What Is The Matter With Inequality? by Adam Wasserman UU Congregation Fairfax

Adam Wasserman, UU Congregation of Fairfax
Adam Wasserman, UU Congregation of Fairfax

This is an edited version of a guest sermon delivered at the Unitarian Universalist Fellowship of Montgomery, Alabama, on March 1, 2015.

F. Scott Fitzgerald, the great novelist, is probably our country’s most acute observer of the rich. You may have heard one of his frequently quoted statements–“the very rich are different from you and me.”  It’s from a short story called “The Rich Boy” that was published in 1926. Let me read the entire passage:

“Let me tell you about the very rich. They are different from you and me… They think, deep in their hearts, that they are better than we are because we had to discover the compensations and refuges of life for ourselves. Even when they enter deep into our world or sink below us, they still think that they are better than we are. They are different.”  F. Scott Fitzgerald, “The Rich Boy”, 1926

Now, you may also have heard Ernest Hemingway’s equally famous retort to Fitzgerald, published many years later:  “Scott said the rich are different from you and me. Yes, they have more money.”

It seems to me that our attitudes about economic inequality are summed up in these two quotes.  Fitzgerald is warning us that there are some very worrisome things attached to great wealth, issues of morality and community.  The rich think they are better.  This is a problem in a society based on the belief that everyone is supposed to have equal rights and equal opportunity and equal value.

Hemingway, on the other hand, is saying basically “So what?”  Who cares if someone has more money?  It doesn’t mean they’re better than me. It doesn’t mean they’re smarter, or better-looking, or can write a better novel.  It certainly doesn’t mean they’re happier or have a more satisfying life. Maybe the opposite.  Stop worrying about it.

Now, many people think Hemingway had the last word in this debate.  His answer is very appealing, and very American. We shouldn’t value people based on their wealth. We shouldn’t look up to them and deify them, like European kings and queens. That’s what America is all about. It’s why we had a revolution.  No more aristocracy, no more oligarchy.

But unfortunately over the past 35 years Fitzgerald seems to have been closer to the truth.  We’ve seen the growth of a rich and super-rich class  that poses real dangers. To our economy. To our democracy.  Above all I think it threatens our shared sense of community and the moral fabric of our society.

Fitzgerald made his observation about the very rich in the middle of the famous Roaring 20s, and that’s noteworthy because when you look at economic inequality in the United States, it turns out that where we are now looks a lot like the 1920s. The two peaks of income inequality in the last hundred years were in the late 1920s, and today.

But between these peaks we had a very different economy. From the 1940s through the 1970s the United States had solid growth, averaging over 2% per year, that was evenly distributed–a rising tide that really did lift all boats.  The rich got richer, but so did the middle class and the poor. Economists have dubbed this period “the Great Compression” because of the striking convergence of income levels.

But in the 1980s inequality began to rise steeply, continuing until just before the 2007 recession when it returned to the levels of the 1920s. During this period the benefits of growth have gone mostly to the haves– the top 20% and especially to the top 1%  and the top .01%.  As a result, inequality has skyrocketed.  And while the Great Depression reduced inequality by wiping out a big chunk of the wealth of America’s 1%, the Great Recession has not.  Virtually all of the so-called recovery from the recession has benefited the 1%, while workers are making less and the middle class is being hollowed out.

Here’s an illustration: In 1965 the CEO of an American Fortune 500 company made about 20 times as much money as the average worker.  Today, he or she makes almost 300 times as much.

Like many Americans, you might think that even if we’re getting more unequal, what really matters is economic mobility.  The American Dream is that anyone can be rich and successful if they get an education and work hard.

But it turns out inequality and mobility are related. At the same time that inequality has increased, moving up the economic ladder has become harder.  The greater the level of inequality in a country or a region, the harder it is for children from poor families to improve their economic status compared to their parents. This is why today you have a better chance of achieving the American Dream in Canada, or Denmark, than you do in the USA.

A few years ago the Chairman of the President’s Council of Economic Advisors, Alan Krueger, gave a name to the graph that shows the relationship between rising inequality, and declining opportunity: he called it the Great Gatsby Curve.

Or as my favorite billionaire, Warren Buffett, said a few years back: “There’s been class warfare going on for the last 20 years, and my class has won.”

