Toward a More Equal America

Part III: Rehumanizing the Economy

Language matters.

The way that we formulate words both belies and influences the way that we think.

Economists have tricked us.

They have convinced us that their statements are value-neutral, that they are just reporting facts about the world.

They. Are. Wrong.

The economy, from community bartering up through Wal-mart and Wall Street, is entirely a creation of human beings. Everything that happens within the economy occurs as a result of human decisions. Human decisions may be self-centered or altruistic, helpful or harmful, and are subject to moral assessment. Therefore every economic “truth” is subject to moral assessment. Every aspect of the system was crafted or molded by human minds. Nothing “just is.” It is high time that we take a closer look at the rules of this game we all play by virtue of being alive in this time and place, and whose stakes are quite literally life and death.

We tend to think of economics as boring. But the economy is not just Wall Street or the Dow Jones Index. It is not just employment numbers or any other statistic released by the government. The economy is everything we own, everything we have ever purchased or eaten or shared with our friends or made with our hands. It determines whether we have a place to live, enough to eat, freedom to follow our dreams, care for our bodies if we are sick. It determines our net worth, and by extension – in many ways – our self-worth.

For all that the economy defines our experience, we spend relatively little energy thinking about it, how it came to be, how it really works, when it is fair and unfair and what determines that difference. So let’s take a quick journey through the evolution of our economic system, with our eyes open for pitfalls and avenues for exploitation.

The money economy began thousands of years ago, long after humans began trading among themselves. One person went fishing perhaps, then traded the fish for flour, firewood, and clothing. But what if the woodcutter didn’t want any fish? Such was the reason for currency. The fisher could sell fish for coins and then buy goods with the coins, and in so doing obtain what she needed. But how many coins was the fish worth? Or the wood? That was for each buyer and seller to negotiate, and so was born a fundamental tenet of economics that remains printed in textbooks to this day: the fair price for a good or service is the value agreed upon by a willing seller and a willing buyer in a free market.

Unfortunately this supposed “law” is only true if the buyer and seller have similar levels of power, which is to say that they can both walk away from an unfair offer. This is very easy to illustrate, but typically omitted from textbooks. Let’s say our fisher gets sick, and the doctor in the village has a lifesaving medicine. If they’re friends they will agree on a price that is commensurate with the knowledge and effort required to produce the medicine. If the doctor is an enemy, he might demand the fisher’s house in return. Then the fisher might call up some friends and go knock some sense into the doctor, or steal the medicine. But let’s say the doctor is also a skilled swordsman. With no recourse, the fisher offers up her house to the doctor in return for the medicine. We have a willing seller, a willing buyer, and a free market, but does this mean that a house is a fair price for some lifesaving medicine? Of course not! It just means that the doctor has both greed and power.

Ethical red flag #1: People will pay almost any price within their means to meet their basic needs, if there is no other option.

Now let’s say another fisher moves to town who has big nets that catch indiscriminately and workers who he treats like slaves, and he starts selling fish for half the price. But the townsfolk love their fisherwoman, and know she does honest work, and so they continue to buy her fish. But then a merchant moves in and sets up a store where the townsfolk can buy all of their food and supplies in one place. The townsfolk, finding it convenient, go to the store and stop buying directly from the fishers and farmers. The merchant, wanting to earn as much money as possible, buys her fish from the new fisherman, and so our fisherwoman is forced to either sell at a loss or find a way to compete. In the language of economics, fish has just become a commodity – that is, a product disconnected from its maker or any other distinguishing features. Economics textbooks will say that competition in a commodity market leads to increases in efficiency, with the implicit assumption that efficiency is always a good thing. Unfortunately, efficiency more often than not means exploitation – of people, of the environment, or both.

Ethical red flag #2: When transactions become abstracted or commodified, with no connection between producer and consumer, competition rewards exploitation.

Now let’s say our fisherwoman is determined to stay in business, but she knows that in order to compete with the new man in town she will need nets, employees, and more boats. So she visits the merchant, who by now has money to spare, and asks for a loan. The merchant agrees provided that, in five years time, she pays back the money plus 20% “interest”. The fisher, not having any other good options, accepts the terms and expands her business. She is now able to compete but ends up selling her house to pay the interest on the loan. Meanwhile the merchant turns a tidy profit without doing any work. Economics textbooks devote many chapters to the ways in which money can be invested to earn returns. The question of whether money ought to earn money is never asked.

