their salary as you focus upon in your example , or do you think that people's productivity is exceeding their salary as I say in my example?

That could come out of a classical economics textbook. But is it true? I think it is more accurate to say that "Capitalism distributes scarce resources to where they will attract the greatest profit. An alternative distribution of a scarce resource is to satisfy addictions. Or that growing opium or marihuana for sale to addicts is 'more productive' than using that same land to produce food for the starving? Capitalism is only ''The most efficient system yet devised'' if efficiency is measured by profitability, rather than satisfaction of the needs of the community as a whole.

A corperation would emediately holt all major infrastructure , stop education investment , stop investment in health , and holt an NDIS. They have nothing to do with making money in the short term. Actually they usually pay them less than they are worth. Making up your version of the 'situation' and discussing your own story is no substitute for the facts. If anyone gets paid more than they are worth it is usually a CEO of a large corporation along with its various directors and members of the board.

Most of us in the West outside of the USA have fared well since WW2 in a mixed economy - sometimes it's been too far left and sometimes too far right but generally life has been good. If you fall through the cracks there are usually extenuating circumstances - but in the USA practically everyone who is not middle class is through the cracks. This cannot be the recipe for a stable and contented society.

This is what most violent revolutions have been about in the end. The problem is not "Capitalism" per se therefore we should seek a "Socialist" solution. In any case the Nordic nations seem miles ahead in looking after ALL their citizens.

Socialism and Communism are two distinct ideologies and forms of society. The confluence and overlap and simplification of the ideology Socialism is the same as Communism is a Coup for Right wing propagandists and unfortunately has become everyday usage. You could probably chuck in Finland too. Was it not the Soviets that smashed the Socialist government of Checkslovakia in the late 's whilst the West merely looked on and did nothing? Of course it was. The Yanks were never going to go in and bat for a Socialist nation.

They have done their utmost since to destabalise Sweden's social democratic reforms by stealth and diplomatic pressure. The assassination of Olaf Palme changed Sweden's polarity significantly whereby it now has much closer ties with the decaying empire of the United States.. Remember Allende and Chile. Remember the Reagan backed and armed death squads of right wing tyrants and dictators throughout Central America.

This is what unfettered extreme Capitalism has bestowed upon the world. The Capitalist model is now ultimately responsible for the appalling state of the environment and the ecology of this planet. And it doesn't stop there. No one is asking Samuel that everyone just lie about and do nothing and live like bludgers. More that people get a fair days pay for a fair days work. Say 38 to 40 hr working week with penalty rates for weekend work and overtime. Something our forefathers and foremothers strove hard for with guts and determination in the Twentieth century.

If the leaders of our Corporate Capitalist agenda were suffering proportionally not even equally to the mass of humanity then I could maybe agree with your oversimplification and sarcastically weak posting. However they are not and they are obsessed by Greed and Power at any cost. I know a chap personally who married into a wealthy mutl-millions family. He is right wing to the extreme. It is person's like him and those who have fortunes who always trot out the indefensible dribble you have in your post.

Why is it always the wealthy and powerful who defend the Corporate Capitalist agenda. I think there is something in that. Could it be Greed and Power over the less fortunate? Also the higher up the Corporate ladder or if you are a successful business entrepen. AFS, the world has changed since the evolution of the Internet. We now live in a world where international trade is no longer owned by big corporations.

You can buy online direct from China, America or the world. You can send money anywhere, anytime. We no longer live in controlled economies. Governments can no longer deliver on any utopian socialist models. We live in a world economy, where the lowest paid are rich by world standards.

This may well be unsustainable in the long run. Welcome to the brave new world economy, where inequality, and conversely, opportunity will be much more prevalent than we have seen since the start of the industrial revolution. Where as if you had a factory building steam engines, you were at the risk of collective bargaining, to basically redistribute your wealth. If you were, say Steve Jobs, or even Murdoch, much of your wealth is based on intellectual property. The ability of unions, and even governments to redistribute their wealth is much reduced. If you are rich enough to be a multinational yourself, you are almost immune from taxation.

The idea that there is some political solution for this is fanciful. The world we now inhabit is now the exact opposite of this. The internet is a communications technological break through achievement and it can allow individuals to surf it and aquire goods and services from almost anywhere on the planet.

