The Nature of Capitalism and the Challenge for the LGBT Community

This past week the controversy about Jo Becker's book chronicling the marriage equality movement proceeded apace, with her own newspaper, The New York Times, which sponsored her investigative work, panning her efforts. Adam Goodheart wrote:

History does show that, as Ms. Becker proposes, a small team of canny strategists can sometimes force revolutionary change -- more so than politicians or philosophers. [Rosa] Parks herself was a member of such a team, not the simple seamstress that legend has made her.

The [Hollingsworth v. Perry] case, though, was hardly such an instance. The gay rights movement's success has owed less to dramatic single triumphs than to inexorable, yet incremental, social and cultural changes: the kind that occur daily as gay couples move into middle-class suburbs, Bible Belt teenagers come out to their parents, and television shows feature gays and lesbians without fanfare or controversy.

Like the Scopes trial, the Perry lawsuit made good theater -- but not a revolution.

Had she shown some humility and marketed the book solely as an exhaustive look at the intricacies of the Perry lawsuit, I expect none of this would have happened, and rather than defending herself on her current book tour, she would be riding a wave of acclaim for an embedded look at the work of a remarkable legal effort, spearheaded by the law's most unexpectedly remarkable duo, Ted Olsen and David Boies. The book has not even made the top 25 on the New York Times bestseller list this week.

Another, far more important book, which might make a revolution, did make the bestseller list, and it's quite a remarkable achievement that it did. This book has become so popular that it has sold out, and given that it's over 700 pages long, the demand is both remarkable and exciting. The book is Professor Thomas Piketty's Capital in the Twenty-First Century and may be this generation's equivalent of Das Kapital. The difference, though, is that Piketty is a first-rate economic historian and researcher who has made significant efforts to not allow any ideological bias to taint his findings, a concern that never influenced Karl Marx.

Piketty's thesis is simple and based on 200-plus years of economic data from the industrialized world. As summarized by Steven Pearlstein:

There is nothing inevitable about the dominance of human capital over financial capital, and that there is inherent in the dynamics of capitalism a natural and destabilizing tendency toward inequality of income, wealth and opportunity.

Another reviewer, Thomas Edsall, points out:

Capitalism, according to Piketty, confronts both modern and modernizing countries with a dilemma: entrepreneurs become increasingly dominant over those who own only their own labor. In Piketty's view, while emerging economies can defeat this logic in the near term, in the long run, "when pay setters set their own pay, there's no limit," unless "confiscatory tax rates" are imposed. ... [T]raditional liberal government policies on spending, taxation and regulation will fail to diminish inequality.

In other words, unregulated capitalism tends toward greater and greater income and wealth inequality because the return on capital is much greater than economic growth. What distributes the fruits of economic growth among the people is not capitalism, as described by Milton Friedman, but government intervention to rein in the excessive returns on capital. The more perfect the market, the greater the unequal rates of growth, and the growing wealth inequality.

So we are now living in a world where the ideological cold war is not between capitalism and communism, as it was for over 100 years, but between capitalism and democracy, and capitalism and fairness. One of the reasons I have been a progressive activist is that I want to do my part to reduce that inequality, and to give everyone a better chance. It's the main reason I'm running for the Maryland state Senate, because Democratic theory and practice of the past three decades has failed to provide for the people, and my opponent is a man mired in the past, beholden to those Democratic leaders who have fully embraced centrism and triangulation. Piketty makes clear that we can no longer compromise with laissez-faire, because without forceful government intervention, not just nudging and tweaking, the trend will not be slowed, let alone reversed.

One other important point he makes is that the world in which the post-war generation came of age was an aberrational one in the history of capitalism. This exceptional period was due to the destruction of capital in two world wars and a global depression, followed by serious government efforts in the United States to redistribute capital. There is no business cycle or even secular, long-term Kondratieff-like cycle that will painlessly take us back to those days of greater economic equality.

The timing of a recent article by Mike Lavers in the Blade was propitious, as it points to the mission that lies ahead for the LGBT movement in this country. As legal equality grows, economic equality will continue to worsen due to underlying market forces. Many members of the LGBT community, particularly but not solely the transgender population, are at greatest risk of being left behind, because even when formal equality is present, the cultural changes attendant to the legislative and legal ones take much more time to permeate through society and take hold. Some 50,000 to 75,000 Marylanders live in poverty, according to Aaron Merki of the Free State Legal Project. He says, "LGBT poverty is rooted in stigma and discrimination a lot of the time."

It's hard enough to overcome that stigma and discrimination, particularly for minority populations, but when the underlying economic trends are tearing the country apart, the challenge becomes even more difficult. Maybe, one can hope, Piketty's work (over two decades in the making) will galvanize a resurgence of concern for the working and middle classes. Maybe the postwar generation, blessed to have lived in the most equitable society in American history, will take action to recreate that society, because it's the right thing to do for our children.

An example of real progressive leadership is the deal struck by Seattle Mayor Ed Murray to raise the minimum wage to $15. It's indexed to inflation, and the business community was brought on board as well in a creative manner. This effort shows what can be accomplished when real leadership stands up.

Oh, I forgot to mention: Mayor Murray is gay.