Excerpted from The Problem of Wealth: A Christian Response to a Culture of Affluence (Orbis Books, 2017, New York), which won the 2018 Catholic Press Association’s First Place Award for a book related to Catholic Social Teaching. In this chapter, Dr. Hinson-Hasty, chair and professor of the Theology Department at Bellarmine, argues that neoliberalism is incompatible with Christian ethics as it assumes an understanding of human beings as atomistic individuals who act out of self-interest alone.
Neoliberal capitalism has dramatically accelerated the growth of wealth inequality in the United States and worldwide. For the last forty years, neoliberalism has been the primary ideological fuel for changes in economic policies, the shaping of public perceptions and ideas, the reshaping of social and political institutions, the commodification of our culture, and the “spiritualization” of the free-market economy. U.S. economic and public policies have favored deregulation, market efficiency, privatization of goods and services, dismantling of social programs, opening of economies across national borders and incentives, such as tax breaks, under the guise that these policies encourage the wealthy owners of industries to increase employment. The impact of policies driven by these goals is well documented.
The Impact of Neoliberalism
Economists measure wealth in two ways, income and net worth as the total value of assets minus total debt. The survey of statistics that follows examines trends in income and wealth in the United States over the last forty years. A higher income allows people to save in order to accumulate and expand wealth. These trends are well-documented by organizations such as the Pew Research Center and the Economic Policy Institute.
When I have spoken in classes or churches on the problem of wealth, I often ask members of the congregation how they think the United States compares to other countries in terms of family income inequality. One of the most common answers is that the United States is similar to Europe. Actually, in comparison with other countries, the United States now ranks forty-fourth in terms of the distribution of family income. Countries with comparable levels of inequality in the distribution of family income are not those most people expect, including Uruguay, Peru, Cameroon, Guyana and Iran.
Over the last forty years, the lowest-paid U.S. workers experienced a reduction in income and wage stagnation, whereas the highest-paid workers experienced a dramatic increase in income. In his groundbreaking Capital in the Twenty-First Century, French economist Thomas Piketty observes, “U.S. inequality in 2010 is quantitatively as extreme as in old Europe in the first decade of the twentieth century, but the structure of that inequality is rather clearly different.” A report released by the Economic Policy Institute shows that between 1979 and 2007 average family income grew overall in the U.S. by 36.9 percent. On the surface, that growth appears to be good. But the lion’s share of that growth, 53.9 percent, went to the top 1 percent. Average income among the top 1 percent tripled during that time, a 200.5 increase, whereas for the bottom 99 percent the increase was only 18.9 percent. What is the income level needed to be among the 1 percent? You would have needed to make at least $389,436 annually. The average family in the top 1 percent had an income in 2013 of $1,153,293, compared to the average income of the 99 percent at $45,567.
The impact of the Great Recession (December 2007-June 2009) was not felt equally by people of all income levels. Statistics show the top 1 percent recovering with an income growth of 38.9 percent between 2009 and 2012. In contrast, the bottom 99 percent actually experienced a decline in their incomes of -0.4 percent.
Overall, between 1979 and 2012 the income level of the top 1 percent increased 180.9 percent. The increase for the bottom 99 percent was a mere 2.6 percent.
Paul Krugman attributes the shift to the rise of “super salaries.” Compare executive pay to earlier eras. Robert Reich observes, “During the 1950s and ’60s, CEOs of major American companies took home about 25 to 30 times the wages of the typical worker …. By 2007, just before the Great Recession, CEO pay packages had ballooned to about 350 times what the typical worker earned.” To underscore this point he cites that in 2005 “the CEO of Wal-Mart—by then the largest U.S. company—took home 900 times the average worker.” CNN reported that average CEO pay was $15.2 million in 2013—296 times the average worker’s.