However it is but a tool. It is not a means within itself. The internet facilitates the Corporatised Globalisation economic mess the planet is now faced with. I'm not suggesting that governments find a solution. The ills of the corporate agenda are a world wide social problem.

Of course we live in a Corporatised world Whitey. Corporations now control and in many cases are more powerful and able to exert more influence than most governments inclusive of nations like the United States but less so China where the government can exert some control over state owned enterprises and corporations. However the China experience is still based on the Western models of Corporate Capitalism. Globalisation has not produced a level playing field in trade between peoples and nations.

Rather it is a construct that heavily favours corporations. Governments apeing their Corporate masters will say there is "Free Trade" However "Free Trade" is not and never will be in its current form "Fair Trade". As for "Intellectual Property" This is just code for making huge profits at the expense of the citizens of the planet.. The intellectual property rights exerted by Pharmacutical Corporations in nothing short of Criminal. Big Pharma to any thinking person is driven by profit and control of medicines.

Not some contrived allturistic mantra to help humans. And good on China and other Asian nations for ignoring Intellectual Property rights when it comes to "Logo's and "Labels". It proves that this Intellectual Property is of no benefit to Humans at all. Nothing more than a means to try and control the market with the help of the parasitic advertising and media industries.

Not to mention the Elephant in the room. Corporatised Fossil Fuel and Mining Companies. These are the most destructive beasts we have on the planet. I could go on. The thrust is that the Capitalist Corporate world which we inhabit is destroying lives, making lives more miserable and destroying the very planet we live on. Something has give sooner or later.

And the sooner the better. I"m not advocating a quick government fix. This is a planetary wide social, environmental and economic Crisis. It needs a coordinated effort and those efforts seem to be happening and increasing despite governments and corporate bullies labelling them as anarchists and meddlers to be dealt with by means of legislated corporate agenda's as here in. Without social structures in place most people couldn't work or exist in modern times. Getting to and from work is on a public road or by public transport , people can buy their lunches because they are protected from food poisoning by government food standards , people's wages or income can be placed in a bank and protected due to government laws , pieces of paper called money only has value because of government regulations , people can live safely in their homes with their possessions because of property laws , people can travel safely on aircraft due to government aviation rules.

People who think that only by their own efforts they exist on this planet are completely wrong. Without social structure and governments regulations almost no one could safely live on this planet in modern times. No one in modern times is completely self made , they are only successful because of the help from others which is a kind of socialism or the pooling of resources so society as a whole helps them to exist and prosper.

SS, Do you even read the articles you comment on? It wouldn't appear so by your comments time and time again. Tim is not arguing for socialism over capitalism. My reading of te article is that he is saying we need to think about how we view government and business.

If you think the current system is perfect and does not have some core fundamental issues that need resolving then you are deluding yourself. Why make it an argument of either or? Surely there is common ground there somewhere we should be aiming towards. Can't a person be a hard worker, inventive, and prosperous, but still have some compassion for those whose skills do not lift him above the life of a labourer.

Why is it necessary for the few to have so much of the total wealth of a nation? I would have thought that the inventor of the bionic ear, or other medical breakthrough should be amongst the most wealthy,not someone whose father found some iron ore, or someone who took one chance and bought a mining lease. There is something wrong with our society, but that does not mean that you have to vilify either capitalism, or socialism to fix it.

Henry ""Socialism" "I don't think that word means what you think it does. Understanding of what socialism is and how it works is sadly lacking in our society. So, how about a quick primer. Both capitalism and socialism are what you call "market economies". The market is simply a feature of the economy that enables the distribution of wealth and the goods and services produced by the expenditure of human labour power.

Both capitalism and socialism produce societies divided into social classes, but the level of antagonism between the interests of the social classes is not necessarily the same for both systems. The major difference between socialism and capitalism is in the way in which the "means of production" plant and equipment, and raw materials is owned and controlled.

In capitalist systems, "capital" and raw materials are controlled by private individuals and "corporations", who extract their income from the economy in the form of "economic rent" profits, interest, direct and indirect contributions from the public purse. In socialist economies, the ownership of the "means of production" is vested in the citizens of the state, and control of the "means of production" is exercised by them via the instrument of their government.

