08/07/2013 02:15 pm ET | Updated Oct 07, 2013

What Does Equality Mean?

The Occupy movements performed a patriotic service in putting equality on the agenda. Americans tend to take this issue more or less for granted. We cite that snippet from the Declaration of Independence at will, that we're all created equal, feeling elevated to high moral ground through God's blessing. Of course we're not really created or treated equal, and it takes moments like the present, when inequality is increasing, to question what equality means.

In practice it seems to mean we want the opportunity to be more equal than our neighbors, believing that if we can freely pass them we will fulfill the divine mandate. We don't want an equality of result where government forces everyone to be nearly the same since this would violate our competitive, individualistic culture. We feel we can fend for ourselves just fine as long as institutions freely function.

In striving to be our best in the workaday struggle to succeed, however, we can become blind to how institutions and spheres of influence make freely-acting individuals unequal.

It's unfortunate that the discussion about how to reduce inequality rarely gets to the source of the problem. We can supposedly do it through education, training select citizens to upgrade their skills so they can compete in the increasingly competitive global market; increasing the minimum wage, or providing a living wage, etc. But if the same reward scheme and occupational ladder remain, individuals will merely replace each other. One's gain will be another's loss. And their actions will have a limited impact on the larger game without help from other bodies, like what a union or collective ownership can provide.

This push to educate everyone exposes the limits of our democracy since the glut of well-educated will become unemployed, or seriously under-employed. To ward off social chaos there must be barriers to universal education.

As long as employers have the power to pay low wages and keep a disproportionately large share of the value from work, inequality won't be reduced. But this issue is not even on the agenda. We don't think in these terms. The gap between haves and have-nots has been widening for so long that we accept it as normal. It's part of our culture. Policies in place over the past thirty-five years or so have mostly reversed the post-WWII policies for expanding the middle class and eliminating poverty through deficit spending and progressive taxation. Where the top 1% owned only around 17% of the wealth in the mid-70s, reflecting the impact of the leveling policies from the previous 30 years, today they own nearly 80%.

It will take the election of many new representatives or a significant increase in citizen power to build a new foundation where different institutions can reverse these trends.

Victims feel helpless in the face of these changes. Stewing in the same pot for so long with many like themselves, they're driven to escape at all costs and improve their situations, make up for past losses, no matter how sympathetic they are with the idea of equality.

Those opposing policies to reduce inequality have an edge in this cultural climate. They point to the very high taxes the European "welfare states" pay, for example, particularly the Scandinavian ones, to make their case, and get mileage from their claims because few victims can imagine what the results of those taxes might be. The relative tax burden has been shifted onto their shoulders since the Reagan revamp of the tax code in the early 80s, but simultaneous with a decline of wages during the same time, making it ever more difficult to pay the taxes.

Since serious efforts to understand the problem of inequality are not on the agenda, the issue is easily distorted. As soon as politicians or the media mention unfairness, especially the need to raise wages and increase the assets and resources of those who've fallen below the poverty level, they're charged with fomenting "class warfare." And this usually prefaces a rant about socialism. Absent is a discussion of the "class warfare" that created the conditions requiring these raises and increases in the first place.

Rants about socialism substitute for this absent discussion. Its mere mention conjures evil and allows the user to capitalize on people's fears and irrationalities. Claims that we already have it--the proof is in the mere mention of Obama's "big government"--allow politicians to conflate improving the plight of workers and the middle class with the arrival of big brother. And this muddles the differences between social democracy and socialism.

There's no question that many are down on socialism, or most any other "foreign" ism. But few can have a grasp of what it is. They must be driven by a media-stoked fear of the unknown since the alignment of power in this country now is far from socialistic. Socialism involves the partnering of business, government and labor in a relationship that's shaped by the belief that all citizens should share in the productive fruits of the whole. With our increasing inequality and exclusion of labor from the bargaining table, those who claim we are in the throes of socialism or on the way toward it must be living in a fantasy state, like that gentleman a while back at a Tea Party rally who urged the government to stay out of his Medicare!

The socialism controlled by baggy suits and bloated bureaucracies barely exists now. North Korea, more aptly labeled a fascist dictatorship, is perhaps the only holdout. Effective mid-January 2013 Cuban citizens were allowed to leave their country for long stretches. The country has already begun to experiment with market principles and appears headed in the same direction as China and other Southeast Asian countries that long ago married capitalism to something resembling socialism. All those evil regimes the right feels are bad models ready to export their disease here to willing importers might collapse from within.

