NEW YORK--Everyone talks about income inequality but no one does anything about it.
"The United States is the rich country with the most skewed income distribution," Eduardo Porter asserts in his upcoming book The Price of Everything: Solving the Mystery of Why We Pay What We Do.
Porter continues: "According to the Organization for Economic Cooperation and Development, the average earnings of the richest 10 percent of Americans are 16 times those for the 10 percent at the bottom of the pile. That compares with a multiple of eight in Britain and five in Sweden. Not coincidentally, Americans are less economically mobile than people in other developed countries. There is a 42 percent chance that the son of an American man in the bottom fifth of the income distribution will be stuck in the same economic slot. The equivalent odds for a British man are 30 percent, and 25 percent for a Swede."
According to Nicholas Kristof, also at The New York Times, we live in a time of "polarizing inequality" during which "the wealthiest 1 percent of Americans possess a greater collective net worth than the bottom 90 percent."
Cornell economics professor Robert Frank notes the correlation between financial stress and social dislocation. He argues that quality of life is suffering due to income inequality.
Citing the work of the British epidemiologists Richard Wilkinson and Kate Pickett, Kristof blames just about every societal ill on income inequality. Among the highlights: infant mortality, drug abuse, teen pregnancies, heart disease, even higher obesity among people who don't eat more than others.
Porter notes that the income gap is increasing across the spectrum. One study shows that in the 1970s the top 10 percent of corporate executives earned twice as much as the average exec. Now they get four times more.
So what is to be done? Here the income-inequality-is-bad crew falls flat.
Kristof's prescription: "As we debate national policy in 2011 ... let's push to reduce the stunning levels of inequality in America."
Porter's solution: "Bankers' pay could be structured to discourage wanton risk taking." But bankers aren't the only culprits. How would this restructuring take place? Who would force bankers to accept it? Frank's answer: "We should just agree that it's a bad thing--and try to do something about it."
But these guys are all smart. They know what is causing this relentless increase in income inequality. Ruling elites have exploited globalization and technological advances to increase profits through deregulation, union busting and lobbying for subsidies and tax benefits. We're witnessing exactly what Karl Marx predicted at the dawn of industrialization: capitalism's natural tendency to aggregate wealth and power in the hands of fewer people and entities, culminating in monopolization so complete that the system finally collapses due to lack of consumer spending.
Nothing short of revolution stands a chance of building a fair society. If working within the Democratic Party and the election of President Barack Obama prove anything, it's that reform within the system is no longer a viable strategy for progressives.
The sooner we start talking about revolution, the closer we'll be to a non-BS solution to the ills caused by inequality of income.