Wednesday, October 5, 2011

Distributive Justice is at the Heart of Occupy Wall Street

Occupy Wall Street, to me, is about distributive justice. It all starts with labor and how the value derived from our efforts gets distributed . Consider this, all the resources of Earth are free. but to gather and use these resources requires labor. All wealth comes from this labor.  The value of a toaster, say, comes not from the minerals from which it is made, but from the mining, drilling, refining, forging, fabricating, designing, building, shipping, marketing and selling which brought that toaster to your table. The fractional value of everyones labor is stored up in the toaster.  

A simpler example:  I weave a basket and my labor is stored up in it. You grow apples and your labor is stored up in your crops. I can then trade my basket (my labor) for some of your apples (your labor). How we come to agree on the number of apples my basket is worth is a market negotiation.  As long as your scales are honest and you haven't some how forced me to only buy apples from you, an honest exchange can happen.  That's how it works. So distributive justice is all about the fair exchange of stored up labor.  


Money is also stored labor, or "potential" labor.  I convert it to actual labor when I pay you to cut the grass.  Or I can exchange it for that toaster, my stored up labor for the fractional labor of everyone who helped produce it.  It is a short hop from seeing money as stored labor to seeing Wall Street investment houses and the market as higher order labor exchanges.  The problem we face now is that we no longer have a fair labor exchange in America. We work harder, produce more and get paid less than we did 40 years ago because the market place has been rigged against those who labor.

From My Prior Post:

One of my prior posts talked about how between 1963 and now the top tax rate went from 91% for income's over three-million dollars (in todays dollar valuation) to 35% today, but other changes and tax loop holes for the wealth bring their effective tax rate to 17%, far less than their employees pay.

Another cause for the great wealth disparity of today can be seen when we look at our earnings history.  When you look at the graph below, think of the green "Productivity" line as our wealth building activity.  All wealth is  generated from labor.  In a fair economy, the more wealth we produce, the more money we should have.  That is only marginally true.  Look at the disparity between what I call the producing class (all of us, the blue line) and the owner class (in red).

Putting it all together, wealth disparity has grown so much over the past 40 years because the owner class has been paying less each year in taxes while taking an increasingly larger share of the value of what we produce.  
Found on Mother Jones. Originally submitted by volunteer editor Jessica S.

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