I won't go into the pros and cons of each system here. Both can operate in either a democratic or totalitarian society and neither can claim to be an automatic path to democracy or a utopian society. Each have their time in history. Capitalism's time is in the past, and socialism's time is in the future. It is not that one is better than the other, but history, like time, is a one-way street. Thank you, V I have no hesitation to say that one is better than the other, because, sooner or later, Economic Competition leads to violence and war.

Things work fairly well while the market is reasonably free, but this is only ever a temporary condition. Sooner of later, wealth and economic power begins to concentrate in fewer and fewer hands and you have a monopolised market. This creates the conditions for economic collapse and it is these collapses that tend to trigger wars. Thanks again V, I agree. But I was thinking more in terms of economic competition between Nations and Empires and their struggle with each other for the domination and exploitation of faraway lands and people.

Invariably, all wars are fought for economic reasons, perhaps with the exception of one which was waged over Helen of Troy: I am afraid this description of "socialism" is a naive, or maybe a bookish point of view. As someone who spent half of his life in USSR and spent years learning the Marxist theory too , I can tell that - "market economy" was not part of it, by any stretch of imagination - "citizens of the state" did not exercise any control over If only turning off the radio that was telling us those ideas that re-tell.

If you think there can exist a "real" socialism, based of "correct" ideas and democracy, I am afraid it cannot. Not that Orwell was absolutely right, but socialism and democracy are not compatible. But a mix of them, a balance of private interest and social responsibility, can be and should achieved. Isn't it what this discussion is about? Dmitri, Had you ever actually been to the Soviet Union, you would realise how silly your remarks appear.

The Soviet Union had a market economy. It had a currency. Goods and services were exchanged for currency. People were paid for their labour in currency. Therefore, the Soviet Union had a market. The fact that you didn't know this casts serious doubt on your claims to special knowledge. Money were used to facilitate control of demand and supply only facilitate.

Markets are based on a balance of control and demand. Socialist system did not have a market. It was centrally controlled, with salary used as one of the tools. Much of economy were not even monetary: Almost free transport, accommodation, education, medical services were part of that. As were the poverty, and lack of goods and services.

Because you get a salary, barely covering cost of food? Well Henry, give us your take on this. It's no good saying "I don't think that word means what you think it does," without letting us know what you think we think it means. The main problem is where to draw the 'redistribution line'. The other problem is that any government enterprise is doomed to inefficiency and economic failure because all the talent ends up in the private sector.

If you doubt this statement then you have never worked in both sectors to compare them. I have worked in big Businesses, small businesses, own business, Government s , contractor. So here's how it goes. There is not a one size fits all simpleton mantra. Yes, you are right, in general the pivate sector can massively outbid the public to purchase the "talent" it wants.

Any attempt by the public sector to keep its talent by paying higher salaries is met by a storm of abuse, as is witnessed by thte current ABC salaries witch-hunt. There are other inbuilt obstacles to public sector efficiency as well: How much time do you think a private sector CEO spends agonising over his expences?

The bottom line is, as ever, if you pay peanuts you get monkeys. If you want an efficient public service you have to pay for it. Baska, are you really defending the ABC? You know, that organisation that exists, for the benefit of the left wingers, to try to bring Australia down. I hope Abbott brings the guillotine down on this flagrant example of a waste of taxpayers money. Yes I am, and proudly!

It is far more open, accountable, accurate, responsible and responsive than the commercial media. And it does this at a fraction of the cost of for example the commercial TV networks. Just for the record I have never worked for or with the ABC or any other media organisation.

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There used to be a tradeoff in the public sector, where lower salaries were compensated for by increased job security. However now we're seeing that security eroded notably in Qld and WA , good public sector employees that might have been happy to trade off income for security will be forced out. Personally, I think it's about making the public sector less efficient to justify selling everything that isn't nailed down.

Citizen, As someone who has worked in the private sector and in all three tiers of our civil service, I can assure you that the tendency toward inefficiency has nothing to do with whether an enterprise is owned privately or by us. The main determining factor in the propensity to develop inefficiencies is the size of the enterprise. The larger the enterprise, the greater the propensity for the development of inefficient systems and procedures.

Public enterprises tend to be enormous simply because many of the important tasks performed by these enterprises are enormous. As a general rule, private enterprise is fine for stuff that doesn't really matter if it gets done or not hair-dressing, advertising, busking, prostitution, fortune-telling, accountancy etc. It's a matter of horses for course really. All the talent ends up in the private sector? That's certainly not the case in the private sectors I encounter. I've worked in both sectors. Capitalism will eventually destroy itself. Thank god for the abc who represent the proletariat.

