Capitalism is not a one-size-fits-all economic system. It comes in various shapes and forms. In the U.S., we've always been told capitalism epitomizes free enterprise, ingenuity, and the exaltation of the private individual.
But there’s more than one type of capitalism, and in a country where the richest 1% hold 40% of the country’s wealth-we are far from the high road of economic justice that we’re taught is inherent in capitalism. On the contrary, the U.S. exists in a structure sociologist Joel Rogers calls “low-road capitalism”. Low-road capitalism describes a system where wages are depressed because businesses compete over the price of products instead of the quality. Indicators besides wages characterize this type of economy. Take, for example, the percentage of workers that are unionized. In Iceland it’s 90%, in Italy 34%, but in the U.S. only 10% are organized. Workers’ rights also must be taken into consideration. The U.S. ranks last among countries when it comes to rules on firing workers and offering severance pay, leaving laborers with little recourse.
It should come as no surprise then that the populations that suffer the most in an unjust economy are descendants of America’s original sin-slavery. In August of 1619, the White Lion, a ship carrying over 20 enslaved men and women from West Africa, landed at what was then known as Point Comfort on the James River in Virginia. They were the first group of enslaved Africans to step foot in North America. To commemorate this 400 year anniversary, the New York Times launched The 1619 Project with the goal of re-examining the legacy of slavery in America. One essay, “In order to understand the brutality of American capitalism, you have to start on the plantation” by Matthew Desmond, examines the cruel beginnings of our modern economic system.
Desmond, a professor of sociology at Princeton, writes:
“Slavery was undeniably a font of phenomenal wealth. By the eve of the Civil War, the Mississippi Valley was home to more millionaires per capita than anywhere else in the United States. Cotton grown and picked by enslaved workers was the nation’s most valuable export. The combined value of enslaved people exceeded that of all the railroads and factories in the nation. New Orleans boasted a denser concentration of banking capital than New York City. What made the cotton economy boom in the United States, and not in all the other far-flung parts of the world with climates and soil suitable to the crop, was our nation’s unflinching willingness to use violence on nonwhite people and to exert its will on seemingly endless supplies of land and labor. Given the choice between modernity and barbarism, prosperity and poverty, lawfulness and cruelty, democracy and totalitarianism, America chose all of the above."
Desmond goes on to point out that there are always losers in a “low-road” capitalist economy – that gains by the few at the top come at the expense of the powerless.
"During slavery, 'Americans built a culture of speculation unique in its abandon,' writes the historian Joshua Rothman in his 2012 book, “Flush Times and Fever Dreams.” That culture would drive cotton production up to the Civil War, and it has been a defining characteristic of American capitalism ever since. It is the culture of acquiring wealth without work, growing at all costs and abusing the powerless. It is the culture that brought us the Panic of 1837, the stock-market crash of 1929 and the recession of 2008. It is the culture that has produced staggering inequality and undignified working conditions. If today America promotes a particular kind of low-road capitalism — a union-busting capitalism of poverty wages, gig jobs and normalized insecurity; a winner-take-all capitalism of stunning disparities not only permitting but awarding financial rule-bending; a racist capitalism that ignores the fact that slavery didn’t just deny black freedom but built white fortunes, originating the black-white wealth gap that annually grows wider — one reason is that American capitalism was founded on the lowest road there is."
It all circles back to the driver of our economy, the American worker, and brings us to the current fight for a fair and livable wage. First, let’s dispel the myth that the typical minimum wage worker is a teenager in a part-time job looking to earn a few bucks after school. The reality is the average age of those working for minimum wage is 35, with 88% being 20 or older. Recent studies show that while 8.6% of white workers are paid a poverty wage (hourly wages that leave them below the federal poverty guideline, which I argue the current $7.25/hour minimum wage does), 19% of Latinx workers are paid poverty wages along with 1 in 7 or 14% of black workers. Raising the minimum wage to a measly $10/hour would increase wages for minorities by billions of dollars, and an increase to $15/hour by 2024 would lift the pay of 40 million of our fellow Americans. It’s time we take the high road toward a more just version of capitalism.
posted by Amy Levengood
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