Seething Millennials
A Tale of Obscene Wealth and Inequitable Capitalism
Millennials, a generation born in the age of information, are increasingly finding themselves on the precipice of economic existentialism. Faced with a wealth gap that only seems to widen, this generation is disenfranchised and disheartened. The massive wealth accumulated by a select few stands as a stark contrast to the financial struggles experienced by the majority.
Economic data from the Federal Reserve paints a grim picture. The top 1% of households own more wealth than the bottom 50%. This stark wealth inequity is not merely the result of the diligent efforts of the rich; it's a product of a capitalist system that has increasingly catered to the wealthy at the expense of the rest.
Capitalism, once acclaimed as the great equalizer, is now being scrutinized for its role in this deteriorating situation. Renowned economist Thomas Piketty argues that capitalism inherently leads to extreme wealth inequality, as the returns on capital consistently outpace those of labor.
The federal government spends over $400 billion to support asset development, but those subsidies primarily benefited higher-income families—exacerbating wealth inequality and racial wealth disparities.
About two-thirds of homeownership tax subsidies and retirement subsidies go to the top 20 percent of taxpayers, as measured by income. The bottom 20 percent, meanwhile, receive less than 1 percent of these subsidies. Blacks and Hispanics, who have lower average incomes, receive much less of these subsidies than whites, both in total amount and as a share of their incomes.
Low-income families benefit from safety net programs, such as food and cash assistance, but most of these programs focus on income—keeping families afloat today—and do not encourage wealth-building and economic mobility in the long run. What’s more, many programs discourage saving: for instance, when families won’t qualify for benefits if they have a few thousand dollars in assets or when they have to give up rent subsidies to own a home.1
The built-in cruelty of capitalism is a grim reality that only a few to acknowledge. Pulitzer Prize-winning journalist Chris Hedges, in his book "Empire of Illusion: The End of Literacy and the Triumph of Spectacle" 2, argues that the capitalist system, with its relentless pursuit of profit, is designed to exploit the vulnerable. It commodifies everything, including human beings, in an endless quest for accumulation.
Professor Richard D. Wolff, in his renowned book "Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It" 3, also highlights the inherently exploitative nature of capitalism. According to him, the capitalist system maintains inequality by its very design, perpetuating a cycle of wealth accumulation that benefits the select few while leaving the majority in despair.
The study, "Capital in the Twenty-First Century" by Thomas Piketty4 underlines the inherent propensity of capitalism to create a wealth divide. He demonstrates that when the rate of return on capital exceeds the rate of economic growth, wealth inequality inevitably follows.
Thus, capitalism, while powerful in its ability to generate wealth, harbors inherent cruelty, manifesting in its voracious appetite for profit and perpetuating economic inequality.
The discontent of millennials with the prevailing economic system is palpable. Incidences of financial insecurity, income stagnation, and limited economic opportunities have fueled a sense of disillusionment among millennials, leading to a rising tide of criticism against capitalism. In a study conducted by the Victims of Communism Memorial Foundation in 20195, it was revealed that 70% of millennials would be likely to vote for a socialist candidate, a stark departure from prior generations. A Bernie in the White House sounds just fine to me.
An article in The Guardian, titled "Millennials and the Moments That Made Us,”6 highlights how millennials have inherited an economy that is rigged against them. Skyrocketing tuition fees, precarious employment, and dizzying house prices - all symptoms of a capitalist system run amok - have left millennials with a sense of betrayal and anger.
In "The Theft of a Decade: How the Baby Boomers Stole the Millennials' Economic Future,” author Joseph C Sternberg points out that the economic policies pursued by previous generations have left millennials in an economically disenfranchised state. The financial crisis, followed by a decade of slow growth and skyrocketing living costs, has resulted in an entire generation struggling to catch up.
As such, it is clear that capitalism, with its built-in mechanisms of inequality, has left millennials feeling disenfranchised and angry, and they are beginning to voice their discontent louder than ever before.
The disparities in wealth distribution have reached staggering proportions7. This obscene wealth inequality has repercussions that extend far beyond economic parameters, permeating societal structures and shaping the way we live, interact, and perceive the world around us. People with no hope are also unlikely to care about social and cultural expectations.
