When Capitalism and Citizenship Collide

Lately I’ve been hearing more references to an old argument: That our present (and growing) income inequality is ok as long as everyone’s life is improving a bit. This is an old conservative saw and one which I find particularly miserly. It’s as though the invention and seeming ubiquitousness of computers made it acceptable for a tiny sliver of the population to take all the rest of the new wealth created since 1970. How is such a position morally defensible? Obviously, a free society with a free market will have some variation in income and wealth levels. That’s a natural outcome of a dynamic system. But a system with the kind of drastic and increasing inequality we see now cannot be healthy.

Nor, I fear, can it last. Our current political economic system is already undermining equality of citizenship. If this continues, at some point the inequalities of wealth will overwhelm our system of government. That’s one of my concerns here. The logic of capitalism, taken alone, has no problem with growing wealth inequality. As long as the market keeps humming along (and it is regaining momentum even now), it’s not really significant who it is that has and spends the money. The market, in theory, will just keep responding to supply and demand.

But the logic of democratic citizenship demands some level of equality. Most fundamental is equality before the law – things like an equal say in government; a trial before one’s peers; rights of property, speech, assembly, religion, etc. But we are also a government founded on the ideal of equal opportunity, that all enjoy the inalienable right to the “pursuit of happiness.” The logic of modern capitalism, of naked pursuit of self-interest, exists in tension with the communal aspects of the logic of citizenship. At some point, that tension becomes outright opposition. When it does so, one must constrain the other or both collapse together. I worry that we’re getting much closer to that conflict igniting around us. Then the time will be over for leaders to pursue whichever course suits their short-term goals. Wise leaders must decide to which system their true loyalties lie.


Several weeks ago I ran across this statement by Henry George that aptly sums up my concerns. Writing more than a century ago, he had this to say:

“When, under institutions that proclaim equality, masses of men, whose ambitions and tastes are aroused only to be crucified, find it a hard, bitter, degrading struggle even to live, is it to be expected that the sight of other men rolling in their millions will not excite discontent? … The political equality from which we can not recede, and the social inequality to which we are tending, can not peacefully coexist.”

Henry George, “The Kearney Agitation in California,” Popular Science Monthly (Aug 1880), 452-453.

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