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Marx on Income Inequality Under Capitalism

By Branko Milanovic

Among those who have read Marx, it is well known that Marx was rather indifferent to the issue of inequality under capitalism. Among those who have not read him, but know the left-wing views from social-democracy and assume that Marx’s view must have been similar (but just more radical) this is not well known, nor are the grounds for such an attitude well understood.

(Marx’s views on the topic are dispersed: they are in GrundrisseThe 18th  Brumaire…CapitalCritique of the Gotha program. A very nice and succinct recent discussion can be found in Allen W. Wood’s piece “Marx on equality”.)

There are several grounds on which Marx treats inequality as we currently understand it –that is, inequality of income or wealth between individuals—as  relatively inconsequential.

The first ground has to do what is the main, as opposed to derivative, contradiction in capitalism: that between owners of capital and those who have nothing else but their labor-power. As for Ricardo, for Marx too, class determines one’s position in income distribution. Class is therefore prior to income distribution. It is the abolition of classes that matters. Engels (who certainly on this had the same opinion as Marx) wrote: “The elimination of all social and political inequality” [as stated in the social-democratic program that he is criticizing] rather than ‘the abolition of class distinctions’, is…a most dubious expression, as between one country, one province and even place and another, living conditions will always evince a certain inequality which may be reduced to a minimum but never wholly eliminated”. (Letter to August Babel) Thus, “to clamor for…equitable remuneration on the basis of the wages system is the same as to clamor for freedom on the basis of slavery” (Marx,Value, Price and Profit).

Once classes are abolished, the “background institutions” are just and this is the moment to begin any real discussion about what is a fair distribution. This is the topic about which Marx wrote relatively late in his life, in Critique of the Gotha program in 1875. He introduced there the famous distinction between the distribution of income under socialism (“to everybody according to their work”) and under communism (“to everybody according to their needs”).

Under socialism, as Marx writes, equality in treatment presupposes an original inequality because people of unequal physical or mental abilities will be rewarded unequally: ”This equal right is an unequal right for unequal labor.” (Critique..).  

Under communism, however, in a Utopia of abundance, the real equality may imply an observed inequality in consumption, as some people whose “needs” are greater decide to consume more than other  people whose “needs” are less. If in a hypothetical communist society we observe a Gini coefficient of 0.4 like in today’s United States, it tells us nothing about inequalities in the two societies—and certainly not that the two societies display the same level of inequality. In one (communism), it is voluntary inequality, in the other involuntary.

Is Woke Capitalism the New Trickle-Down Economics?

Stakeholder capitalism might be a feel-good corporate-friendly ideology, but so long as some stakeholders are (extremely) more equal than others, it is a flimsy fig leaf trying to hide an economic system that is producing ever-increasing levels of inequality.



Just like the trickle-down economics of a generation ago, stakeholder capitalism provides a moral justification for the pursuit of corporate self-interest while inequality gets worse and worse.

Each January Larry Fink, billionaire boss of asset management firm BlackRock, sends a letter to the CEOs of the corporations his company invests in. In these letters he takes it upon himself to outline his views on the most important issues affecting the business world.  

A well-known advocate of “corporate purpose,” in the past Fink’s letters have addressed the responsibility of corporations’ environmental sustainability, workforce diversity, and the impact of business on society. His mantra has been that people have lost trust in governments that are failing to solve social and political problems, and it’s time for business to step up.

In this year’s letter released on January 17, Fink had a slight change in tack. He still goes on about stakeholder capitalism and how corporations should pursue the interests of the customers, employees,  suppliers, and communities, rather than just shareholders. What he added in 2022 was a direct statement that his approach to business is not “woke” and “is not about politics.”

Stakeholder capitalism, according to Fink, has nothing to do with ideology, it is simply the best way to do capitalism. What could be less woke than that! “We focus on sustainability not because we’re environmentalists, but because we are capitalists and fiduciaries to our clients,” he opines.

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Econ 101 with Robert Reich

Episode 224: Rumble with Michael Moore

Listen in podcast app

Former Secretary of Labor Robert Reich (Win McNamee/Getty Images)


Today marks the second anniversary of Rumble with Michael Moore. Thank you for participating in and supporting my podcast! We’ve done 224 episodes and have had over 31 million downloads! 

