In a Truthout interview with Noam Chomsky, the celebrated linguist describes how economic inequality in the US has reached an unprecedented level. “The inequality in the contemporary period is almost unprecedented. If you look at total inequality, it ranks amongst the worse periods of American history,” he says.
“However, if you look at inequality more closely, you see that it comes from wealth that is in the hands of a tiny sector of the population. There were periods of American history, such as during the Gilded Age in the 1920s and the roaring 1990s, when something similar was going on. But the current period is extreme because inequality comes from super wealth. Literally, the top one-tenth of a percent are just super wealthy. This is not only extremely unjust in itself, but represents a development that has corrosive effects on democracy and on the vision of a decent society.
The “American Dream” was all about class mobility. You were born poor, but could get out of poverty through hard work and provide a better future for your children. It was possible for [some workers] to find a decent-paying job, buy a home, a car and pay for a kid’s education. It’s all collapsed — and we shouldn’t have too many illusions about when it was partially real. Today social mobility in the US is below other rich societies.
Right through American history, there’s been an ongoing clash between pressure for more freedom and democracy coming from below and efforts at elite control and domination from above. It goes back to the founding of the country. The “founding fathers,” even James Madison, the main framer, who was as much a believer in democracy as any other leading political figure in those days, felt that the United States political system should be in the hands of the wealthy because the wealthy are the “more responsible set of men.” And, thus, the structure of the formal constitutional system placed more power in the hands of the Senate, which was not elected in those days. It was selected from the wealthy men who, as Madison put it, had sympathy for the owners of wealth and private property.”
Now, the so-called American Dream was always based partly in myth and partly in reality. From the early 19th century onward and up until fairly recently, working-class people, including immigrants, had expectations that their lives would improve in American society through hard work. And that was partly true, although it did not apply for the most part to African Americans and women until much later. This no longer seems to be the case. Stagnating incomes, declining living standards, outrageous student debt levels, and hard-to-come-by decent-paying jobs have created a sense of hopelessness among many Americans, who are beginning to look with certain nostalgia toward the past. This explains, to a great extent, the rise of the likes of Donald Trump and the appeal among the youth of the political message of someone like Bernie Sanders.
Concentration of wealth leads naturally to concentration of power, which in turn translates to legislation favoring the interests of the rich and powerful and thereby increasing even further the concentration of power and wealth. Various political measures, such as fiscal policy, deregulation, and rules for corporate governance are designed to increase the concentration of wealth and power. And that’s what we’ve been seeing during the neoliberal era. It is a vicious cycle in constant progress. The state is there to provide security and support to the interests of the privileged and powerful sectors in society while the rest of the population is left to experience the brutal reality of capitalism. Socialism for the rich, capitalism for the poor.