1
People in the United States, by and large, are firmly convinced of the superiority of what we call "The American Way of Life." Ours is the greatest country on earth, a land of freedom and opportunity, a beacon for poor and oppressed people the world over. So strong is the appeal of America that dictators the world over must erect walls, as the Communists did in Berlin, to keep the people they oppress in and the truth about America out. The collapse of the Berlin Wall in November 1989 is seen as providing proof of the superiority of our way of life. According to Robert Heilbroner, for example,
Less than seventy-five years after it officially began, the contest between capitalism and socialism is over: capitalism has won. The Soviet Union, China, and Eastern Europe have given us the clearest possible proof that capitalism organizes the material affairs of humankind more satisfactorily than socialism. (Heilbroner 1990:98)
Clearly, the sun of Freedom and Capitalism is rising, driving out the dark night of Control and CommunismÑor is it? Do capitalism and the "American Way of Life" really provide freedom, abundance, and opportunity for all, or is the "American Way of Life" merely an ideological veil for a much darker reality? Does our belief in the "American Way of Life" provide a realistic basis for our personal lives and domestic and foreign policies? Or is it, in fact, a "Great American Myth," designed to prevent us from coming to grips with the real conditions of our existence?
To address these questions, we must examine empirically the real conditions of life in the United States and the rest of the world. We must also draw upon the insights of the "science of myth," Anthropology.
Other nations also have their myths. Europeans, I suspect, by and large subscribe to a Great European Myth, similar to our Great American Myth, probably less extreme and more humane version, but no less pernicious. The Japanese have their myths and debates about Nihonjinron. These myths must be addressed by Europeans and Japanese; my concern is the critical examination of the Great American Myth.
Anthropology began as a professional discipline by challenging the myths about "savage" and "primitive" peoples that were used to justify colonial rule. Both the general public and scholars believed that "savages" were not only disgusting in their personal habits, they were mentally and physically inferior as human beingsÑif they were human at all! Given their rude, subhuman status, it was only proper that "savages" should be eliminated or ruled by White Civilization. The Myth of the Savage thus served to legitimate the extermination of the American Indian, the African slave trade, and other forms of oppression by which Europeans established their colonial rule over the remainder of our species.
Anthropology stripped this Myth of the Savage of its scientific respectability. By actually living with native peoples and attempting to understand them in their own terms, anthropologists developed a new understanding of non-Western peoples. No longer can non-Western peoples be seen as lower forms of humanity, inferior to their conquerors. All humans, Western and non-Western, must be seen as fully and equally human. Ideas of superior and inferior peoples, cultures, or races are based on prejudice, not science.
This insight, which forms the foundation of modern anthropological science, is incompatible with colonial rule. If non-Western peoples are as human as we, they should be treated as human beings, and not plundered, enslaved, or exterminated.
White rule has not disappeared. New forms of oppression have replaced old ones, and new myths have incorporated the mystifying functions of the old. Accordingly, anthropology must examine these new myths critically and scientifically. Anthropology, which began by de-mystifying the Myth of the Savage, must now turn its attention to the Great American Myth.
For our purposes, the Great American Myth has three aspects, the Myth of Americanism, the Myth of Backwardness, and the Myth of Anti-Communism. Taken together, these myths serve to legitimate the status quo at home and U.S. foreign policy abroad.
The fundamental political belief of Americanism is that ours is a free country, a land of abundance and almost limitless opportunity. People in other countries may be poor, exploited, and oppressed, but not in America. Anybody can make it in America if they are willing to work hard. Of course, there are those who are unwilling to work: bums, hippies, welfare cheaters. There are also those government bureaucrats who would rather lead lives of security, "sucking on the public teat," than take their chances in the real world. These bureaucrats want to run other people's lives through government regulations and tax their wealth away. These and other "do-gooders" try to arrange things to give the advantages to the unworthy, letting welfare mothers cheat and setting criminals free.
