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For the Love of Money

What about Africa? The Middle East? Latin America? Or the "developing" nations of Asia? How will these peripheral regions fare in the emerging era of trade blocks?
Robert Soza

Issue #50, June 2000

Alongside the pending unification of Europe is the concurrent rise of right-wing nationalism. This rise is exemplified by the election of the ultra-right Freedom Party in Austria; years of ethnic cleansing in the Balkans; and the resurgence of extreme nationalist parties in Russia, to name just a few manifestations of recent right-wing trends. The contrasting project of European unification appears to be motivated by a desire, on the part of EU nations, to preserve the wealth and privilege of Europe in the face of NAFTA and the rise of China as the trading partner (writ large) for the economic powers of Asia.

It is a marvel that a geographic area as ethnically, linguistically, and culturally diverse as Western Europe is willfully relinquishing its national sovereignties and seemingly prefers to form a unified state. It is especially remarkable given the centuries of warfare that have been waged with the purpose of establishing the very independence that each nation is now ceding. The birth of the Euro, the EU councils at The Hague, and the austerity measures imposed on citizens to enforce unification deadlines all signal that the Western Europe we once knew is slowly becoming a single state. Whether or not the Balkans or the former Soviet satellites are incorporated remains to be seen, but Western Europe is well on its way to becoming one nation.

This union will produce one of the largest markets in the world. Trade will be unfettered, tariffs on goods produced on the continent will be non-existent, and so on. It will be an economic watershed for the countries and companies within the EU. This will certainly ensure its competitiveness on the world market — the US and the "developed" economies of Asia will have to make their peace with the EU. Equity and prosperity among the G-7 and those states closely allied with them will continue to grow.

As this happens, those on the outside will continue to be, well, on the outside. Why does this matter? Because there is a fear of equity among the so-called First World countries. Their privilege matters to them. Let's face it, Mexico is not an equal partner within NAFTA. Likewise, do you really think that Spain or Portugal will have an equal stake in the EU when confronted with economic demands of Germany or the UK? Not likely. And what about Africa? The Middle East? Latin America? Or the "developing" nations of Asia? How will these peripheral regions fare in the emerging era of trade blocks?

To answer these questions let's look closer to home, at the internal machinations of the largest and most prosperous market place in the world: the United States. We currently live in a continental free market; in 1994, NAFTA created a market that is supposedly open to all, from Mexico's border with Guatemala to the south, to the Arctic Ocean north of Canada. And we are simultaneously experiencing the longest peacetime economic expansion this country has ever known! However, by all accounts, the wealth gap between rich and poor has expanded significantly.

This is not a new phenomena. Kevin Phillips' 1990 book, The Politics of Rich and Poor: Wealth and the American Electorate in the Reagan Aftermath charts the germination of the current cycle of the rich getting richer and the poor getting fucked. Michael Omi and Howard Winant observe a similar trajectory, but along racial lines and with an older genealogy in Racial Formations in the United States From the 1960s to the 1990s (1994). They point out that with the end of the Democratic presidency of LBJ the Republican party moved, subtly, via rearticulation and coded language, to undo the changes in social structure produced by the Civil Rights movement. Both of these studies demonstrate that the interest of the empowered consistently undermine movements that attempt to redistribute economic wealth (as Phillips focuses on) or political power (as treated by Omi and Winant). The powerful in the United States understand that power is finite and it is best to keep hold of it. Omi and Winant explain that altruism, as a necessary public stance, is a by-product of the "great transformation" of the 60s and 70s. Overt racism and policies of exclusion are no longer fashionable but exclusionary practices, now subtler and re-stylized, still resonate within the ideologies of the privileged.

Consider the January 24, 2000 New York Times editorial "Why Decry the Wealth Gap?" by W. Michael Cox, an economist with the Federal Reserve Bank in Dallas, and Richard Alm, a business reporter for The Dallas Morning News. The authors observe: "The Center on Budget Policy Priorities and the Economic Policy Institute put out a state-by-state breakdown of Census Bureau data, which found that nine states in which the richest 20 percent of households now earn at least 11 times the income of the poorest 20 percent. This indicates a much sharper disparity between the top and bottom that existed two decades ago. Then the Federal Reserve Bank released its latest survey of consumer finances. It showed that the average net worth of families earning less than $10,000 a year had fallen by $6,600 over the past three years, while households earning more than $100,000 a year had seen their wealth jump by more than $350,000. Our response is: So What?" (Emphasis added).

The editorial goes on to argue that the growing gap is caused by structural facts of American life: discrepancies in income between those with college degrees and those without, and urban vs. rural income levels. Their final point is the lack of fixity in one's social status. America isn't a caste society, and studies that track individuals' incomes over time show that Americans have a remarkable ability to propel themselves upward. The ability to "propel" oneself upward is so fantastic and freely accessible that the wealth gap is continually increasing! The poor are still markedly poorer, and the rich richer! But again, so what?

