There they go again. Conservatives are back again with their “war on poverty,” which is to say, their war on poor people and any liberals, or sympathizers, who try to help them.
Unlike Lyndon Johnson's War on Poverty, which despite 50 years of demonization and policy reversals has cut U.S. poverty by 40 percent (see No. 3 here), the conservative version has little hope of doing anything about poverty. But that's not the point. Neither is attacking poor people and liberals, for that matter. The point is defending the obscenely rich, and the massive upward redistribution of wealth America has seen going on since the 1970s. At the same time the broad-based increase in affluence of the early post-World War II era has been decisively shut off.
IRS data compiled by Thomas Piketty, Emmanuel Saenz and their colleagues at the top incomes database shows how stark America's shift from a broad-based prosperity model has been. From 1947 to 1973, the average incomes of the bottom 90 percent increased 99.2 percent, compared to 88.9 percent for the top 10 percent, and a mere 7.4 percent for the top 0.1 percent. But from 1973 to 2008, the average incomes of the bottom 90 percent fell 6.1 percent, while the average incomes of the top 10 percent continued rising by another 70.8 percent, and average incomes of the top 0.1 percent skyrocketed an astronomical 706.4 percent.
With the bottom 90 percent losing ground, on average, and the top 0.1 percent gobbling those losses up like candy, it makes perfect sense to try to distract attention by finger-pointing at the poor—as well as those who might be inclined to help them. Whether it actually makes sense or not is irrelevant. All it has to be believable—for those with a powerful-enough motive to believe.
A case in point is the recent David Brooks Op-Ed blaming poor folks for their poverty, which Salon's Elias Isquith wrote about here recently, along with a disturbingly similar poor-bashing piece by neoliberal Nicholas Kristof. Given his high-profile perch at the so-called liberal New York Times, Brooks drew some rather pointed data-informed responses, including ones by Elizabeth Stoker Bruenig at the New Republic ("Poor People Don't Need Better Social Norms. They Need Better Social Policies. What David Brooks doesn't understand about poverty," Connor Williams at Talking Points Memo, who argued that "David Brooks Is Mistaking Poverty's Symptoms For Its Causes," and Noah Smith who responded with a short blog post, providing the links to make his point that "Americans are better behaved than ever."
Finally, at the Week, in "The conservative obsession with moral values doesn't explain the plight of the working poor," Jeff Spross took broader aim at "the Douthat-Murray-Brooks thesis," implicating Charles Murray's book "Coming Apart" and a Ross Douthat NYT Op-Ed last year, as well as the new offering by Brooks. In a key passage, Spross writes:
The most comprehensive expression of the theory was by the Times' Ross Douthat, in a piece called "Social Liberalism As Class Warfare," in which he argued that the promotion of social liberalism by the progressive upper class — more carefree sexual mores, less social and legal stigma for divorce and abortion, etc. — deprived the lower classes of the "scripts" they need to live stable, flourishing lives.
But the social fabric can't be the victim of liberal morals in the lower class and the bulwark against them in the upper class.
In his piece, Isquith cited both Spross and Bruenig, and he wisely links Brooks and Kristof, despite their supposed ideological differences. The truth is that neoliberalism is and always has been a variant of conservative ideology, in much the same way that libertarianism is, but with a bit more charity and a lot more self-promotion of the (ironically) George H.W. Bush kind: “Message: I care.” As venture capitalist Nick Hanauer told me recently, “The problem with our politics is President Obama and the people who surround him don’t represent an alternative to trickle down economics, they are trickle-down-lite. They’re sort of kinder-and-gentler trickle-down economics.”
It should be obvious by now that this blame-the-poor ideology—shared by neoliberals, libertarians and social conservatives alike—does not have a leg of data to stand on. Smith cited data showing that all manner of bad behavior is way down and falling, including crime, teen drug and alcohol abuse, teen pregnancy, domestic violence and child molestation. And as Isquith noted, “Bruenig points to studies suggesting that Brooks and Kristof have it exactly backward; that people who receive “food stamps” make better nutritional choices than most, and that poor parents who are provided with economic support spend their money on normatively good things — like children’s clothing, toys and books — while spending less on “bad” things like cigarettes and beer.” Finally, Spross added on the fact that, “Other western countries do far more to reduce deprivation in absolute and relative terms [graph here], while coincidentally enjoying far greater family stability.”