On today’s Rumble, with the end of the year approaching & reports about inflation dominating the nightly news, Americans everywhere are anxious about what this means for them. Former US Secretary of Labor and progressive activist Robert Reich, however, thinks this is a major misdiagnosis: the problem isn’t inflation, but a lack of competition to stop big, monolithic corporations from jacking up prices. Robert joined me on the show today to talk about who is really responsible for your gas and milk prices skyrocketing, and why it’s more important than ever for the government to intervene in a moment when they’re trying to pull back. Plus, we discuss the rising labor movements in America and whether the “labor shortage” the media & big companies keep alleging is actually a general strike of workers across the country. 

I hope you’ll give this a listen and share with friends and family.



Is “Tax the rich” the solution?

By Arjae Red 

U.S. Representative Alexandria Ocasio-Cortez (D-N.Y.) was the center of a large social media debate when she appeared at this year’s Met Gala event wearing a dress with “Tax the Rich” boldly embroidered on the back. The fundraising event is attended by many wealthy individuals and celebrities. 

Much of the debate placed Alexandria Ocasio-Cortez herself under the microscope, dissecting her personal motives and scrutinizing her background. Largely missing from the debate — the most important aspect — was the slogan itself: “Tax the Rich.” To examine this slogan, we need a systemic understanding of the exploitation working-class people face under capitalism.

Class nature of the problem

Wealth inequality is one of the most obvious contradictions of the capitalist system. Beyond the amount of wealth people have, there is the even deeper contradiction that allows the huge income gap between the rich and the poor to exist in the first place. 

Out of all the contradictions within capitalism, the primary contradiction shaping our experience is that contradiction of property ownership — between those who own and those who do not. The capitalist class owns the means of production — the property central to wealth creation. They therefore claim the “right” to all the products the workers they employ produce. The rest of us, the working class, own nothing that we can use to produce but our own labor power. 

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Ten Solutions to Bridge the Racial Wealth Divide

The deep and persistent racial wealth divide will not close without bold, structural reform.


The deep and persistent racial wealth divide will not close without bold, structural reform.  It has been created and held in place by public policies that have evolved with time including slavery, Jim Crow, red lining, mass incarceration, among many others. The racial wealth divide is greater today than it was nearly four decades ago and trends point to its continued widening.

In this report, we offer ten bold solutions broken into three categories: Programs, Power, and Process. These solutions are designed to strike at the structural underpinnings holding the racial wealth divide in place while inspiring activists, organizers, academics, journalists, legislators, and others to think boldly about taking on this incredibly important challenge. This summary outlines the ten solutions, gives a snapshot of the latest racial wealth divide data, and offers a warning against false solutions.

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The Case for Expropriation: Billionaires’ Wealth Surged 60 percent in First Year of Pandemic

Niles Niemuth

The collective wealth of the world’s billionaires exploded by more than 60 percent last year, from $8 trillion to $13.1 trillion, according to Forbes magazine’s annual list of global billionaires, released on Tuesday.

“COVID-19 brought terrible suffering, economic pain, geopolitical tension—and the greatest acceleration of wealth in human history,” Forbes writes.

Left: Jeff Bezos (AP Photo/Charles Krupa), Right: Workers wearing PPE bury bodies in a trench on Hart Island, April 9, 2020 (AP Photo/John Minchillo)

The number of billionaires in the world grew by 660 to 2,775, the biggest total number and the largest annual increase ever. A new billionaire was minted every 17 hours.

Amazon CEO Jeff Bezos and Tesla CEO Elon Musk lead the pack with $177 billion and $151 billion, respectively. They are followed by Bernard Arnault and family ($150 billion), who control the French luxury goods company LVMH, Microsoft co-founder Bill Gates ($124 billion) and Facebook CEO Mark Zuckerberg ($97 billion).

Press reports discuss how Zuckerberg “earned” $50 billion and Elon Musk “earned” $130 billion last year. But the very term is an absurdity. One cannot “earn” a figure equivalent to the gross domestic product of a mid-size country.

This wealth is socially appropriated. First, through the exploitation of the working class in the process of production.