The Myth of Backwardness holds that the rest of the world would like to be like America but is not as advanced as America. Consequently, there is still poverty in the world, but Americans are generous and try to help when they can. Through international aid programs such as CARE, Americans help people in foreign countries help themselves (and become like Americans). Unfortunately, these things take time, and many foreigners, envious of America and spurred on by Communist propaganda, turn to anti-American terrorism. Such terrorism is perhaps the most visible threat to American freedom.
The primary enemy of freedom, however, is Communism. The Myth of Anti-Communism is that Communists want to destroy freedom and establish a totalitarian, slave-like state. Communists create unrest among the world's underprivileged by blaming America for the world's problems and promising security and wealth in a Communist state. When Communists take power, however, they establish totalitarian police states, such as the Soviet Union. The real goal of the Communists is world domination, and to accomplish this they must destroy American freedom.
In the face of this Communist threat, the United States must be strong and protect itself from Communist aggression and subversion. This unfortunately entails maintaining a strong nuclear arsenal and intervening in foreign countries to prevent Communist takeovers. It also entails some measures to prevent idealistic Americans from "selling out" to the Communists.
American men must be strong and, at times, ruthlessÑworthy of the respect and admiration of our women. Men must be men, and women must be women. American men are not intellectuals, but they know the difference between right and wrong and good and evil. In the worlds of John Wayne and Sylvester Stallone, white men are good, Indians are bad; cops are good, robbers bad; and Americans are good, communists evil.
Such, in broad outlines, is the self-image of America in the modern world. This self-image underlies our foreign policy. It underlies much of the everyday thought and behavior of the average American. This self-image image, however, ignores or obscures vital segments of reality. It ignores the actual class structure of the United States. It ignores the actual distribution of wealth and poverty in the United States. It obscures the real nature of the sex/gender system in the U.S. It obscures the actual cause of world poverty and economic underdevelopment. It obscures the actual economic roots of United States foreign policy. It obscures the real roots of the arms race. To form a clear picture of the United States and its role in the modern world we must examine each of these in turn.
Many, if not most, Americans believe that the United States is a land of opportunity, that anyone who is willing to work hard can "make it" here. The rich should not be criticized, because they worked for what they have. The poor need not be pitied, because their condition is a result of their own decisions; they have only themselves to blame for their poverty.
This belief is deeply rooted in the American character. To the extent that it encourages individuals to take responsibility for their own lives and for their own decisions, it promotes a healthy approach to life. But there are less healthy aspects to this belief. It encourages complacency among those who have been able to use the system to their advantage and callousness towards those who are less fortunate.
A few years ago, a welfare mother named Laura committed suicide after killing her three children in Long Beach. A local religious leader observed that, "Laura and her kids are the victims of a sick society." This observation prompted a number of letters to the local newspaper:
But, all in all, I don't think the system really "failed" Laura.É Laura opted for a third child. Women do have choices. Poor Laura just never made the right choices.É (Referring to a friend on welfare that won't speak to her anymore) That she chose her lifestyle, as we chose ours, never occurs to her. She prefers to be a victim.É It's tough to see someone I care for living on the droppings of an affluent society. But that was her choice. (Another letter:) I am sick and tired of looking at my paycheck and knowing that part of it is to support people like Laura. People like Laura breed a society of welfare recipients. And we are to feel sorry? It is people like Laura who have made this society sick. (Another letter:) "society is not responsible. Their mother is." (Press Telegram 1986:B10)
At a superficial level, the Great American Myth does appear to reflect reality. We all know some wealthy people who are hard working and some poor people who are lazy. As a guide for social policy and a tool for social analysis, however, it is inadequate, for a variety of reasons.