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Indeed, most of the modern social science—and its pop spinoffs—that appears to support such views can be traced back to a 1961 book by Oscar Lewis, "The Children of Sanchez," in which he coined the term “culture of poverty,” based on a small sample of ethnographic studies of a handful of small Mexican communities. As explained by Paul Gorski in a brief overview, “The Myth of the Culture of Poverty.” Lewis inspired a flood of research. Gorki cites a number of examples, including studies analyzing the overall body of evidence,then says:
These studies raise a variety of questions and come to a variety of conclusions about poverty. But on this they all agree: There is no such thing as a culture of poverty. Differences in values and behaviors among poor people are just as great as those between poor and wealthy people.
In actuality, the culture of poverty concept is constructed from a collection of smaller stereotypes which, however false, seem to have crept into mainstream thinking as unquestioned fact.
In short, there's no data to support the widely held blame-the-poor ideology. Which can only mean one thing: it doesn't need any evidence. It just needs to pretend it has evidence, because mean old liberal Marxist lesbian feminist vegans of color demand it, or else they'll call you names, like “uninformed.” But why doesn't it need any data to support it? Because of the flip side, obviously: If the poor are to blame for their poverty, regardless of any evidence to the contrary, then the rich, categorically, are entitled to their wealth, also regardless of any contrary evidence. And questioning that is clearly unthinkable, it's an absolute article of faith.
We're not talking about economics as a science here, we're talking about it as theology. The theology that was embodied in the Protestant work ethic, and was scandalize by Bernard Mandeville's "The Fable of The Bees: or, Private Vices, Public Benefits," which first advanced the argument that private consumption—not savings—is the engine that drives economic prosperity, creating the demand that makes businesses grow. For this, Mandeville's book was "convicted as a nuisance by the grand jury of Middlesex in 1723," as noted by John Maynard Keynes.
As a theology, it deals with both good and evil, praise and blame. Which is why it doesn't just blame the poor, it justifies the rich. Up to and including, for example, overlooking how much of their wealth is due to either a) good luck—who you were born to, and where—or b) bad behavior—such as slavery, the Native American genocide, and imperialism—all substantial sources of wealth in American history, rationalized easily enough at the time, but not so much in hindsight. It's this latter fact—the reluctance, if not fear, of calling into question the sources of great wealth—which is, to a large extent, the reason why there's so much resistance to any sort of honest discourse about the poor, or even, more recently, how to sustain and expand the currently shrinking and embattled middle class.
First, let's address the matter of good luck—inherited wealth and/or social position. Some of the most obvious extremes are clearly lacking in merit. The Walton heirs, for example. According to Josh Bivens of the Economic Policy Institute, their combined wealth in 2007 was equal to that of “the bottom 35 million families in the wealth distribution combined, or 30.5 percent of all American families.” By 2010, the Waltons' fortunes increased while most people suffered. Their wealth was now “as large as the bottom 48.8 million families in the wealth distribution (constituting 41.5 percent of all American families) combined.” These are heirs, mind you. A single family holding more wealth than over two-fifths of all the nation's families—a population equal to that of California, Texas, Florida, New York, Illinois and Pennsylvania combined.
Perhaps even more instructive is what happened with the onset of the Great Recession, as Bivens noted, “Concretely, between 2007 and 2010, while median family wealth fell by 38.8 percent, the wealth of the Walton family members rose from $73.3 billion to $89.5 billion.” If the “wealth creating” Walton heirs were creating an additional $16.2 billion of wealth for themselves, they were creating enormous losses for others. Of course that doesn't fit the theology. That's why it's theology, not science.
But it's not just the extremes of people like the Waltons. Across the board, individual and group inheritance is the dominant factor in how well people do in the world. As World Bank economist Branko Milanovic, a leading expert on international inequality, explained to Salon's Sean McElwee recently:
At least half of your income is determined by where you live, which for most people is where you were born. Then about 20 percent is due to the income level of your parents. So, your citizenship plus your parental background explain around two-thirds or even 70 percent of your income.
Then, obviously, if I had data for gender, race, ethnicity and other things, which are similarly exogenously “given” to an individual, that percentage would go up, perhaps to more than 80 percent.
Of course, most people aren't thinking about themselves on a global scale. Comparing people within a given country should produce a lot more mobility—and it does, sometimes, at least. In the 19th century, America gained a reputation for just that, and a 2005 paper by Joseph Ferrie, an economist at Northwestern, found considerably more mobility in the U.S. than in Britain at that time...but not anymore, as reflected in the paper's title: "The End of American Exceptionalism? Mobility in the U.S. Since 1850." Detailed individual financial records don't go back that far, but Ferrie compared broad occupational categories for fathers and sons decades apart in both countries. He found that "only 51.3 percent of the sons of unskilled fathers in Britain were able to obtain jobs better than unskilled themselves 30 years later; in the United States, 81.4 percent were able to do so." In contrast, Ferrie found that the mobility differences between the U.S. and Britain in the late 20th century were not statistically significant.
