Reflections on the Public Good in the New Gilded Age
Laxer, James, Queen's Quarterly
In the early decades of this century, productivity gains in such industries as steel making and automobile manufacturing took place at a breathtaking pace. The outline of an affluent new satiety began to take shape -- only to come crashing down in depression and world war. By the postwar years, Western nations had learned something important about productivity gains and distribution of wealth. Unfortunately, the hard lessons of the past seem to have been forgotten during the present-day technological revolution.
There are a remarkable number of "feel good" books penned by the wealthy plutocrats of our day. My favourite of these motivational volumes is Bill Gates' 1995 work, The Road Ahead. Just before his personal fortune skyrocketed by $20 billion in a single year -- the greatest short-term accumulation of wealth by one individual in the history of the world -- Gates wrote that Adam Smith would have been pleased by the way capitalism has proved its advantages over other systems in the 1990s. It would be odd indeed if Gates did not have that opinion. In 1996-97, as North American stock markets soared upward, one and a half per cent of all the market gains went to Bill Gates personally -- to one man on a continent of 300 million people.
The historical moment since the end of the Cold War has witnessed an orgiastic celebration of the societal benefits that flow from inequality. When it published its annual "rich list" last year, the Times of London trumpeted the good news that "the enterprise culture is here at last. Soaring asset values have brought a vast increase in wealth for Britain's millionaire class ..."
A century ago, during capitalism's original gilded age, John D. Rockefeller, the world's first billionaire, remarked on what it means for a business to struggle ruthlessly with its competitors. "The American beauty rose," Rockefeller said, "can be produced in the splendor and fragrance which bring cheer to its beholder only by sacrificing the early buds which grow up around it. This is not an evil tendency in business. It is merely the working out of a law of Nature and of God."
In today's new gilded age, the twin ideas of equality and citizenship have been driven to the margin. They have become pesky, uncomfortable concepts left over from a bygone day. From the time of the American and French revolutions, the notion that in important respects all people are equal has nourished the evolution of citizenship and the rights of citizens. In my opinion, the first casualty of globalization has been the concept of citizenship.
I would like to focus on the threat the new inequality of our age poses to the ideas of citizenship and democracy and consequently to any authentic quest for the public good.
In part, we can see the inequality in our society clearly in statistics. Over the past 20 years the income gap between the rich and the rest of the population has widened hugely, and the wealth gap has become a chasm. From the mid-1970s to the present, the inflation-adjusted income of the average Canadian male has not increased and remains below $35,000 a year, while the real income of the average Canadian female has increased a little, to just over $19,000 a year. Meanwhile the incomes of chief executives of major North American firms have soared from about 30 times to about 100 times those of their average employees.
The wealth gap has widened much more than the income gap. In 1996-97, when the assets of us stocks grew by $1.4 trillion, half of all the gains went to families with incomes of over $200,000 a year. In the us, the top one per cent of income earners hold 48 per cent of financial assets while the bottom 80 per cent hold only 6 per cent of assets. The three wealthiest Americans -- Bill Gates, John Walton, and Warren Buffett -- have personal financial assets that total about $100 billion. That is as much as the combined financial assets of the 100 million poorest Americans. …