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Biden Ready to Take on Decades of Inequity in How This Nation Built Itself

Joan McCarter

WASHINGTON, DC - APRIL 2: U.S. President Joe Biden speaks about the March jobs report in the State Dining Room of the White House on April 2, 2021 in Washington, DC. According to the U.S. Labor Department, employers added over 900,000 jobs in March, up from 416,000 in February. (Photo by Drew Angerer/Getty Images)

When President Joe Biden said Wednesday that the plan he was introducing to “rebuild the backbone of America” would “bring everybody along,” he meant it. “Regardless of your background, your color, your religion, everybody gets to come along,” he said. What that means is billions of dollars to be invested in communities of color that haven’t just been ignored for generations of federal lawmakers, but harmed.

It’s a start at correcting those wrongs, with $20 billion dedicated specifically to “reconnect” communities of color that were bulldozed, paved under, and cut into parts by previous “redevelopment” and “urban renewal” programs that emphasized building highways to bring white suburbanites into cities by plowing through existing neighborhoods. “These highways were essentially built as conduits for wealth,” Eric Avila, an urban historian at the University of California, Los Angeles told The New York Times. “Primarily white wealth, jobs, people, markets. The highways were built to promote the connectivity between suburbs and cities. The people that were left out were urban minorities. African-Americans, immigrants, Latinos.” That’s one festering wound Biden and Transportation Secretary Pete Buttigieg are committed to addressing.

“A lot of previous government investment in infrastructure purposely excluded these communities,” Bharat Ramamurti, a deputy director of Biden’s National Economic Council, told the Times. “So if you look at where we need to invest in infrastructure now, a lot of it is concentrated in these communities.” That includes the communities like Flint, Michigan, poisoned by the lead in their drinking water; Black, Hispanic and tribal communities existing alongside Superfund sites; and urban and rural Black, Latino, and tribal communities who have less access to affordable high-speed internet. The plan also dedicates $20 million to historically Black colleges and universities (HBCUs) for upgrading facilities, research infrastructure, and laboratories. The funding includes the creation of a new national lab at an HBCU.

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Massive Inequality Is a Feature of Capitalism, Not a Bug (+2 more)

The Biden administration may usher in a new period of reform, but history shows that it’s unlikely to last if our economic system remains intact.


To grasp the sheer magnitude of U.S. economic inequality in recent years, consider its two major stock market indices: the Standard and Poor (S&P) 500 and Nasdaq. Over the last 10 years, the values of shares listed on them grew spectacularly. The S&P 500 went from roughly 1,300 points to over 3,800 points, almost tripling. The Nasdaq index over the same period went from 2,800 points to 13,000 points, more than quadrupling. Times were good for the 10 percent of Americans who own 80 percent of stocks and bonds. In contrast, the real median weekly wage rose barely over 10 percent across the same 10-year period. The real federal minimum wage fell as inflation diminished its nominal $7.25 per hour, officially fixed and kept at that rate since 2009.

Massive Inequality Is a Feature of Capitalism, Not a Bug – In These Times

Rev. William Barber: The Fight for a $15 Minimum Wage Is a Fight for Racial Justice

Democrats need to stop playing games and use their majorities to pass a $15 minimum wage right now—we can’t wait any longer.


Sixty-two million people in the United States make less than $15 an hour. And here’s the truth: the fight to raise the minimum wage to a living wage of $15 is as important as the Civil Rights Act of 1964 and the Voting Rights Act of 1965. For Black people, it’s taken us 400 years to get to $7.25 an hour. We can’t wait any longer. People in Appalachia can’t wait any longer. Poor white people, brown people, we cannot wait any longer. And we won’t be silent anymore. 

Rev. William Barber: The Fight for a $15 Minimum Wage Is a Fight for Racial Justice – In These Times

Can America’s Soul Be Saved?

You know that your country is caught in an endless loop of repetitive thinking when, almost 20 years after you invaded and occupied a distant land, beginning a war you’ve been incapable of winning despite massive “surges” of troops, contractors, CIA operatives, as well as air power, the Afghanistan Study Group, a congressionally mandated crew led by a retired Marine general who once commanded U.S. forces in that very land, recommends that the official date for the withdrawal of all American troops (but not planes, drones, or contractors), May 21st, be abandoned in the name of peace and the war fought on. (Consider that, by the way, a sentence worthy in length of such a never-ending war.)

Beyond Donald Trump –


~ Steve, editor