In Tucker County for centuries there grew a white oak. Its girth reached whatever in feet it takes to encompass a diameter of 13 feet. In 1913 this miracle of nature, more wonderful than a cathedral or a trade tower, was felled by lean mountaineers with axes and crosscut saws. The tree produced enough lumber to fill a train. The oak lumber left the state and became the floors and doors of some palatial residence far away from Tucker County. Those lean mountaineers received for their labor only enough wages to keep their skinny bodies alive. And all this state had left of the tree was the stump and brush piles and the absence of a forest giant that would take half a millennium to replace. The profits left the state with the lumber.
And the story is similar for coal and coal miners, except that after years of unconscionable exploitation of miners by northern capitalists, miners organized a union; and with John L. Lewis’ leadership and FDR’s blessing, the union forced capital to pay a decent wage and generally give miners benefits that decency demanded.
But capitalists had the last word. They took labor’s value that they expropriated—that is, that value created by laborers that should have gone to them but that capitalists pocketed— and bought machinery with that surplus profit. The upshot was that the value labor was denied bought the machines that superannuated labor and reduced labor’s ranks from 125,000 miners to 12,000 miners who, with machines titled to capitalists, produce as much coal as the 125,000.
The fate of miners has become the fate of many employees. Except that instead of mechanizing their production some capitalists have outsourced their production; that is, they have set up assembly lines in far off places to produce products at a fraction of what the cost would have been had the work remained here and labor had been paid going wages. The result of mechanization and outsourcing is that this nation is creating great wealth but that wealth is accruing in the hands and accounts of fewer and fewer while the many have fewer jobs and less money to purchase all the products that mechanization and outsourcing are producing. Soon the credit-card economy’s bubble will burst; and then with the majority in bankruptcy and the minority wealthy as Croesus, class warfare will begin in earnest.
Not content with the profits of mechanization and outsourcing, capitalists have hired lobbyists to induce politicians to exempt all income but wages and salaries from taxation. This means that dividends, interest, and capital gains will be tax free. Only salaries and wages will be taxed. In addition, they have lobbied enough conservatives to pass a bill exempting estates from taxes, the result of which is that the rich will gain most of their wealth from tax-free dividends, interest and capital gains and die richer than rich and leave their wealth to their heirs untaxed. And the next generation of wealthy will do likewise ad infinitum.
The culmination of this exploitation of labor, outsourcing of jobs, taxing only wages and salaries is that the rich get richer and the poor get poorer and worse the middle class falls into the poor class; and when the foregoing happens history tells us there will be no civil peace only class warfare and perpetual chaos followed by martial law and eventually a coup d’etat and military dictatorship. Then Jefferson’s high hopes for this nation will dissolve into a banana republic.
When most consumer goods are produced by the labor of robots and machines titled to capitalists and other work is outsourced to cheap labor; when only wages and salaries are taxed and most of the rich’s income is untaxed and passed at death to heirs untaxed; when the divide between rich and poor widens with each generation, and when capital becomes more and more concentrated in the hands of a few wealthy and the numbers of proletarians increase, who is going to buy the plethora of goods and with what? How can social stability be maintained under such an inequitable economic system? And how can one born poor expect to die other than poor?
Robert Kuttner in The America Prospect proposes: Leave the market unbridled and allow all the wealth to concentrate. Then the wealthy can reshape American into a neo-Victorian Britain with a multitude of Upstairs-Downstairs socio-economic arrangements in which the capitalists reside Upstairs in leisure amid splendor and the cooks, butlers, nannies, chauffeurs and a legions of other servants work Downstairs for those Upstairs at minimum wage.
Alternately, he proposes: Tax private wealth progressively and use the money for social investment to create jobs that would serve the public’s good rather than serve just Upstairs inhabitants—such jobs as teachers, health-care workers, social workers, etc.—and use the power of government regulations and trade unionism to ensure that Wal-Marts, fast-food joints, hotels and nursing homes pay a living wage. That is, tax the few rich and spend, invest, redistribute, and regulate for their benefit and the benefit of the rest of this nation’s family.
Corporate capitalism has no conscience and knows no country. Exploitation and expropriation are its means. Cheap labor is its game. Nature’s capital and her resources are for its pillage and plunder. It creates wealth that concentrates and corrupts. It will inevitably lead to class distinctions and thus to class warfare. And it will exhaust the earth’s resources, create a universal Wal-Mart, and leave a few castled billionaires and other millions in a state of serfdom —if left to its own devices.