War or Revolution Every 75 Years. It's Time Again.
When Charles Dickens wrote "It was the best of times, it was the worst of times" to begin "A Tale of Two Cities," he compared the years of the French Revolution to his own "present period." Both were wracked with inequality. But he couldn't have known that 75 years later inequality would cause the Great Depression. Or that 75 years after that, in our own present period, extreme inequality would return for a fourth time, to impact a much greater number of people. He probably didn't know that the cycles of history seem to drag the developed world into desperate times about every 75 years, and then seek relief through war or revolution.
It's that time again.
Three cycles (225 years) ago, in the years before the French Revolution, inequality was at one of its highest points ever. While it's estimated that the top 10% of the population took almost half the income, as they do today, the Gini Coefficient was between .52 and .59, higher than the current U.S. figure of .47. The French Revolution began a surge toward equality that lasted well into the 19th century.
Two cycles ago, in Dickens' day of the 1860s, European inequality was again at a nearly intolerable level. It took the second industrial revolution and the U.S. Civil War to start correcting the economic injustices.
One cycle ago was the Great Depression. The New Deal, World War 2, and the laborious process of war recovery put an end to this third period of extreme inequality.
Now, nearly 75 years after we started World War 2 production, we again feel the agony of a wealth gap expanding, like grotesquely stretched muscle, to intolerable limits. If history repeats itself, we will be part of another revolution of long-subjugated people. Indeed, it has already begun, in Europe and Canada and with the Occupy Movement.
The face of plutocracy has changed, but not the consequences. Just before the French Revolution, Paris and London were dismal places for the masses, with islands of unimaginable splendor for aristocrats, who, like the multi-millionaires of today, found it hard to relate to the commoners. Dickens portrayed it well. Exclaimed the Marquis St. Evremonde to a gathering crowd: "It is extraordinary to me that you people cannot take care of yourselves and your children. One or the other of you is for ever in the way. How do I know what injury you have done to my horses?" This he said after his carriage had struck and killed a young child.
Today the two cities could be Los Angeles and Chicago, both among the ten most unequal metropolitan areas in the United States. Instead of lords and noblemen, we have CEOs and hedge fund managers. The economic injustices are fashioned in more civilized ways. Insidious ways.
Los Angeles is the biggest city in a state with a $9-16 billion budget deficit. It is facing severe cuts in education, health care, social services, and the court system. College tuition increased 50% in two years. Public schools are down to one counselor for every 800 students.
But California's deficit wouldn't exist if corporations had paid their state taxes. Apple is a prime example of nonpayment. While the company's 10% federal tax rate has been widely publicized, its 2% state payment (rather than the required 9%) is less well known. For state avoidance purposes, they claim residency in Nevada. And despite conducting most of its research and development in the United States, they channel much of their sales through Luxembourg and Ireland and the Caribbean.
What about Chicago? It has the highest sales tax in the country. Illinois cut 2012 education spending by a greater percentage than any other state. The state tax rate was just increased by 66%. Property taxes went up by about $300 per homeowner. Illinois was recently named one of the ten "Most Regressive State Tax Systems," with the third-highest "Taxes on the Poor."
Yet if just 20 large Illinois companies had paid state taxes at the required statutory rate over the past three years, an additional $7.5 billion would have come back to the state, or about half of the state's current deficit.
Just as Los Angeles loses out to technology, Chicago is victimized by finance. The Chicago Mercantile Exchange (CME), with billions of untaxed contracts worth well over a quadrillion dollars, and whose profit margin over the past three years is higher than any of the top 100 companies in the nation, demanded and received an $85 million per year tax break.
"A man grown grey in treachery...who once when it was objected, to some finance scheme of his, 'What will the people do?' - made answer, in the fire of discussion, 'The people may eat grass.'" -- Thomas Carlyle, "The French Revolution," the main source for Dickens' novel.
In our 'civilized' times people aren't being run down by noblemen or forced to eat grass. The aristocracy has learned a lot about suppressing crowds in 225 years. But they need to fear the growing revolution. They need to fear, as Dickens put it, "the remorseless sea of turbulently swaying shapes, voices of vengeance, and faces hardened in the furnaces of suffering until the touch of pity could make no mark on them."