First, the very structure of our society dictates that only some can become rich and others must be poor. Perhaps an analogy may help make this point. Only one team can win the Super Bowl. No matter how hard everyone plays, most teams will notÑand cannot, by the very structure of the NFLÑmake it into the playoffs. Similarly, we cannot have a society made up solely of doctors, lawyers, bankers, and managers; there must be dishwashers, waitresses, garbage collectors, secretaries, and workers for the assembly lines. And, as we shall see when we examine the nature of capitalism, there must be unemployed workers. Individual effort may determine who will be rich and who will be poor, but the structure of society dictates that there must be rich and poor, just as the structure of the NFL dictates that there must be winners and losers.
Professional football players, of course, choose to play the game and are paid reasonably well for doing so, losers as well as winners. Aside from physical injuries, no one is hurt. By contrast, everyone must play our economic game, capitalism, and the stakes are high indeed. For the winnersÑthe affluent one-fifth of American familiesÑthe rewards are considerable. For the rest, the rewards are less impressive. For the losers, the nearly one-fifth of the population living in officially defined poverty, the punishments are severe: homelessness and hopelessness.
The structure of our society thus dictates that, irrespective of how hard people try, there will be rich and poor, winners and losers. Further, the competition is not equal. Although middle class white males may compete with one another on the basis of rough parity, this is not the case for the remainder of the population.
Early childhood socialization is probably more important, though less visible, than the very real discrimination faced by racial and ethnic minorities and women in the job market. From infancy on, middle class white men are socialized for success. We are given role models to identify with, we are taught to compete, and adequate training is provided for us. Middle class women are socialized to provide support for male competition, though women are increasingly also programmed to compete for jobs.
Among the poor, conditions are much different. A child growing up in a ghetto may have a prostitute for a mother and pimps and pushers for role models. Such children will not acquire the values and training needed to succeed in U.S. society. Perhaps parents do make poor choices, but children have little choice in the matter. Poor children are socialized for failure in our society, no less than the middle class is socialized for success. The fact that some of the poor do manage to acquire the will and skills to escape their poverty does not alter the situation.
These are some of the considerations which must be kept in mind as we look at the actual distribution of wealth in the United States.
We all know that we are an affluent society. But just how affluent are we, and how is this affluence distributed among the people of the United States? Our government provides abundant statistics on such things per capita income, income distribution, poverty, and unemployment. It is difficult to evaluate these in a meaningful manner, however. One must consider inflation and wide differences between families in life-style, family composition, and age. In addition, different sets of statistics are collected for different purposes and use different methodologies. They are not, therefore, strictly comparable. In spite of these difficulties, it is possible to use these statistics to form a rough idea of the actual conditions of people in the United States.
Beginning in the late 1940s, the Bureau of Labor Statistics regularly published a series of income levels to indicate just how much money an urban family of four people needed to live at various standards. The BLS discontinued this in 1981, because of their own budget cuts. The BLS was unable to update their methodology to take account of changes in life-style since the 1940s. The BLS figures for 1981, however, can be updated to allow for inflation. In addition, the Social Security Administration regularly computes a Poverty Level. Taken together, these figures provide important benchmark levels that can be compared with the actual income figures provided by the Bureau of the Census. This will give an idea of the relative affluence of Americans (for a fuller discussion of income statistics, see Rose 1986). Other statistics are available on the wages of workers. I have brought these statistics together in Figure 1.1., which provides a rough picture of the actual living conditions of the U.S. population.
Perhaps the most striking thing is that nearly two thirds (66%) of U.S. families live at or below the Medium Budget of $28,547, what might be called a "modest but adequate" budget. This is scarcely affluence. The budget allows for "one new suit every 3-4 years for the father, three street dresses every two years for the mother, a new TV every 10 years, a new refrigerator every 17 years, a new toaster every 33 years. Adults get nine movies per year; children get none." (Rose 1986:9)
Nearly one third (32%) of U.S. families lives below the Low Budget of $17,216, and 16% live below the Poverty Level of $10,200. Further, the average wage of U.S. production workers in 1983 was $17,400, barely above the low BLS standard and far below the "modest but adequate" standard. The minimum wage of $3.35 per hour provides an annual income of only $6,700 (assuming 50 weeks of 40 hours per week). Consequently, most families in the U.S. must have two or more wage earners just to make ends meet.
