Twenty-first century capitalism is not an improved and benign version of its nineteenth- and twentieth-century manifestations, nor will it ever be, despite daily bluster by the system’s practitioners and apologists that a rising tide of prosperity will soon lift all boats. The animating principles of capitalism governing the pursuit of profits are as hollow and iniquitous now as they were in 1848, especially where human exploitation and the distribution of wealth are concerned. As super-capitalist Warren Buffett remarked recently in a trenchant understatement: “A market system has not worked well in terms of poor people” (The New York Times, June 27, 2006).
Notwithstanding technological advances and new trade arrangements, capitalism, with its sanitized label of globalization, is not striding toward a brave new future, but is hurtling furiously toward the past. Within capitalism—whether it is branded as globalism, imperialism, or free enterprise—there is nothing new under the sun.
From its earliest days, capitalism has been global—or what were clipper ships for? And capitalism always has been ruthlessly indifferent to human suffering—or what was (and is) traffic in slaves, opium, and weapons all about? In the second half of the nineteenth century and into the early years of the twentieth, capitalists ventured from their principal industrial bases in the United States, Europe, and Japan into Latin America, Africa, China, and other parts of Asia, dividing territories and brutalizing indigenous populations with the lethal support of their home nations’ imperial armies. The struggle of the capitalist states among themselves did not inhibit the system’s ultimate subjugation and exploitation of local populations.
The facts and data compiled and collated in an agglomeration of publications by United Nations agencies, governments, non-governmental organizations, leftist journals, and capitalist financial organs all document the same fundamental reality: a small minority of the world’s population enjoys a comfortable standard of living and holds a disproportionate share of money and assets while the majority of humanity lives in squalor, often beset by political instability and violence. Even a casual observation of the economic and cultural consequences of capitalist production and distribution reveals that the system has no internal principles or mechanisms that will halt—or even abate—the relentless flow of wealth into the hands of a relative few, while leaving the majority racing on treadmills to escape dangerous jobs, shabby schools, and third-rate medical systems.
The poor—and those anxious to help them—know the squalid and unsafe conditions they inhabit; and they understand that what bars them from a healthy and fulfilling life beyond poverty is the dearth of what the capitalist class has plenty of—cash. It is the responsibility of socialists and progressives to demand political and economic mechanisms to transfer cash from those with an obscene surplus of it to those who can barely feed and clothe themselves and their children. The vehicle for this is the guaranteed annual income, an idea that has drifted in and out of political debate and activism for nearly a century, and which now must be resurrected, but this time with an international thrust.
Socialist thinkers and agitators from Marx and Engels to Rosa Luxemburg, into the modern era and the observations of the late Ernest Mandel and Daniel Singer, have all chronicled capitalism’s relentless drive to expand beyond national or regional boundaries in search of cheap labor, markets, and raw materials; and hence, these thinkers all insisted that the struggle against capitalist predations must necessarily be an international one. They saw clearly that capitalism is an international malady requiring an international cure.
The need for an international guaranteed annual income is urgent. By the time any prevailing models for relief are implemented—meaning the development of infrastructure in third-world countries marked by the construction of roads, ports, utility lines, etc., so capitalists can build their factories and establish their agribusinesses—millions will have died from starvation and disease; and even after the businesses, mines, and farms are operating, millions will remain unemployed and those with jobs will be woefully underpaid.
Two phenomena of present day capitalism create impregnable barriers to a better life for the dispossessed and accelerate the wealth gap between the rich and the poor as well as the middle class. The first is that globalization has regressed into a condition that Marx identified as “primitive accumulation,” and that David Harvey has called “accumulation by dispossession.” The second factor is that the rapine of the capitalist oligarchy is unrestrained by any political or “market” forces capable of retarding the flow of cash upward from the field or shop floor into the pockets of CEO’s, their favored managers and employees, and stockholders. No market forces dictate that a CEO should receive a salary of $12 million a year—or even $2 million; but boards of directors and corporate compensation committees composed of cronies can guarantee this largesse at the expense of workers. And this same group of decision makers, along with the political officials they sponsor and subsidize, will deceptively claim, for example, that market forces, inflationary pressure, and the potential loss of jobs compel them to block efforts to increase the ludicrously low minimum wage in the United States from $5.15 an hour, where it has been for a decade.
