Those Who Forget the Past, Essay Example

As anyone who has been paying even the least bit of attention to contemporary politics in the United States can attest, one of the most common phrases used to describe our current political and economic circumstances is “income inequality.” This two-word term sounds fairly benign, but it actually describes a situation that is anything but benign. Over the last few decades, the divide between the “haves” and the “have nots” has grown wider by the day. As applied to our contemporary political and economic systems, “income inequality” refers to the enormous gap between the small number of people who control nearly all of America’s wealth and the vast majority of those whose incomes have remained stagnant, or even shrunk, over the last several decades. At the root of this problem is unfettered capitalism, and a political system that refuses to reign in the excesses of profiteers who use money, power, and influence allows them to continue amassing wealth at the expense of the American people. This is not the first time in American history that such an imbalance has existed, and the lesson of history shows that income inequality is untenable, and will eventually lead to economic and political disaster.

The defining characteristic of economic and political systems in the late 20^th and early 21^st centuries has been the advent and continued growth of globalization. The term globalization encompasses a fairly broad set of factors, but it can be loosely defined as the processes by which trade, travel, and communication have connected individuals and public and private organizations on an international and transnational scale. The growth of globalization has been largely underpinned by the rapid evolution of computer technology, satellite communication, affordable air travel, and other means by which the world has become increasingly interconnected and interdependent. It is hardly surprising that many of the individuals and businesses which develop and provide computers, cell phones, and other forms of digital technology have amassed astonishing profits for their efforts. Companies such as Apple and Google, which manufacture computer hardware and software, are among the largest and most profitable companies on the planet. It is also hardly surprising that the organizations and individuals who generate such massive wealth also exert overwhelming political influence, nor is it surprising that they use such influence to avoid paying taxes whenever possible and to support favorable legislative and regulatory schemes.

One and a half centuries ago, a similar technological revolution was reshaping the United States. Industrialization was pushing the American economy away from its traditional agricultural foundations and towards an economic system built on manufacturing. While air travel has allowed international and transnational business and trade to flourish in the 21^st century, rail travel and freight were booming in the 19^th century. Rail lines were being laid across the United States, connecting states, cities, and towns and making it possible for businesses to move materials and goods at unprecedented speeds. Sitting at the peak of the economic mountain in this period were the industrialists who have come to be known, collectively, as “robber barons” (Lubin, 2011). These robber barons amassed great wealth, often at the expense of their workers, as they bought off politicians, built monopolies, and exerted enormous influence over the economic and political landscape of the U.S.

In the 150 years since the robber barons virtually ruled the U.S. by using their wealth to purchase political favor and economic security, the U.S. economy has collapsed on more than one occasion –most notably during the Great Depression- and rules and regulations have been enacted that make it more difficult for business to exploit their workers to the same extent as did the robber barons of the 19^th century. Businesses can no longer exploit child labor, for example, and working conditions in most U.S. economic sectors are safer than they were in the 19^th century (Lubin, Kelly, & Wile, 2012). At the same time, however, businesses do not face the same restrictions in many other countries, so manufacturers of computers, automobiles, clothing, appliances, and virtually every other type of product have moved their manufacturing processes to countries where labor exploitation is still possible.

The robber barons of the 19^th century did not just exploit labor; they also exploited U.S. economic policies to avoid paying as much taxes as possible. In the 21st century the corporate tax rates in the U.S. are, in many cases, at their lowest levels in history, a fact which helps contribute to the obscene profits many companies generate (Lubin, 2011).  U.S. companies rely on infrastructure such as roads, rail lines, and the backbone of the Internet –which was an invention supported with taxpayer dollars- to conduct their operations, yet seek to avoid paying taxes whenever possible. A similar set of circumstances exists for the wealthiest individuals; as millionaire businessman Warren Buffet observed, his tax rate is actually lower than that of his secretary, who earns a mere fraction of what Buffet himself earns every year (Isidore, 2013).

The Democratic Party in the U.S. has recently called for legislation that would establish a national minimum wage of just over ten dollars per hour. The issue of income inequality is likely to be a central component of the Democrats’ platform in upcoming mid-term and presidential elections in 2014 and 2016. Similar discussions were taking place at the dawn of the 20^th century, as the era of the robber barons was coming to a close. In the early 20^th century, after decades of industrialization making a few men very, very wealthy and leaving millions more on the verge of poverty, the crushing weight of bad economic policies and wildly uneven income inequality, the U.S. economy collapsed under its own weight. It is not difficult to imagine that the U.S. is doomed to repeat this history if income inequality continues to grow; the rich can only get richer for so long before there is simply nothing left for anyone else.

Works Cited

Isidore, Chris. ‘Buffett Says He’s Still Paying Lower Tax Rate Than His Secretary’. CNNMoney. N. p., 2013. Web. 5 May. 2014.

Lubin, Gus, Michael Kelly, and Rob Wile. ‘Meet The 24 Robber Barons Who Once Ruled America’. Business Insider. N. p., 2012. Web. 5 May. 2014.

Lubin, Gus. ’23 Mind-Blowing Facts About Income Inequality In America’. Business Insider. N. p., 2011. Web. 5 May. 2014.