Ethical red flag #3: Investment income requires no work or contribution to society, and so provides the earner with the ability to purchase more of others’ time and effort while contributing none of their own.

It’s easy to see from our fisherfolk example that, once extended beyond a small community bound by social ties, a system of currency designed to facilitate exchange will naturally evolve to reward exploitation and generate wealth inequality. It’s equally clear that a few simple rules could prevent this from occurring, and we’ll get to that in Part IV. For now, I want to focus on the near-complete absence of an ethical dimension in the realm of economics.

Allowed to evolve without guidance or intent, political systems will tend toward autocracy and monarchy. Leaders initially supported by the will of the people will naturally act in their own self-interest to perpetuate their power such that the people will come to serve their leaders, rather than leaders serving the people. A fifteenth century political science textbook would have described this process as natural and inevitable, and devoted many chapters to the roles of peasantry and nobility. If it included any ethics, it would have been along the lines of “what makes a good king?” with no question as to whether kings ought to exist in the first place.

Then, in the mid-1700s, something changed. A group of intellectuals who found themselves an ocean apart from their king decided to try a new approach. Rather than asking how the system worked, they asked themselves how it ought to work. How might a system of governance be intentionally created to be resistant to the forces of human nature that lead to tyranny, in order to serve the people in perpetuity. In an explicit rejection of the old system, the Declaration of Independence, they wrote:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

This was radical at the time, and the structure of government they devised, with three distinct branches and checks and balances to prevent any branch from attempting to consolidate power, has survived for 244 years and has been copied and improved upon by democracies around the world.

There is some cruel irony in the fact that several of the men who penned these words owned human slaves, but at the same time it is laudable that their founding documents described not a system of government specifically of, for, and by rich white men, but a government of, for, and by “the people”, which allowed the definition of “the people” to be expanded over time to include non-landowners, freed slaves, and women without needing to change the basic structure of government.

It should also be noted that because the Founding Fathers were wealthy and privileged, near the top of the economic ladder, it is not at all surprising that they made no attempt to create an economy of, for, and by the people. The economy as it existed worked just fine for them, so long as they didn’t have to pay taxes to the King of England. The result has been that, at several times throughout US history and increasingly in the present moment, economic inequality has become a threat to the institution of democracy. If votes can be purchased through the media, or if monetary influence can circumvent the will of the voters, or if people are sufficiently disenfranchised that they will vote for an angry strongman with no talent for leadership, then democracy is in crisis.

The science of economics was developed by the winners – those who earned money from investment rather than hard work – and so it ultimately served two ends:

  1. To educate those with wealth, and their children, as to the best ways to maintain and increase their wealth, and
  2. To explicitly define the system as it is to be free, fair, and not open to ethical analysis.

The ethics in our economics textbooks remains at the level of “what makes a good king.” We can talk about people who benefit from breaking the rules (insider trading, pyramid schemes, “predatory lending”) or about applying our values to our economic decisions within the existing framework (e.g. “socially responsible investing”), but the system itself remains inviolate.





We can start by recognizing human agency in statements about the economy.

What they sayWhat it really means
Labor is cheaper in (some
The government and elite of (some country) have conspired with other nations and multinational
corporations to devalue the labor
of their lower classes.
The cost of healthcare has doubled since the 1980s.After adjusting for inflation, healthcare providers are charging twice as much for the same services as they did 35 years ago.
The cost of public college has tripled since 1990.After adjusting for inflation, public colleges are charging three times more for the same services as they did 30 years ago.
The average American now spends 37% of their income on housing
Landlords and real estate investors are earning record profits from a basic human right, with little to no investment of time or effort on
their part.
Jobs in the manufacturing sector have decreased.Companies have moved their manufacturing operations to countries with cheaper labor and fewer environmental regulations.
The weather in Phoenix is hot and
The weather in Phoenix is hot and

Language matters.

We see the statements in the left column as headlines in newspapers and trade publications, and we are encouraged to plan accordingly. Save more for college and healthcare, find a job with health benefits, find a roommate to save on housing costs. Such is the extent of our power, we are told, to react and adapt. But the reality is in the right column. Economics is not like the weather, that just is the way it is and so we must adapt. Whenever an economic change causes pain, someone did something harmful to someone else, for their own economic gain. We could adapt and move on, we could censure them – in the hope that they will be good kings – or we could change the system so that those actions are no longer possible.

