Free to Be Poor


At the turn of the
millennium, leading architects of American policy and opinion claimed to know
that one thing was clear in a complex and ever-changing world. Human beings,
they told us, were freer than ever before. According to the editors of Time
magazine, the last century’s legacy to the new one could be summarized in
two words: “freedom won.” “Free minds and free markets,” Time claimed
on the last day of the last year to begin with the number 1, “prevailed over
fascism and communism.” As evidence for this heartwarming thesis, Time
and others pointed to the unprecedented high percentage of people living in
countries with universal suffrage, competitive multi-party elections,
elementary civil rights, and “free market” economies. Using these criteria,
the conservative think-tank Freedom House reported that 85 of the planet’s 192
nations had become “free” by the turn of the millennium. Another 59 countries
were “partly free,” leaving an all-time low of just one fourth of the world’s
nation states as “unfree.” Two days before Time’s celebratory
retrospective, the Wall Street Journal cited these findings to claim,
“Democracy is quite literally sweeping the world as the 20th century comes to
a close.” This “long march to freedom” became the key theme in a chorus of
self-adulation sung by the American political class and its intellectual
cheerleaders at millennium’s turn. That march, American leaders knew, owed its
success primarily to the model and activism of the United States. As the
“first truly benevolent” and now thankfully sole superpower, the U.S. had
provided the necessary impetus and protection to bring about the globalization
that is, by the conventional elite wisdom, the main force behind the spread of
“freedom and democracy.”


Most of the
World Lives in Shanty Towns

Beneath the chorus,
those who cared to listen could discern from within the mainstream media
discordant notes of deepening human suffering and shocking inequality. In a
major study that received moderate media attention in the summer of 1999, the
United Nations Human Development Program found that “global inequalities in
income and living standards have reached grotesque proportions.” The UN
reported that the income gap between the richest fifth of the world’s nations
and the poorest fifth (measured by average national income per head) increased
from 30 to one in 1960 to 74 to one in 1997. The top fifth of nations
possessed 86.1 percent of the world’s gross domestic product, 68 percent of
direct foreign investment, and 74 percent of the world’s telephone lines.
Taking into account the wide disparities between rich and poor people in all
countries (rich and poor alike), it seemed likely that the richest 20 percent
of the world’s people received at least 150 times more income than the poorest
20 percent. In the candid words of the Boston Globe, “globalization”
had “resulted in a boom for the wealthiest 20 percent of the world’s
population and a bust for just about everyone else.”

Such disparity
would have seemed less disturbing if it hadn’t been a leading cause of
substantial misery among those at the bottom. While the world’s 200 richest
people (overwhelmingly from advanced northern states) doubled their wealth to
$1 trillion from 1994 to 1998, the media reported, more than 1.3 billion
people in the developing world scraped by on less than one dollar a day—the
World Bank’s benchmark for “abject poverty.” Correspondent RC Longworth of the
Chicago Tribune marked the millennium’s turn by noting that the world’s
“surging economy enriches a few” but “bypasses the rest.” In Longworth’s view,
“the 21st century, like the 20th, has began as a belle epoque for those
lucky enough to enjoy it.” Those lucky people were a distinct minority for
whom the new global era was “a golden age of peace, great wealth, booming
markets. Easy travel. Instant communications, fabulous comfort and, with it,
an innocence and confidence that this good fortune is not only deserved but
permanent.” But “things are very different,” Longworth noted, for the world’s
“majority [who]…live in shanty towns on the outskirts of the global
village.” Longworth referred to “the rest of humanity” beneath the opulent
minority: “millions of unemployed nomads in China, street people in Calcutta,
European workers without jobs, the 28 percent of Americans whose jobs pay
poverty-level wages, semi-educated young men in Morocco begging in four
languages, the hopeless poor of Africa, child laborers in Bangladesh, the
pensioners of Poland, the Russians wondering what happened to their lives.”