In explaining the early stages of capital accumulation, Marx described a seventeenth- and eighteenth-century environment that is sadly being replicated today without any potent countervailing force to inhibit the viciousness of capitalism as it scours the globe searching for cheap labor and materials:
the accumulation of capital pre-supposes surplus-value; surplus-value pre-supposes capitalist production; capitalist production pre-supposes the pre-existence of considerable masses of capital and of labour-power in the hands of commodity producers. The whole movement, therefore, seems to turn around in a never-ending circle, which we can only get out of by assuming a primitive accumulation.1
Marx continued, with sarcastic anger:
The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the aboriginal population of that continent, the beginning of the conquest and plunder of India, the conversion of Africa into a preserve for the commercial hunting of black skins, are all things that characterize the era of capitalist production. These idyllic proceedings are the chief moments of primitive accumulation.2
Slavery was a “moment of primitive accumulation,” and so are sweatshops in Mexico (the infamous maquiladoras), in China, in Indonesia, in Jordan, and elsewhere. What is the $5.15 federal minimum wage in the United States if not a modern version of the whip wielded to wrest surplus profits from the superexploitation of farm workers, janitors, and others in the ranks of the marginalized?
Worldwide, one estimate places “1.2 billion people [living] below the international poverty line, earning less than $1 per day.”3 United Nations figures show that in 2000, 56 percent of Guatemalans lived beneath that country’s poverty line, and one can quickly locate similar figures for Mozambique, Rwanda, Bangladesh, and other third-world outposts, while in more developed countries such as Poland, Chile, and Thailand, the percentage of the population living beneath established poverty guidelines hovers around 15 percent.
This does not mean that the people who barely escape falling into a poverty rubric are enjoying incomes and social services that make for economically secure and healthy lives. The central factor to note is that the millions of people worldwide living in or near poverty are prey for exploitation because they are powerless to resist the blandishment of the low-paying and often dangerous jobs presented by capitalists, who locate their factories, large-scale farming enterprises, and other businesses in the midst of the impoverished.
The present capitalist moment, then, is not an enlightened stage of a system that believes its survival depends on an equitable sharing of wealth with workers and those who cannot work for reasons such as age or disability. No, capitalism in the twenty-first century is recreating through multinational corporations and their political allies new “moments of primitive accumulation.”
The capitalist universe assures that wealth—brutally and primitively accumulated—flows into executive suites and not into workers’ paychecks or tax-funded programs for the common good. Under capitalism’s current reign, it is a crime for a poor person to steal a loaf of bread or a box of infant formula, but it is not a crime for corporations to pay workers wages that perpetuate poverty while executives collect salaries and benefits in the millions. With their hefty compensations, the affluent lead lives of opulence that would make the Medici blush. According to the Boston Consulting Group, a firm that provides advice to what has lately been tagged the New Luxury sector of capitalism (companies such as Cartier, Louis Vuitton, Gucci, etc.), sales rose in this grouping from $450 million in 2003 to $525 million in 2004, with projections for $1 trillion in sales by 2010.
The salaries of today’s prototypical capitalists—CEO’s, corporate raiders, investment bankers, hedge fund managers—rest upon a political and cultural disconnect between the work they perform and the income they receive. Only their egomaniacal self-justification asserts that their compensation is a fair measure of their contribution to the common good. There is no market anywhere that insists a CEO make $12 million annually—or even $2 million—while his workers make 1/300 of this or worse. No natural forces dictated that Richard Grasso was entitled to $190 million as severance pay when he resigned as president of the New York Stock Exchange, or that $400 million was a just gratuity for Lee Raymond when he retired as president of Exxon. The legally sanctioned salaries, bonuses, option packages, and golden parachutes of corporate oligarchs are not set by markets, and not by moral philosophers either, but rather by their equally larcenous class colleagues.
