Posted by John, September 15th, 2009 - under Poverty.

Tags: Classes

Never before has the goal of abolishing poverty been within our reach: there are no longer any insurmountable technical, resource or logistical obstacles to achieving it. Yet… 1.1 billion people do not have access to clean drinking water and, every hour, 1,200 children die from preventable diseases”.

– United Nations Development Program Annual Report, 2006

There is something seriously wrong with the way our economy operates. A world of abundance which produces enough to provide two kilograms of food to every person every day instead leaves over a billion people in chronic hunger and poverty.

At the turn of the century global capitalism was still claiming there was now indisputable proof that it is the best of all possible worlds.

Yet the richest 1 per cent of adults on earth owned 40 per cent of global assets and the richest 10 per cent accounted for 85 per cent of the world total.

In contrast, the bottom half of the world’s population owned just 1 per cent of the wealth.

Today in the United States – the richest country on earth – 46 million people do not have health insurance. Over 10 million struggle to get by on the minimum wage of just $290 per week. Over 37 million live in poverty.

In Australia, inequality is also the norm.

According to the Reserve Bank, the richest 20 per cent of Australian households own 63 per cent of all wealth in the country, while the bottom 20 per cent own just 0.2 per cent.

Between 1990 and 2005, the average annual pay of a sample of CEOs rose by 564 per cent to $3.4 million. In the face of this, last month the federal minimum wage was frozen at just $14.31 per hour.

Why, when, as the UN notes, “there are no longer any insurmountable technical, resource or logistical obstacles” to eradicating poverty, does such inequality persist the world over?

The answer is not “human nature”: There is nothing natural about going hungry, nor is there anything natural about hoarding resources and denying them to those in need.

Nor is the answer a lack of education: The majority of people don’t need to learn about the fact that we are poor. We’re not that stupid that we didn’t notice.

So what is it?

Warren Buffett (the second richest person on the planet with a personal fortune of $37 billion), when questioned about the economy, related to an interviewer the following:

I don’t have a problem with guilt about money… It’s like I have these little pieces of paper that I can turn into consumption. If I wanted to, I could hire 10,000 people to do nothing but paint my picture every day for the rest of my life.

What he illustrated in this response is something fundamental to understanding the persistence of inequality.

Those who control the wealth are not simply rich; they are powerful because they can decide what other human beings will do with their time and energy.

Owning and controlling the world’s resources – the offices, the factories, the aeroplanes, the computers, the telecommunications networks, the financial institutions etc – gives the ruling class the capacity to decide what gets produced, who produces it, where it gets produced and where the benefits of production go.

So while millions around the world are in need of shelter, clean water, medical treatment etc, Buffett and his ilk are busy bragging about how many paintings they might own.

The ruling class is callously indifferent to the trauma that capitalism causes the majority of people. But this is not simply a defect of their humanity.

Because capitalism is driven by competition for profit these decisions that the rich and powerful make are not, and cannot be, directed to fulfilling human needs.

The profitability of business is completely counterposed to the interests of the majority of the planet.

The rich benefit from the fact that the majority of people in the world live a precarious existence.

They act to keep it that way because they need people who will have to work for them to create profit – whether staffing one of their shops or driving one of their trucks or producing munitions for one of their wars.

The more people live hand to mouth, the less money they will accept to get a job. This is the economic law that the rich constantly evoke in the inverse – too much employment will threaten a “wages push”. For business higher wages are a bad thing.

Understanding why inequality persists, then, is really about understanding that class is not just a question of the haves and the have nots.

It’s a question about the decisions that get made which determine what happens in society at large.

The working class – those who don’t own or control society’s productive resources and don’t direct other people’s labour – has little or no control over the direction society takes because they are excluded from the decision-making processes regarding the world’s resources.

So class is defined by material inequality and economic power. The basis of that power is the production of profit through control of resources. Everything else is secondary to that.

However, class society is also about much more than this.

The ruling class has a massive apparatus which enables them to organise the extraction of profits from the working class on a national basis.

The police force, the education system, the military, the parliament, the legal system and the media are all institutions whose importance lies in their role in maintaining class rule through protecting and legitimising the economic power of the ruling class.

A key confusion among people who would like to see a better world is that these institutions can seem like they are the source of power in our society, rather than instruments used to protect existing power.

While the control of institutions is obviously important and some can be sites of struggle (parliament for example), understanding their role in sustaining capitalism helps to explain why the world never really seems to change.

We can and do, for example, elect different people to the parliament, get our news from alternative media sources and educate ourselves about the way the world really is, but the economic power of the ruling class remains unchallenged by any of this.

The solution to the world’s inequality, then – to the fact that the majority of us are excluded from participating in decisions which fundamentally affect our society and our own lives, to the fact that the working class creates all of the wealth but has no say or control over it – is to build a political alternative which demands that human need be put ahead of profit.

More than that, though, it means building an alternative which understands that a world where the needs of humanity are placed above all other considerations can only come about through a direct challenge to the power of the ruling class, rather than accommodation to its wishes.

So the fundamental reason for understanding class is precisely so we can aim to rid the world of it.

This article, by Ben Hillier, first appeared in Socialist Alternative.