They get paid much less than commercial networks, and represent the common man. Tim is going to start the revolution and lead us to Marxist utopia! Workers of the world unite! Yes they can speak well for the common man. I find it uncommonly ironic that the well heeled should speak for the common man whoever that is. If you ever watched the ABC, you will notice that their income does not distort their sense of perspective on the whole That sort of attitude is reserved for Andrew Bolt, Allan Jones and other greedy conservative nut jobs No, the complain about other people getting paid too much, ie, corporate execs with real jobs and real responsibility.

As opposed to sitting around and talking sh But, as we now know, the destruction of capitalism alone does not necessarily result in the emergence of a brand new, more equitable and rational economic system. If you are interested, you can probably learn a lot about the folly of believing that all we need to do is bring down capitalism for utopia to emerge by looking up "anarcho-syndicalism" on Wikipedia. Capitalism has proven remarkably resilient despite its increasing obsolescence largely as a result of the extraordinary concentration of 'hegemony' enabled by the natural tendency of capitalist system toward monopoly.

Hegemony enables those who wield it to effectively control the mood and direction of popular culture. This allows the wielders of hegemonic power to cause individual human beings and, as a result, society, to act contrary to their own best interests. Our muddled and hesitant reaction as a society to the clear and present danger of anthropogenic climate change is a good example of how the anti-social and misanthropic use of hegemonic power can severely hamper our ability to act rationally as a society.

This places a great deal of responsibility on us, as individual human beings and citizens. We cannot expect utopian society to bloom from the ashes of capitalism unless we are prepared to exercise some self-discipline, stop listening to the false prophets who tell us that the way to a better future is through hating your neighbour and fearing strangers, grow a bit of backbone, educate ourselves, and start placing our trust in each other and the governments we elect, not the mindless automatons we call "corporations".

Whether or not the third collapse of capitalism results in a new world order or just "World War Three" is largely up to us. I was going to add "the result of failed capitalism is a default to failed socialism". But "failed socialism" is a tautology, is it not? Never used a telephone or electricity? Show us a market where there's no society, genius. What on earth do common services like sewerage have to do with socialism? The key objection to socialism are attempts by the state to control prices, wages, production and commerce in general.

And let's not confuse regulation with control. They have everything to do with it. Without government intervention, items like sewerage would only be possible in rich communities that could afford to build it. There is definitely value in the ability of the state to control prices to some extent. The boom-bust cycle of unfettered capitalism isn't a good thing after all. The capitalism that so many enjoy has many victims. The question is how do we share the wealth amongst everybody? Solution, one world government to enforce taxes on the transferring of money, a Tobin tax if you will.

At the same time they can enforce environmental and labour standards on these multinationals exploiting populations and resources through out the world. Funds raised to find another planet to live on ;-. I don't think that anybody has ever come up with a really good answer to this. Probably the best solution so far has been offered in an oblique sort of way by a grumpy old Anglicised German called Marx. His idea was to reform society in a way that resulted in a gradual severing of the link between wealth and power.

In so doing, he solved the problem by making it irrelevant. But your question is still a good one because the society envisaged by Marx is not likely to develop in our lifetimes, or those of our children even if we started yesterday. And capitalism, in particular, does not work very well when the unequal distribution of wealth leads to the unproductive accumulation of surplus value, 'demand drought', labour-shedding, unemployment, deepening "demand drought" and so on.

Ensuring that wealth is distributed in a way that ensures that it drives demand rather than simply mouldering in the bank accounts of the few, provides capitalist systems with a modicum of stability that unregulated, "laissez-faire" capitalism can never emulate. There are all sorts of very sound and profound ethical and moral arguments in favour of a more equitable and just society, and I don't want to diminish these in any way. But I suspect that our decision to move to a more equitable society will, in the end, be driven more by pragmatism than romance.

How free the market was? Did Nero ever float the sestertium? It has raised living standards for some for thousands of years. Most have lived very basic, mundane lives. Those with power did OK, those without power were exploited for the most part. It was the democratization of capitalism that helped most people. Capitalism without distribution isn't much use to most. If you are one of the wealthy you would probably like it. At some point though, your head will be severed and the reset button will be hit.