Without Opportunity

Particularly striking
were mainstream reports from Russia, a celebrated new “democracy” in the
post-Cold War era. The Russian peoples’ enthusiasm for U.S.-led globalization
and the related “march of freedom” was dampened by the fact that since the
collapse of Soviet socialism and the opening of their country to global market
forces they were living through the longest and worst depression ever
experienced by an industrialized society. As John Lloyd, former Moscow Bureau
chief for Financial Times, reported in the summer of 1999, in a New
York Times
article titled “Russian Devolution,” post-Cold War “Russians,
free to get rich, are poorer.” Further: “The wealth of the nation has
shrunk—at least that portion of the wealth enjoyed by the people. The top 10
percent is reckoned to possess 50 percent of the state’s wealth; the bottom 40
percent, less than 20. Somewhere between 30 and 40 million [Russians] live
below the poverty line—defined as around $300 a month. The gross domestic
product has shrunk every year of Russia’s freedom, except perhaps
one—1997—when it grew, at best, by less than 1 percent. Unemployment,
officially nonexistent in Soviet times, is now officially 12 percent and may
really be 25 percent. Men die, on average, in their late 50s; diseases like
tuberculosis and diphtheria have reappeared; servicemen suffer malnutrition;
the population shrinks rapidly.”

“So great has
been Russia’s economic and thus social catastrophe,” noted Russian expert
Stephen F. Cohen in the left-liberal Nation, “that we must now speak of
[an]…unprecedented development: the literal de-modernization of a
twentieth-century country.”

Along with the
tens of millions of others on the wrong end of globalization, the victims of
this “de-modernization” would have understood well the plaintive cry of Lula
de Silva, the charismatic leader of Brazil’s Workers’ Party. “Do we have
democracy,” asked Lula, “only to have the right to cry out in hunger?” Noam
Chomsky said much the same thing. “Freedom without opportunity,” wrote
Chomsky, “is a devil’s gift.”


Begins At Home

Chomsky’s warning was
relevant within the supposed headquarters and homeland of global freedom,
where the top tenth of the population owned 72.3 percent of total private
wealth at millennium’s turn. In an important study that received moderate
media attention in the next-to-last year of the 20th century, Fordham
University researchers Marc and Marque-Luisa Mirongoff reported that the
social health of the U.S. in the 1990s was far below past levels. Especially
disturbing were the Miringoffs’ finding that three indicators reached their
lowest level since 1970: health insurance, food stamp coverage, and the gap
between rich and poor (the difference between the percent distribution of
aggregate income received by the top fifth and the bottom fifth of families).
“It used to be that a rising tide lifted all boats,” they concluded “but at a
certain point during the 1970s, per capita income and social health split
apart.” Thanks largely to persistent poverty and related deepening inequality,
the Miringoffs concluded that Americans were experiencing a hidden “social
recession” beneath the long economic boom of the 1990s.




It might seem
paradoxical that mainstream media announced two such conflicting themes—one
full of light and hope (the march of freedom and democracy) and the other of
darkness and suffering (the persistence and even deepening of poverty and
inequality)—at one and the same time. Poverty is the enemy of freedom in the
most basic material sense. Moreover, western political theory has recognized
that core democratic ideals—“one person, one vote” and an equal distribution
of policy-making influence—cannot flourish side by side with significant
wealth inequality and poverty. Wealthy minorities possess resources to distort
the political and policy processes in ways that subvert democracy. On the
other side of the inequality pendulum, people who must spend the bulk of their
time trying to maintain their basic material existence lack the time and
energy to participate to any great extent in the political and policy-making
processes. These standard disparities in political power and their dark
implications for democracy are deeply exacerbated by the corporate and
financial globalization that current top-down ideology places at the taproot
of expanding global freedom. Largely by design, globalization removes basic
socioeconomic decision making power from state-specific public policy,
insulating private power further from the dangerous influence of the
nonwealthy majority.

The paradox
dissolves, however, when five basic things are taken into account. First, the
“march of freedom” and not the tragic persistence of mass poverty and
inequality was by far and away the dominant story line of the respectable
media at millennium’s turn. The former theme was found on page one of the
front section of leading newspapers and in their editorials; the latter theme
was buried deeper in pages and sections reserved for the more dedicated
truth-seekers. Second, then as now, certain parts of mainstream coverage were
often quite substantially correct and candid because the mostly affluent and
therefore ideologically safe consumers of mainstream media required accurate
information if they are to effectively carry out their social-systemic tasks
of supervision, indoctrination, and “strategic planning.” Third, the dominant
ideological framework of American policy- and opinion-makers at millennium’s
turn held that equality of opportunity was the only legitimate goal of a free
society. Operating on the false and self-serving assumption that such equality
had been substantially achieved, American authority figures at millennium’s
turn were quite certain that the evident savage inequalities in results
reflected the internal flaws and failures of the nonwealthy to seize readily
available opportunities.