The framework of social justice has introduced most of us to the terms structural racism and implicit bias. Structural racism is any racial discrimination that is “baked in” to the rules or norms of society, such that we can be “good people” in terms of playing by the rules but still be discriminating. Implicit bias (in a race context) is any action that causes racial harm without intending to do so – typically due to structural racism.

It is high time that we applied these concepts to our economy. To do so, we must remember that the only ethical function of the economy is to provide a means of exchange: payment for our contribution to society so that we might purchase the contributions of others. A basic doctrine of ethical economics can be summed up neatly as:

  • Equal pay for equal work (within and between countries)
  • Adequate pay for all essential work
  • No work, no pay (except to keep up with inflation, and for people unable to work), and
  • Fair prices for basic needs (food, shelter, medicine, etc.)

Few of us would disagree with these ideals, and yet our economic reality violates all four on a daily basis.

It is implicit bias to pay foreign workers less than domestic workers for the same jobs, simply because structural inequalities have set the going rate lower. To do so is to say: your time is worth less to me, because of who and where you are.

It is implicit bias to pay anyone less than the cost of living for full time work doing anything, unless they have agreed to volunteer. To do so is to say: you do not deserve to have your basic needs met.

Any investment that provides a return greater than inflation without requiring work or reasonably compensating for risk of loss is structurally elitist. Such returns are effectively pay for no work, and yet this pay can be redeemed to purchase the work of others. These investments may be directly exploitative (e.g. loans and mortgages repaid with interest) or indirectly exploitative (e.g. government securities repaid with taxes, or shareholder profits taken from corporate revenue), but they always entail a transfer of wealth from people who have fewer financial resources to people who have more.

Any housing or medicine that is offered at a price higher than the cost incurred plus the value of the labor invested constitutes implicit bias. The “market rate” is irrelevant, because demand for essential needs is inflexible and so buyers will pay any price up to and including bankruptcy. To profit by offering these services is to say: by virtue of having privilege (as a property owner or care provider), I am entitled to accumulate wealth at your expense.

What then shall we do about it?

If we believe, as stated in the Declaration of Independence, that “All (Humans) Are Created Equal,” then we have a clear obligation to give everyone a fair shot at “Life, Liberty, and the Pursuit of Happiness.” That is to say, once we recognize the inequity of our economic system, we cannot ethically ignore it any more than we can ignore human slavery, genocide, or the structural racism that led to the murder of George Floyd, Breonna Taylor, and so many others. Here’s what we can do in this time:

  1. Assess our own personal lives from the framework of ethical economics. How do we earn our money? How many hours of others’ labor is invested in the goods and services that we purchase, and how does this compare to the number of hours that we spend working? This is probably impossible to answer, but it is helpful in thinking about equity. How is the system exploiting us? Loans? Mortgage interest? Rent? Low wages? How are we benefiting from the exploitation of others? We don’t need to be too hard on ourselves; we are participants in the system, but we are not responsible for it.
  2. Commit to changing the system. Realize that putting that change into effect means that any of our income that currently derives from unethical exchanges will disappear, and accept that. If we can begin to eliminate unethical exchanges from our lives in a way that benefits others, do so.
  3. Network. Tell this story, to challenge the narrative that the economy as we know it is fair and beyond question and impossible to change. Those who have been beaten down by the economy will not believe that change is possible. But it is. The economy is nothing more than the sum total of human exchanges. It is us. If the ~70% of Americans in the red zone of exploitation (from Part I) could rise up together, we could easily change the system.
  4. Make people uncomfortable. But don’t judge them or call them out. Lead by example, and calmly point out the ways in which the system is unethical. Induce cognitive dissonance. Most people believe they are good and have earned their wealth by honestly playing by the rules. They are not wrong, and implicit bias is not a crime. If we tell them they are bad, they will react defensively and close themselves off to our message. If we tell them they are good, but it is hard to watch good people inadvertently hurting others, and would they consider following our lead in making or advocating for changes… they may still cling to their story, but a seed of doubt will be planted.
  5. Stop romanticizing the American Casino. A few people from the wheat fields of Kansas and the streets of Chicago will end up as movie stars and investment bankers. That makes for some good stories, but the chance that anyone can strike it rich does not excuse the reality that tens of millions of people work 40+ hours a week doing essential work for their entire lives only to remain locked in poverty.
  6. Join the conversation and help to envision an ethical economy. As more people escape from the old story, we can build a movement and move forward together. I’ll lay out a possible platform for change in Part IV: Changing the Rules of the Game, but that’s just one possible framework, and perhaps there are other changes that would be more important.
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6 Responses to Toward a More Equal America