At the other end of the scale, slightly over a fifth (22%) of U.S. families lives in affluence, at or above the High Standard. The ability of our economic system to provide abundance for some Americans is thus undeniable. But the government's own statistics attest to the failure of capitalism to meet the needs of the majority of Americans.
However much they may be embedded in our economic system, inequality and poverty are not necessary. Our industrial system is capable of providing economic well being for everyone. This may be seen by examining two further measures, the Equal Distribution Share and the Potential Equal Distribution Share. The Equal Distribution Share is the average household income, what every household would receive if income were equally distributed. As seen in Figure 1.1., this was $28,844, or just above the middle BLS standard. This means that there is enough income to abolish poverty simply by redistributing present income. Of course, no one advocates that this be done, but the Equal Distribution Share is an important statistic for understanding how inequality impacts upon our everyday lives. More significant, however, is the Potential Equal Distribution Share.
Table 1.1. BLS Living Standards and Family Income, 1983 & 1990
1983 1990 % families
value
added per production worker $72400 $90500
potential
equal distribution share $43150 $53940 20%
above
high
BLS standard $42764 $53455 22% above
equal
distribution share (mean) $28844 $36055 67%
below
medium
BLS standard $28547 $35685 66% below
median
family income $25594 $31995 50%
below
average
wage of production workers $17400 $21750 32%
below
low
BLS standard $17216 $21520 32% below
mean
hh income, African-Americans $16531 $20665
mean
hh income, female head $13015 $16270
poverty
level $10178 $12725 16% below
minimum
wage $6700 $8375
Source: (United States Bureau of Labor
Statistics 1982, United States Bureau of the Census 1985:430, 446-448, 450,
469, 562, 744). The BLS standards
given for 1981 are inflated by 6% per year to arrive at 1983 figures. All 1983 figures are increased by 25%
to give 1990 figures.
The Potential Equal Distribution Share assumes full employment, full utilization of productive resources, and elimination of wasteful expenditures on the military, advertising, corporate law, and the like. As I argue more fully below (Chapter 7), this would increase total income by 33%. The Potential Equal Distribution Share is thus $43,150, or 33% above the actual average income. This was just above the high BLS standard of 1983. Nearly 80% of U.S. families receive less than this. We may conclude that the overwhelming majority of families in the U.S. would benefit from re-structuring our economy. Greater equality, full employment, more rational use of resources, production for human needs rather than corporate profitsÑin a word, socialismÑall these are in the interests of the majority of Americans.
My own analysis may be faulted, since I claim no particular expertise in statistics. Since completing this analysis in 1985, however, I came across other analyses which confirm my general conclusions. These additional studies provide an important time dimension and show that inequality is increasing and the real conditions of life for the poorest segments of our population, and for the working class generally, are worsening.
This is a reversal of earlier tendencies in the postwar period. The average gross weekly earnings of workers rose steadily from $124 in 1947 (when statistics first became available) to $198 in 1973 (in 1977 dollars). Since 1973, weekly earnings have fallen to $167 (their 1961 level) in 1989, a reduction of over 15% (Horn et al. 1990:93). At the same time, there was a gradual equalization of household income from 1948 through 1969. Since 1969 household income has become more unequal, slowly from 1969 through 1978 and more rapidly since 1978 (Rose 1986:9).
Rose calls this phenomenon "the incredible shrinking middle class" (Rose 1986:9). As Figure 1.2 indicates, the middle class, defined as households with incomes between the low and high BLS standards, fell from 52.3% of the population in 1978 to 44.3% in 1986, a decline of 8.0%. This was offset by an increase of 2.8% in the population in households above the high standard and 5.2% in households below the low standard (Rose 1986:9).
