The new By Jon Pahl F
or the past five years, as a new facet of my vocation, I’ve directed a master of arts in public leadership program in partnership with the Fox School of
Business at Temple University, Philadelphia. We began this two-year curriculum to prepare leaders for social ministries such as Lutheran Services in America’s 300- plus agencies. In conversation with leaders of these agen- cies, one topic has consistently emerged: inequality. Economic inequality has always existed. But over the
past 50 years a new kind of inequality has appeared to stall progress, harm people and threaten the planet. Tat inequality has grown is undeniable. In 2012
a greater gap existed than at any point since 1929 between the wealth of the top 1 percent of U.S. citizens and the remaining 99 percent. Kevin Philips signaled this troubling trend in Wealth and Democracy (Broad- way Books, 2002). And economist Tomas Piketty clinched the case in Capital in the Twenty-First Century (Belknap Press, 2014). Piketty documents how in the last 50 years wages have
stagnated for most workers, while those for the top 1 percent have risen 165 percent (that’s 362 percent for the top 0.1 percent). In 2014 dollars, that means the aver- age annual household income has remained flat at about $51,000, while incomes for the top 1 percent have risen to an average of $717,000, according to Forbes magazine. Many CEOs now routinely rake in annual salaries in the double- or triple-figure millions, when not long ago their salaries were much closer to those of the average worker. And inequality in wealth—in accumulated capital—
has expanded even more. Tax breaks favoring inherited wealth have produced what Piketty calls “patrimonial capitalism,” where family dynasties dominate political life. Forbes estimates that the top 1 percent control 43 percent of the wealth in America and the next 4 percent
control an additional 29 percent. More than 70 percent of U.S. wealth is held by 5 percent of citizens. Practically, this means decisions about investing in
innovation are made by a startlingly small group. Meanwhile, in this new “Gilded Age,” some social
programs have been eliminated or cut and others (like Medicare and Social Security) struggle to sustain them- selves. In Philips’ words, these trends “corrode Ameri- can democracy” because they discourage innovation, reinforce privilege and encourage corruption.
Marks of inequality A first mark of inequality is underinvestment. “Inequal- ity,” economist Joseph E. Stiglitz argues, “means that [a society’s] most valuable asset—its people—is not being fully used.” Underinvestment in education, infrastructure and
technology obstructs people from realizing fulfilling vocations. “America,” Stiglitz concludes, “has become a country not ‘with justice for all,’ but rather with favor- itism for the rich and justice for those who can afford it.” A second mark of inequality is concentration. Politi-
cal scientists Michael Hardt and Antonio Negri have shown how global inequality has produced a new kind of “empire.” It’s not linked to territorial conquest by a nation-state, but to corporate control of the global flow of information (think Google) and commodities (think cellphones), which are concentrated in fewer and fewer hands.
July 2014 19 20
inequality: Our Lutheran vocation
“LAZARUS AND THE RICHMAN”/JAMES B. JANKNEGT
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