[Peace-discuss] Chomsky Reply on Economic Inequality

[David Green]

According to estimates by the economists Thomas
Piketty and Emmanuel Saez--confirmed by data from the
Congressional Budget Office--between 1973 and 
2000 the average real income of the bottom 90 percent
of American taxpayers actually fell by 7 percent.
Meanwhile, the income of the top 1 percent rose by 148
percent, the income of the top 0.1 percent rose by 343

percent and the income of the top 0.01 percent rose
599 percent. That's about what has been reported for
many years by the major studies of these topics, the
biennial State of Working America, published by the 
Economic Policy Institute; latest edition just
appeared.  You can read plenty about it on Znet,
and by authors who publish there, myself included, for
many years, using these and other very reliable 
sources.

You can find the details in many books and articles of
mine and others who write on Znet, and the academic
and government sources studied.  The greatest
period of growth in American economic history (and
pretty much worldwide) was from about 1950-75, often
called the "golden age of (state) capitalism" (I'm 
adding the word "state," because the development was
very heavily based on the dynamic state sector, as it
still is).  And it was indeed egalitarian: the
lowest quintile actually did slightly better than the 
highest.  The last 30 years have been very
different.  By most macroeconomic indices there
has been significant deterioration in growth, 
at least among those countries that followed the
neoliberal rules of the era: those that radically
violated them, as in East Asia, did very well. 
And growth has been highly egalitarian.  I
suppose this is the first period of roughly 1/4
century in American economic history when real wages
for the majority have stagnated or declined, and
family incomes are kept up only by an increasingly
heavy work load, I think either the highest in the
industrial world or close to it; you can find 
the details in the regular EPI studies.>

The economy is so poorly understood that no one can
give answers with any confidence.  However, a
great many leading economists do attribute the 
significant deterioration to the liberalization of
finance from the early 1970s: John Eatwell and Lance
Taylor's Global Finance at Risk, to take just one of
the many studies by prominent economists.  The 
figures are often fudged by advocates of neoliberalism
(called "globalization" commonly) by indiscriminately
mixing countries that kept to the rules and those that
followed them, giving meaningless statistics that can 
be used to show that "globalization" is great -- for
those who ignored the rules, and overlooking very
deleterious effects within these societies (China,
India, etc.).  The Vietnam war probably had very 
little to do with it except for a brief period.