Weekend Economists Rise Again August 10-12, 2012

[Demeter]

3. Drifting Away From Our Ideals By Gar Alperovitz, The Democracy Collaborative | Book Excerpt

http://truth-out.org/opinion/item/10786-drifting-away-from-our-ideals

This excerpt from Chapter One of "America Beyond Capitalism" is Part Five of our continuing exclusive series of installments from Gar Alperovitz's visionary book, first published in 2005, whose time has come.

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We often forget that it was once simply assumed the United States would move inevitably in the direction of ever greater equality. A 1963 American Economic Review article observed that "most recent studies" of U.S. economic history take for granted that "since the end of the depression the nation's wealth has been redistributed and prosperity has been extended to the vast majority." A respected group of researchers declared, "The United States has arrived at the point where poverty could be abolished easily and simply by a stroke of the pen." The title of an important book by the liberal economist John Kenneth Galbraith proclaimed the "Affluent Society."

Such assumptions now appear strange, indeed, unreal. Statistical studies show growing, not diminishing, inequality. Writers like Galbraith have been forced to a radical reassessment: "Alas, I am not nearly as optimistic now as then.... [T]hose who dismiss the pro-affluent movement of these past years as a temporary departure from some socially concerned norm are quite wrong."

Compensation of the ten most highly paid CEOs averaged $3.5 million a year in 1981. By 1988 it had jumped to $19.3 million. By 2000 it was $154 million—an increase over this period of 4,300 percent.

In 1948 Nobel laureate Paul Samuelson had attempted to illustrate the extent of inequality in his popular economics textbook with the following example: "If we made ... an income pyramid out of a child's play blocks with each layer portraying $1,000 of income, the peak would be far higher than the Eiffel Tower, but almost all of us would be within a yard of the ground."

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