How that works out after the fact is up to the mood of the populace and what fills the vacuum. Capitalism has failed to satisfy need in the world, never mind the general want, as opposed to the selective. Jimmy, I agree, have a look at microeconomics that have given many women around the world a leg up through business, alas, capitalism at it's finest. I have been involved in helping third world women escape poverty through small loans that enabled them to start a small business to enable their kids to go to school and ensure a better future.

However, the rusted on socialists want everyone to be on the public tit. The best way to eliminate poverty IMO is to give individuals the tools and opportunity to pull themselves up. This can't be done centrally. And who is it who provides, " Well it is rarely ever the private sector that provides the tools ie education and opportunity ie structured society , and almost always government.

Did you charge interest on those loans, Trev? I've given to those same programs so I know that you don't. What youre participating in is the redistribution of wealth, albeit temporarily. If the system was capitalist you'd demand a return on your investment. Congratulations though on pointing out an area where capitalism fails ie providing loans to high-risk clients who have limited ability to make repayments to profit seeking banks. Who's saying to get rid of capitalism? By the way we have nothing like Adam Smith envisaged.

We have oligopolies, rent seeking, with incestuous politicians all from the same political machine, who group think and have their heads up the backside of those who fund them and a public too ignorant, ill informed to demand better. While one could argue that "expecting the world to be fair with you because you are fair, is like expecting a lion not to eat you because you didn't eat him", from a spam email.

One solution may be to just shoot the lion and feed it to the other lions. Another, to acknowledge the lion intentions and cage them, or simply acknowledge that we are not lions, we are better than lions and that we live on this "pale blue dot" and we can do better. Economist, "By the way we have nothing like Adam Smith envisaged. If you are talking about his early impressions of free-market capitalism formed during his days closeted away in Glasgow University , I am sure that what we have would have been a great disappointment to him.

But Smith did not stay tucked away behind university walls all his life. In later years he got out and about and saw the effects of monopoly capitalism, which led him to the conlusion that an unregulated market would result inthe worst of all possible worlds. Benjamin Franklin, one the great pioneers of democracy in the United States, reached a similar conclusion.

Tory ideoogues tend to pick the eyes out of the work of people like Smith and Franklin because, through careful selection, you can make it appear that they support the nonsense spouted by the free-market ideologues. Its a fiddly job, but it keeps them off the streets.

Inequality is a political problem, not an economic one

In the last "several thousand" years, our society has evolved a number of economic systems from hunting-and-gathering through nomadic-tribal husbandry, agrarian village society, city-states and slave society, feudalism, capitalism and a few halting attempts at socialism some more successful than others. By far the fastest increase I living standards in this period occurred among the citizens of the old Russian Empire from the Bolshevik Revolution to the dissolution of the Soviet Union, although it must be said that the Soviets did go through a bit of a rough time of it when a collapse of capitalism produced a fascist dictatorship in Germany and a debilitating war fought almost entirely on Soviet soil.

Capitalism has failed catastrophically at least twice and these failures have resulted in the greatest man-made disasters in our history WW1 and WW2. Perhaps even worse, it's chronic failure in the area of distribution of wealth and access to resources is responsible for the longest and most disastrous famine in the history of humanity.

I cannot remember a time in my life when our enjoyment of television was not interrupted by images of starving kiddies in Biafra, Somalia, Bangladesh, the Sudan, Chad, Mali, Ethiopia and so on. Capitalism started with the joint stock companies given under reoyal grant by the various European monarchs in the 16th and 17th centuries and was given a huge boost by the Industrial Revolution. Prior to capitalism there was a period of mercantilism or the great trading empires. International banking was started in Europe by the Knights Templar during and after crusades, although the Chinese and the Mongols also had early forms of banking.

It wasn't until the Italians invented double entry book keeping that things were put on a firm footing.

Socialism and unionism were a response to the inhuman conditions of the early Industrial Revolution, mostly in Germany and the UK. Don't you guys know any history? Doomed to repeat it I guess.

Capitalism started when one caveman traded a shell for a sharp stone. Banking has been around long enough for Jesus to have complained about it. Marx just gave it a name. What has changed is the level of complexity, sophistication and freedom. Matt, "Capitalism started when one caveman traded a shell for a sharp stone. Market economies have been around for thousands of years, but capitalist economies are a relatively recent development.

