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How Much Economic Inequality is Fair?

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"None," a student quickly replied when this question arose in a campus college club meeting. Another member reported on a meeting she'd attended about "economic justice." The head of a big liberal group had droned on about how workers can't live on minimum wage, how the "social safety net is torn," the growing gap between the rich and everyone else, and other well-known facts.
"He kept saying there was too much inequality," she said. "I started wondering how much economic inequality he thinks is fair. They want everyone to make $15/hour but you can't live on that, especially if you can't get more than 20 or 30 hours a week."
"To be fair, money would have to be worth nothing," said the first student, who read Red Flag last semester. "Why can't we just live like that? It's not that crazy."
"That would be a nice system," said an older student. "People could work at things they are talented at."
Then he said, "You can't have a fair economy if you allow unfettered profit. Businesses should serve the community. The first rule is that your bottom line can't be to make profit."
A teacher explained that the first rule of capitalism is that the bottom line is exactly to make profit –the maximum profit possible. Otherwise a business can't attract the capital it needs to grow and compete in the marketplace.

Where does profit come from?
The students thought it came from customers. The teacher explained briefly that this is only the appearance. In essence, profit comes from the difference between what workers are paid for their time (wages) and the amount of value they produce in that time.
"So profit comes from exploitation," the younger student concluded.
A lively discussion continued about how communism would be different. Then it moved to how to get more students to come to talk about these things.
The students were frustrated because they'd handed out several hundred invitations to classmates and on campus, and nobody had turned up. But they agreed to go back and tell people what they'd missed. They will also make personal contact with others who'd signed up for the club.

US Capitalist Rulers Say: "Inequality Slows Economic Growth"
The capitalist rulers have opened a public discussion about economic inequality for their own reasons. Last year the New York Times business section (10/16/12) described a "compelling narrative" developed by the International Monetary Fund and the Brookings Institute.
"The concentration of income in the hands of the rich," they warned, "might mean less stable economic expansions and sluggish growth." Right now the US rulers are struggling to rebuild their industrial base and their global competitiveness. Yet a very basic contradiction at the heart of their system – the tendency toward increasing economic inequality – stands in their way.
The less workers make, the less they can buy and the less they pay in taxes. So capitalists sell less, and profits fall. The government can't bail them out without causing more problems (debt, deficit, devaluing currency, etc.) that further weaken international competitiveness.
That's why reform organizations from the AFL-CIO to the American Civil Liberties Union are promoting "economic justice" through campaigns like $15/hour for fast-food workers. Don't be fooled! The ruling class might put some "fetters" (chains) on McDonald's profits by increasing the minimum wage. But it's also driving down wages and benefits for transit workers, teachers, unionized aerospace workers and others in a "race to the bottom."
The capitalist profit system never could meet the needs of the masses. In this time of global crisis, it is less able than ever. We can't live like that.

Bosses' "Economic Justice" Campaign: Opportunity to Mobilize for Communism.
This student group plans to invite a member's friend who works on the $15 campaign to speak on campus. Many students work (and eat) in fast-food restaurants. We hope to get them into conversations about capitalism and communism and spread this discussion to their workplaces. "Any amount of economic inequality is economic injustice," the students concluded.
"Get rid of money- it's the only way," one added. We can live like that!


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