A Movie Review
The Declaration of Independence states that all are created equal and have the right to life, liberty and the pursuit of happiness, but income inequality has locked us all into the prison of free market economics. The life and liberty of the poor is not respected and the rich are obsessed with wealth. The result: a divided community in separate prisons without a thread of connection. Happiness is a lost goal.
Robert Reich confronts the current economic malaise with his book, After Shock, and a movie “Inequality for All.” The movie follows the book in theme and content.
Reich effectively establishes the fact of inequality with bar charts; one especially impressive is a chart that has the configuration of the Golden Gate Bridge. This is fitting since the bridge was built during the great depression as part of an economic stimulus program and Reich teaches at nearby U.C. Berkeley. The movie is based at U.C. Berkeley showing Professor Reich teaching a class – and us - about income inequality and what he proposes we do about it.
The Golden Gate Bridge bar chart shows two towering opposite poles representing income inequality just before the great depression and income inequality just before the great recession. Immediately the impression is – income inequality = an economic crash.
What is the moral point of view? Let’s refer to the papal Encyclical most revered by conservatives, Centesimus Annus. and to Dutch theologian – Henri Nouwen.
The ‘Liberal’ Answer: Focus on Middle Class Security
Reich and others look to Roosevelt’s New Deal of the 30’s for the answer: money in the hands of those who will spend it on goods and services will stimulate the economy to benefit all. The ‘multiplier’ effect results in a constant turnover of funds for spending that stimulates production and jobs and the ‘accelerator’ effect of increased investment maintains the recovery. The movie provides a circular graph for an explanation.
The ‘accelerator’ effect depends on investments in the production of goods and services and not on various types of Ponzi schemes; hence government regulation and spending on infrastructure is crucial.
The ‘multiplier’ effect depends on providing purchasing power on a massive scale. The keys are labor unions and taxes. Reich goes along with the New Deal economic theory that workers must have the right to organize and taxes must be fair requiring the rich to pay their fair share.
For the system to work, government is needed for direction. Reich is clear that the economic system is not of nature, but was and is created politically. He also is clear that the system is to benefit most not just the few. This is where we find the basic disagreement. Republicans and right wing Democrats look to the economy to benefit the few.
But what direction are we going? Since the 70’s Republicans and right wing Democrats have moved the political spectrum to the right. Today Eisenhower would be to the left of Obama. Eisenhower wrote to his brother Edgar,
Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H.L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or business man from other areas. There number is negligible and they are stupid. (The Papers of Dwight David Eisenhower, L.Galambos and D. van Ee, eds. doc.1147. cited by J.S. Hacker & P. Pierson, Winner-Take All Politics, Simon & Schuster, New York, 2010, p. 189.)
Today compromise in the middle is really right wing politics controlled by the very wealthy which makes Reich’s movie quite clear.
Centesimus Annus as a Guide to the Moral Dimension
Some sample quotes: Income disparity
As a help in reviewing Robert Reich’s movie, “Inequality for All,” let us consider John Paul II’s Centesimus Annus widely touted by conservative analysts as most important and supporting for their point of view.
Centesimus Annus was written in 1991 for the 100th anniversary of the Encyclical Rerum Novarum. Pope John Paul II reviewed and reaffirmed the social teaching tradition of the church and named it part of the ‘New Evangelization.’ (C.A. Intro. 3; c.1,5; c.6, 53 ) The 1891 setting for Rerum Novarum was tragic income disparity.
Pope John Paul wrote in Centesimus Annus,
Here we find the first reflection for our times as suggested by the encyclical (Rerum Novarum). In the face of a conflict which set man against man, almost as if they were “wolves,” a conflict between the extremes of mere physical survival on the one side and opulence on the other … However, the pope was very much aware that peace is built on a foundation of Justice. (C.A.c.1,5.)
Intervention by the government
Such a society is not directed against the market, but demands that the market be appropriately controlled by the forces of the society and by the state, so as to guarantee that the basic needs of the whole of society are satisfied. (C.A. c. 4, 35)
Furthermore, society and the state must ensure wage levels adequate for the maintenance of the worker and his family, including a certain amount for savings. This requires a continuous effort to improve workers training and capability so that their work will be more skilled and productive, as well as careful controls and adequate legislative measures to block shameful forms of exploitation, especially to the disadvantage of the most vulnerable workers, of immigrants and those on the margins of society. The role of trade unions in negotiating minimum salaries and working conditions is decisive in this area. (C.A. c.2, 15)
Preferential option for the poor
The focus of Robert Reich’s analysis is the middle class, but for Roman Catholic social teaching the focus is the poor. John Paul II wrote in Centesimus Annus,
Rereading the encyclical (Rerum Novarum) in the light of contemporary realities enables us to appreciate the church’s constant concern for and dedication to categories of people who are especially beloved to the Lord Jesus. The contents of the text are an excellent testimony to the continuity within the church of the so called “preferential option for the poor,” an option which I defined as a “special form of primacy in the exercise of Christian charity.” (Sollicitudo Rei Socialis,42 cited in C.A. c.1, 11)
“Preferential option for the poor” is unique to the Roman Catholic Social Teaching. By the “poor” is meant world-wide poverty – of little concern to Robert Reich in his attempt to save the U.S. middle class.
Ecology and Consumerism
Centesimus Annus was written in 1991 and John Paul II had concern about the environment as part of his moral economic message.
Equally worrying is the ecological question which accompanies the problem of consumerism and which is closely connected to it. (C.A. c.4, 37)
It is not wrong to want to live better; what is wrong is a style of life which is presumed to be better when it is directed toward “having” rather than “being,” and which wants to have more, not in order to be more but in order to spend life in enjoyment as an end in itself. (cf. Gaudium et Spes, 35, Populorum Progressio, 19, cited in C.A. c.4, 36)
Neither point, ecology nor consumerism, is emphasized by Robert Reich.
Reich and His Movie – Inequality for All – Not Radical Enough for Catholic Social Teaching
‘Preferential option for the poor’ is not important for Reich with his focus on the U.S. middle class. Catholic social teaching expresses concern for the poor worldwide. Reich was a member of the Clinton administration when N.A.F.T.A. (North American Free Trade Agreement) was passed. On January 4th 1994, the Zapatistas took control of several towns in Chiapas Mexico in protest. N.A.F.T.A. was nothing more than a new way for U.S. corporations to exploit Mexican labor.
It’s not just Reich; the politics of the day skip concern about the poor, not just in other parts of the world, but in our own inner cities. This relates to ecological concerns; after all the wealthy can always escape the floods. Roman Catholic Dutch theologian Henry Nouwen noted that compassion, a defining note for being human, is limited in our capitalistic society.
Nouwen wrote that compassion, like that of Jesus, looks like an enemy of competition, the basis of the free market. Would too much compassion destroy the contemporary version of the free market economic system? Remember, it’s the source of opulence for those in power. (McNeil, Morrison, Nouwen, Compassion, Doubleday, New York, 1982)
The income gap threatens the existence of U.S. democracy, but ‘New Deal’ economics is not the solution. Consumerism threatens the earth itself. Jobs, work, fair income with the goal of happiness for all, needs to be re-thought and apparently Reich doesn’t even see the fundamental problem which is somewhat different from that of the 30’s.
“Inequality for All” is informative and important, but it falls short of even defining the economic disaster we face; the very ecological environment we live in is threatened by our economic system based on ‘having’ rather than ‘being.’