Muddy waters: why Vinnies are wrong on inequality

Vinnies agree. Criticising “third way” reformists in a 2002 St Vincent de Paul paper, John Falzon began:

Long live Australia: the classless society! This is the fairy tale world of those who occupy the intellectual space of the third way. A beautiful fairy tale, but a fairy tale nonetheless. Class is not dead … [There is a] solid class structure that constitutes the contemporary socio-economic formation.

Wealth and exploitation

Marx believed that capitalists accumulate wealth by exploiting the labour of others. This means that one class only gets richer if another gets poorer - the so-called “immiseration thesis”. As Marx put it “accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole”.

This is an absurd, zero-sum conception of wealth generation which assumes one person can only get rich at another’s expense. But the Vinnies’ researchers agree with it. We have already noted their insistence that poorer people do not benefit from economic growth, but Falzon goes further when he states “as wealth has been generated so has poverty been created”. And although Wicks rather awkwardly distanced himself from this position when directly challenged on radio, the Vinnies’ web site clearly resonates with Marx’s own comments by claiming “the accumulation of wealth on the one hand is connected with the accumulation of poverty on the other”.

Class conflict

Marx believed the widening economic gap between the classes would gradually raise the level of tension and conflict between them, as workers came to see how much wealth was in the hands of the capitalists. Class conflict would take various forms including strikes, absenteeism and criminal behaviour, but eventually it would coalesce into a revolutionary political movement.

The Vinnies baulk at violent revolution, but they agree with Marx’s assumption that class envy will generate social unrest. As we have seen, their recent paper assumes, with no empirical justification, that increasing inequality will generate “sharpening divisions, discord, increased crime”. And asked on Radio National why he believed inequality “is not good for society” Wicks replied “well, because the people at the very bottom see all the things that are available in society … A young Australian … he’s never going to get all the things they show on TV, all the nice goods and services, and all the rest of it. And so what’s he going to do if he can’t have those?”

The Bible’s answer to Wicks’s question (what is a poor young Australian to do when confronted with material goods he cannot afford?) is clear: “Thou shalt not covet thy neighbour's house, thou shalt not covet thy neighbour's wife, nor his manservant, nor his maidservant, nor his ox, nor his ass, nor any thing that is thy neighbour's.” Nor, we might add, anything thou seeist on TV. Vinnies’ answer, however, seems rather more equivocal.

The ruling class

Marx believed that class conflict involves the State operating to defend the long-term interests of the capitalist class. This means that legislation tends to reflect the interests of capital rather than those of labour.

Vinnies agree. Falzon thinks recent public policies have been “dismantling the public sphere in the interests of capital and decollectivisation of labour”. Echoing contemporary Marxist theorists like David Harvey, he sees privatisation as the “result of the need to create new fields for investment of surplus capital around the globe”. Similarly, he attacks “the legislative attempt to wreck the collective bargaining rights of labour”. He sees the 1998 waterfront dispute as “a frontal assault on a well-organised section of the working people” and bemoans the way the State promotes ideologies of personal aspiration to “drive a wedge” between different “members of the working class”. All of this is straight, undiluted Marxist analysis.

The welfare state

The welfare state did not exist in Marx’s day, but an extensive Marxist literature developed from the 1960s onwards explaining how the welfare state “incorporates” the working class, pacifying them, preparing them for their role as wage labourers, and legitimating capitalist rule by blunting its worst effects. Their argument is that “bourgeois” institutions like the welfare state can only ever ameliorate the suffering of the working class and that when workers participate in such institutions they are in effect reproducing the very system which is dominating them.

Vinnies agree. Falzon is scathing about attempts to help the poor that stop short of transforming the whole society:

The third way is, at best, an excuse for not doing anything to substantially assist the poor. It makes no attempt to alter a socio-economic infrastructure that not only puts people into poverty but keeps them there. It proposes that people can escape the chains of poverty by their participation in the very structures that produce their poverty.