Chapter 4: Disparity
It is typical for CEO's to make hundreds or even thousands of times what the vast majority of their employees make. In 1916 the CEO disparity was approximately 16 times what the typical employee earned. Whether you ever become an active initiator of the Transition to viable paradigms or not, I hope you will come to understand the fact that the struggles you are experiencing (all of us and billions of others as well) are not any indication of a deficiency on your part. The system is broken by design. That is why it must be shut down and a new system put in place to replace it. The people at the top of the pyramid will not willingly allow that to happen so we will have to force the change the same way we would have to wrest the controls of an airplane from the hands of a drunk or delirious pilot, and for the same reasons.
The disparity is more extreme in industrialized Capitalist countries than that of medieval Europe. It is not uncommon for a CEO to make in one week, one day or even one hour what a typical employee of the same company makes in a year. The most extreme disparity in a well-known company as reported under the requirements of the Dodd-Frank Act in 2018 was that of Weight Watchers International, Inc., whose CEO made 5,908 times what their median employee made, meaning that Ms. Grossman made in about twenty minutes what her median employee made in a year. Exceeding this extreme disparity is that of Jeff Bezos, CEO of Amazon. His total increase in net worth in 2017 was $33 billion. When we add that to his official salary of $1.6 million and divide it by his median employee’s salary of $28,446, we immediately see that he made in just under nine seconds what his median employee made in a year, at the rate of $3,182 per second. In daily life, this translates into CEO’s who live in power, luxury and privilege rivaling or exceeding that of traditional royalty, while typical employees of these companies cannot meet basic living expenses on their salaries. Clearly this paradigm is no more viable or defensible than a boat that cannot float long enough to cross the ocean.
Most if not all CEO's and their ilk are unable or unwilling to grasp that their fantastic wealth is only possible because of the hard work of all of their employees doing their part. The paradigm in operation in this society has trained them, and most of the rest of the population as well, to believe that their disproportionate share of the revenues of the company is justified because of some mysterious something that they have that makes them incalculably more valuable than the typical employee.
Sometimes it is said that it is because they make the company more successful. This is truly no different from the Medieval paradigm that postulated that the kings, queens, czars, kaisers, emperors and other dictators of their day (all the way down to earls, dukes and the like) were in their position because God put them there, having made them inherently more worthy than others. Therefore to rise up against them was to rise up against God which carried with it a sentence of eternal damnation.
A more rational, though circular and equally untenable, justification was that the peasants were ignorant and incapable of governing themselves. Of course they were kept ignorant by design while being constantly overworked, underfed and terrified, leaving them incapable of much more than surviving another day until they couldn't any longer and died. In today’s Capitalist systems, the rising cost of education is steering us in the same direction. Likewise the current U.S. regime's plan to surreptitiously privatize primary and secondary education will guarantee future generations incapable of critical thinking if we do not succeed in thwarting those agendas wherever they occur.
Another example of a country experiencing extreme neo-Feudalistic stratification as the result of Capitalist paradigms is Brazil, where the vast majority of people live in favelas in extreme poverty, privation, danger and disenfranchisement.
The extreme and growing disparity is further tolerated in Capitalist cultures because of the myth that “anybody can make it,” supported by true anecdotal but dramatic “rags to riches” stories that perpetuate the belief that if one is hard-working and entrepreneurial enough, one can ascend the economic Pyramid to the upper reaches where one is free from the constant stress over economic survival, where one is able to purchase the privilege of exercising one’s Constitutional rights. Sadly, as is discussed elsewhere in greater depth, this is more myth than reality even through it is not strictly speaking a lie. As in any casino or lottery, anybody CAN “make it big,” but very few actually will. The myth ingrains the belief that if one hasn’t “made it,” it is because of some failure or inadequacy on their part. In reality, it is the economic system which by design cannot function unless very few individuals ascend to the upper reaches.