So what? Alm and Cox argue that education is a key to the "readily" available upward mobility in the US. But how can a family whose $10,000 a-year income is decreasing in value afford to get one child, much less two, three, or more, through college, which by their own admission is a necessary gateway to wealth in this nation? The struggle to make this happen is a Herculean effort, yet at the same time the wealthiest families raise their children expecting to go to college; it is a given. Wealth perpetuates wealth. And while poverty is not a predetermined state, it is important to acknowledge that more than a facile nod to "opportunity" is required to address the limitations of upward mobility. More basic than the costs of college are the inequities in the K-12 systems nationwide. Affluent neighborhoods raise significantly more taxes to fund local school districts: AP classes are not universally available, computers, adequate textbooks, safe and comfortable infrastructure, etc. don't await every child at school. Again, the children of the rich can expect these benefits, these privileges. But, "so what?" According to Cox and Alm, the fact that poverty deprives many children of these necessities is no cause for worry.

Beyond education, consider what wealth entitles one to. Growing up in a middle-class home I expected to go to the dentist, orthodontist, and doctor when the need arose. I figured that that was the way of the world — it never seemed like a privilege. As I grew up and began talking with people from beyond my privileged and blindly provincial neighborhood, and indeed, with members of my own family, it became clear that "adequate" health care is a privilege. When I go to the grocery store I marvel at the price of "health" foods; eating healthy is certainly a privilege. I am amazed at the privilege embedded in the culture of exercise: to stay healthy one needs childcare, gym membership dues, time off work, and leftover energy after a day's work. The rich are therefore the ones who have the monetary and other assets to partake of all that one needs to "propel" onself upward: education, exercise, and a healthy diet.

And the subalterns? As their real income diminishes by growing at a much slower rate (whites' incomes have grown by approximately $7,000 since 1972, Hispanics' income by only $3,000) the ability to keep up not only with the Joneses, but to partake of the American dream diminishes. So what? This population, the poor and disenfranchised, has been downsized, excluded and basically told "so what." Attitudes like those displayed by Cox and Alm write off a significant portion of the population in an effort to justify the wealthy abdicating their responsibility to the poor. But this abdication attempts to sidestep the symbiotic relationship, both symbolic and material, that exists between the rich and the poor. Consider Hegel's master/slave dialectic. Hegel knew there needed to be disempowered folks for the powerful of the world to be able to recognize their place, and for Hegel's master there was an existential crisis that accompanied the domination. But for Cox and Alm and other fiscal conservatives of their ilk there is a desire to eliminate the existential crisis — no need to feel bad, because the poor have a chance. The poor purchase the goods produced by companies owned by the rich; the poor clean the homes of the rich; they serve them food in fancy restaurants, care for their children, and so on. The rich need the poor. The rich need a bifurcated social system in order to reassure themselves of their privilege. No doubt many of the wealthy work very hard and feel they deserve the rewards they receive. Maybe they do. But do they deserve them at the cost paid by the people who make their wealth possible?

The "first world" countries view the rest of the world as rich Americans view poor Americans. On a global level, is it so hard for the first world to see the direct and beneficial economic benefits of five hundred years of colonial domination? The prevalence of public rhetoric about African "internal chaos" that emphasizes how domestic tyranny and corruption are the cause of Africa's woes confirms that the First World cannot see its own wealth as a direct result of the exploitation that produced the groundwork for the chaos that haunts Africa, Latin America, and parts of Asia today.

First world countries have a direct fear of equity because equity means a reckoning with the abuses both of the past and of the present. In the United States the wealthy, who are primarily white families, would have to acknowledge in such a reckoning that while they may not consider themselves racist they have nevertheless benefited and continue to benefit from the racist practices of the state. Whites everywhere benefited from Jim Crow, red-lining, racist hiring practices, segregation and so on. Being white did and still does carry considerable culture weight — it matters and it is a privilege to be protected. Similarly, men in the US would have to reckon with the gendered nature of class and access. Women were and are the most productive unpaid workforce in the world. Domestic labor has never been acknowledged and men, like it or not, could not have done their work in the public and corporate spheres if they had been at home tending to domestic matters.

On a global level, Europe and the United States if faced with the reckoning that would come with equity would have to admit to a lot. They sit idly by watching significant portions of the global population suffer from the side effects of poverty unknown in the first world, such as malnourishment and infant mortality rates that are unjustifiable given the advanced state of medicine. There is more fear, the fear of responsibility. Fear of having to account for and sacrifice the very wealth that assures the first world of its greatness and prosperity. A fear of looking in the mirror and having to honestly report the roots of privilege.

Birgit Rasmussen, also a PhD candidate in Ethnic Studies, deserves considerable credit for participation in the conversation from which this article emerged; so, thanks.

Robert Soza is a PhD candidate and Ford Foundation Fellow in the Department of Ethnic Studies at UC Berkeley. He is also a member of the Bad Subjects Production Team.

Copyright © 2000 by Robert Soza. All rights reserved.