Joe Hendren

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Tuesday, November 22, 2005

Income inequality and the dominance of corporations

In the latest edition of Focus on the Corporation, Russell Mokhiber and Robert Weissman collate some interesting facts demonstrating the inequality of the world, and how the gap between the rich and the poor is widening.

While they title their piece 'Economic Apartheid in America', many of the examples have a familar ring, perhaps demonstrating how US hegemony over the world economy has led to inequity becoming a significant (and unwelcome) export.

"Of the world's 100 largest economies, 47 are nations, and 53 are corporations. Seventy-five percent of major corporations hire a consultant to stop employees from forming a union."

"Top executives now make more in a day than the average worker makes in a year."
(I assume this is based on US figures)

The Washington monument is 555 feet tall. Imagine it signifies the 2003 average compensation for CEOs in the Fortune 500.
- Today the salary of the average worker would be only 16 inches tall
(a ratio of 419 to one)
- In 1965 the worker's monument was 13 feet six inches tall
(a ratio of 41 to one)

And in order to preempt the predictable defence that the wealthy deserve higher incomes because they 'work harder', Mokhiber and Weissman point out that forty-two percent of those listed on the Forbes 400 in the US, inherited sufficient wealth to make this list.

"J. Paul Getty Jr. inherited the oil fortune from his father. David Rockerfeller Sr ($2.5 billion) is the grandson of Standard Oil founder John D. Rockefeller....."

They also include a nice quote from the Constitution of the Knights of Labour. Dating from 1869, it is a nice way to demonstrate the similarities between the so called modern 'global' economy and that of the 19th century.
"The alarming development and aggressiveness of great capitalists and corporations, unless checked, will inevitably lead to the pauperization and hopeless degradation of the toiling masses. It is imperative, if we desire to enjoy the full blessings of life, that a check be placed upon unjust accumulations and the power for evil of aggravated wealth."
When modern so called free marketers like to associate their ideas with Adam Smith, the man who coined the term the 'invisible hand', it is worth noting that they often use Smith in a selective fashion. While Smith did not like governments (the bit right wingers love), he also hated what we now call corporations. Smith would have argued for the need to resist mergers and acquisitions and break up monopolistic firms like Microsoft or Telecom. Yet the call for stronger competition law is now more likely to come from the left, rather than the right.

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