Fourth, the
dominant U.S. definition of democracy at millennium’s turn bore little
resemblance to the classical definition. It required only that all citizens
enjoy minimal basic civil rights and that they be procedurally free to vote in
periodic competitive elections that select at least some significant portion
of the country’s policy makers from a privileged circle of elites. These
representatives remained free to pursue their agenda without direct
accountability to the people between elections. As the conservative economist
Joseph Schumpeter put it in 1947, “democracy means only that the people have
the opportunity of accepting or refusing to accept the men who are to rule

The dominant
definition restricted acceptable democracy to the political sector and its
“division of labor” between the political and socioeconomic spheres. Democracy
was limited by definition to the former and essentially unconcerned with the
latter. This was consistent with the long history of capitalist ideology.
Under capitalism, as Ellen Meiksens-Wood has noted: “a great deal can happen
in politics and community organization at every level without fundamentally
affecting the exploitative powers of capital or fundamentally changing the
decisive balance of social power. Struggles in these arenas remain vitally
important, but they have to be organized and conducted in the full recognition
that capitalism has a remarkable capacity to distance democratic politics from
the decisive centers of social power and to insulate the power of
appropriation and exploitation from democratic accountability…Capitalism has
made possible a far wider distribution of extra-economic goods, and
specifically the goods associated with citizenship, than was ever possible
before. But it has overcome scarcity by devaluing the currency.”

As Chomsky
noted in the middle of the last millennium’s last decade, the “doctrinal
meaning of democracy” in the hands of U.S. intellectual and policy elites
“refers to a system in which decisions are made by sectors of the business
community and related elites…the public are to be only ‘spectators of
action,’ not ‘participants’.… They are permitted to ratify the decisions of
their betters and to lend their support to one or another of them, but not to
interfere with matters—like public policy—that are none of their business. If
segments of the public depart from their apathy and begin to organize and
enter the public arena, that’s not democracy. Rather it’s a crisis of
democracy in proper technical usage, a threat that has to be overcome in one
or another way: in El Salvador, by death squads —at home by more subtle and
indirect means.”

By the dominant
U.S. criteria at millennium’s turn, then, there was no contradiction in
asserting that a society with massive disparities in wealth, privilege, and
even political influence was a democracy. There was no contradiction in
claiming that the world was becoming more democratic at the same time that it
was becoming increasingly poor and divided by wealth and income. “By limiting
the focus to political contestation among elites through procedurally free
elections,” sociologist William I. Robinson pointed out in an important study,
U.S. elites made “the question of who controls the material and cultural
resources of society” essentially “extraneous to the discussion of democracy
[emphasis added].” It was an absurd position but it was held
nonetheless in the corridors of American economic, political, and intellectual



The End of
History, Interrupted

The fifth and final
reason that mainstream media  could report such seemingly contradictory
evidence on the state of human freedom and democracy was the American
political class’s judgment that no significant forces existed to call them on
their contradictions. With the collapse of the Soviet Union and its satellite
states, the demise of Third World resistance, the roll-back of labor movements
and social democracy, and the global triumph of “neoliberal” market forces,
the American and global ruling classes concluded that serious social-systemic
division and related moral-ideological debate had drawn to a fateful close.
History, understood as a series of struggles over the nature and purpose of
political economy, had, in their satisfied opinion, ended. It had dissolved,
they felt, into a welcome consensus on “free market” (really state) capitalism
as the best of all possible worlds.

Fortunately for
all but the world’s opulent few, however, this conclusion proved to be an
illusion. Its falsity was revealed in Fall 1999, when tens of thousands of
protestors filled the streets of Seattle to crash the party of global capital
at the annual meetings of the WTO. Subsequent mass demonstrations against
capitalist globalization and the dominant world financial and regulatory
institutions in Washington DC, Prague, Quebec City, and elsewhere combined
with the holding of a World Social Forum in Port Allegre, Brazil, and other
developments to announce the emergence of a new social movement challenging
the persistent and deepening authoritarianism, destructiveness, and injustice
of the new world capitalism. Composed of numerous and sometimes conflicting
impulses and tendencies—eco- decentralists, anarchists, social-democrats,
anti-globalists, left-globalists, indigenous rights advocates, feminists,
Marxists, labor, etc.—the new movement was united by commitment to the
inseparably linked values of social justice and democracy classically
conceived and by its determination to confront capital on a global scale. The
basic human instinct for genuine freedom, one that takes people beyond the
“devil’s gift,” was not extinguished. History, it turns out, has not ended
after all.                            Z


Street is research director at the Chicago Urban League. His articles have
appeared in
Z Magazine, Monthly Review, and the
Jounral of American Ethnic History.