Image by Nohe Pereira.

Over the past forty-five years the United States has experienced deepening economic divisions between the rich and poor. The effects of this division are similar to those in developing nations. Economists such as, Jared Bernstein, Paul Krugman and Paul Stiglitz argue that the major cause of this division is the result of the United States becoming a debtor nation. This is directly linked to capital flight, deindustrialization, lack of infrastructure investment, and the militarization of the economy. The cause of the deepening economic crisis can be traced to neoliberal economics and the conservative Reagan revolution.

But here is another assessment that confirms the neoliberal disaster of the economy.

Thomas Piketty’s Capital in the Twenty-First Century, 2014, addresses the precipitous decline of the US economy into Third World status. Piketty argues that the average workers’ wages in the United States have declined considerably from 2007 to 2012 to a level far below poverty wages on an individual basis. In the same period, over 90 percent of all new income went to the top 1 percent while approximately 46 million Americans remain in poverty. The gap between corporate profits and workers’ wages has never been greater. Piketty’s conclusion is that capitalism, if left unchecked, generates a concentration of wealth among a tiny minority and this has manifested itself in America. Piketty further argues that merit or hard work, the standard justification for inequality, has little to do with what has been defined as the “new gilded age.” It has more to do with the nature of capitalism itself in which capital precedes labor, and where profit maximization becomes the rational basis for human interaction and economic relationships. Piketty critiques the very structure and foundation of capitalism itself.

Piketty argues that an “invisibility” to the negative outcomes of capitalism is needed by capitalists for the same system to optimize for elites. But invisibility is not the only weapon in the ideological arsenal of capitalism. The first line of right-wing defense is denial, with some variation on the contention that the state of the economy is the best of all possible economic worlds and that “it works”. There may be inequalities, they argue, but the inequalities are not harmful since capitalism brought consumers innovations in technology such as cell phones, laptops, electric cars, etc. The tactic used by the capitalist class is to cajole the working class and poor into believing that inequality isn’t that bad since almost everyone can afford an i-pad. They draw on the ideological conviction that capitalism, left to its own devices, rewards the........

© CounterPunch