Another EPI study showed that between 1978 and 2011, CEO compensation increased 725 percent. Politicians in the United States, unlike lawmakers in other industrialized countries, have completely avoided a serious public discussion about reasonable and tolerable wage differentials. With the election of Donald Trump as U.S. president, this conversation is unlikely to happen anytime in the near future.
According to the Organisation for Economic Co-operation and Development (OECD), the United States has the highest number of workers in low-wage jobs of all the OECD members. Low-wage workers don’t fare very well in the United States in comparison to those working in other countries either. In the United States, “Low-wage workers earned just 46.7 percent of that of the median worker—far beneath the OECD average of 59.9 percent in 2012,” according to Lawrence Mishel in “The United States Leads in Low-Wage Work and the Lowest Wages for Low-Wage Workers.”
One in four of all U.S. jobholders are employed in low-wage jobs. Forty percent of U.S. single parents are in low-wage employment, an exceptionally high percentage compared to other groups of workers in the nation. About 80 percent of those single parents working in low-wage jobs are mothers. A larger proportion of women and people of color are paid low wages, poverty-level wages or minimum wage. African Americans and Hispanics are overrepresented among persons working in low-wage jobs. A far higher percentage of people of color are unemployed when compared to whites.
In December 2015 the Pew Research Center released a report of its analysis of middle-class income data gathered from the U.S. Census Bureau and the Federal Reserve Board of Governors. They define the term “middle income” in the report as “adults whose annual household income is two-thirds to double the national median, about $42,000 to $126,000 annually in 2014 dollars for a household of three.” The middle-class is shrinking and losing ground (see Figure 4.2).
A key factor in this shift that should be named relates to the stagnation of middle-class incomes while the cost of college education has increased in recent decades. In August 2016, Consumer Reports published an article titled “Lives on Hold,” which tells the stories of traditional-age college students who are overly burdened by college debt. They report that “just about everyone involved in the student loan industry makes money off of the students—and the best kind for banks and debt collectors.” These circumstances were created by the states’ disinvestment in education accompanied by decisions made a generation ago for the federal government to open its student loan bank to for-profit corporations. Consumer Reports estimates that there are “about 42 million Americans bearing $1.3 trillion in debt that’s altering lives, relationships and even retirement.” About one-fourth of borrowers are in arrears and “an estimated 7.6 million in default.” What is even more distressing is the fact that “contractors are expected to make more than $2 billion in commissions from the federal government” in 2016.
This shrinking of the middle class represents a significant change in U.S. identity. The Pew Research Center reports, “After more than four decades of serving as the nation’s economic majority, the American middle class is now matched in number by those in the economic tiers above and below it.”
Alice Evans, Robert Evans and Bean Kennedy made the powerful observation in their book Pedagogy for the Non-Poor that the perception of a huge and undifferentiated middle class has meant that, in the First World, it has been “more difficult to use ‘class’ as a descriptive category” than in other contexts where extreme poverty is ubiquitous. But that is changing. A Gallup poll conducted in 2015 revealed that only 51 percent of U.S. Americans now identify themselves as middle class, down 10 percent since 2008. Nearly half of all U.S. Americans (48 percent) now say they are working or lower class.
The Market as the Ground of All Being
There are many reasons to be alarmed by the impact of neoliberalism and to respond with a sense of moral indignation at the growing divide in income and wealth in the United States and around the globe. Peace should be the reason placed first on the list. Max Fisher, a former editor for the Atlantic Monthly, says the level of income inequality in the United States is “on par with some of the world’s most troubled countries and perpetual conflict zones of Latin America and Sub-Saharan Africa.”
Another significant cause for concern is the privilege that money can buy. According to Wilkinson and Pickett, the problems for wealthy countries like the United States are not “caused by the society not being rich enough (or even by being too rich) but by the scale of material differences between each society being too big. What matters is where we stand in relation to others in our own society.” Social hierarchies create social anxieties and the fragmentation of communities, which in turn lead to problems such as unequal educational opportunities and reduced performance levels for all, not just in lower-income families, and health disparities and reduced life expectancy for all, not just people living in poverty. Moreover, inequality damages individuals and communities on all levels of the social hierarchy, from the richest to the poorest. In societies where values are centered on the individual acquisition of material possessions, fame, and social status, people place themselves at greater risk of depression, anxiety and personality disorders, and substance abuse. Communities engender lower levels of generosity and trust as well as weaker connections.
