Some of you know, and you're quite right, that inequality doesn't begin with capitalism.
It's older. It has existed before. Capitalism hasn't overcome it as many of its enthusiasts
promised it would, but it hasn't been the beginning of it either.
And there's a lesson in that. Let's take a look at the two major economic systems before capitalism:
feudalism and slavery. There's something interesting that we can learn about those systems,
and they were systems of enormous inequality. The pyramids in Egypt are a product of a society very,
very unequal. The pyramid is a tomb for the richest produced by a mass of the poorest
citizens. The chateaus along the river Loire in France that our tourist attractions were the homes
of the very richest feudal lords, and they were produced and staffed by the poorest serfs. What is
interesting about slavery and feudalism that we can learn from is something that they have in
common with capitalism. In other words, a certain structure is true about slavery and feudalism
that is also true about capitalism. And that, I believe, explains why all of them have this
extreme inequality that they reproduce over centuries. Let's start with the slaves.
You divide the population of a slave economic system basically into two roles: "master" and
"slave". The master runs the show. The masters are a small minority of all the people.
The vast majority are slaves in most slave systems. But that minority has extraordinary
power. They decide what gets produced, how it gets produced, where it gets produced, and they get
all the product. They give a portion of it back to the slaves so that they can keep working, but wow,
it is no surprise that the people who run that system make themselves the beneficiaries.
They become wealthy and the mass of the slaves don't. Let's turn to feudalism.
There we divide again into a minority that runs the show, they're called "feudal lords" in Europe,
and a mass of people who do the work, they're called "serfs." Now, it's a different system.
The lords don't own the serfs the way the masters owned the slaves. Slavery is not there anymore.
But in this relationship between lord and serf here's what we have again: a minority, the lords,
make all the decisions: what to produce, how to produce, where to produce, and what to do with
the product. And the serfs do all the work. Now the serfs keep part of it, they deliver only the
extra, the surplus, the "rent" as it was called, to the lords. But it allows the lords to amass
enormous wealth which we can see because much of the wealth of feudalism is still around in
the great castles and in the the great cities, in the Versailles outside of Paris and so forth.
Now we come to capitalism and here's the clue. Capitalism also divides the people
involved in production into two groups: a small minority that runs the show, and they have a name,
"employers" (or if you like "capitalists" because they're employers who are trying to amass
capital, to make their wealth grow, which is what capitalism means), and then a vast majority of
people who are "employees." Employer to employee replicates lord to serf, and master to slave.
And again the employers, because they're in charge and they have the position of gathering
the net product, the surplus, the profit, into their own hands, take a big portion for themselves
to become wealthy. And the mass of people live on their wages and do not become wealthy.
In other words, here's the punchline: whether it's slavery or feudalism or capitalism the structure
of each of those societies positions a minority in such a way as it can accumulate wealth and keep
that from being shared among the mass of people. That's the clue. Ot's the structure of production,
or if you like the "class structure," because employers are one class employees are another,
just like lords are in one class and serfs in another, masters in one class slaves in
another. This system, this class division within capitalism, explains why it is unfortunately
as successful in reproducing inequality over time as both feudalism and slavery were over the many
centuries that they were the dominant economic systems before capitalism came to replace them.