The same can be said of the annual pay garnered by professional athletes, movie stars, and other celebrities. The social value of their product is often dubious, but whatever its merits, the stratosphere in which their compensation is found is not set by market forces. Society can survive without Paris Hilton or Tom Cruise, but public safety and health are threatened after a week without garbage collectors or nurses.
The reallocation of wealth and the implementation of an international guaranteed annual income, so that the majority of humanity can sustain themselves, even thrive, must begin by recognizing the obvious: if executive and celebrity pay is not linked by identifiable and rational principles to work performed, but is rather the result of arbitrary and frivolous notions of entitlement, then there can be no justification for withholding a fair, annual compensation from anyone based on the spurious rationale that he or she does not produce something of value at a job. This is especially true because capitalism intentionally suppresses wages and perpetuates unemployment by utilizing labor-eliminating technology, establishing ludicrously low minimum-wage levels and poverty guidelines, and creating parsimonious social safety nets.
The premise of a guaranteed annual income posits that individuals must receive payments sufficient to support themselves from society’s product, not because they make a direct contribution to productivity, but simply and solely because they exist and have needs that must be met. Its provenance as a modern political goal can be traced to Bertrand Russell. In his 1918 polemic, Proposed Roads to Freedom: Socialism, Anarchism and Syndicalism, the English philosopher wrote: “a certain small income, sufficient for necessities, should be secured for all, whether they work or not. A larger income…should be given to those who are willing to engage in some work which the community recognizes as useful….”4 Russell’s fond hopes gained no traction and the Second World War derailed them altogether. But when western-style capitalism rebuilt itself, and technological innovations in the 1950s and 1960s revealed capitalists’ increasing ability to supplant human labor with machines, thinkers such as Robert Theobald and W. H. Ferry resurrected the idea of income payments to people regardless of whether they held a job.
An economist, Theobald submitted a logical and pragmatic critique of the capitalist industrial economy: (1) capitalism must constantly increase production, and to do this it requires the participation in the workforce of all—or almost all—able-bodied individuals; (2) as a result of their participation, these individuals receive wages, with which they can purchase and consume the goods and services produced by the system; (3) while capitalism has never put everyone to work, and in fact encourages the existence of a surplus labor pool to maintain a downward pressure on wages, the development of computers, automation, and cybernation will eliminate forever the possibility of full employment; (4) as a result, substantial numbers of people will be unable to obtain a job despite their willingness to work; (5) consequently, a guaranteed annual income is a political and practical necessity.
Theobald was not content to have his ideas confined to academic discussions. On March 22, 1964, Theobald and a number of colleagues, including Norman Thomas, Michael Harrington, Bayard Rustin, and Linus Pauling, sent a report titled The Triple Revolution to President Lyndon Johnson.5 The Johnson administration acknowledged the cogency of the observations and solutions proposed by the report, but proceeded with its own Great Society approach to poverty. Throughout the 1960s, the idea of a guaranteed annual income remained a respectable topic for political discourse; and by 1971, the idea gained support from—of all people—then-president Richard M. Nixon.
In the 91st Congress, Nixon pushed for a Family Assistance Plan that was essentially a guaranteed income proposal according to Professor (later U.S. Senator) Daniel Patrick Moynihan. In his book—The Politics of a Guaranteed Annual Income: The Nixon Administration and the Family Assistance Plan—detailing the political struggle surrounding Nixon’s unsuccessful effort to get the legislation passed, Moynihan addressed Nixon’s political calculation to stay clear of the label “guaranteed income”: “This will confuse some readers and trouble others, inasmuch as it was, a fact the President knew well enough…. There was no work requirement per se in the legislation, but the central income supplement provision was surrounded by incentive structures designed to increase the feasibility and desirability of work” (emphasis in original).6 The Family Assistance Plan passed in the House of Representatives but was defeated in the Senate; yet for a decade, the idea of a guaranteed annual income, whatever appellation was affixed to it, remained a mainstream political issue.