Another cause for concern is theological. A distinctive feature of neoliberalism and the economy that it has shaped in the United States is that the market itself is understood to transcend human control, tied to a conservative sense of religious faith and morality and expresses the will of the divine. Lawrence Grossberg, a professor at the University of North Carolina at Chapel Hill, observes that neoliberal economic doctrine is informed by its own “metaphysics” or understanding of that which is the ground of all being. Grossberg cites arguments made by George Gilder, one of the architects of Ronald Reagan’s supply-side economics and a Senior Fellow of the Discovery Institute. Gilder claims that capitalism is a moral good and argues that the most productive element of the economy “is ‘the metaphysical component … human creativity in conditions of freedom.” According to Gilder, altruism is the capitalists’ ultimate goal. What capitalists aim to do is to foster opportunity, particularly for the underclasses. “Wages and salaries are philanthropy, trickled down from above.” Gilder has been quoted as saying that entrepreneurs more than any other people “embody and fulfill the sweet and mysterious consolations of the Sermon on the Mount.”
It is quite striking to hear in Gilder’s statements the way in which capitalism is associated with altruism and charity and equated with Christian ideals, even the Sermon on the Mount, a central text in Christian social ethics. There is no recognition in Gilder’s conflation of capitalism with Christianity of the value of workers and the fact that even those dependent upon wages to sustain their livelihoods are in themselves creative beings and contribute their own imagination and labors to production. Grossberg observes that neoliberalism has created an economy in which the moral and economic status of workers is no longer seen as significant or valued.
Gilder is not the only one to equate capitalism with Christian ideals and apply theological concepts to businesses, industry and the free market. An early example is found in The Man That Nobody Knows, written by advertising executive Bruce Barton and published in 1925. Barton depicted Jesus as the “founder of modern business.” More recently, Laurie Beth Jones, author of Jesus CEO, a book first published in the mid-1990s during an economic boom, applied what she called Jesus’s divine leadership style to corporate management in an effort to turn the tide of leadership problems she identified in U.S. corporations.
Among those problems she sought to address, she aimed to help “homeless” employees within the corporation find ways for their own leadership and intelligence to be “tapped” and “utilized” for the common corporate good. Jones observed that Jesus was a master at working with his “board” of twelve disciples. Jesus exemplified—incarnated—the true model for contemporary corporate motivational leadership.
Kenneth Lay, former CEO of Enron, made some equally noteworthy comparisons between Christianity and capitalism when he compared his understanding of the free market with freedom known in God and found in Christ. Lay confessed, “I believe in God and I believe in free markets. Certainly Jesus attempted to take care for the people around him, attempted to make their lives better, [but] he was also a freedom lover. The freer the country in terms of its market and political system, the higher the standard of living.” Steven Forbes attributed salvific force to the market in the wake of the Great Recession of 2008 as he claimed, “Free market capitalism will save us—if we let it.”
Neoliberalism becomes in this worldview not only a vision for the nation’s economy, corporations, organizations and institutions, but also an eschatological vision for the new earth. Time is fulfilled through the creation of wealth, unlimited growth and technological progress. Families persistently in poverty or people who are deemed inefficient because of disabilities or caregiving responsibilities are often identified as anomalies with personal moral failings. Sometimes poverty is even associated with moral failure or sin. Robert Rector and Rachel Sheffield, two researchers for the Heritage Foundation, suggest that “among families with children, the collapse of marriage and erosion of the work ethic are the principal long-term causes of poverty.”
By Elizabeth Hinson-Hasty