The Rich Won’t Need us Much Longer, Dr. Stiglitz
I read a scholarly article recently by an economist I respect, Nobel winner Joseph Stiglitz. He made a compelling case for the rich helping the rest of us for “selfish” reasons. The argument was well documented, but I think Dr. Stiglitz missed one thing: The rich won’t need Americans much longer.
At least, they won’t need an American middle class.
They’ve got bigger fish to fry.
In China, in India, all along the Pacific rim, a new middle class is rising. You’re looking at three, four billion people, compared with America’s 300 million. With globalization, production has moved to the eastern nations, and the result is rapidly increasing buying power over there.
The rich have never really belonged to any one country. They spend their winters in the Alps, their summers on the Mediterranean and so on. You can probably still catch them in New York in the fall, taking in the latest Broadway shows, but who knows where they’ll be for the rest of the year?
As for America’s corporations, they are no longer American. How can you still think of General Electric as an American company? GE is spending a couple of billion dollars in China this year on research and development, technology and financial services partnerships.
You’ll hear a lot about General Motors’ great comeback, how it’s number one in the world again. But you probably won’t hear that much of its success comes from its Chinese operations. They’re selling a lot of cars in China now – to the emerging Chinese middle class. And GM cars made in China will soon be on sale in America.
Americans are not the only people with buying power these days. And the trend will inevitably increase as the corporations’ political lackeys enact policies that impoverish the mass of the American people.
This is a global world, a global economy, and you have to think of the middle class, the consumer class, in global terms.
Even the gambling industry has gone global. Conservative activist Sheldon Adelson, a Las Vegas casino czar who contributes millions to Republican candidates, has huge operations in the Chinese isalnd of Macao, for example.
Why do you think European economic crises have such an impact on the New York Stock Exchange? Why do you think a tsunami in Japan or an earthquake inIndonesia sends shock waves through America’s economy?
Workers in developing countries don’t make the kind of wages that Americans make. And it will take decades for the gap to close. But, nevertheless, the new working class has money to spend, and they are buying the products they make. They have far less buying power individually, but there are so many of them!
The obvious answer for America is to enact tariffs on goods (and services) produced abroad. But many of the corporations producing those goods and services are “American” and the tariffs would hit them hard. They are prepared to spend whatever it takes to keep their tariff-free acess to America’s consumers. And that includes massive campaign contributions and PAC budgets.
Of course, American trade unions are funding opposition to the global corporations, but the unions’ economic power is under seige. Today, in Wisconsin, Republican Governor Scott Walker is facing a recall election that could severely undermine America’s union movement. Walker’s recall was sparked by public opposition to his union busting policies, and if he wins, you can expect a deluge of anti-labor legislation across the land.
Corporate activists like the Koch brothers know this. That’s why Walker’s campaign was able to raise more than $20 million – not including the millions spent by superPACs supporting him. In contrast, Democratic challenger Tom Barrett raised $3 million. And most of Barrett’s support has come from the unions.
If Barrett loses, it could be the beginning of the end for organized labor as a major funding source in American politics.
And as the unions collapse, so will opposition to the global corporate elite.
The way I see it, the American middle class is destined for the scrap heap unless we wake up and start fighting back. Dr. Stiglitz argues that the rich should selfishly support a strong midle class. I would add that the middle class should selfishly support itself. And that means standing together with the union movement to protect our interests in a global economy.