Today the notion of a guaranteed annual income, like all progressive redistributive proposals, languishes at the margins of political debate. Despite this, activist groups from Europe to the United States to Namibia push living-wage campaigns and agitate for what is often labeled a “basic income guarantee.”7 Even some conservatives are attracted to these ideas, as they see in them the possibility of eliminating many of the government bureaucracies that presently dispense welfare benefits.
The political demand for an international guaranteed income will meet with ferocious opposition from the capitalist class and their allies. They will argue that it will be impossible to calculate payments to be made to people living in countries and regions with disparate wages, prices, and infrastructures; but it is already an observable fact that there are vastly different minimum-wage laws and poverty lines established across the globe. Economists, aided by experts in such fields as housing, transportation, and medical care, can easily compute the income people require to live above a local poverty line.
Funding such payments presents political problems, but as Theobald and others have demonstrated—and as Richard M. Nixon thought possible—a vital economy of abundance can support these payments, as could the curtailment of capitalist hoarding that is undergirded by perpetual tax holidays for corporations and the corporate plutocracy. The political objective, of course, is to transfer funds from the governments of developed countries, not to mention multinational corporations and their owners and operators, into the pockets of the poor.
The global oligarchy will undoubtedly wring its hands about a guaranteed annual payment stifling initiative and fostering indolence among the working class. This argument has always been advanced by reactionaries to subvert political movements seeking to obtain any type of welfare payment or social advantage for poor people. The capitalist rationale is that if payments for dependent children, or unemployment, or food in the aggregate come close to equaling what one could earn in a low-paying job, there will be no incentive for the person to seek employment.
Two European scholars have offered a rejoinder to this neoliberal fearmongering. In a co-authored essay, Robert J. van der Veen and Philippe van Parijs proposed a universal grant of a guaranteed annual income to each citizen, regardless of income or wealth. Recognizing that achieving the collective ownership of the means of production by workers is not feasible in this historical moment, the authors contend that it is a realizable goal to rearrange the distribution of society’s social product in an equitable manner. The authors advocate that every individual receive payments that have no relation to any actual labor performed; and they further insist that the payment not be structured as a potentially denigrating and thus demoralizing income supplement or subsidy designed to lift up an individual’s income to a previously established minimum level. “If, on the other hand, guaranteed income takes the form of a universal grant, unconditionally awarded to every citizen…. citizens have an absolute right to this grant whatever their income from other sources, they start earning additional net income as soon as they do any work, however little and however poorly paid it may be…” (emphasis in original).8
One goal of socialism is to raise people out of squalor, so any payment must be decently above the poverty level in a given region; activists and policy makers can debate whether it should be 150 percent or some other number above the line. However, the universal grant that van der Veen and van Parijs propose invites the criticism that people at high-income levels earning monies well in excess of anyone’s reasonable needs do not require payments that, in effect, would be windfalls. In the United States, for example, someone earning $15,000 a year to support herself and three children could surely utilize an annual grant of $38,000 per year (twice the current poverty level for a family of four); but any payment to a person who for the past two or three years has been averaging $300,000 in income seems altogether unnecessary and wasteful.