Wealth inequality fosters social divisions, exacerbating class conflicts and fueling social unrest. It hampers social mobility, instills a sense of hopelessness in the economically disadvantaged, and perpetuates a vicious cycle of poverty. It breeds an environment of resentment, mistrust, and disillusionment that can lead to social instability and discord8.
The future of humanity in the face of such rampant wealth inequality is uncertain. If left unchecked, this disparity could exacerbate social tensions, destabilize economies, and lead to a global crisis. However, this does not have to be our fate. Millennials, more than any other generation before them, are acutely aware of the systemic flaws that have led to this state of affairs and are strongly advocating for change. Faced with growing discontent, there is a beacon of hope that future generations will strive for a more equitable, sustainable economic system that benefits the many, not just the few9.
There are several proposed solutions to address the issue of wealth inequality. One is progressive taxation, where high-income individuals are taxed at a higher rate than those with less income. This method promotes wealth redistribution and has been endorsed by economists like Thomas Piketty and Emmanuel Saez10.
Another potential solution is a universal basic income (UBI), where every citizen receives a set income regardless of their work status. Advocates argue that UBI could reduce poverty and inequality by providing a safety net for those in need. It's a concept that has gained traction recently, with pilot projects running in various countries11.
Improving access to quality education could also mitigate wealth inequality. Education is a powerful tool for upward mobility, but unfortunately, it's often inaccessible to those in lower income brackets. Providing equal educational opportunities can help level the playing field and break the cycle of poverty12.
Lastly, implementing minimum wage laws that ensure a living wage could help reduce wealth inequality. These laws can raise the income of the lowest earners and reduce income disparities13.
Adding fuel to the fire, millennials are left to grapple with an eroding social safety net. According to a report by the Urban Institute, Millennials will have spent more on healthcare and received less in unemployment benefits by age 40 compared to Gen Xers or Baby boomers.
The disenfranchisement of millennials is an issue that demands immediate attention. As a society, we must work to ensure that the wealth of a nation benefits all its residents, not just a privileged few. I am not calling for utter eradication of capitalism, but for its reform (by restraining its cruel impulses and nature, to build a system that truly embodies the spirit of equality and opportunity. This can only happen if we have a better election system, more robust checks and balances, and the end of the two-party monopoly on power, which has caused the social equity gains made in the last century to begin to unravel.
If the millenials become a mob and wipe out older generations, well maybe we had it coming.
Author’s postscript: I’ll be writing more on this topic in the near future.
https://apps.urban.org/features/wealth-inequality-charts/
Hedges, C. (2009). Empire of Illusion: The End of Literacy and the Triumph of Spectacle. Nation Books.
Wolff, R. D. (2010). Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It. Interlink Pub Group Inc.
Victims of Communism Memorial Foundation, "Annual Report on US Attitudes towards Socialism"
The Guardian, "Millennials and the Moments That Made Us"
Piketty, T. (2014). Capital in the Twenty-First Century. Belknap Press.
"A Generation without Compromise: Gen Z, Millennials, and the Future of Socialism." YouGov.
Joseph C. Sternberg, "The Theft of a Decade: How the Baby Boomers Stole the Millennials' Economic Future"
"Global Wealth Report 2020: The Decade of the Wealthy." Credit Suisse.
"Inequality and Social Conflict Over the Long Run." Piketty, Thomas. The Economic Journal.
https://www.weforum.org/agenda/2018/04/education-income-inequality-effects-wealth
Follow up: do you think American power and corruption are diffuse? Be as detailed as you like in responding.
Brilliant synthesis Pen. Two other books delve into a slightly different angle: “The 9.9 Percent” by Matthew Stewart (quite philosophical, some big jumps in logic that were new to me, acerbically funny) is one. The other is “Thank you for Your Servitude” by Mark Leibovich. It’s darkly harsh, and more rooted in everyday realities.
Both have left the idea of the 1% behind mainly. They are a terrible drag, but focusing on them excuses by ignoring the next tier down.
The big idea, so to speak, is the myriad of ways that capitalism unchained has hollowed out the middle class. The top 10% have created a self-perpetuating system that it would take years for any government to unwind.
Truthfully it reminds me of the pre WWI aristocracy in Britain, an area of study for me in my university days. It took two wars and a Depression to leave but a shadow of it left - a shadow that stills punches, unfortunately, above its weight.
Thanks for your insights and well-crafted pieces.