Issue 238 of SOCIALIST REVIEW Published February 2000 Copyright © Socialist Review

Letter from the US

What's good for the rich...

Protesters at Seattle were united around a common sentiment, says Sharon Smith

There was a time when the city of Seattle was identified most immediately with the 'new' American model of capitalism--a leaner, meaner and more globalised capitalist system. Two of the most internationally recognised symbols of the new international system were from Seattle-Starbucks and Microsoft. A third--the athletic shoe giant Nike--was headquartered nearby.

But that seems like a millennium ago now. Today Seattle has become a symbol of a completely different kind. Indeed, one could even say that it has come to represent the exact opposite of what the corporate chiefs and politicians had so carefully nurtured--a symbol of the diverse and ever growing opposition to corporate power, local and global. The Battle of Seattle, as the protest against the WTO has become known in the press, was in essence a fight for human needs against the greed and profit motive that rules the world.

The many thousands who came to Seattle, and those who protested elsewhere, were concerned with many issues--the environment, human rights, child labour and Third World poverty, among others. But they were also clearly united by a common sentiment--hostility to the transnational corporations and their allies in government, both here in the US and around the world. In the aftermath of the WTO protests, mainstream newspapers searched for an explanation for the events. In the end it wasn't difficult even for the wilfully blind of the mainstream media to conclude a simple truth. As one newspaper wrote, 'They are folks who don't check each day to see how their 401K is doing or hang out with people who have become millionaires when their companies went public. What they all seem to agree on is that giant corporations have gone too far in gaining control over their lives and defining the values of their culture, and that the WTO has become a handmaiden of those corporate interests.'

Simple and to the point. But what these commentators often miss is just how deep this sentiment runs. And it is not surprising either, since most media commentators have missed out on the most important aspect of the new capitalism that ordinary workers understand all too well--what is good for the rich is not good for workers. The depth of the resentment felt by ordinary workers is combined with an understanding that the rich and their politicians have been lining their pockets like never before.

The growing inequality between rich and poor--between haves and have nots--is common knowledge to the majority of those who demonstrated against the WTO. A UN report issued last July, for example, reported that the three richest billionaires in the world--Microsoft's Bill Gates being one--owned more than the combined gross national product of all the world's least developed countries and their combined population of 600 million people. According to the report, while 1.3 billion people struggle to live on less than $1 a day, the world's richest 200 people doubled their net worth between 1994 and 1998 to more than $1 trillion. About 840 million people are malnourished, and close to 1 billion find it difficult to meet their basic consumption requirements. More than 880 million people lack access to health services and 2.6 billion people have no access to basic sanitation.

Far from narrowing, the gulf between rich and poor is growing. 'Some have predicted convergence. Yet the past decade has shown increasing concentration of income, resources and wealth among people, corporations and countries,' the report states. The income gap between the fifth of the world's population in the wealthiest countries and the poorest fifth of the world's population was 74 to 1 in 1997--up from 60 to 1 in 1990 and 30 to 1 in 1960. This vast concentration of wealth in the hands of a tiny layer of people at the top of the heap exposes them for the parasites they are, and their system for what it is.

The figures for the US help explain why there has been such a dramatic shift in the outlook and attitude of so many ordinary people. Take the difference in pay between workers and corporate executives. A report issued last year showed that the gap between the pay of corporate executives and workers has grown more than tenfold in the US over the last two decades. In 1980 the chief executive officers (CEOs) of major corporations made an average of 42 times the pay of the average worker. Today's top bosses make a stunning 419 times the pay of the average worker.

And despite all the talk of economic recovery, its benefits have clearly been lopsided. To quote only one of many reports, The State of Working America 1998-99, put out by the Economic Policy Institute last year, 'Putting recent economic gains in historical context, the study finds that the living standards of most working families still have not recovered from the recession of the early 1990s, nor have their wages kept pace with the growth in productivity. The income growth that has been generated among middle-income families has been driven largely by an increase in working hours... to make up for the long term deterioration of wages. The economic realities facing the typical American family over the 1990s include increased hours of work, stagnant or falling income, and less secure jobs offering fewer benefits.'

This massive shift in wealth has not gone without a parallel attack on workers' rights. Indeed, the attack on workers' rights, organisations and living standards has been the precondition for the economic expansion of the last several years. The corporations and Wall Street began their current binge in the aftermath of Ronald Reagan's defeat of the air traffic controllers' strike in 1981. This was the start of a long period of retreat and concessions on the part of labour. Last year the Brussels-based International Confederation of Free Trade Unions (ICFTU) summarised the state of the US labour movement by arguing that US workers are effectively stripped of their right to belong to a trade union. The ICFTU report concludes, 'While in theory, US law provides for workers to have freedom of association, the right to join trade unions and participate in collective bargaining is in practice denied to large segments of the American workforce in both the public and the private sectors.'

In the wake of the Battle of Seattle, it is important to remember that symbols come and go. But the process that began before Seattle will continue well after the battle in the streets.


Today's top bosses make a stunning 419 times the pay of the average worker


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