The Institute for Policy Studies recently published a report¹. The report shows how in 2021 CEOs for the 300 biggest public U.S. companies have increased their yearly salary with over 25%, while the average non-c-level worker's salary increased by 6%; one of these employees, on average, earn 0.2% of what their CEO earns.

In 2021, the CEO of Amazon earned 6,474 times more than their median worker².

At a dozen of the 300 companies, the CEO-worker ratio is 1000:1.

At more than a third of these firms, the median worker pay didn't keep pace with inflation; in other words: due to inflation, this sort of median worker earned less in 2021 compared with 2020.

Late-stage capitalism

From the report:

At the 106 companies in our sample where median worker pay did not keep pace with inflation, 67 spent resources buying back their own stock, a maneuver that inflates executive stock-based pay. These repurchases totaled $43.7 billion.

The biggest buyback firms turned out to be retailers Lowe’s, Target, and Best Buy. The typical worker at these chains lost ground while their bosses were blowing mega-billions on stock buybacks.

With the $13 billion Lowe’s spent on share repurchases, the company could have given each of its 325,000 employees a $40,000 raise. Instead, median pay at the company fell 7.6 percent to $22,697.

Top-level management managed to implement schemes to get richer while lowering the salary for the people at the bottom.

This is the end game of capitalism: the system is so broken from the very start that it's bound to self-destruct.

Capitalism is fascist in nature: one of the main tenets of capitalism is the power pyramid, where the CEO earns the most and has the most power. As we move down the pyramid, there's less money and less power. We're told that this is the natural way, the so-called trickle-down effect.

I'm reminded of a scene in The Devil Wears Prada³ where a young and eager low-level worker is told, by the very top person at the company, that what she's wearing isn't the result of conscious choice, but rather what the very top echelons of the fashion industry have meant for her to wear: it starts with the haute couture fashion houses, then trickles down to the rabble a year later, at much 'discount' (meaning substantially lower quality and price).

The scene is one that plays out in capitalism. It must, in order to generate as much profit as possible for the major shareholders; this is the absolute core purpose of a capitalistic company, at any other cost⁴.

The high cost of low price

Lasica, JD. 2010. “Andy Jassy, CEO of Amazon Web Services.” 2010. https://www.flickr.com/photos/jdlasica/5186917480/.

Infamous for their highly exploitative, algorithmically-managed labour regimes, Amazon fulfillment centers are sites of continual breakdown and disrepair for the bodies and minds of its workers.⁵

We know that these CEOs lie⁶. There are entire podcast series⁸ about how 'the minority of the opulent is protected from the majority'⁷, to paraphrase former U.S. president James Madison during the secret meetings.

We pay corporations seemingly little money but at an extremely high cost⁹. This pays the top shareholders major dividends for a relatively short period of time while the company breaks at the seams and the workers get the shaft once the company collapses.

Let's end with a very poignant quote from Noam Chomsky¹⁰:

One of the simple but profound statements in the book is that the “problem isn’t individual, but institutional.” Mainstream political discussion tends to obsess over individuals rather than institutions. There are many Americans who are angry about politics but aren’t exactly sure why or how to direct their rage. Is part of that because — as much as, say, Biden is preferable to Trump — the overall problem isn’t individual, it’s institutional?

There are differences, which are significant, but basically institutions place tight constraints on what can happen. Let’s take the most urgent issue that has arisen in human history: the destruction of the environment. If we don’t take care of that in the next couple of decades, nothing else matters. We’ll be off on an irreversible course of self-destruction. Well, there are institutions and individuals. There’s the CEO of ExxonMobil. There’s Jamie Dimon, who runs JPMorgan Chase. They make decisions, and the decisions to some extent reflect their own goals, priorities, sentiments, and so on. But they are narrowly constrained. So, for example, the CEO of ExxonMobil surely knows as much about global warming as you or I do, probably a lot more, at least if he reads the materials that come to him from his own scientists and engineers, and they’ve known it for 50 years. ExxonMobil scientists were in the lead, back before many people were warning about the extraordinary dangers of heating in the environment. In fact, when James Hansen, a famous geoscientist, made a speech in 1988 warning of the threat of global warming, putting it into the public realm, ExxonMobil responded with significant efforts to undermine the idea that there is a threat. They didn’t do it stupidly. They didn’t deny it, because that would have been easily refuted. What they did is try to develop doubt — “Maybe we don’t know,” “We haven’t looked into clouds,” “Let’s put off any big decisions so we can have a richer society,” “We might have to do something about it a long time from now,” etc. They all knew that was nonsense. They all knew that if we don’t do something about it quickly, we are in severe danger.

Back to your question. Suppose a different individual CEO came in and said, “Let’s tell the population the truth. Let’s tell them that we are destroying the prospects for organized human life on earth. Let’s tell them that we are going to stop doing it. We’re going to move to renewable energy, because we care about your grandchildren and ours.” He would be out in five minutes. That’s part of the institutional structure. If you aren’t maximizing profit and market share, you aren’t going to stand. Of course, there is a point to criticizing individuals, but the real point is that, within the system, they don’t have a lot of choices. Therefore, we have to ask, “What is it about the structure of our institutions that is leading us in this direction?”

