From Economic Apartheid to Political Revolution
Joel S. Hirschhorn
-- -- Americans have always accepted a certain level of
economic inequality as the inevitable consequence of an open
capitalist society where some people through their own
efforts do better than others. The presumption is that
there is fairness in the marketplace and economic system.
What a quaint, outdated belief.
most Americans really believe that the game is not rigged by
rich powerful elites to preferentially benefit them? As
certain as the law of gravity, the game IS rigged, and more
have a plutocratic corporate state that now has taken
economic inequality to new levels – in fact to what now is a
sick and shameful condition of economic apartheid. To a
society that increasingly separates Americans into two
classes: the wealthy Upper Class and the Lower Class. The
Upper Class has protected and gated mansions, private
vacation spots and spas, special access shopping venues,
private schools, lavish entertainment options, luxurious
hospital accommodations, and private jets and stretch
limos. The Upper Class does everything possible to
PHYSICALLY separate itself from the poor, repugnant and
uncouth members of the Lower Class. This physical
separation is the hallmark of economic apartheid. The only
contact the wealthy have and want with Lower Class people is
when the latter serve, protect and pamper them. And of
course they expect the hugely larger Lower Class to keep
spending and borrowing their way into economic despair and
to keep sustaining the two-party mafia. Voting for
Democrats and Republicans is as meaningful as voting for
American Idol contestants. Nothing more than a
Vegas the truly rich have their private gambling rooms and
clubs, and occupy special access suites. In sports stadiums
they luxuriate in their glass boxes high above the masses.
In the Pacific and Caribbean they have their private island
hideaways. On the oceans they travel in self-indulgent
yachts. They eat in private rooms in the most expensive
restaurants. The biggest entertainment stars come to them
in their private social functions. And, yes, they have all
the access they want to high government officials in both
major parties because they provide them with all the
campaign money they need. And hidden from public view they
– and only they – have incredible opportunities to invest
their riches to easily receive 30 percent annual gains with
little taxation. As they get ever richer they find it
increasingly difficult to spend all their wealth – but they
handle the chore with alacrity.
is remarkable about this new society is that there are
MILLIONS of these super-rich, physically isolated
Americans. They mingle with millions more throughout the
world. As globalization has devastated the once proud
middle class it has expanded this elitist wealthy class
worldwide, even in the poorest nations.
Economic statistics keep solidly documenting growing
economic inequality. But I fear that the most economically
oppressed and barely surviving peasants have neither the
time nor energy to ponder and fret over these data. Here
are some new data that reveal an important historic reality.
Economists Emmanuel Saez and Thomas Piketty have recently
revealed just how horrendous the inequality gap has become.
Way back in 1928, the last full year before the Great
Depression began, the families that made up America’s
richest top hundredth of 1 percent had incomes that averaged
$8.2 million, as measured in dollars inflation-adjusted to
2005 levels. That is one per 10,000 households. In 1928
that amounted to some 5,000 households. These super-rich
averaged 891 times more income than families in the bottom
90 percent averaged. By 1955, in the midst of post-World
War II prosperity, families in the top hundredth of 1
percent took home only $3.8 million, in inflation-adjusted
dollars. They made just 179 times the average bottom 90
percent income. There was much more economic equality
because of shared prosperity. Even in 1980, the richest of
the rich took home 175 times more than Americans in the
bottom 90 percent - still relatively good economic equality.
Then things changed.
Consider the figures for 2005: the top hundredth of 1
percent, about 10,000 households, averaged $25.7 million in
income, three times the money in 1928. This amounted to 882
times more than the bottom 90 percent average — an economic
inequality gap in 2005 that’s almost identical to the
891-to-1 divide in 1928! Welcome to the modern billionaire
world of the rich getting much, much richer, while everyone
else stagnates. Of course, the top 1 percent of households
are also extremely rich – some 1 million families or 3
million people – relatively to the bottom, majority 90
Married couples with children now account for fewer than
one-quarter of American households – the lowest in history.
It is the Upper Class that now emphasizes marriage with
children. Married households with children are twice as
likely to be in the top 20 percent of income. Some 13
percent of the increase in the nation’s income inequality
since the 1970s results from the marriage of high income
earners. Marriage is now for the rich. What does that say
about American democracy and culture? That the Upper Class
is like an inbred aristocracy. Children of the rich will
marry other children of the rich.
Another critically important change in the real (ugly)
America is the bursting of the traditional fantasy-belief
that people can educate themselves into wealth. Is getting
more Americans educated and trained all we need to do to
attack economic inequality? If so, then inequality should
fall over periods of time when people become more educated.
Right? Americans have become more educated over the last
three decades. In 1970, only three out of four Americans
aged 25-29 had completed high school. In 2004, nearly nine
of ten Americans that age had a high school education. In
1970, only 16 percent of Americans in their late 20s held a
four-year college degree. By 2004, that had nearly doubled
to 29 percent. Something else has nearly doubled since
1970: the share of national income that goes to America's
richest 1 percent.
means that the share going to average Americans has dropped.
Lower Class Americans in the bottom 90 percent of the
nation's income distribution took home 67 percent of U.S.
income in 1970, but only 53 percent in 2004, despite their
greater education and productivity. American reality: We’ve
become more unequal at the same time we've become more
educated. Why? Education doesn’t determine how income and
wealth – or macro domestic and global prosperity – are
distributed in our unfair system. The Upper Class ensures
that increasing fractions of income and wealth go to them.
is more painful statistical truth: In 2004, the most recent
year with IRS data just about 25,000 taxpayers took home
over $5 million. After exploiting every loophole they paid
an average 21.9 percent of their incomes in federal income
tax. Back in 1952, at the height of the Korean War, the
comparable federal tax bite on America’s richest 25,000
averaged 51.9 percent. About a decade earlier, in the
middle of World War II, the 25,000 highest-income taxpayers
in the United States paid 68.4 percent of their incomes in
federal income tax. How things have changed for the
wealthy. A greater fraction of the nation’s prosperity has
gone to the Upper Class AND they pay less tax! Economic
power produces political power.
is worth pondering: When will the economic inequality that
has morphed into two-class economic apartheid provide
sufficient pain and disgust for a few hundred million
Americans to fuel political revolution?
will the stranglehold of the Upper Class on the political
system that criminally distorts the economic system be
busted? When will Lower Class consumers that drive the
economy take back their sovereign power? When will they
understand they are losing the class war and revolt?
will take historically unique action, not electing different
Democrats or Republicans. Our Constitution provides the
tool – not used for over 200 years because the power elites
do not want it used – an Article V convention outside the
control of the White House and Congress to consider
political and government reforms. Learn more about it at
Learn about the author’s new book at