What accounts for such differences over time? In a section titled “Accounting for High U.S. Occupational Mobility Through 1920,” Ferrie points out an obvious explanation:
The U.S. had more relative occupational mobility across generations through the 1900- 1920 cohort than either Britain in the second half of the nineteenth century or the U.S. in the second half of the twentieth century. Any attempt to account for these differences must immediately confront the size of the farm sector in the late nineteenth and early twentieth century U.S.
In short, when American income mobility truly was exceptional, one of the main reasons why was because of circumstances beyond any individual's control. While most people have been trapped by circumstances in most of human history, it is likewise circumstances that allowed them greater freedom. By 1851, less than 5 percent of male employment in Britain was farm labor, Ferrie notes, adding:
In contrast, throughout the 1850-1920 period, the U.S. farm sector remained large (nearly two thirds of the adult male labor force in 1850 and more than a third through 1900) and continued to both add and lose new workers (with net significant losses).
America's current lack of exceptional income mobility was underscored by a 2007 OECD paper, “Intergenerational Transmission of Disadvantage: Mobility or Immobility across Generations? A Review of the Evidence for OECD Countries” by Anna Cristina d’Addio. The paper found that America was at the high end of income inheritance, just slightly better than Italy and the U.K., all bunched together near 50 percent, with Denmark, Austria, Norway, Finland and Canada as the most mobile societies, with between 15 and 20 percent of inheritance effects. In those countries, inherited wealth matters less than half as much as it does in America. None of them has a rapidly-shrinking farm sector to help fuel their income mobility. They do, however, have much more activist welfare states, which are particularly helpful in combating childhood poverty, and providing broad-based quality education.
There is one more situational effect I want to touch on. A popular way to discourage talk about income inequality is to say that “income inequality isn't the problem, income mobility is.” It's not at all obvious why this should convince anyone. It's popular with people who don't want to think about inequality, and it sounds at least moderately open-minded. That explains why people would say it—but not why anyone should believe it. And, in fact, there's a very good reason not to believe it at all: It turns out that “Inequality Is Bad for Growth of the Poor (But Not for That of the Rich),” the title of a paper that Milanovic co-authored with Roy van der Weide. As the paper's abstract explains:
The paper assesses the impact of overall inequality, as well as inequality among the poor and among the rich, on the growth rates along various percentiles of the income distribution. The analysis uses micro-census data from U.S. states covering the period from 1960 to 2010. The paper finds evidence that high levels of inequality reduce the income growth of the poor and, if anything, help the growth of the rich. When inequality is deconstructed into bottom and top inequality, the analysis finds that it is mostly top inequality that is holding back growth at the bottom.
Now there's a surprise! It's the rich getting too rich that keep the poor stuck where they are. It's not the bad habits of the poor, as Brooks would have it. It's the bad pay structure for the rich—just as the Occupy movement would say it was.
So, that's a brief roundup of some relevant facts about the impacts of good or bad luck, in terms of where you're situated when life begins, and how much of a chance that leaves you with. But if one is willing to take a close look at the sources of America's wealth, there are sources there much darker than just plain luck. We like to think that our national wealth, as well as individual wealth, is a sign of virtue. That's what the theology tells us. But the evidence? Not so much.
“Behind every fortune there lies a great crime,” Balzac wrote, and that's certainly true of America's national wealth as a whole, starting with conquest and eventual genocide of the Native Americans who originally inhabited the land. It's a crime so vast and monstrous, so at odds with the myths we love to tell ourselves that we seldom give it any thought, much less serious consideration. And yet, without that enormous theft of land, there wouldn't even be any America at all. This is not to say that all the wealth created here over the centuries is solely due to the genocide of Native Americans. That would be absurd. And yet, none of it would have been possible without that genocide, with only the most minimal exceptions for some early peaceable relations, primarily from Quakers.
In short, the portion of American wealth due to genocide is vast, but incalculable . We simply lack any coherent framework to adequately quantify it.
We can do a somewhat better job of quantifying the second great criminal source of American wealth: slavery. Henry Louis Gates provides a neat summary, drawn from multiple sources, here. Most significant, of course, is the value of slaves themselves, and this is where we can at least get a plausible low-end baseline. About this, Gates writes:
Steven Deyle shows that in 1860, the value of the slaves was "roughly three times greater than the total amount invested in banks," and it was "equal to about seven times the total value of all currency in circulation in the country, three times the value of the entire livestock population, twelve times the value of the entire U.S. cotton crop and forty-eight times the total expenditure of the federal government that year."
You'll sometimes hear apologists for slavery and the South argue that the Civil War was unnecessary, because slavery would have died out on its own. The greatest share of national wealth at the time simply vanish in smoke? With no one complaining about it? Hardly. There was a very good economic reason that the South fought the war. They knew exactly what they were doing.