Any claim by the capitalist oligarchy and their mouthpieces (the William Clintons and the Thomas Friedmans) that a proposal for an international guaranteed annual income is utopian can be rejected by directing their attention to current reality. The historical fact is that capitalists have dominated most of Latin America, Africa, and Asia for two centuries, but the majority of Latin Americans, Africans, and Asians have nothing to show for this except illiteracy, AIDS, squalor, and hunger. On the contrary, it is utopian to believe that the class that for two hundred years oppressed workers, violently resisted changes as mild as the abolition of child labor and the implementation of the eight-hour day, and degraded the environment will abandon greed in favor of justice now that they can discuss their concerns at the World Trade Organization. As Immanuel Wallerstein noted in an insightful work called Utopistics, an important distinction must be made between visions of the future that are impractical and unrealizable, however paradisiacal they may appear, and those that are within our grasp if creative intelligence and political will are brought to the table. These latter goals Wallerstein denoted with his coined word—utopistics: “The serious assessment of historical alternatives, the exercise of our judgment as to the substantive rationality of alternative possible historical systems.”9
The fine points, of course, can be debated in legislatures and in the streets, but the principle socialists must advance is clear: the perpetual stagnation of workers’ wages, accompanied by chronic unemployment and underemployment, requires that every person be given an annual share of the social product regardless of whether he or she contributed labor to those who own the global production machinery.
It must be repeated loudly and often that just as there is no reasonable relationship between a service performed and the annual payment of $12 million to an executive or manager, there need not be any direct correlation between a service rendered and a guaranteed payment to a worker (or would-be worker) of an amount calculated to provide the necessities of life and a modicum of dignity.
To buttress demands for an international guaranteed annual income, advocates can point to binding legal principles memorialized in international treaties, all of which recognize fair wages and decent living conditions as an inherent and inalienable right of the individual. Article 23 of the Universal Declaration of Human Rights of 1948 provides, among other things, “everyone has the right to work, to free choice of employment, to just and favorable conditions of work, and to protection against unemployment,” and that “everyone who works has the right to just and favorable remuneration insuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection….”
Twenty-one years later, Article 16 of the United Nations Declaration on Social Progress and Development proclaimed that one of the “means and methods” for realizing social progress was an “equitable distribution of national income, utilizing, inter alia, the fiscal system and government spending as an instrument for the equitable distribution and redistribution of income in order to promote social progress….” These grandiose pronouncements have yet to be realized under the regime of global capitalism, just as the people who have their hands on the throttle of the world’s most powerful economy have not done anything reasonably ordained to achieve the economic justice advocated by Franklin D. Roosevelt, who, in his famous Second Bill of Rights speech, demanded for everyone “the right to a useful and remunerative job in the industries or shops or farms or mines of the Nation” “the right to earn enough to provide adequate food and clothing and recreation” etc.10
On the international level, it is unfortunate that the United Nations—the very institution that crafted the treaties acknowledging inalienable rights of all people to sustenance and dignity—undermined the possibility of halting globalization’s cruel dominion by what it sententiously calls its Millennium Development Goals. This project is viewed by international aid professionals and bureaucrats as an effective plan for the developed nations to uplift the undeveloped; but from a socialist perspective, it is a fraudulent imposition by the rich and the affluent on the impoverished and the indebted. The United Nations’ objectives, especially those designed to eliminate extreme poverty—“poverty that kills”—are laudable: purification of water supplies, inoculation programs, literacy campaigns, etc. But the rub, as always, is in the politics and the fine print, where we can see the indelible marks of today’s international global buccaneers: “In a market-oriented economy, as long as individuals and businesses have the tools offered by infrastructure and human capital, the private sector can develop rapidly. Private sector-led growth in agriculture, industry and services will then generate jobs and incomes, which reduce poverty and future dependency on foreign aid.”11 The “then” referenced in this capitalist tenet of faith is that point in time which arrives with the creation of an infrastructure in a donee country. But at that delicious moment the poor will have been rendered ripe for picking and plunder by imperial multinationals and local elites.