The main defining characteristic of capitalism relates to the ownership and control of the "means of production". In capitalist systems this ownership is vested in private individuals and entities known as "corporations" who draw income from the economy in the form of "rent", in exchange for providing access to the means of production.

In feudal society, the "means of production" mostly land was owned and controlled by the aristocracy. In socialist society, the means of production is owned and controlled by the people.

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All are "market" economies, but n ot all are capitalist economies. Matt, "Banking has been around long enough for Jesus to have complained about it. Money lending has been going on for many centuries and lending money in return for interest is considered a mortal sin in two of the semitic religions Christianity and Islam. But what we know as "banks" arose in Italy about five hundred years ago before the advent of capitalism when the feudal world was retreating in favour of mercantalism and a new social class known as the "borgeoisie" was emerging. And Marx didn't name banks.

Our universe, our galaxy, our solar system, our planet, its continents, human society and every individual on earth is in a constant state of change and evolution. Economic systems are no different. They emerge, flourish, reach maturity, decline and are replaced. Capitalism is simply the latest but not the last in a long line of market-based economic systems. Clearly you don't understand the difference between a market and capitalism, or the difference between a bank and a money lender. Looks to me like History isn't the only think you don't know about!

Lawn beetle, "the result of failed capitalism is the default to socialism. Capitalism has a couple of features that make it both the ideal vehicle for the rapid development of a global economy and humanity's worst enemy. The first feature is the fundamental relationship between stability and growth. As a result of the unavoidable accumulation of "surplus wealth" among the owners of capital and resources, capitalism must be in a state of continuous growth in order to maintain stability. This provides a powerful social incentive for expansion into new markets and, as we can see by looking at our history, has led to the development of a "global economy".

The second feature is capitalism's genius for generating demand by constantly offering new products and, through advertising, convincing consumers that they have a constantly growing list of needs to be satisfied. But there are also a couple of not-quite-invisible pachyderms stalking about the room. The first is the contradiction created by capitalism's genius for creating wants and needs, and the over-riding priority of an economy to satisfy wants and needs. The second is the inconvenient truth that we live on a planet with limited and strictly finite resources.

This creates another contradiction: In reality, we reached this point about years ago and, as a result of our failure to accept this fact and evolve, the 20th century was the most disastrous and violent century in human history. We need to move on, not for any ideological reasons, but simply because it is our only real choice.

I hasten to add that I'm, sadly, somewhat convinced that the only real chance for change lies at the end of some otherwise unassailable catastrophe. I think Zizek has it right when he says it's easier for us to imagine the end of civilisation than the end of the current system. But do you really think it's possible at this stage? Aren't we too far gone for that? The world is held tight in the grip of fascism, where corporate power resting in the hands of the elites, not only influences, but dictates political realities.

This grip cannot be stopped without an uprising on a world-wide scale, and if I think of an uprising of this magnitude, I cannot help but expect to see nuclear weapons unleashed the elites will fight back and a horrible devastation as a result, which does not lead to a tomorrow where life can go on, let alone have a future. Sorry if it's too pessimistic V. I am an optimist by nature, but the world in its current state does not inspire optimism in me. But let's hope I am wrong. In fact the human condition only deteriorates as time goes by.

We see glimpses of better possibilities now and then, appearing quickly and disappearing even quicker, tantalising to some, invisible to most. Better future for the human spirit is beyond materialism and beyond the earthly realm, if it can escape its siren song. In other words "We cannot become angels, that is, come into heaven, unless we bring something of an angelic character from living in this world.? Who would have thought it? A dogmatic propaganda piece for socialism and bemoaning the terrorism of capitalism on the ABC.

While the rich continue to get richer - and the pie gets bigger - the poor get richer too. The government cannot make the pie bigger - they can only change who gets what piece of the pie. If the pie does not change size then the incentive for rich people to flee to a place where the pie does get bigger is increased.

They will take their slice of the pie with them. Hence the pie will get smaller. New people wont join the pie because there is no incentive. Yes I have forgotten about altruism. And so will others. You have apparently bought into the horribly discredited communist theory. Oh wait, that comment is as obtuse as yours, and not one I would make other than to make the point. Timely makes the point that a market system needs to have incentives for those at all levels.