Table 1.2. Income Distribution, 1978 & 1986
1978 total hu/wi female male single single
adults couples head head females males
above
high budget 193 80 2 1 10 20
low
to high budget 523 218 22 7 35 23
poverty to low
budget 142 46 13 2 25 10
below
poverty 142 42 25 2 22 9
total 1000 386 62 12 92 62
1986
above
high budget 221 88 4 2 15 24
low
to high budget 443 169 19 5 44 37
poverty to low
budget 185 62 19 3 24 15
below
poverty 151 40 30 2 24 15
total 1000 359 72 12 107 91
Source: (Rose 1986:8). Table represents a population of 1000
non-dependent adults. Each figure
represents 146,000 adults, each hu/wi couple represents 292,000 adults. About 1.8 unmarried couples are included
in the hu/wi couple category.
The latest figures indicate that inequality is continuing to grow. The Congressional Budget Office calculates that the share of total income received by the top 20% of households has increased by 34.8% from 1977 to 1990, while the share received by the bottom 20% has fallen by 10.1% in the same period (Greenstein and Barancik 1990:15). These calculations are based on the figures on income distribution in Figure 1.3.
The income of the poorest sectors of our population is declining in absolute terms as well as relatively, with the poorest 10% experiencing a 20 percent decline in real income, from $5,418 in 1977 to $4,295 in 1990. At the same time, the income of the rich is increasing, absolutely and relatively, with the real income of the richest 1% doubling, from $190,423 in 1977 to $399,697 in 1990 (Committee on Ways and Means 1990:28). According to the Committee on Ways and Means of the U.S. House of Representatives:
Average real incomes between 1977 and 1990 declined for
the bottom (poorest) 70 percent of the population. However, when an adjustment for family size É is made, the
bottom 40 percent of the population has experienced a real income decline.É The primary reason for the difference
is that family size has declined on an average of almost 10 percent between
1977 and 1990.
Because
Federal tax rates declined for high-income families between 1977 and 1990,
after-tax incomes increased faster than pretax real income. For example, average real pretax
incomes over this period increased by 85 percent for the richest 1 percent of
the population, compared to an after-tax income increase of 110 percent. (Committee on Ways and Means 1990:10)
The distribution of income is highly unequal. Families in the top fifth of the population received 41.5% of all income in 1981 and 49.9% in 1990. Families in the bottom fifth receive only 5.2% of all income in 1981 (or only one eighth as much as those in the top fifth), and 4.3% in 1990 (or less than one tenth as much as those in the top fifth). But, as Figure 1.4. indicates, the distribution of wealth is even more unequal than that of income, with the top fifth owning 76% of all wealth and the bottom fifth owning only 0.2%. The distribution of income-producing property (such as stocks and bonds and rental property) is still more unequal. The top fifth owns 100% of all privately owned stock, and within this group, 1.6% own 82.2% of all privately owned stock!
Table 1.3 Shares of After-Tax Income for All
Families
(in percent)
change
1977 1980 1985 1990 77-90
lowest
quintile 5.7 5.4 4.3 4.3 -1.4
second
quintile 11.6 11.4 10.2 9.9 -1.7
middle
quintile 16.3 16.2 15.3 14.9 -1.4
fourth
quintile 22.8 22.6 22.0 21.7 -1.1
highest
quintile 43.9 44.8 49.1 49.9 +5.1
total 100.0 100.0 100.0 100.0 0.0
top
10 percent 28.4 29.5 33.6 34.9 +6.5
top
5 percent 18.5 19.6 23.4 25.0 +6.5
top
1 percent 7.3 8.3 11.2 12.6 +5.3
Source: (Committee on Ways and Means 1990:20)
Table 1.4. Distribution of Income, Wealth, and
Stock
Income Wealth Stock
(1977) (1962) (1963)
Lowest
Quintile 5.7 0.2 0.0
Fourth
Quintile 11.6 2.1 0.0
Third
Quintile 16.3 6.2 0.0
Second
Quintile 22.8 15.5 0.0
Highest
Quintile 43.9 76.0 100.0
Total 100.0 100.0 100.0
Top
1.6% (10%) (40%) 82.2%
Source: (Brecher and Costello 1976:151, Duncan
1984:13, Lundberg 1969:8, 13)
Figures for the Income and Wealth of the top 1.6 percent of the
population are my estimates.
