In France, the United States and beyond, capitalism has justified itself by its achievement or at least its targeting of equality in general. This equality included the distribution of wealth and income, at least in theory and rhetoric. Yet from the start, all capitalisms have been grappling with contradictions between lip service to equality and inequality in their actual practices. Adam Smith worried about “the accumulation of stock” (wealth or “capital”) in some hands but not in others. Thomas Jefferson and Alexander Hamilton had different visions of the future of the independent United States in terms of whether or not it would guarantee equality of wealth, later dubbed “Jeffersonian democracy”. There was and still remains in the United States an awkward dissonance between theoretical and rhetorical commitments to equality and the realities of slavery and then systemic racist inequalities. Gender inequalities are also at odds with commitments to equality. It took centuries of capitalism to achieve even the purely formal political equality of universal suffrage.
So, it should come as no surprise that American capitalism – like most other capitalisms – causes a largely disturbing contradiction between the real wealth inequality it produces and deepens. Thomas piketty has definitely shown) and his commitment to equality on several occasions. Efforts to redistribute wealth – thus shifting from less equal to more equal distributions – follow. Yet they also worryingly divide the societies where the capitalist economic system prevails.
Redistributions of wealth take from those who have and give from those who do not. Those whose wealth is redistributed feel or resist this taking, while those who receive during redistributions of wealth develop logic to justify this reception. Each side of these redistributions often demonizes the other. Politics generally becomes the arena where demonizations and conflicts over redistribution occur. Those at risk of being deprived as a result of redistribution aim to either oppose or escape redistribution. If opposition is impossible or difficult, evasion is the chosen strategy. So, if capitalist profits are to be taxed to redistribute wealth to the poor, big business can escape by politically shifting the burden of taxation onto small or medium-sized businesses. Alternatively, all companies can unite to shift the burden of this redistributive taxation onto the wages and salaries of better paid employees, and away from corporate profits.
Recipients of redistributions face parallel political issues of who to target in order to contribute to the redistribution of wealth. Will the beneficiaries support a tax on all profits or rather a tax only on large companies with perhaps some redistribution from large to medium and small companies? Or could low-wage beneficiaries target high-wage workers for redistributive taxation?
All kinds of other redistributions between regions, races and genders display comparable strategic policy choices.
Conflicts over redistributions are therefore intrinsic to capitalism and always have been. They also reflect but also deepen social divisions. They can and often have become violent and socially disruptive. They can trigger system change requests. They can work as catalysts for revolutions. Because pre-capitalist economic systems like slavery and feudalism had fewer theoretical and rhetorical commitments to equality in general, they had fewer redistributive struggles. These eventually arose when inequalities became relatively more extreme than the levels of inequality that more frequently provoked redistributive struggles in capitalism.
No “solution” to the divisive struggles over the redistribution of wealth in capitalism has ever been found. Capitalisms continue to reproduce both theoretical and rhetorical calls for equality as self-celebrations alongside the realities of deep and growing wealth inequalities. Critics of capitalism on the basis of inequality of wealth drive the system everywhere. Divisive social conflicts over the unequal distribution of capitalism’s wealth persist. Endless efforts to find and implement an effective redistributive system or mechanism continue. The latter includes various universal basic income proposals.
To avoid a divisive social conflict over redistribution, the solution is not to distribute unequally in the first place. This can remove the cause and the momentum of redistributive struggles and thus the need for endless and hitherto unsuccessful efforts to find the “appropriate” formula or mechanism of redistribution. The way forward is to democratize the decision to distribute wealth as it emerges from production. This can be accomplished by democratizing the enterprise, by converting the workplaces of their current capitalist organization (i.e., Hierarchical divisions into employers – public or private – and employees) into worker cooperatives. In the latter case, each worker has one vote and all fundamental issues in the workplace are decided by majority after free and open debate. This is when different views on the distribution of production should be articulated and decided democratically.
No redistribution is required, necessary or induced. Members of the workplace are free to reopen, debate and re-decide on the initial distribution of wealth at any time. The same procedure would apply to workplace decisions about what to produce, what technology to deploy, and where to produce. All workers collectively and democratically decide on the wages that the collective of workers pays to each of them individually. They also decide how to eliminate or allocate any surplus, which is greater than the total individual payroll and the replacement of depleted inputs, that the business might generate.
A parable can illustrate the basic point. Imagine parents taking their twins – Mary and John – to a park with an ice cream vendor. The parents buy two ice creams and give them to Mary. John’s moans provoke a search for a proper redistribution of the ice cream. The parents take one of Mary’s ice creams and give it to John. Anger, resentment, bitterness, envy and rage plague the rest of the day and divide family members. If affection and emotional support are distributed and redistributed in the same way, it results in deep and conflicting scars. The lesson: we don’t need a “better” or “fair” redistribution; we must first distribute more equitably and democratically.
Richard D. Wolff
Independent Media Institute
This article was produced by Economy for all, a project of the Independent Media Institute.