December 29 2008
Wall Street Bonuses: Economic Violence Casts its Shadow
(New York) It's bonus season on Wall Street. This time two years ago, with record profits and bonuses to match, BMW set up an office in the financial district open 24 hours a day so traders and managers flush with cash could buy a new car on the spot. That same year, a writer at one of New York’s daily newspapers calculated that if the $16.5 billion paid out at just one firm, Goldman Sachs, was spread around, it could raise the income of every person in New York City above the poverty line. Last year, the bonuses were even higher and, well, we know what has happened since.
This year the pay is expected to be significantly lower but still enormous by almost any normal standard. The final numbers aren’t in yet, but as of late October (after the $700 billion bailout was passed) the top Wall Street banks were planning to pay their workers more than $70 billion. To put this in perspective, a typical Wall Street managing director, working an average of eight years in the business, is likely to receive roughly 15 times the income of the average American household.
Apart from being grossly unfair, this wildly disproportionate pay scale raises deeper questions about the violent foundations of our economic system. Financial workers who produce nothing have put the future of the whole society at risk with reckless speculation. As the financial crisis impacts the real economy, unemployment is surging, pension funds are dwindling, and millions of people are in danger of losing their homes. What began as a credit problem has quickly converted to a global recession with consequences that could be devastating for hundreds of millions of people. Meanwhile, the urgent needs of the most vulnerable for health care or social assistance are once again postponed, with help ruled out as a dangerous indulgence in Socialism. But a bailout of enormous proportions for the richest investors was set in motion in a few weeks.
This situation is not a result of quasi-natural market laws but of concrete decisions and actions (or non-actions) by policy-makers, regulators and investment bankers. And it is this fact that allows us to speak of economic violence. This is a concept we don’t hear very much about. We hear a lot about the bailout, the need for economic stimulus, but we don’t hear very much about economic violence. So to illustrate, let’s imagine a world without it.
Imagine a world in which every child born on the planet had good health care, housing and food; in other words where children didn’t die of poverty – a perfectly preventable cause of death. Imagine a world in which every child had the same access to education.
Imagine a world in which people made a good living doing things that are satisfying and meaningful, with a real say in decision-making and a real share of the profits. Imagine equal pay for women, no sweatshops, no child labor. Imagine a world in which you weren’t afraid of going bankrupt or losing your home if you get sick.
What if taxes were used to improve people’s lives, to develop clean energy sources and improve the infrastructure rather than to build develop for space?
Let’s go even further. Imagine free time to spend with your family and friends, to participate in your community and take part in local decision-making. Imagine being able to study your whole life long; to continue to learn and develop new interests and skills. Imagine having time and energy to be creative. Imagine an economy based on cooperation, creativity, worker control, where technical innovation benefits workers rather than putting them out of a job.
These could be some of the characteristics of a world without economic violence. So what is it exactly?
Economic violence is essentially exploitation of other people; stealing from people, using others – like objects – for your own gain. This can happen on an individual level but it also can and does happen on a massive scale at the level of societies, regions and the whole world.
During the Bush presidency, 6 million US citizens fell from the middle class into poverty, more than seven million lost their health insurance; over four million lost their pensions. Meanwhile during the first seven years of Bush's tenure, the wealthiest 400 individuals in the US saw a $670 billion increase in their wealth, and at the end of 2007 owned over $1.5 trillion in wealth. The US today has the most unequal distribution of income and wealth of any major country on earth. That is economic violence. And that doesn’t begin to address the inequalities we see on a global scale, in which tens of thousands of children die each day due to poverty.
Humanists work to overcome all the forms of violence and build harmony, tolerance, and solidarity; and of course this applies to economic relationships. The world today is plagued by economic violence; a situation in which a very small minority uses the whole of society for their own gain – employing every form of public relations, coercion, legal maneuvering, political manipulation and real physical violence, including invasions and occupations. This situation blocks human progress and prevents the application of technology and resources to end poverty, which the world has the capacity to do, and has had for some time.
While the crisis of 2008 finally brought the violence of our economic system to light, we've lived under it for a long time. We've lived with it so long we stopped noticing it; like the sun when it's directly overhead and casts no shadow. Now we're able to see it better and to understand that economic systems are man-made, not natural, not inevitable, and if people make the system people can also change it. And then the question becomes which people are deciding? And what if it were all of us?
Chris Wells North American Spokesperson for New Humanism
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