Sometimes, late at night, I think of the American economy as an immensely complicated electronic switchboard, with wires running every which way. At the bottom of the switchboard are two terminals for each American, one for receiving electrical impulse s (i.e,, income), the other for emitting impulses (i.e., expenditures). When current races through the switchboard, the economy is in full swing; the higher the voltage, the higher the GNP.
Now, not all the terminals are equal. The vast majority of us are connected to single copper strands, but a small minority are attached to thick coaxial cables; those who own the most wealth have the thickest coaxial cables. The wires within their in come cables fan out in all directions, hooking up with numerous black boxes (corporations, banks) which in turn are tied into millions of individual expenditure terminals.
A number of insights can be drawn from this cybernetic imagery. First, the beauty of wealth is that it sucks money through your input cable from all over the place. Say you own a share of GM stock. Every time an American, anywhere on the switchboard, purchases a GM product, a tiny electrical impulse will find its way through the wires and black boxes and emerge at your income terminal. The more wealth you own, the more impulses will arrive at your income terminal from more places.
Another observation that can be made, based upon statistical studies of wealth distribution, is that though the arrangement of wires within the switchboard can occasionally shift around, the distribution tends to remain remarkably rigid. So that even though there may be upsurges and downsurges of voltage, the great bulk of energy within the system flows along the same circuits to the same terminals in roughly the same proportion.
The trouble with most economic policymaking in recent years is that it has concentrated too much on increasing the voltage of the American economy, and not enough on distributing the energy. This concern for high and steady voltage has n ot been for naught; it has guided us to an economy that provides jobs, physical comfort and some opportunity for upward mobility to millions. But it is a strange and unsatisfactory kind of affluence that it has given us. While a small minority siphons off more money than it knows what to do with, a fifth of the adult population remains perennially poor, and millions more teeter on the edge of poverty. Ever-increasing production has not, by itself, corrected this and is unlikely to do so in the futu re; it is more likely to choke us to death on junk and waste. Instead of the old Kennedy exhortation -- we can do better -- we need a new motivational prod: can't we share better?
There is a lot to be shared. The total, personally owned wealth in the United States is about $4 trillion. That amounts to around $20,000 for every man, woman and child, or about $70,000 for the average family. Yet only about one family in 25 owns tha t much.
On top of this personally owned wealth base, the economy poured out $800 billion in personal income in 1970. That works out to approximately $14,000 per family, but three out of four families got less.
Various improvements have been tried. Billions of dollars have been spent on education, at least partially in the belief that education would narrow the gap between rich and poor. Billions more have been spent on housing, health, anti-poverty and welf
are programs, to compensate for, if not correct, the private economy's distributive failings. There is a nominally progressive income tax, and even a mild inheritance tax. Yet about the only things that have measurably lessened economic inequality during
this century were the Depression and World War II, neither of which commends itself as an experience worth repeating.
This essay is the final part of a series written by Peter Barnes for The New Republic magazine in 1971-72. We think you'll be pleased -- and perhaps shocked -- to see how timely and insightful the essays are for today. Each essay is being republished, in installments, by The Progress Report.
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