In a land with no speed limit on economic growth, how do we hit the brakes?
A long car trip is an American summer rite, a chance to glimpse the continent's natural splendor on the fly. But if you're not a fan of smog, cell phone towers, and runaway sprawl, the journey becomes more trroubling by the day. As described by one roving economist, the country's natural splendor and love of fairness are threatened by inequality and environmental decline. It's time for ordinary Americans to look deeply into both problems, he says, and get the the nation back on track. -- The Editors
My wife, Karen, and I left Portland, Oregon, in late April last year and spent five months driving about 9,000 miles through 16 states. We visited 13 national parks, 7 national monuments, and towns large and small. We walked on streets and hiked on trails, talked to people, read local newspapers, watched local television, and shopped in local markets. We observed the economics, politics, and ecology in the places we stayed. What follows are some of my impressions.
The ghosts of Karl Marx and Edward Abbey haunt the contemporary United States. Marx, the 19th-century German social philosopher, needs no introduction, but perhaps Abbey does. He was born in 1927 in Indiana, Pennsylvania, a small town about 30 miles from where I was born. A novelist, essayist, poet, and radical environmentalist, he lived most of his adult life in the desert and canyon country of the Southwest. Among his best works are Desert Solitaire, a 1968 nonfiction account of a year he spent as a park ranger at Arches National Monument (now a national park) north of Moab, Utah, and The Monkey Wrench Gang, the 1975 novel that inspired a generation of militant environmentalists. Abbey died in 1989.
Marx argued that capitalist societies tend to exhibit poles of wealth and misery, with each pole tightly connected to the other. This theory has been dismissed by mainstream thinkers, who argue that while there might have been some truth to it in capitalism's early years, the advanced capitalist countries have shown that all boats tend to rise on the tide of the system's incredible economic growth. However, if we look at the United States today, nearly 140 years after the onset of full-scale capitalism in the 1870s, we see that Marx's prediction still has a lot of life in it.
Marx was speaking of relative misery -- that is, how those at the bottom compare to those at the top. Workers create profit by their labor, and the capitalists take this profit because they own the workplaces. If the workers aren't organized, employers will squeeze more and more profit from their labor, making the workers worse off over time. Growing inequality is a consequence of uncontested employer power. When workers do organize, both at their workplaces and politically, they can control and have controlled the growth of inequality.
Today, the power of capital in the United States is more and more uncontested. Labor unions continue to hemorrhage members and lose political power. The state is more firmly in the hands of employers than it has been in 70 years. Property rights reign supreme in the law, and capital is pretty much free to do what it wants, whether that means firing workers trying to organize unions or moving operations to a low-wage venue in another country. Workers are becoming more insecure, without allies or organizations, and are slowly but surely losing the social securities won over many years of hard struggle.
The facts show that relative misery is growing in the United States. By 2000, the income share of the richest 1 percent of households was about 20 percent, its highest level since just before the Great Depression. The figure has been rising since the mid-1970s, when it was just half this high. The rise in the share of the richest .01 percent (one-hundredth of the richest 1 percent) has risen even more dramatically, from well under 1 percent of total household income in the mid-1970s to a little over 3 percent today. Much the same can be said about the distribution of wealth -- people's stock of assets as opposed to their yearly flows of income. The richest 1 percent of households own a third of the nation's wealth, while the bottom 80 percent have just 16 percent, and this gap has been growing for at least two decades, although it shrunk during the recent stock market crash.
Both Marx and Abbey understood that capitalism devastates the environment. Abbey said, in reference to the environment, "Like my old man always says, capitalism sounds good in theory but it just doesn't work; look around you and see what it has done to our country. And what it is going to do to our country -- if we let it." Abbey documented the destruction of the unique canyons, deserts, and mountains of the Southwest by the mining industry, agribusiness, urban sprawl, and the automobile. He knew that growth -- the heart of capitalism -- is incompatible with environmental health. He also understood that growth is not just a requirement of the economic system. It is also a deeply embedded part of capitalism's ideology, and thus accepted as truth by Americans on both sides of the political divide.
The signs of environmental destruction are nearly everywhere. Consider just a few facts. More than 100 million persons in the United States live in urban areas where the air is officially classified by the Environmental Protection Agency as unsafe to breathe. In a world awash in toxic substances, the United States, with just 5 percent of the world's population, produces over 70 percent of the world's hazardous waste. Over a million American children suffer from lead poisoning.
Needless to say, inequality and environmental devastation are connected. The poorest are the most affected by pollution, congestion, pesticides, and bad water. The rich can buy their way to relatively clean air and peaceful neighborhoods. Great inequality is deleterious to democracy and precludes any sense of common ground or need to solve social problems. Those at the bottom are so harried by daily life and so alienated from those at the top that they are likely to abstain from politics, leaving the well-to-do to make the government an agent of their will. The poor are forced to live in ways that harm the environment, while the rich see nature merely as something to be bought and sold.
As an economist, I'm used to seeing the world in terms of data. But to give the facts real bite, you must tie them to the lives of ordinary people. Perhaps I can do this by describing what we observed on our journey.
Signs of growing inequality are everywhere in the United States. One especially stark indicator is the growing distance between the housing of the rich and the poor. The great increase in the family income of the top 20 percent, and even more so the richest 5 and 1 percent, combined with low mortgage rates, have driven up housing prices. The rich are buying and building ever-larger houses, while those with even moderate incomes can only afford modest homes. For those at the bottom, there is no new public housing, and housing subsidies everywhere are under attack. The result is a kind of housing apartheid.
Across the country, the rich have isolated themselves. They're either living in gated or otherwise guarded communities or they're building huge mansions on enormous tracts of land. Often their growing political power allows them to obtain, through the lobbying of real estate and banking interests, large tax breaks for "developing" the land. In Portland's Pearl District, for instance, tax breaks were given not only to the developers who converted warehouses into swank condominiums but to the buyers as well.
Consider the town of Florence on Oregon's central coast. Florence used to be a small fishing town, and there are still working boats at the dock on the Siuslaw River in the Old Town, not far from the gorgeous art deco-style bridge on Highway 101, built by the Works Progress Administration during the Great Depression. Like a lot of working-class towns, Florence has an easygoing and friendly feel, but the area's slower pace has begun to attract wealthy newcomers. A drive to the beach next to the north jetty where the river meets the Pacific Ocean takes you past several gated communities. Income disparity is growing, as evidenced by the new casino, a sure sign that good jobs are rare, and no doubt the new residents feel safer behind gates.
We found much the same in Santa Fe, the capital of New Mexico, which attracts thousands of visitors annually to its opera, Indian market, and art scene. Downtown Santa Fe features several excellent art museums, many fine restaurants, and at least half a dozen smart hotels. The weather is usually warm and sunny, and the town's setting is glorious, with easily reachable mountains to the north and east. Not many people live in downtown Santa Fe, but the surrounding hills are full of houses that boggle the mind. On a hike one morning near Atalaya Mountain east of downtown, we passed a posh gated community filled with large adobe-style houses, followed by a series of isolated homes with stables, gardens, and swimming pools, each more spectacular than the last. Many are, in fact, second homes that sit vacant much of the year.
The poorly paid workers who service tourists in the downtown restaurants and hotels are nowhere to be seen. They tend to live in houses and apartments out near Cerrillos Road, an ugly 10-mile stretch of strip malls, motels, businesses, and retail stores that serves as the southern entrance to Santa Fe. A bookstore clerk explained that many service workers earn the minimum wage or slightly above and have trouble finding adequate homes. Even poorer housing can be found in the predominantly Indian villages close to the town.
Although we did not observe this in Santa Fe, entire migrant families now sometimes live in cheap motels as they look for work. I assumed these people were mainly immigrants or displaced manufacturing workers, but a recent Washington Post article describes a new phenomenon: highly skilled but displaced information technology workers living in motels, often with their families, while they complete temporary job assignments. One worker complained that the room rate of $58 a day was eating deeply into his wage.
The second striking feature of inequality in the United States is its racial and ethnic face. While there are exceptions, poor in this country means black or brown and rich means white. When we lived in Portland, for instance, the only people of color we saw in the upper-income neighborhoods were the Mexican gardeners and construction laborers -- a lack of diversity that most white people failed to notice.
The numbers point to the reality. Median family income (in 2003 dollars) for American whites in 2002 was $55,885, but for blacks it was $34,293 and for Hispanics $34,968. While 20.4 percent of white workers earned a wage that would not support a family of four at the poverty level of income, for black workers it was 30.4 percent and for Hispanics 39.8 percent. Since the mid-1970s, the average unemployment rate for whites is just over 5 percent. For blacks it is more than 13 percent, and for Hispanics it is more than 9 percent.
These figures understate the true disparity, because relatively more blacks and Hispanics have dropped out of the labor force. For example, blacks constitute only a bit more than 11 percent of all workers, but nearly half of the 2.2 million persons in our prisons and jails. The rapidly rising rate of black imprisonment over the past three decades has devastated black communities.
If we look at the wealth data, the racial gap is startling. In 2001 the median net worth (assets minus debts) of black households was $10,700, compared to $106,400 for white households. This includes all wealth, of which houses are a major component for all but the wealthy. If we include only financial wealth (stocks, bonds, and cash), median black wealth is a mere $1,100; for whites it is $42,100. About 31 percent of black households have zero or negative net wealth, while just over 13 percent of white households do. Data for Hispanic household wealth are not available, but it is surely much lower than that for whites.
Racial divisions are present in all aspects of American life, from the neighborhoods where we live to the food markets where we shop. But the divide becomes a chasm at work. If there's a low-wage, low-status job, a person of color is likely to be working at it. Throughout the West, we saw prisoners doing roadwork under armed guard. A white worker here was as rare as rain in Death Valley. Having stayed in nearly 30 motels, we saw hundreds of desk clerks, maintenance personnel, and housekeepers. Desk clerks in the West were usually white, whereas housekeepers almost never were. In fact, we met exactly one white housekeeper (not counting the national parks, where white Eastern European young people are recruited by the parks' concessionaires and then set, often against their wishes, to cleaning rooms). Nearly all the rest were Latin American. All were women. Some had children with them. Most spoke little or no English.
In restaurants, where it is possible to recruit them, as it is in our national parks, waiters are more likely to be white, while dishwashers and cooks seldom are. You rarely find whites working as Laundromat attendants, convenience store and gas station workers, grocery store clerks, baggers, stockers, retail store workers, gardeners, nonunion construction laborers, or farm workers. In the West, Hispanics, American Indians, and blacks do the dirty work. They also live in the worst housing, are most likely to be homeless, and inhabit most of the prison cells. White skin privilege runs deep, and it thoroughly divides the working class.
Development and growth are the watchwords of capitalism in the United States. Environmental protection is pretty much an afterthought; when this conflicts with growth, growth wins. Two things you can't miss if you drive around the country are urban-suburban-exurban sprawl, heavily subsidized by the government, and private use of public lands.
Los Angeles is notorious for sprawl. It's a city of clogged highways, tangled freeway ramps, and unsightly housing developments, the whole mess made possible by a century of publicly financed dam building and river ruining. The city and its suburbs extend north and south far into the desert. Even the towns and developments that lie beyond them suffer from smog and industrial pollution. In Joshua Tree National Park 150 miles southeast of Los Angeles, we stopped at Keys View, the park's highest point accessible by car. We could see the resort town of Palm Springs, its hundred golf courses shamelessly wasting water, and the brown Los Angeles smog snaking its way through a mountain pass, corrupting even the relatively pristine desert. The insanity of a megalopolis spreading in such a place is underlined by another sight: the San Andreas Fault.
Growth run wild now marks the drive from Albuquerque to Denver. The Albuquerque area's population has quadrupled since the 1950s, to about 800,000, and the city sprawls interminably, its ceaseless traffic serviced by 19 freeway exits. What seems like an infinity of new developments crowd out the desert, filled with cheaply built but expensive homes on treeless lots, running almost the entire 60 miles north to Santa Fe.
Welcome to the exurbs -- areas removed from the suburbs and not necessarily connected to a city. In his book On Paradise Drive (Simon and Schuster, 2004), New York Times columnist David Brooks sees them as incubators of new technology. Employers are building office complexes and other workplaces in the exurbs, far away from the higher taxes and unions of the cities or even the older suburbs. Though the exurbs are for Brooks an exciting economic frontier of sorts, the ones we saw tended to be lifeless places with few social amenities. Perhaps somewhere in the nondescript industrial parks that now pockmark the desert there are scientists developing technology's next big thing, but that doesn't justify the social cost of such land-destroying, water-wasting, and air-polluting ugliness.
Denver, 430 miles north of Albuquerque, is another mess of relentless traffic and highway building. The farmlands north of the city are rapidly being converted into tracts full of houses so similar it must be hard at times to find your own on a dark night. It won't be long before the farms have disappeared and Denver goes on forever. The logic of capitalism, as nearly unfettered today as it was in the 1920s, indicates that land will be put to whatever use can generate the most profits. Economically strapped farmers will sell their fields to developers, who in turn will build exurbs, sharing their fortunes with construction companies and politicians on the take. Governments will accommodate them with new zoning laws, more highways, and subsidized industrial parks.
In theory, the country's public lands belong to all the people. In reality, many public lands might as well be private property, and much public land is always under threat of being sold to private developers. Throughout the West, cattle graze on public lands irrigated with public water, ruining the terrain and polluting its rivers and streams. Communication towers mar the peaks of publicly owned mountains, and cell phone towers are appearing in the national parks. New roads will soon allow lumber companies to log the trees. Mines and wells can be dug at an angle from just outside public lands. Snowmobiles so pollute the air of Yellowstone National Park that the gate attendants wear protective masks. That's fine with the federal government. The usurpation of public lands by private interests is very likely greater at state and local levels, where business can exert enormous influence on public officials.
We ended our journey in Miami Beach, Florida, where we often walked down the beach to the pier at the southern end of town. From there we watched the giant container ships delivering cargo to the port at Miami and carrying cargo out to the far corners of the earth. We also saw huge cruise ships full of tourists bound for exotic places, looking at night like decorated mansions as they headed out to sea.
Yet even that tranquil scene was shadowed by the modern ills glimpsed by Marx and Abbey. Such ships are usually registered in countries such as Liberia that lie outside the reach of U.S. labor law. The employees who do the hardest, most dangerous work are invariably people of color, typically from poor countries, working long hours for little pay. Those injured on the job are often forced to return to their home countries for medical care, even when better care is available in the United States.
Miami's Virginia Key, just offshore, is an oasis of natural beauty, known for its nature trails and unspoiled beaches -- the first beaches in Miami that black people were allowed to use. Developers now want to build luxury condominiums there, and the city stands to make a lot of money by selling the land. We heard that a compromise was in the works. If history is any guide, rich folks will soon have another place to live. Once capital gets its foot in the door, it does not tolerate compromises.
Our travels led me to one major conclusion. The radical politics of the future must make inequality and environmental destruction its centerpiece. Both ills are so much a part of the nature of capitalism that it's hard to talk about them without making at least a partial indictment of the system. Their consequences are harming the health, welfare, and happiness of the majority of people. They impose an ugliness on daily life that is becoming increasingly hard to tolerate.
Perhaps this is why some people turn to the seeming verities of religion. But I know from experience as a teacher, mainly of working men and women, that discussion of these twin evils can resonate strongly. We have to find the ways to hammer home their ill effects, over and over, in our unions, at work, in our political work, in letters to the editor, in our daily conversations.
The data on wealth and income in this essay are taken from The State of Working America, 2004-2005 by Lawrence Mishel, Jared Bernstein, and Sylvia Allegretto (Cornell University Press, 2005). Michael D. Yates, pictured here with his wife, Karen, is associate editor of the independent socialist magazine Monthly Review and the author of Naming the System: Inequality and Work in the Global System (Monthly Review Press, 2004). His new book, Cheap Motels and a Hotplate: An Economist's Travelogue, is forthcoming from Monthly Review Press. Adapted from Monthly Review (March 2005). Subscriptions: $29/yr. (12 issues) from 122 W. 27th St., New York, NY 10001; www.monthlyreview.org.