Single-mindedly targeting the middle and upper income classes as the previous dyfunctional government did does not serve the country well. Sure you can try and supertax the rich see France and they scamper off to other more welcoming countries. Everyone loses from that approach. The system needs balance - the Grattan Institute argued the case for 20 types of tax reform without fear or favour.

They openly state which are more or less regressive. They even argue that Australians understand that the worst well of must be catered for, but no tax reform will be effective if it obviously targets one group over another. That's an impossible sell. Are we in this together or are you a special case? Seems too many here think capitalism has only one end point and that is the dysfuntion in the USA How big is China's middle class?

At a rough guess million. How did that happen? You guessed it - capitalism. How did they get so poor to start with? You guessed right again - communism. As you indicate, it is only after they decided to play ball with the rest of the world, and relaxed freedoms at home, that they began to prosper. I for one am happy to see it. That was a result of Capitalist Colonialism This is also the reason why, starting with Deng, they have introduced capitalist reforms without abandoning Communism They are smart the Chinese They then fought a civil war before they "finally tried communism" and the defeated capitalists were banished to Taiwan, where they prospered.

The communists, meanwhile, spent 50 years floundering with central control. They saw what happened to the USSR, and rethought their policies. They're pragmatic, I give them that. The Chinese communists are democratic, the party votes for the leaders. Any party member can rise to leadership. The party votes for whom the inner circle of the communist party tells them to. I wasn't defending their system, simply pointing out that capitalism has nothing to do with democracy and democracy does not necessarily mean equal access by all, it means equal access by those eligible to vote.

Alpo, you're letting your left wing stupidity show. No mate, that was just colonialism, you know, the same mindset that drew Cocky Caldwell, oops, a labor name, to say "two wongs don't make a white. Trev, stay away from issues you have not a clue about. Surely you may get those few neurons to work and find a way to use them more productively? I'm glad I'll never have to live in your utopian world Alpo.

It sounds truly frightening. Have you ever actually been to China? And before the communists everybody was rich under the KMT. Just can't understand why there was a revolution. Emma, I really feel for you. If there is no wealth generated, there can be no wealth distributed. Simple as that, really. Timely, you're happy then that employees of Walmart require a charity drive to get by? Just how low exactly would you like wages to go? What percentage of the population would you like to be the working poor? Neo-liberal capitalism has fundamental issues at its core, ignoring them wont make them go away.

It all smacks of "let them eat cake".. So you really don't think there is a problem with Walmart staff having to receive charity from their own customers - while the 6 owners have a greater net worth than approximately MILLION people? Look, I'm all for people who work hard to create and establish businesses that then create jobs getting all the rewards they can. But there is a line surely. Yep, let them eat cake. This is utter nonsense.

The base wage in America has not increased in real terms for 40 years, yes It is almost as bad here. There is no CEO on earth worth a hundred times his employees wages. The poor may get wealthier, but the wealth they need to get by increases faster. As it stands, the pie gets bigger, the environment gets trashed and the rich steal the increase in the pie. What do these people contribute when they don't pay a living wage? How has their wealth improved that of their fellow citizens? The only time one usually hears of rich people having such large amounts of income, words like Mugabe, Africa, Rhinehart etc are also in the sentence.

This basically is what fairy godmother Gina would like her workers to work for, and Great Uncle Clive will not be any more generous, for all his fine words. If there is too much inequality you get civil unrest and revolution, as history teaches. Ugh, you just made me feel like throwing up picturing Gina's fugly face fluttering around with fairy wings.

It will be interesting to see how countries that depend on growing domestic consumption cope with weak wage growth now it's citizens are more wary about taking on so much debt. You can only rely on asset inflation and debt to fuel consumption for so long before it comes back and bites you.

Ahhh yes Rob - the deflationary cycle, which is getting going, will cause many problems with the current model. It will likely shake out vast chunks of the global economy. However, the only result that I can see is that the small number of winners will win big - i. The old curse is coming true - may you live in interesting times. There's plenty of pie to go around except a very small percentage want nearly all the pie. It's up to the government to make pietax law to ensure there is enough pie for everyone.

