Capitalism's Poverty Problem

Monday, 20 September 2010 12:44 By Richard Wolffe and Richard Wolff, t r u t h o u t | News Analysis | name.

Capitalism
Between 2008 and 2009 - while health insurance "reform" was a top agenda item for the president and the Congress - the number of Americans without any health insurance rose by over 4 million people. (Photo: John Starnes)

The costs of capitalism and its recurrent crises can be tallied in multiple ways. Frequently used measures include the effects of unemployment, home foreclosures, cuts in wages and job benefits, insecurity of jobs and reductions in the services provided by governments at the federal, state and local levels. The costs tallied for the current crisis - now completing its third awful year - are so huge, diverse and lasting that no final or complete count will ever be possible. There are yet other ways of seeing and measuring the costs of capitalism. One measure less frequently used concerns poverty: the consequences of consigning people to live on incomes below whatever amount the government uses to define poverty. Another less frequently used measure is the number of people without health insurance.

The US Census bureau released statistics on September 16, 2010, that enable us to consider these last two measures of the costs of capitalism’s dysfunction in this crisis across its first two years.

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The US poverty rate rose between 2008 and 2009 from 13.2 to 14.3 percent. That is, while trillions were thrown at banks and corporations in bailouts and stimulus programs, nearly 4 million more Americans fell into the ranks of the poor. Those poverty-stricken among us entered 2010 numbering 43.6 million, one in seven of our fellow citizens. The US Census Bureau calculated the threshold for poverty in 2009 for a family of four at $21,756. At that level of income, the members of such a family of four would each have a total of $14-15 per day for everything they need to spend money on. During the same year, elite US colleges and universities charged a typical individual undergraduate well over $50,000 for tuition, room, board and basic expenses for an eight-month academic year.

Over the same year period between 2008 and 2009 - while health insurance "reform" was a top agenda item for the president and the Congress - the number of Americans without any health insurance rose by over 4 million people, from 46.3 million to 50.7 million.

Such statistics testify to deepening social divisions and explain correspondingly building mixes of depression and rage. Growing social tensions point to future social costs of capitalism's crisis that will have to be added to the already-imposed costs as the economic crisis has unfolded since late 2007. When we recall that most of 2009 saw media headlines trumpeting economic "recovery," the costs of an uncritical press also need to be added to those of a dysfunctional economy. 

This article was originally published on Dr. Richard Wolff's blog. Click here to visit rdwolff.com.

Richard Wolff

Richard Wolff is a Professor Emeritus at the University of Massachusetts in Amherst and also a Visiting Professor at the Graduate Program in International Affairs of the New School University in New York. He is the author of New Departures in Marxian Theory (Routledge, 2006) among many other publications. Check out Richard Wolff’s documentary film on the current economic crisis, Capitalism Hits the Fan, at www.capitalismhitsthefan.com. Visit Wolff's Web site at www.rdwolff.com, and order a copy of his new book Capitalism Hits the Fan: The Global Economic Meltdown and What to Do about It.

Last modified on Monday, 20 September 2010 14:23