  1. Mark K says:

    Hard to understand why anyone would take the risk of making a loan if there was not any financial return. Lending is hard to do successfully. We all need to save for the future, if only for retirement. There has to be a system for putting those savings to work for the benefit of both lender and borrower.
    Re housing costs. We can vouch for the fact that building a house costs more than simply purchasing an existing house. Even a modestly sized house. Part of the problem with housing costs is people buy houses that are too big IMHO.
    Re healthcare costs. Healthcare is very different that it used to be. Healthcare workers are not grossly overpaid if they are overpaid at all. It would be nice to reduce the cost of pharmacuticals, but given the effort we put in to keeping people alive at all costs and the sad state of fitness overall in our population–high healthcare costs are here to stay even with reforms.

    • Mark says:

      Thanks for the comments – I assume you found me via Michele?

      Re: loans

      I’m far from convinced that most loans are of benefit to the borrower. Certainly the borrower chooses to get the loan in order to have something sooner (car, home, etc.), but they inevitably end up with significantly fewer resources than they would have had if they had simply saved the money and purchased when they had enough. Loans are marketed because they generate profits. People can be tempted by promises of instant cash. But I still feel that the transfer of wealth from those who have less to those who have more is unethical, and that we would be better off if loans with interest were not permitted.

      Re: housing

      The ballooning expense of building a house is partly due to a proliferation of codes, permits, fees, etc. – which from my perspective seems to be a deliberate choice to generate more income for the professional-managerial class as well as to limit the supply of affordable housing. Land values are unnecessarily inflated, and current codes etc. make it difficult to build a small house, though many people would buy them if they were available in the $100-$200k range.

      Re: healthcare

      Healthcare deserves more words than I gave it. I don’t think I explicitly suggested that healthcare workers are overpaid, though I believe some of them are. Healthcare costs (in inflation-adjusted dollars) can increase for four reasons:

      1. Wages and benefits for healthcare workers increasing faster than for society at large. This is unethical, but if it is not overpayment relative to the cost of living, then the better solution would be to help society at large to “catch up.”

      2. More people employed in healthcare who are earning salaries without directly contributing to patient wellness. This includes added levels of administration, insurance employees, malpractice lawyers, and any number of others. We can provide good reasons for their existence but ultimately if they are increasing the cost of care without improving the level of care then this is unethical.

      3. Increased profits to shareholders and executives, especially in the pharmaceutical industry. This is clearly unethical.

      4. Improved technology, and increased amount of care being performed. This can be due, as you say, to a declining state of health in the population, as well as to new innovations and drugs that further prolong life or improve treatment options. This is not unethical, although if the trend continues we will at some point have to have a difficult conversation – individually and collectively – about just how much of our economy we wish to devote to prolonging human life.

      We can weed out #4 by asking whether costs have increased over time for the same procedure – a basic office visit, say, or an appendectomy. It is in fact true that providers are charging dramatically more for the same services than they were 20 years ago, and also that we spend twice as much on healthcare compared to comparable nations with no observed benefit in terms of outcomes. So I would argue that healthcare costs can and should go down dramatically if we can start to envision healthcare as a public utility rather than a profit-driven industry.

  2. Alison DONIGER says:

    Thanks for your thoughts Mark! I found your post thru Helen. I’m wondering what you think of my situation. I work in the construction trades, which can be exploitative and devastating to the environment. Since you say it is our duty to make sure our income streams are not exploiting others, how does one go about doing this if, let’s say, the copper piping that I install in someone’s home comes from a mine in Indonesia where the indigenous people are being removed from their land by the government? I do not personally source the copper but I am the one doing the labor. How can I work towards justice? This is just one example. I feel very conflicted about my job for many of the reasons you mention above. But I do want to learn to plumb a house and I feel that i can use what I’m learning to improve life for people with limited resources.

    • Mark says:

      Hi Alison! Thanks for reading and sharing your thoughts. I didn’t actually write that it is our duty to make sure our income streams are not exploitative. Instead I encouraged us to examine our income streams for exploitative patterns, make changes if it is reasonable to do so, and commit to working toward systemic change.