A study undertaken nearly two decades ago, when dollars were worth more than today, indicated that
Four percent of the population owned over a quarter of the nation's real estate, three-fifths of all privately held corporate stock, four-fifths of the state and local bonds, two-fifths of the business assets (excluding business real estate), a third of the cash and virtually all of the notes, mortgages and foreign and corporate bonds. After subtracting their debts, they were worth over a trillion dollars, enough to have purchased the entire national output of the United States plus the combined output of Switzerland, Denmark, Norway and Sweden. (Smith 1973:44, as quoted by Harris 1975:406)
The income produced by this wealth is fantastic, and enables its owners to lead lives of luxury beyond the wildest dreams of most Americans. As Harris notes:
in 1968, 4,000 families reported incomes greater than $500,000. The total earned by these families was the equivalent of the budget for one million families living on welfare and exceeded all the money that the government spent on education in that year.É For example, the former Mrs. Seward Mellon had a household budget of $750,000 a year, not including $250,000 for her husband's pocket money, and a $20,000 budget for the family dog. (Harris 1975:405)
More recent studies indicate that the distribution of wealth, like the distribution of income, is becoming more unequal. As Figure 1.5. indicates, in 1983 the top 1% of the population owned 42% of all wealth, and the top 10% owned 72% of all wealth.
Table 1.5
Distribution of Wealth in the
United States, 1983
percentage percentage
of of
level
of net worth households total
net worth
$2.5
million or more 0.5% 35%
$1.4
to $2.5 million 0.5% 7%
$206,340
to $1.4 million 9.0% 30%
below
$206,340 90.0% 28%
Source: (Crapo 1990:322, citing
Joint Economic Committee of the Congress of the United States 1986)
Quite simply, the rich are getting richer and the poor poorer.
This process may be seen in all systems of class rule. From the dawn of civilization, inequality has been increasing (Lenski 1966). This tendency has been observed by both Jesus and Marx,
For unto every one that hath shall be given, and he shall have abundance; but from him that hath not shall be taken away even that which he hath. (Matthew 25:29)
Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole, i.e., on the side of the class that produces its own product in the form of capital.É This is the absolute general law of capitalist accumulation. (Marx 1867:644-645, order reversed)
This law, as Marx notes, may be mitigated in its operation by offsetting tendencies. In the immediate postwar period, the improvements for the working class were based on the strength of the union movement. Since the 1970s, these offsetting tendencies have been weakened. Further, there has been an increasing export of capital to Third World nations. Relatively high paying jobs in the unionized industrial sector have been replaced with low paying jobs in the service sector. There has also been an increasing "feminization of poverty" (about which, more below).
Finally the government policies of the Reagan-Bush years have facilitated the enrichment of the rich and the impoverishment of the poor. In particular, taxation has become less progressive. An increasing percentage of federal tax revenues is being taken from the poor, while the percentage taken from corporations and the rich is declining. As Table 1.6. indicates, corporate taxes accounted for 27% of federal revenues in 1965, but only 15% in 1990. Individual income taxes provided 51.6% of federal tax revenues in 1965. This rose to 72.2% in 1990.
Table 1.6.
Federal Tax Revenues by
Source 1965-1990
(in billions of $ and %)
1965 1990
source $ % $ %
individual
income 49 51.6% 490 72.2%
corporate
income 25 27.0% 102 15.0%
excise 15 15.4% 36 5.3%
estate
& gift 3 2.9% 9 1.3%
other 3 3.2% 42 6.2%
total 95 100.0% 679 100.0%
Source: