Transnational Factors Driving U.S. Inequality And Poverty

Approximately one hundred million Americans, one-third of the U.S. population, are poor or nearly poor. ¹ Trend lines today point to a gap in take-home income and living income that is both deepening and being experienced by more Americans. Growing poverty in the United States runs counter to the 150-year trend of continually rising real wages for [white] workers between 1820 and 1970 (Wolff, 2012). As a result, about six successive generations could count on rising incomes and upward social mobility, both intra-generationally and inter-generationally. The growing individual prosperity was linked with economic nationalism (Patterson, 2013). Nineteenth-century America was a land of nearly sequestered agriculturally based communities. By the mid-twentieth century it transformed into an organically linked and complex industrial economy. This phenomenon provided a source of wealth production for robber-barons and upward mobility for individual workers and their families. That model of economic nationalism—which, to paraphrase General Motors’ Roger Smith, exemplified the concept “what’s good for American industry is automatically good for American workers”—is over (Mizruchi, 2013; Robinson, 2004). Mizruchi, who writes from the perspective of traditional business literature, and Robinson, from the critical transnational capitalist school, arrive at much the same conclusion about how “American corporations” are no longer able to serve the interests of American labor and civil society. Rising inequality and the attendant rise in poverty in America are the partial result of the transformation from economic nationalism to economic transnationalism. The U.S. state that managed to simultaneously serve the interests of capital and labor up to the 1970s has lost that capacity as the U.S. state is now being absorbed into a more complex institutional structure that increasingly serves the needs of transnational capital, often at the expense of labor (Robinson, 2004). During the lifetime of Rudolf Hilferding (2006)—the late 1870s to early 1940s author of the classic Finance Capital—national capitalism required state assistance to dominate international markets, whereas today’s transnational capitalism requires the state to dominate national economic interests. The transformation between these two eras of capitalism is contributing to growing levels of inequality and poverty.