      In reality we are all a part of the system as it is, with limited capacity to change it on an individual level. So we can try to flee to a self-sufficient homestead or drive ourselves crazy investigating all of our supply chains for everything that we use or buy, but ultimately I feel like both of these approaches are counterproductive in that they sap away energy that could better be used toward changing the system or designing new local economies. My goal in writing this is not to convince us to feel bad, but rather to give hope that we could do better. So, if I’m not the one buying the pipe, I would personally not worry about it. If it is my decision to make, I might see if I could find a source that used recycled copper or otherwise seemed ethically preferable, so as to support others who are also working toward a more ethical economy in their own ways.

      I also work in construction, to some extent. I build small-scale seed cleaning machines that are now in use around the US. I’m sure that there is exploitation in the production of some of the 90 or so items on my parts list, but at the same time I feel good about earning a living from the work of my own hands, and supplying a machine that makes life easier for others (and allows me to trade for local goods in return for seed cleaning services). Construction is one of the few trades for which the economy still seems to work: supplying a fair wage in return for labor that directly benefits others.

      I don’t know what the best order of operations would be to enact systemic change. My goal in this time is just to start waking people up – to convince people that if we believe that we are all created equal and deserve a fair shot, then we cannot also be accepting of an economy that systemically generates and perpetuates inequality.


  3. Dandy Tidwell says:

    Mark, I found the link to your blog that you posted to Ecosophia. So far this series is amazing! Of course it doesn’t hurt that I agree with almost every word and you have pointed out several things that I’ve been saying myself to little effect. I disagree with your position on loans, to a certain degree. Home loans, for instance are generally profitable to the borrower in many ways. In a market where housing prices have been steadily rising for decades, they allow someone to claim a piece of property now at a much lower cost than it will be later when they have saved the money to pay cash. More often than not, even with interest, a mortgage note will be significantly cheaper than rent for a comparable property, and *much* cheaper if one considers the need to both rent and save. It allows the borrower access to all of the intangible benefits of home ownership now rather than being denied them for the considerable time needed to save the money. Without home loans, only wealthy people would own homes and rent is really a far more extractive practice than home loans. I would put loans for automobiles in the same category, perhaps even more desirable and necessary in tat securing any income can be dependent on transportation. Of course we *should* have excellent public transportation everywhere, but we don’t and it seems to me that private transport is so deeply woven into the geography of our civilization that it will not go away anytime soon without massive upheaval and personal suffering. I do think credit cards and other small scale credit is detrimental and in an economically just society with public healthcare, livable wages and some guarantee of housing, they would be unnecessary. Of course the levels of interest charged on loans is highly problematic. I’m not sure if it is workable in real life but it seems to me the ideal would be a government program where money to buy houses and transportation could be borrowed from a public fund at zero interest.

    Advances in medical technology are certainly a thing, but so are usurious profits. A CT scanner can be had for several hundred thousand dollars and scans billed at several thousand each. It quickly pays for itself and then the fear of malpractice and the lure of pure profit encourages using it as often as possible. Medicines are routinely produced for dollars and sold for hundreds, often with only marginally better results than older alternatives. Nationalized medicine seems the only just possibility.

    I look forward to the rest of the series.

    • Mark says:

      Dandy, Thanks for reading and for sharing your thoughts!

      I’ve had more comments about my thoughts on loans than on anything else so far. Perhaps there is a place for loans in an ethical economy. My intention is not so much to provide a prescription than to start a conversation. There were plenty of discussions, disagreements, and compromises in the writing of the Constitution, and I would expect the same if we could come together to design an economy of, for, and by the people.

      Certainly there needs to be some provision to allow people to own expensive necessities like homes and vehicles before they have earned and saved enough to buy them outright. One idea might be a “universal basic inheritance” – a payment of $200k or so to each citizen upon reaching adulthood. A zero-interest or rate-of-inflation-interest loan program could accomplish the same, with less potential for squandering the money.

      In the example of home loans in the current economy that you give, I would caution that if interest exceeds the rate of inflation someone always loses, although it may not be the borrower. If inflation and wage increases are 1.5%, and I get a home loan at 3% interest, and property values increase at 5% annually, then I come out ahead, but future homeowners lose. What this typically means is that wealthy people are bidding up the value of properties because they can rent them out at extractive rates and turn a tidy profit, and furthermore the price increase puts homeownership out of reach for more people and so increases the pool of renters.

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