I’m giving thanks this Thanksgiving for Thomas Piketty, the French economist and author of Capital in the Twenty-First Century, the much acclaimed tome on the subject of economic inequality. I acknowledge that giving over a portion of our national feast day to contemplate how the top ten percent of American wealth holders control 72 percent of the nation’s private capital (the top one percent control 35 percent) might make for unpleasant dinner conversation. But what better time to discuss our yawning wealth gap than when our charitable impulse beats strongest. As we are forced to dig a little deeper so that all may be fed, as we work a little harder to meet the demand for donated food that never shrinks, as we write yet another grant to support one more non-profit food program, the rich are reverently counting the steady accumulation of their financial blessings.
Consider a few simple facts. First, the rich get richer, generally through little effort of their own. As Mr. Piketty demonstrates with clear graphs that stretch back over 200 years, capital grows consistently at the rate of 4 to 5 percent annually. The bottom 50 percent of American wealth holders, by the way, control a paltry five percent of all private capital and benefit very little from their holdings.
The second fact is that we’re making little progress reducing domestic hunger and obesity. Blame whomever you want: the pack of guard dogs in the Republican Congress who defend financial privilege and the myth of “up-by-your-bootstraps” social progress, or the countless private and public food programs that feed people but do nothing to reduce poverty or inequality. Yes, there’s been a slight downward tick since the end of the Great Recession in food insecurity, now at 14 percent. Adult obesity owns 37 percent of all Americans. But remember, food insecurity in 2000 was 10 percent and adult obesity was 30 percent (it was at 13 percent in 1994).
These unfortunate numbers are largely due to the ever-growing pool of Americans who are needy and unable to find higher wage jobs. The earnings of nearly 100 million people are less than 185 percent of the national poverty level. This entitles almost one-third of the nation to some federal food programs such as SNAP, WIC, or school meals.
The depth of the escalating need for “free food” was revealed in a Feeding America survey of over 60,000 food pantry clients. The survey found that 54 percent of the respondents said they relied on food pantries as a regular source of their food, a situation that was never envisioned by the founders and managers of the nation’s emergency feeding network.
Recent mortality research by the 2015 Nobel Prize-winning economist, Angus Deaton, and his colleague, Anne Case, puts a tragic face on the declining fortunes of a growing class of Americans. They found a dramatic rise in death rates for middle-aged white U.S. males due largely to suicide, drug abuse, and physical pain. These growing rates were associated with low education and poor job prospects.
Hunger, bodies worn down before their time, self-abuse, ill health, and suicide are rife and rising in no-wage/low-wage America. But in the gated communities of Houston, Westchester County, and Silicon Valley, Ma and Pa sit comfortably at poolside deciding how many decimal points less than one percent of their wealth to dole out this season to their servants and favorite charities.
The hardcover edition of Capital in the Twenty-First Century is two inches thick and weighs more than a Thanksgiving meal with two helpings of pumpkin pie. After a year of dedicated reading, I notated nearly every one of the 577 pages of text and many of the 76 pages of footnotes (I’ve yet to pour over the online technical appendix that is also available). This labor of love was rendered largely painless by the Frenchman’s fluid prose (translation is courtesy of Arthur Goldhammer) and his consistent and successful efforts to render complicated economic subjects accessible to the educated lay reader.
Though the book’s physical density could stop a bullet on page 479, its importance in today’s economic climate makes it essential reading. This is why it was discouraging to hear my PhD son-in-law who works for a London financial trading firm tell me that he’d never have time to read a book like that. A recent New Yorker profile on Bernie Sanders quoted a close advisor to the Vermont Senator as saying, “I read a third of Piketty’s book. I don’t think Bernie would read a page of it.” My response is that sometimes you just got to bite the bullet and plow through books that explain how you’re getting screwed.
Here are a few of Mr. Piketty’s morsels to chew on this holiday season, morsels, by the way that were produced by some of the most comprehensive data gathering and number crunching in the annals of social science.
“When the rate of return on capital exceeds the rate of growth of output and income [as it does now] …capitalism automatically generates arbitrary and unsustainable inequalities.” No matter how smart and hard I work, those with large reserves of capital will continually pull ahead of me.
The top ten percent of U.S. income earners garnered 30 to 35 percent of all income in the 1970s. Today, they are taking down 45 to 50 percent of all income, a percentage that is probably higher since the growing use of tax havens makes it easier to conceal income. One reason for growing income inequality is the rise of so-called “super-managers,” primarily corporate CEOs and other high-ranking officers who receive out-sized compensation allegedly due to their out-sized skills, an assumption the Piketty does a good job of debunking. One thing that stands out about the rise of this richly rewarded class is that it started in the U.S. and remains much more common here than in Europe or elsewhere. And if there’s one thing that will scare the turkey stuffing out of you, it is that America’s income inequality is, “probably higher than in any other society at any time in the past, anywhere in the world.”
The consequences of income and wealth concentration are not limited to how many houses and yachts the one percent can buy. Keep in mind that just one percent of all adult Americans is 2.6 million people who can and do exercise a disproportionately large amount of social and political power. They and their elected representative keep taxes down, suppress the popular will’s urge to increase the minimum wage, and maintain a chokehold on the public purse.
One thing that Piketty makes clear, and which points the way to a reasonable solution (he likes to gently remind the reader that the size of inequality extant in the U.S. today has typically led to violent uprisings elsewhere in the past) is that the top “’1 percent’ who earn the most are not the same as the ‘1 percent’ who own the most.” The amount of private capital in this country is extraordinary, weighing in at four times the value of America’s annual gross domestic product of $14 trillion. That works out to about $56 trillion in private assets, a value that Capital persistently reminds us just keeps growing. To rein in this hungry monster – which is what must be done to reduce inequality – we need more than just a progressive income tax, and if you’re a low-wage worker, you need more than a significant increase in the minimum wage. We need, as Piketty makes abundantly clear, a tax on the capital itself, not just capital gains. The beauty of this approach is that a very small tax on capital, in the order of one percent of the assets held by the top ten percent, when applied to this monumental quantity of private wealth is capable of yielding about $400 billion annually for the public’s coffers. This isn’t even a financial haircut for the rich; think of it as not much more than a trimming of split ends.
Again, unless something of this order is done to curtail capital concentration, the gap will only grow. Yes, there are moments when major capital holders are caught in economic downturns, but ultimately capital accumulation, and the increase in the wealth gap, are like global warming: There will be some years that are colder than previous years, but ever hotter temperatures are a scientific certainty.
Why does this matter to those of us who toil in the world of food security and community food systems? Aren’t we just doing our bit to alleviate people’s suffering and to create alternatives to the industrial food system? Ultimately, I believe that most of us who do the myriad tasks that produce, distribute, and improve the quality of food want to win. For me, winning looks like substantially reducing food insecurity, diet-related illness, and the iron-grip of the industrial food system. Economic equality, progressive public spending, and a robust democracy will be required to win that game, but if the rules are determined by an elite who control an ever-expanding slice of the pie, we are bound to lose.
What I propose is this: First, Bernie, read the damn book (I’m sure Hillary has)! Reader, you should read it too, or at least some excerpts (the Introduction alone is immensely helpful). Make discussions of income and wealth inequality regular agenda items at your organization and faith community meetings. Consider what impact substantial new federal tax revenues and targeted expenditures would make in the lives of the people you serve (New York City Coalition Against Hunger’s Joel Berg has estimated we could end domestic hunger with additional annual expenditures of $40 to $50 billion). As candidates vie for political office over the coming year, force them to address the outrageous economic divide that threatens to sink our whole national ship. And over Thanksgiving dinner, as you break bread with family and friends and celebrate the equitable distribution of the harvest, take some time to talk about what this country might look like if we didn’t need food banks and soup kitchens anymore.
Just as Piketty says, “it is hard to imagine an economy and society that can continue functioning indefinitely with such extreme divergence between social groups,” it is hard for me to imagine a food movement functioning effectively without embracing the fight for far greater income and wealth equality.