$400,000 ≠ $20,000

What happens to class conflict in the fight against inequality?

Economic inequality in the spotlight during a 2011 Occupy Wall Street rally.
Economic inequality in the spotlight during a 2011 Occupy Wall Street rally.
Image: REUTERS/Jessica Rinaldi
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The numbers of wealth inequality in 2020 are striking: 2,153 billionaires have more wealth than 4.6 billion people, which means there is more wealth in the hands of 0.00003% of the world population than in 60% of it. In the US, where the highest number of billionaires live, the disparity between the ultra rich and everyone else is at a five-decade high: The richer 0.1% earn almost 200 times as much as the remaining 90%.

Since the 2008 recession and, shortly after, the inequality protests of Occupy Wall Street, the idea that the world—and chiefly, America—has an inequality problem has gotten into the mainstream, and become a key programmatic point of progressives.

A wealth tax has widespread support amongst Americans of various political leanings; meanwhile, conservatives decry it as an attempt to have the US capitulate to socialism.

But who is the fight against inequality and for income redistribution going to benefit? According to the Economic Policy Institute, as of 2018 the threshold to qualify to the 1% was about $421,000 a year. This means that someone making $400,000 a year and someone making $20,000 a year both belong to the 99%, while surely their lives and struggles are not alike.

Is it fair to group together all these income brackets, or is the fight of everyone against the ultra-rich helping the elite (albeit not quite as elite as the 1%), washing their conscience from their own privilege?

The limits of a social-democratic approach

Bertell Ollman, a professor of political science and a leading expert in Marxism (as well as the creator of the internationally syndicated board game, Class Struggle), told Quartz the current debate over inequality isn’t too far from Karl Marx’s representation of capitalist society: On top, says Ollman, are the capitalists—a small group of people who are interested in maximizing profit at all cost; below them is everyone else, whose work is exploited for the capitalists’ profits. Although it might look different in terms of social status, and income, the position of professionals and that of factory workers, for instance, isn’t intrinsically different.

“Whether it’s the 99%—or maybe the 95%—the middle class is still workers,” says Ollman.

This doesn’t mean that the current debate on inequality—largely driven by individuals and politicians who themselves belong to an elite, either cultural, or economical, or both—is addressing everyone’s concerns and needs equally. “People calling themselves social-democrats are focused on making it easier for the mass of comfortable workers,” says Ollman, pointing to the reforms social-democrats have carried forward in Europe.

But Ollman says the European experiments, where some mitigations of capitalism were brought in in the form of the welfare state and regulations, show precisely the limits of maintaining a capitalistic framework while trying to make its reality more palatable to the middle class (as opposed to the working class). “Insofar as [social-democrats] don’t do away with capitalism, it’s going to turn around and bite them in the butt,” says Ollman. So long as the system isn’t changed, he explains, reform can always be undone as soon as there is a government aligned with the interests of wealth.

This also ends up alienating workers, who see only incremental progress, and don’t get necessarily captivated by social-democratic political forces. Better welfare structures are important progress, but “most workers are still doing something that is long, hard, dirty, and insecure,” says Ollman, “and that is what they think of, first and foremost.” This explains why those who would benefit from redistribution are often less engaged in the fight for it.

Middle class and workers—unite?

Michael Thompson, a professor of political science at William Paterson University, also sees merit in the framing of everyone against the ultra-rich, while sharing Ollman’s cautiousness. “The [idea of] 99% versus 1% is significant for one level of analysis,” he told Quartz, “since it’s the traditional middle class that is falling apart.”

Thompson says that the current debate on inequality is focused on re-establishing access to the kind of welfare programs that, with Franklin D. Roosevelt and after World War II, all but artificially created a middle class, and that lumping together people of different income (especially when they may have high earnings, but not a lot of accumulated wealth) with the aim of gathering momentum against inequality makes sense from a historical point of view.

While in northern European countries, for instance, redistribution of wealth has happened by way of solidarity between the rich, middle class, and poor—who all saw advantages in a more equal society—things were very different in the UK or US, where actions that went against the accumulation of wealth were actively opposed by some social groups and parties.

Thompson, however, points to something else: While for the purpose of wealth distribution it may make sense for the 99% to rally together, focusing simply on the broader issue of the few who are holding onto wealth risks diminishing the complexity of class relationships at the micro level. “There are daily micro-inequalities that get glossed over by the broader conversation on inequality,” he says. “We are so obsessed with numbers that measure distribution that we ignore the new inequalities that are emerging.”

The urban 20%, for instance, who is more likely to be attuned to the inequality conversation, is in a position of power over the rest of the country—even when it doesn’t belong to the ultra-rich. Within cities, too, Thompson sees what he calls “the expansion of the servant society,” or the growth of people who lend their time and work for temporary services—such as driving for ride-sharing companies, or delivering food.

This risks derailing the fight against the ultra rich, Ollman says—because it recreates capitalistic, exploitative dynamics within workers. Those who are aware of the issue of inequality, then, as well as the more exploited workers who don’t have the luxury to engage in big political conversations, end up gravitating back toward isolation—they no longer identify as the 99%, but rather as parts of different subclasses. “People end up defending what they have, not reaching out for solidarity,” says Ollman. “This plays in the hands of the [capitalist] system, maintaining and enabling inequality.”