Why not start with the history of the emerging problem, and the scope of the problem then and now?
After the end of WWII -- coming out of the "Best Years of our Lives" recession -- income and wealth distribution was more even in the US than at any time earlier in our history.
Roosevelt had made a bargain with corporatists. They had the war debt to pay off; Social Security and other reforms had changed the game for the 98%. Labor unions were in an ascendancy. The economic data from those years show that the 98% had sufficient income to save enough before they bought durable goods like cars and washing machines outright. There were no credit cards.
Eventually, corporations began to find loopholes in the regulatory framework which sustained the incomes or decent wages. As that happened, the time-series shows real wages stagnating, while corporate profits took off into the stratosphere.
During the 50's, marginal tax rates for the 2%-ers were close to 90% -- not their overall average tax rate, but the marginal rate applied to the last dollar earned, or the uppermost bracket.
But that has all changed. In the 50's, CEOs "gave themselves" an income package that wasn't more than 20 times the average corporate employee. Now it exceeds 400 times. CEO compensation has increased 1,000%. Meanwhile, real wages have stagnated for other salaried employees -- most of the 98%, or a good part of it. [The recent study by Bloomberg is only one of many.] The Gini Index of wealth distribution is most uneven in Mexico -- Carlos Slim only one example when Jesse Ventura boasts of working for the richest man in Mexico (or perhaps -- the world?) The country that ranks only second to Mexico?
United States of America.
All during the Cold War, both "experts" and politicians told us that countries with such wide disparities in wealth and income were the hot points of world instability, most susceptible to communist insurgencies.
Now we add to this the fact that during the 1950s, multi-national corporations were only then coming into their own. If corporate headquarters were in the US, if board directorships were held mostly by Americans, the movers and shakers were still following Rooseveltian prescriptions.
But now, we have accounting schemes whereby a corporation based in Germany can find a way to avoid taxation by -- say -- declaring certain factors about its organization and employment permitting taxes to be paid in another country. This has been judged to be nothing less than fraud, but loopholes in national and international application of tax law allow it.
There are other symptoms.
In 2007, Halliburton was found by GAO to have made in excess of $8 billion in double charges to the Defense Department as the Iraq War sole-source contractor. They also made close to a billion dollars in fraudulent claims. Not long thereafter, Halliburton's leaders announced that they would relocate corporate headquarters to Dubai, escaping taxation in Texas and the US.
Then there was the Gulf disaster of Deep Horizon and the Macondo Prospect. As soon as Obama announced a deal with BP for an initial $20 billion cleanup settlement, Congressman Barton of Texas stood up and charged Obama with "shaking down a corporation."
It isn't so much a question of the positive status or what prevails in the real world, but a question of what should prevail ideally. Should corporate entities be superior to the nation-state?
And the dirty truth of this matter -- acknowledged no less by James Madison in the Federalist Papers than by Marx 50 years later -- Marx's predictions about the self-destructive forces within capitalism are coming true. And just so we have a clear understanding of what I'm trying to say here -- Marx -produced two major works. Das Capital was simply an intellectual critique of Adam Smith's "Wealth of Nations" and an attempt to apply some semblance of a scientific method and paradigm to further understand history. It was the Communist Manifesto that was Marx's undoing and that of a good part of the world until the early 1990s.
Some suggest an international treaty and regime of regulation that makes it difficult for a corporation in a wealthy country to relocate to an impoverished one to avoid taxes in the former.
Otherwise, it is about class struggle and property rights. Property rights are assigned by the State and can be changed by the State. They don't come from God, or any other incredible similar explanation expounded by the Right. Add to this the fact that an idiot son of a Wall Street banker can avoid doing any work for the rest of his life while the inherited assets continue to increase rapidly with no contribution to society or human progress, and we have a recipe for disaster.
Contrary to what Morgan Freeman asserted in recent TV interview -- the myth that great fortunes are lost as well as made -- the odds of that happening to even a minority of super-wealth holders are very, very small.
The odds of something similar happening to a wage earner are much, much higher.
Facebook
Twitter