What does it mean to live in a country where the Buffett class has won?  More and more the lives of the very rich, and even the sort-of-rich, don’t intersect with the less well off.  The rich send their kids to different schools, live in their own gated communities, and vacation at exclusive resorts.  Increasingly the rich and poor in America occupy separate zip codes.  Places like Manhattan and San Francisco, which used to be vibrant melting pots that incubated artists and entrepreneurs, are increasingly theme parks for the ultra-rich from all over the world.

Geographic distance makes it easier for both rich and poor to accept Fitzgerald’s judgment: that the rich ARE different, and that their success is evidence of superior talent and drive and intelligence.  While being poor is often seen not as bad luck or an accident of birth, but as evidence of inferiority:  not working hard enough, not being smart enough, not having enough self-control.

There’s a name for this type of society, where wealth is the measure of all things–it’s called oligarchy.  Some of you may think it’s farfetched to worry that the United States is in danger of becoming an oligarchy.  But I think it has already happened, without our noticing.

In the history of mankind oligarchy has not been the exception; it has been the norm.  In much of the world–in Russia, in most of Latin America and Africa and the Middle East–it still is. We should not imagine that it can’t happen here. In every society I know, wealth and power go together; and in every society I know, those with wealth and power try to keep it and pass it on to their heirs.

There’s a moral philosopher who I admire, Michael Sandel, who calls this trend, this way of looking at the world that sees it as a function of market forces and that sees the verdict of the markets as proper and just, “market fundamentalism.”  Perhaps the biggest change in America in my lifetime has been the widespread acceptance of market fundamentalism, the belief that markets are the measure of all things.

As we know, the most effective way to wield power is to get your victims to internalize their own inferiority.  In the past, when you could convince blacks or women or the poor that they were inferior–when they believed it themselves–you hardly needed to use force to maintain control.  Once we believe that challenging the verdict of the market is not just difficult but immoral, that money is speech and corporations are people–then, as Warren Buffett told us, the war is over.

As societies become more unequal they also become less trusting and more polarized. I don’t need to tell you that in America, our trust in government and each other has been plummeting, while the intensity of our political disagreements has been rising, at just the same time that economic inequality has gone up.

Is it possible to stop the growth in inequality?  Learned economists tell us that inequality is the result of great global and historical changes like the rise of China and automation and artificial intelligence that are hollowing out the middle class, and there isn’t anything we can do about it.

I disagree.  The rise of inequality is not beyond our capacity to change. What we need to do is accept that this is not just an economic or even a political challenge, but a moral and spiritual one.  We need to see it as a threat not only to our pocketbooks but to our moral fabric and our ability to live in community with one another.

There is no shortage of ideas and programs and policies to make our economy fairer, to help people at the bottom get educated and trained so they can move up, to channel resources away from the 1% to benefit the 99%, to keep money from polluting our democracy.  What we lack is the will and the vision to implement them.

To make this happen we will need to recover our faith in human agency, in our ability to act together.  Market fundamentalism is just one more example of ideologies that, throughout history, have been created to make people believe that the way things are, however unequal, however unjust, is ordained and cannot be changed.  Whether this is seen as coming from God, or Fate, or History, or Nature, or the Market, the purpose is the same:  to convince the have nots and powerless to accept the order of things.

Peter Morales, the head of the Unitarian Universalist Association, said in 2011:  “Economic inequality pollutes human relationships the way smog pollutes our lungs. Just look at life where the gaps between rich and poor are greatest — Latin America and Africa. And look back to when the gap was greatest in American history. These were times of slavery and robber barons.”

At great sacrifice and cost, Americans overthrew slavery, and tamed the robber barons.  These victories started with changes in our understanding of right and wrong and in our view of what we owed one another if we were to live in one community. That slavery was not part of the natural order of things–it could be abolished. That robber barons were not Masters of the Universe, but predators who we had the right to rein in with laws and regulations.  We HAVE risen to the challenge before. We can now.

Fitzgerald may have it partly right:  the very rich are different.  Perhaps it’s more accurate to say that they often convince themselves, and sometimes the rest of us, that they’re different. That they’re the makers, and the rest of us are takers.  But we have it in our power to give Hemingway the last laugh. Yes, they have more money. But we know that every human being has inherent worth and dignity.  Every one. Let us go forward together.


Source: Thomas Piketty and Emmanuel Saez, “Income Inequality in the United States, 1913-1998,” Quarterly Journal of Economics, 118(1), 2003. Updated to 2008 at http://emlab.berkeley.edu/users/saez. – See more at: http://inequality.org/income-inequality/#.dpuf