Economic Inequality: It’s Far Worse Than You Think

[Illusions like the “American Dream” (and the “Myth of Post-Racial America”) are useful tools for capitalist rule:  “the United States is now the most unequal of all Western nations”….”At the core of the American Dream is the belief that anyone who works hard can move up economically regardless of his or her social circumstances”…..”Our unique brand of optimism prevents us from making any real changes.”  For a long time, and especially now (as the pace of re-proletarianization of the “middle class” and as the disposability and suppression of black and brown workers continues to accelerate), this optimistic illusion has been useful to the capitalist system — useful, in keeping the masses down, “making do”, or blaming themselves for their plight, while dreaming of social mobility, or buying a lottery ticket.  —  Frontlines ed.] 
The great divide between our beliefs, our ideals, and reality
In their 2011 paper, Michael Norton and Dan Ariely analyzed beliefs about wealth inequality. They asked more than 5,000 Americans to guess the percentage of wealth (i.e., savings, property, stocks, etc., minus debts) owned by each fifth of the population. Next, they asked people to construct their ideal distributions. Imagine a pizza of all the wealth in the United States. What percentage of that pizza belongs to the top 20% of Americans? How big of a slice does the bottom 40% have? In an ideal world, how much should they have?
The average American believes that the richest fifth own 59% of the wealth and that the bottom 40% own 9%. The reality is strikingly different. The top 20% of US households own more than 84% of the wealth, and the bottom 40% combine for a paltry 0.3%. The Walton family, for example, has more wealth than 42% of American families combined.

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Revealed – the capitalist network that runs the world

[An interesting study has detailed the organizational networks and concentrations of the world imperialist economic and financial systems of control.  Described in a recent issue of New Scientist magazine, it verifies the visceral sense of monstrous power of “the 1%” as the Occupy movement has dubbed it.  Although this article describes the study as “ideologically-free”, it actually portrays this concentration of power as a natural phenomenon and characteristic of “human nature” as well–as if the dominance of capital and the devastation it brings as collateral damage from the “expand or die” laws of capitalism is genetically, and not culturally, derived. Promoting such an assumption is capitalist ideology at its core. — Frontlines ed.]
24 October 2011
by Andy Coghlan and Debora MacKenzieNew Scientist Magazine issue 2835.
The 1318 transnational corporations that form the core of the economy. Superconnected companies are red, very connected companies are yellow. The size of the dot represents revenue

The 1318 transnational corporations that form the core of the economy. Superconnected companies are red, very connected companies are yellow. The size of the dot represents revenue

AS PROTESTS against financial power sweep the world this week, science may have confirmed the protesters’ worst fears. An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.

The study’s assumptions have attracted some criticism, but complex systems analysts contacted by New Scientist say it is a unique effort to untangle control in the global economy. Pushing the analysis further, they say, could help to identify ways of making global capitalism more stable.

The idea that a few bankers control a large chunk of the global economy might not seem like news to New York’s Occupy Wall Street movement and protesters elsewhere (see photo). But the study, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich, is the first to go beyond ideology to empirically identify such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world’s transnational corporations (TNCs).

“Reality is so complex, we must move away from dogma, whether it’s conspiracy theories or free-market,” says James Glattfelder. “Our analysis is reality-based.”

Previous studies have found that a few TNCs own large chunks of the world’s economy, but they included only a limited number of companies and omitted indirect ownerships, so could not say how this affected the global economy – whether it made it more or less stable, for instance. Continue reading