To confront global capitalism effectively, socialists must also overcome the antipathy of the middle class, who, of necessity, work in the service of globalization with more adequate compensation than frontline workers, but who have a reactionary consciousness attributable to the corporate-dominated media, a manipulated electoral system, and, in the United States, a craven political opposition. What Engels said about middle-class attitudes in his 1845 tract, The Conditions of the Working Class in England, is true today: “They really believe that all human beings (themselves excluded) and indeed all living things and inanimate objects have a real existence only if they make money or help to make it.”12 Substantial numbers of elected officials, and the electorate that votes for them, exhibit a continuing hostility toward the poor generally, and toward immigrants, minorities, ex-prisoners, etc. in particular. There are today, as Engels noted about his time, “honorable exceptions” to the general rule; and though the middle class does not awake each morning planning to step on the necks of the poor, their apathy and indifference has the same practical effect.
Capitalism has never harbored any internal principles that by themselves require the payment of just wages or the elimination of the degrading social conditions in which most poor people live. Any benefits enjoyed by the marginalized, not to mention the middle class, are the results of external forces such as revolutions, the threat of revolution, strikes, the demands of mass movements, and so on. Though various types of social safety nets are scattered throughout the world’s countries, capitalism’s relentless pressure for increased profits through expansion inevitably coerces the system to act retrogressively relative to improving the lot of the majority. This is true in long-standing capitalistic economies, and it is true in the new global powerhouses of China and India, where wage disparities between capitalists and workers are pervasive, unions are often impotent, working conditions are unsafe, and new millionaire classes are developing, with a few billionaires thrown in for good measure. Two socialist critics have recently described the situation in China with words that apply to many places where international capital dominates:
with the purchasing power of the majority of rural people stagnating, with intensified exploitation and repression of industrial workers, and with the plunder of state assets by the new capitalist class and its Chinese Communist Party allies, the country’s household income inequality now exceeds that of India and Indonesia and rivals that of Brazil and South Africa.13
Wherever it reaches—and this means almost everywhere—capitalism spreads its tentacles into all dimensions of economic, political, community, and private life, thereby presenting to socialists and others committed to resistance multiple areas for struggle: environmental sustainability; peace; occupational safety; affordable and adequate health care for all; etc. But in the midst of these necessary confrontations, socialists must constantly press an uncompromising demand for an international guaranteed annual income, as the capitalist alternative is death and misery for the mass of humankind.
- ↩ Karl Marx, Capital, vol. 1 (London: Penguin Classics, 1990), 873.
- ↩ Marx, Capital, 915.
- ↩ <www.pulsemed.org>.
- ↩ Bertrand Russell, Proposed Roads to Freedom (New York: Blue Ribbon Books, 1918), 110.
- ↩ The Triple Revolution is available at www.educationanddemocracy.org/. For Robert Theobald’s discussion of the guaranteed annual income, see his An Alternative Future for America (Chicago: The Swallow Press, 1968) and Free Men and Free Markets (New York: Clarkson & Potter, 1963).
- ↩ Daniel P. Moynihan, The Politics of a Guaranteed Annual Income (New York: Random House, 1973), 11.
- ↩ A comprehensive resource concerning scholarship and action regarding the basic income guarantee is www.usbig.net.
- ↩ Robert J. van der Veen and Philippe van Parijs, “A Capitalist Road to Communism,” Theory and Society 15 (September 1986), 643.
- ↩ Immanuel Wallerstein, Utopistics (New York: The New Press, 1998), 1.
- ↩ Cass R. Sunstein, The Second Bill of Rights (New York: Basic Books, 2004), 243. This book also includes excerpts from treaties and national constitutions referencing rights to economic justice.
- ↩ www.unmillenniumproject.org.
- ↩ Friedrich Engels, The Condition of the Working Class in England (California: Stanford University Press, 1958), 311.
- ↩ Martin Hart-Landsberg and Paul Burkett, China and Socialism: Market Reforms and Class Struggle (New York: Monthly Review Press, 2005.), 111.
Also see the correspondence between Ken Collier and Stephan Fortunato Jr., “A Guaranteed Annual Income Will Not Work,” Monthly Review 59, no. 7 (December 2007):58-59.