Growing Apart

Not reflected in evidence Look at Nordic and other countries for examples. You need to stop repeating corporate propaganda and do your research. Craigw, 'You need to stop repeating corporate propaganda and do your research. You might find that you have less time to whine and more time to enjoy. Its not like they cant afford to pay them a decent wage to put in into simple figures thats 6 out of million people having more money then the bottom million people combined.

The owners of Wal-Mart had nothing to do with it. It was the owners of one Wal-Mart franchise in Ohio. I hope the negative publicity teaches them a lesson, but let's not sensationalise things or we'll never get anywhere. The overall owners of WalMart would certainly have a responsibility here. They're creaming out wealth in obscene fashion, while the people who generate that wealth for them can't afford to eat. The dichotomy is awful to behold, but sadly not surprising. As the rich get richer the poor get poorer. This is the result of pure capitalism. Our situation has been improved by the occasional spells of Labor power where the living costs for people are factored in.

Your capitalist system would gladly see the majority of the population living in poverty. The profits do not filter down to the bottom in enough to avoid the requirement of socialist wealth distribution. If the divide continues to grow, expect massive social unrest by people who have nothing and also nothing to lose. The idolised capitalist empire with burn and it will be the same in Australia unless we retain our balance between socialism lets call it the Labor party and capitalism lets define this as the Libs.

The greed at the top which you seem eager for us to believe you are a part of must be controlled. Their wages are lower, sure. So is the cost of living. Cars cost half the price. I'm not saying they don't have problems, but it's a different system and not laterally comparable to here.

Jimmy, go over to the US and live off the minimum wage for six months. Then come back and tell us how great it was and that you want to get a green card and live in the US on the minimum wage. Did I say it was "great"? I said it's not directly comparable. Earlier this week, I asked readers of this column to submit ideas for a list of "99 must-reads on income inequality.

Well, I underestimated you. Within 24 hours of the query, I'd collected more than distinct books, films, YouTube clips, websites and documentaries on this topic. I'm so grateful for these submissions. And I know readers are, too. One professor wrote to me saying she plans to use it as part of a course. Others said they're eager to see what their peers think are the most valuable and insightful works on this topic. I can't take credit for any of this. You're actually the reason I'm reporting on income inequality in the first place, since many of you voted for it to be part of the Change the List project , which focuses on social justice for bottom-of-the-list places.

Ninety-nine of your suggestions are below. Don't read too much into the order. It has more to do with when the works were suggested than how significant they are. If you show special attention to the man wearing fine clothes and say, 'Here's a good seat for you,' but say to the poor man, 'You stand there' or 'Sit on the floor by my feet,' have you not discriminated among yourselves and become judges with evil thoughts?

See median household incomes mapped by subway stop. The author tries to live on low-wage jobs and finds it's nearly impossible. Heartfelt and so well-written. Podcast on the " Economics of Enough ". By comparison, Americans at the base of the income pyramid -- those in the bottom 20 percent -- donated 3. Reducing inequality, though, has clear benefits over time: It strengthens people's sense that society is fair, improves social cohesion and mobility, and broadens support for growth initiatives.

Policies that aim for growth but ignore inequality may ultimately be self-defeating, then, whereas policies that decrease inequality by, say, boosting employment and education have beneficial effects on the human capital that modern economies increasingly need. To paraphrase what Albert Einstein reportedly said at the dawn of the Atomic Age in You cannot solve a problem with the same thinking that created it. International solidarity is a requirement of the moral order; world peace depends in part upon this. Dorothea Lange 's photography Think Dust Bowl. Invisible in America ," by David Shipler.

How Hungry is America ," by Joel Berg. Rodgers, Wall Street Journal. The Inequality Issue of The Economist. What Went Wrong ," by the Philadelphia Inquirer This s newspaper series really stuck one reader, who wrote in an e-mail to me that "it took my breath away when I read it as a young man in my late 20's; and it continues to have a profound impact on my thinking today - particularly about concerns over the American middle class. Monty Python clip on "Constitutional Peasants" "Oh, there you go, bringing class into it again Both grew up fatherless in similar Baltimore neighborhoods and had difficult childhoods; both hung out on street corners with their crews; both ran into trouble with the police.

How, then, did one grow up to be a Rhodes Scholar, decorated veteran, White House Fellow, and business leader, while the other ended up a convicted murderer serving a life sentence?

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