From a silent residential street, dominated by tall ginkgo trees, D.C.’s busy 14th Street NW is just a few steps. And yet, when you turn the corner, it feels like you’ve stepped into a different city. The change is immediate; the street is full of bars, restaurants, and shops, the sidewalks crowded by fast walking young and slim people. At certain hours of the day, most of them are wearing tights or shorts and carrying rolled yoga mats over their shoulders. A young army of people with jobs, practicing yoga and gripping their smartphones. The future.
Just a few blocks further up, on U Street, which runs west, life stops. For a couple of blocks, this area is populated by nail shops and beauty parlors lined up one after another. They’re shabby and unattended, seemingly abandoned. It’s a small area in the heart of D.C.; in the language of political correctness, one would vaguely call it an ethnic enclave. But it’s not gentrified, and it’s unemployed.
This juxtaposing images of social inequality can be seen across America. New York is full of them, even if, because of the density of the population, the contrast may be less apparent. But if you look closely at the rich Hampton’s, on Long Island, the difference is immense. All the big and small villas are attended to by the gardeners and maintenance workers who clean and do whatever is needed on the properties of the well-off, rich, and wealthy white people. They are well-equipped, they are efficient, they come to the houses and gardens and swimming pools and transform them to immaculate in a matter of minutes. They swing in, do their job with a lot of noise, and then they disappear using the side roads. I always felt that there was a certain amount of polite hatred between the two social strata in the Hamptons, a tension that is increasing parallel to the growth of the inequality gap.
It was there, in the Hamptons, that I first sensed that the situation was unsustainable and potentially explosive. Was it because I am not used to being in this kind of situation, where the division of social inequality is huge not only on the level of income but also in lifestyle, or the measurable factors of quality of life? “The Pitchforks Are Coming…”, an open letter that Nick Hanauer wrote in 2014 to his fellows’ plutocrats, depicts the situation well:
At the same time that people like you and me are thriving beyond the dreams of any plutocrats in history, the rest of the country—the 99.99 percent—is lagging far behind. The divide between the haves and have-nots is getting worse fast. In 1980, the top 1 percent controlled about 8 percent of U.S. national income. The bottom 50 percent shared about 18 percent. Today the top 1 percent share about 20 percent; the bottom 50 percent, just 12 percent.
But the problem isn’t that we have inequality. Some inequality is intrinsic to any high-functioning capitalist economy. The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.
Nick Hanauer is rich, immensely rich. He’d have little to worry about if the possibility of violence arising from prevalent inequality wasn’t so alarming. His awareness that no society can sustain this kind of rising inequality is perhaps self-interested, but more importantly, it’s correct. “There is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when ” he wrote. Hanauer warns the richest of the rich, requesting to raise taxes on the rich and pay the workers better, much better: “If workers have more money, businesses have more customers. Which makes middle-class consumers, not rich business people like us, the true job creators. Which means a thriving middle class is the source of American prosperity, not a consequence of it. The middle class creates us rich people, not the other way around.”
Two years after Hanauer wrote the pitchfork letter, Branko Milanović published The Global Inequality, a book that brought to light a chart that summarised household surveys across the world. Because of its shape, the chart is called an elephant chart; it includes the population from the poorest 10 percent to the richest one percent in 1988 and again in 2008. The chart showed the growth in income between these two years, an era of “high globalization,” from the fall of the Berlin Wall to the fall of Lehman Brothers.
The period in which Chinese and other large groups in Asia were not wealthy has seen a massive shift; compared to Americans, they have done very well. The chart also showed that lower and middle-class Americans, and Japanese and Germans, have not done well. Early this year, in an interview for a Slovenian newspaper, Milanović explains:
Large groups of people in the West lost the illusions about globalization. Their delusion is not an impression; it’s a fact supported by research and data. The support for globalization in China, India, Indonesia, Vietnam to this day reaches 80 to 90 percent, while on the other side, in Europe and especially in France, does not go beyond 15 percent. The disappointment is evident, and our research indicates that the people who voted Trump and Brexit are less educated, are coming from the rural areas and belong to the lower social strata and the older generation. These are the people that were left aside by globalization and represent the bottom of the elephant chart. The chart shows the fundamental dilemma of this people: on the world scale they look good – 85 percent of the individuals in the world have lower income than they – and yet they feel that increasing Asian competition has taken away their jobs. At the same time, the upper one percent in their own countries pushes them aside.
According to the Oxfam report from Davos, the gap between the richest and the poor seems to be growing exponentially. In the data presented by the movement, the eight richest men in the world now own the same wealth as the 3.6 billion people who make up the poorest half of humanity.
The alarming data forced Nick Hanauer to write a second letter to his tribe of plutocrats:
My ideas about the effect of inequality on social instability align with the work of social scientist Peter Turchin. He and his collaborators use mathematical models to study the rise and fall of societies—an analysis that postulates a new American civil war arriving as soon as 2021 (and in a highly-armed nation already suffering from an epidemic of gun violence, he doesn’t mean “civil war” metaphorically). For the first time in history, polls show that most Democrats and Republicans identify Americans from the opposing party as the biggest threat to our country. So yes—if you have a deep sense that something is very wrong with our nation, you are almost certainly correct.
America now has a movement of Patriotic Millionaires, a club that counts over 200 millionaires. But their impact is dubious and will remain such unless they start seriously lobbying in the Congress. Their slogan “tax us please” did not affect at all on this administration.
Pessimism is growing, and the symptoms of potential social conflicts are multiplying in the Trump era. The blackest forecast for the solution of the problem came from the book “The Great Leveler” by Walter Scheidel. The brief review, published by The New York Times, indicates no hope: “From the Stone Age to the present, ever since humankind produced a surplus to hoard, economic development has almost always led to greater inequality. There is one big thing with the power to stop this dynamic, but it’s not pretty: violence. The big equalizing moments in history may not have always had the same cause, he writes, “but they shared one common root: massive and violent disruptions of the established order.”
Among the other symptoms America–and with it the global world–faces is also the exponential growth of high-tech companies like Amazon and Apple. They show how much the sector is disconnected from the sluggish development of the rest of Main Street, one notable strategist said in a report titled “Occupy Silicon Valley.” As Finance.yahoo reported the tech stock rally “could ultimately lead to populist calls for redistribution of the increasingly concentrated wealth of Silicon Valley.” The story’s title draws parallels to the 2011 “Occupy Wall Street” protest against the wealth of the largest U.S. financial institutions which arose out of the financial crisis. The sheer size of the tech sector already tops the gross domestic product of several U.S. metropolitan areas. Amazon’s market value surpasses the GDP of Washington, D.C., Hartnett pointed out.
The list of the problems is long. They are not every day, easily resolved problems. They touch upon the structure and model of the contemporary, postmodern, postindustrial society and can not be fixed with mere populism. To save the human race from perishing, to save this planet and continue to enjoy not the God’s but our own lives, we need to reflect. We need leadership that is aware of the edge of catastrophe, to which greed has driven us. Perhaps among all the problems, this is the toughest one to resolve. There is a lot of mediocrity and minimal talent among the people who are leading and mismanaging our societies. So when a middle-aged Hispanic woman is driving a white-haired white woman down Fifth Avenue, with “Elect Trump” and anti-immigration stickers decorating the bumper, I wonder how long that woman will be able to keep driving, silent. Another year or two? Or only another block?