Let’s take another current example, right in the headlines. We are in the midst of a pandemic. It is well understood, across the board, that unless vaccines are provided quickly to the poor, suffering areas of the world, such as parts of Africa, it is going to be a disaster, not only for them, but for us. Mutations will take place. It is unpredictable, but some might be lethal. They’ll get back to Europe and the United States, and we’ll all be in deep trouble. So, we have a choice. We can work on a people’s vaccine, sending the vaccine freely and openly to the people of Africa. That’s good for them, of course, but it will also protect us from future disaster. That’s one choice. The other choice is to protect the profits of the major pharmaceutical corporations, already loaded with profits because of the highly protectionist elements of the mislabeled “free trade agreements.” Which are we pursuing? Not just us, but Europe as well. The idea is you work for yourself, for the system of power within your society, and if it kills people elsewhere, that’s someone else’s problem. That is the way the institutions work.

In fact, if you look at the details, it is pretty shocking. Imagine yourself a rational observer from outer space watching this species. Take a look at the United States, which has one of the best — or least bad — records on the vaccine. There happens to be a surplus of vaccines in the United States, because the FDA has not yet authorized the use of AstraZeneca, and there’s a large extra supply. So, Biden did the sensible thing. He dispensed them to other countries. Which countries? The first one is Canada, which is the world’s champion in storing unused vaccines that it will never be able to use because it has hoarded them way beyond any potential use. So, that’s the first recipient. The second recipient is Mexico, as part of a bribe to violate international law and minimal ethics by keeping desperate refugees away from our border. This isn’t because Biden is a bad person. He seems like a nice guy. It is just the way that institutions structure decisions. That said, there are different forces operating on how decisions are structured. There are the corporate boardrooms, and there are the activists in the streets. Who is going to win? That’s the issue, and it’s not subtle.

Go back to the beginning of this 40-year assault on the general population called “neoliberalism.” It was pretty obvious at the start. You may not be old enough to have heard it, but I’m sure you’ve read about Reagan’s inaugural address in 1981. The punchline was, “Government is the problem, not the solution.” Okay, so if government is not the solution, who is the solution? Where will decisions be made if not in government? Does it take a genius to figure this out? They’ll be made in corporate boardrooms. So, in other words, we shift decisions from government — which whatever its flaws, is, at least, partially responsive to the general population — to private tyrannies, which are totally unaccountable to the public, and which are dedicated, explicitly — there’s no secret about it — to maximizing what’s called “shareholder value”: dividends, benefits to management. That’s their task. The name for that in the United States is “libertarianism.”

All of these are ways in which, to go back to my and Marv’s course, “common sense” is instituted. We happen to start with Gramsci. We go back to earlier sources, even David Hume’s “Of the First Principles of Government.” These themes run through, and it is understood that you have to impose common sense. You have to manufacture consent. As progressive democratic theorists have argued, “The people are too stupid and ignorant to do what is in their own interest. So, we the responsible men have to make decisions for them.” Of course, the intellectuals and the responsible men are actually following the dictates of private power. They don’t like that part of the story. They like to see themselves as running the show.

In my lifetime, I’ve seen it over and over. During the Kennedy and Johnson years, the technocratic and meritocratic elite, my colleagues from Harvard and MIT, were flocking down to Washington to show how the world should be run. Well, in Vietnam, we saw what came of that. It was not unpredictable. Those of us in the streets were warning of it all along.

Now, it is the same. Neoliberalism, whatever is in the minds of people who advocate for it, maybe they don’t even think about it, is an explicit effort, and it is evident from the structure, to hand power to private institutions, which are dedicated to self-enrichment. It would be obvious to a 10-year-old, even if economists don’t see it, because they have some theory that says it leads to “Pareto optimality.” Whatever. We have 40 years of experience, and we can see what’s happened. It was totally predictable. To give you just one example, you may have seen it, but a couple of months ago the RAND Corporation did a detailed study trying to determine how much wealth was transferred from the working class and middle class to the superrich during the 40 neoliberal years. They estimated $47 trillion. Some call it “transfer.” “Robbery” is a better term. Meanwhile, the top 0.1 percent of the population doubled their share of total wealth from 10 percent to 20 percent. Take a look at the effects: the majority of the population gets by paycheck to paycheck. Real wages have stagnated for 40 years. The gains of productivity growth concentrate in very few pockets. This leads to what you mentioned before — unfocused anger. Is it surprising? People aren’t told what is really robbing them. Instead, they are told that it is immigrants, Blacks, some pedophiles from outer space, if you believe QAnon. Anything but what is actually happening. That’s another mode of manufacturing consent and establishing “common sense.”

The job of people like you, activists on the streets, people who are trying to change the world for the better, is to dismantle all of this stuff. It is to get people to see what is not that far from right in front of their eyes. None of it is very profound. You can talk about it to high school students. They often understand it better than graduate students at major universities, who have been more indoctrinated.

As we discuss in the book, this is a point George Orwell made. Something that not many people read but should is the introduction to Animal Farm. Animal Farm is seen as safe, because it is a satire of the totalitarian enemy. The introduction, which was not initially published, is addressed to the people of England. Orwell warns not to feel too self-righteous, because in free England, unpopular ideas can be suppressed without the use of force. He calls it “literary censorship in England,” and one of the means he describes is simply a good education. You go to the best schools, like Oxford and Cambridge (similar to Harvard and Yale), and have it instilled in you that there are certain things that it just wouldn’t do to say, or even think about.

It is funny the way it works. A couple of days ago I had a talk with a group of Latin American activists. They were from all over Latin America. Well, just for fun, I read for them a column that appeared in The New York Times that day by one of their top foreign affairs specialists. It was about how the United States has been committed to the rule of law, human rights, and democracy. They just burst out laughing. They’re living in the real world, not the world of US intellectual culture.