Due to endemic cultural myths and carefully-crafted propaganda, the majority of people in most countries drastically underestimate the disparity. In a study published in 2015 in Scientific American,” 5,000 randomly-chosen Americans were asked in 2011 what they thought the wealth distribution was in the United States. It was discovered that the average American believes that the richest 20% of American households controlled 59% of the wealth, the middle 40% controlled 32% and the bottom 40% controlled 9% of the wealth. In reality, the richest 20% controlled 84% of the wealth, the middle 40% controlled 15.7% of the wealth, and the poorest 40% controlled only 0.3% of the wealth. As of the writing of the article, the Walton family alone controlled more wealth than the poorest 42% of U.S. households together. The article also cited a study done in 2014 which found that the average American estimated that the ratio of average CEO pay to average employee pay was 30:1, when at that time it was actually 354:1. In 1965 it was 20:1. At the time of this writing, there are companies where the disparity is above 2,000:1 . As well be seen in the more detailed data analysis at the end of this writing, the disparity has grown even more extreme since then.
This underestimation of the extremity of the economic disparity and its continuing escalation is a big reason for the lack of a widespread wave of effective activism to correct this feudalization of the society. The typical citizen is blissfully unaware of the severity of the situation and of its implications. The combination of cultural myths, effective propaganda, and the abundance of diversions and distractions keeps the vast majority of people unaware and even unconcerned regarding the subsuming of democratic institutions and mechanisms under the control of a decidedly un-democratic, authoritarian power structure that is devoted to feeding the dangerous, insidious addiction of a microscopic few ultra-wealthy individuals and families to wealth, opulence, privilege and power over others. In our ignorance, we have unwittingly perpetuated this destructive dynamic. It is time to become aware of the full scope and true dynamics and functioning of this socio-economic paradigm and recognize it as inherently destructive and non-viable. We must then shut it down to replace it with one that is designed to reinforce and foster the happiness and well-being of every individual and the community, while preserving and sustaining the global biosphere of which we are a part.
Even people in professions that were long a part of the middle class in the U.S. are now, with the acceleration of the Feudalization of the economy, are barely living paycheck to paycheck. There are numerous studies, articles and statistics available that document this.
In your and my life it translates into working harder and harder, seeing more and more hours of our lives required to access the bare necessities. Until the Transition, of course, we have to do our best to survive by going through the motions, but it is a fatal error to focus on coming up with the right job or start a business that will put us over the top and out of perpetual jeopardy. The likelihood of that succeeding is scarcely better than the odds in a casino or Lotto. The only real viable solution is to bring about the Transition and redesign of the socio-economic paradigm.
Those who urge us to manage our finances better or suggest investing are usually of the ruling elite and utterly ignorant of the world almost all of us live in, or worse yet, taking us for fools. By analogy, if one airplane is only able to reach an altitude of 100 feet and another airplane is able to reach 30,000 feet, the second plane can easily withstand a drop of 1,000 feet in a downdraft, but obviously the same loss of altitude would be fatal to the plane that tops out at 100 feet.
Similarly, a billionaire can easily absorb the loss of a third or even half or more of their income and come out the other side in great shape. In fact, they would probably not pay any taxes for many years; and if things were to get really hard for them, the government would use taxpayers’ money to help them out. The banks will waive any fees or penalties without even being asked. If you or I or 99% of the population were to lose a third to half our income, we would be homeless in short order and severely handicapped in trying to get back up since no bank would give us a loan and potential employers with better jobs would delete our resumes out of hand.
The disparities are virtually endless. In the justice system, in the economic system, in every human endeavor, under Capitalist paradigms the economic Pyramid engorges and privileges those at the top by crushing the life out of those at or near the bottom.
There is no way around it. This system truly needs to be shut down and replaced with something that is designed and strives to work for everybody. It is not working. It cannot be fixed or repaired because it is a fundamentally flawed design that cannot be made to serve the well-being, happiness, safety and thriving of any but a very few.
Data and Graphs