The anti-socialism pundits, vague about the targets of their discontent anyway, seem to be obsessed with a nonexistent threat. This is a fair definition of paranoia, but they know more about socialism than they're letting on. Though socialism has no foundation here, playing the socialism card, claiming it is everywhere, is an effective way to silence critics, and it helps screen attention from a very real threat to them: the creeping rise in wages back to the levels of the 70s when there was a solid middle class.

CEOs know that once wages begin to increase they might spiral upward and people will like it; even come to expect it. They must demonize socialism, and even social democracy, because if people better understand these alternatives they might better grasp how capitalism works and sympathize with a more humane alternative. These ideas persist because they propose to correct some of capitalism's flaws with respect to inequality, and can help explain the smoke-and-mirrors that allocate wages and money. Above all they might offer a way forward that manages the relationship between public and private more equally.

Perhaps the CEO's real fear is that they will no longer be able to amass fortunes at the expense of others.

The right's reactions to Obama's victory are telling. Bill O'Reilly said that the real victors were those who want more stuff from the government, who believe they're entitled. Which means in effect they're guaranteed something they don't deserve, that's not theirs, and that's filtered down from the welfare dispensary, i.e. the government, which stole it from the job and wealth creators, the losers in the election. The former must be in Romney's 47%. Those who voted for Obama, the socialist who believes in filter-down big government, simply don't want to work. Legitimate work, which leads to authentic wealth-creation, comes with no help from government or outsiders. It is performed by large corporations that supposedly do it themselves. If they get a little help from their friends, however, mum's the word. They may not need more stuff, but they certainly seem to be grabbing an awful lot of it!

Their creation of wealth suffers, however, when they can't take advantage of cheap labor. They might even have to work more and get help, become dependent on an outside source. Shrinking wealth may even suggest that someone stopped working as hard as they apparently were.

But there's entitlement embedded in the lives of those at the top as well. They work and network to get a system that returns infinite payouts. They lobby for tax laws that dispense permanent and unquestioned largesse. Oil companies and agribusinesses who buy candidates expect subsidies and transfers. And the work that justifies this sort of entitlement has a higher value than the low-wage work that needs government support due to the very unlevel playing fields formed over a long period of time. Through a mostly invisible shell game, this work uses the work of others and resources from the treasury to get more value, allowing its owners to collect more stuff. To stake out a difference from the republicans and get control of the agenda in going forward, Obama and the democrats will need to expose how this shell game works, explain it to the people and sway the opposition. What is the power that assigns value to work? How are wages set so low for some? Who defines what welfare is?

Value gets buried in the power of market forces which give the impression of being an arbitrary referee between employers and potential employees. Those with something to offer meet up with those who need something, and in the give and take some win and some lose. It suggests efficiency and fairness. But while anyone in theory can have a shot at participating in a market as producer or consumer, there's no such thing as a market that is free in its structure and effects. Those who own more have more control over outcomes. Large employers have had more control for a long time, and not because of some "free" movement of market forces.

Corporate-funded government has helped keep the minimum wage low, refused to enforce antitrust laws that could keep the playing fields more level, prevented a union movement from spreading to ever more sectors of the labor force, enhanced free trade agreements that give inordinate advantages to business over labor, made the tax code ever more advantageous for those in the top tiers, etc. The result is an entrenched cronyism that allows those with the biggest stick and bankroll the opportunity to be more effective players.

These players are winning the game, and have the ability to define the losers as lazy, dependent, and mostly into getting "welfare." They ignore the fact that the big corporations either won't hire people, despite their stockpile of cash, or keep reducing wages, taking away value, so that government support is the only way for these victims to survive in this transition to a healthier economy. But they are getting away with it, thanks to the power of pundits like Bill O'Reilly and Rush Limbaugh who pass on the toxic mental bondage that helps to keep the victims of our monstrous downturn in physical bondage.

Can Obama and the Democrats set a process in motion that breaks this mental bondage and capture the narrative for change? If they are to successfully battle this power and appreciably reverse inequality, they will first have to admit the problem exists. Then they will have to shift the debates and bust through the austerity and "entitlement" illusions to focus on the reconstruction of the economy and jobs through growth. The expansion of the economy will stream more tax revenue into treasuries and eventually reduce the deficits. Above all they need to reverse the mythology that lower wages are somehow crucial for a healthy economy!

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