With this issue, we’re inaugurating “The Score,” a monthly feature about the economy by Bryce Covert and Mike Konczal.
The wealth controlled by the top tenth of the top 1 percent has more than doubled over the past thirty years in the United States, approaching levels not seen since the 1920s. The left’s two recent intellectual blockbusters—Thomas Piketty’s bestselling Capital in the Twenty-First Century and Ta-Nehisi Coates’s “The Case for Reparations”—published by The Atlantic—indicate the profound uneasiness with this trend.
Wealth is the ownership of the productive economic elements in society, such as land and corporations. The wealthy control the direction of the economy, and they claim an increasing share of what it produces. But as their influence increases, they avoid being held to the same standard of accountability under a system of democratic politics, while those of us without wealth find ourselves vulnerable.
Democrats and Republicans advocate different solutions to inequality, but both seek to shift financial risk from the state to the individual. Republicans promote the “ownership society,” in which privatizing social insurance, removing investor protections and expanding home ownership align the interests of workers with the anti-regulatory interests of the wealthy. Democrats focus on education and on helping the poor build wealth through savings programs. These approaches demand greater personal responsibility for market risks and failures, further discrediting the state’s role in regulating markets and providing public social insurance.
Instead of just giving people more purchasing power, we should be taking basic needs off the market altogether.
Consider Social Security, a wildly popular program that doesn’t count toward individual wealth. If Social Security were replaced with a private savings account, individuals would have more “wealth” (because they would have their own financial account) but less actual security. The elderly would have to spin the financial-markets roulette wheel and suffer destitution if they were unlucky. This is why social-wealth programs like Social Security combat inequality more powerfully than any privatized, individualized wealth-building “solution.”
Public programs like universal healthcare and free education function the same way, providing social wealth directly instead of hoping to boost people’s savings enough to allow them to afford either. Rather than requiring people to struggle with a byzantine system of private health insurance, universal healthcare would be available to cover the costs of genuine health needs. Similarly, broadly accessible higher education would allow people to thrive without taking on massive student loans and hoping that their “human capital” investment helps them hit the jackpot.