But the point of having most of those slaves was growing cotton, and cotton was not simply a Southern product. It was, as Gates writes, “one of the world's first luxury commodities, after sugar and tobacco,” and was also the economic engine of the entire country:
Slave-produced cotton "brought commercial ascendancy to New York City, was the driving force for territorial expansion in the Old Southwest and fostered trade between Europe and the United States," according to Gene Dattel. In fact, cotton productivity, no doubt due to the sharecropping system that replaced slavery, remained central to the American economy for a very long time: "Cotton was the leading American export from 1803 to 1937."
The economic ties to New England were particularly profound, Gates explains:
As Ronald Bailey shows, cotton fed the textile revolution in the United States. "In 1860, for example, New England had 52 percent of the manufacturing establishments and 75 percent of the 5.14 million spindles in operation," he explains. The same goes for looms. In fact, Massachusetts "alone had 30 percent of all spindles, and Rhode Island another 18 percent." Most impressively of all, "New England mills consumed 283.7 million pounds of cotton, or 67 percent of the 422.6 million pounds of cotton used by U.S. mills in 1860." In other words, on the eve of the Civil War, New England's economy, so fundamentally dependent upon the textile industry, was inextricably intertwined, as Bailey puts it, "to the labor of black people working as slaves in the U.S. South."
The kind of dependence just described is one reason why it's impossible to give a specific accounting of the role of slavery in creating American wealth. New England's textile industry would not have existed without it, and the entire regional economy would have been but a shadow of its actual self.
A third great criminal source of American wealth has been imperialism—a term that most American commentators are reluctant to use in describing America, since our practice was generally not like that of Britain, and the other European colonial powers. We had little interest in running other countries in a hands-on manner, but that didn't mean we didn't want control—especially in Latin America, where we began by “protecting American interests” in the 19th century, and graduated to installing governments in the 20th. An extensive list of U.S. military actions—though not CIA/covert activities, can be found here. Reading through the list, it's possible to gain a sense of how attitudes and intentions shifted over time, as many of the early incidents were tit-for-tat actions, while the tendency to get more deeply involved in running the affairs of others developed gradually, in fits and starts at first, then seemingly clicked into place as standard operating procedure around the time of the Spanish-American War. The transition was officially formalized when Teddy Roosevelt announced the Roosevelt Corollary to the Monroe Doctrine. Franklin Roosevelt reversed course, promising non-intervention with his Good Neighbor Policy in 1934, but with the Cold War, all bets were off, and interventions—both overt and covert—occured at a dizzying pace around the globe.
It's obviously quite difficult to put a figure on the amount of wealth secured in this fashion, and it's certainly much smaller share than Britain took from India, for example, but it's hardly a negligable concern. Our overthrow of the Mossadegh government in Iran in 1954, for example, lies at the root of all the problems we've had with Iran since the Iranian Revolution of 1979.
Strictly in terms of wealth-creation, it's significantly complicated by the ways in which the military has been involved, often extracting wealth from the American people themselves. For decades now, for example, a considerable slice of the “defense” budget has gone to defending oil interests in the Middle East, a massive de facto subsidy to oil company profits. During the Cold War, a massive geographical restructuring of domestic military spending took place, resulting in "The Rise of The Gunbelt," as Ann Markusen and her co-authors described. This restructuring of industrial capacity had considerable negative economic impacts on the traditional industrial heartland, even as it has made others fantastically wealthy. Finally, following 9/11, a classic example of imperial Blowback from our Afghanistan involvements in the 1980s and 90s, we engaged in two ill-advised wars—neither directed against those who attacked us—with a combined projected cost of up to $6 trillion.
Altogether, what these three key examples show us—the Native American genocide, slavery and imperialism—is the pervasive role of massive crimes in wealth creation, quite apart from what any one individual or group of individuals might want to believe about the purity of their own motivations or actions. This doesn't mean we shouldn't strive to do good. But it does mean we shouldn't be too quick, or too simplistic, in rushing to judge others, or to pat ourselves on the back.
For all the taint that lies on all the wealth of America, it's still the case that countless millions have also striven nobly to earn a living, to build wealth, to pass it on to their descendants. And yet, it's also still the case that those on the bottom are largely trapped there, but don't have to be. If we can find the strength to face our demons—face the evil mixed with the good that our nation is built upon—and deal with them practically, not theologically, as problems to be solved, then we still hold it within our power “to begin the world anew,” as Thomas Paine once said of America's promise to the world. But doing that means we have to stop worshiping wealth—which, for a mostly Christian nation really shouldn't be that hard, now should it?
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