Much thinking about economic justice for working people has been framed by the nineteenth-century concept of “capitalism”: owners of enterprises constitute a minority of the population; they hire workers who represent the majority of the population; wages and profits define the distribution of income throughout the whole population. This picture still works well enough for a range of economic activities in the advanced capitalist economies when it comes to manufacturing, agriculture, and service industries. According to recent tabulations by the US Bureau of Labor Statistics (link), there were 158 million workers in wage and salary employment in 2023. Manufacturing represented 8.2%, retail and wholesale trade 13.7%, information 1.9%, financial services 5.8%, leisure and hospitality 10.5%, and federal and state government 14.4%. This adds up to 54.5% of the US labor force, and these workers and firms can be thought of in roughly the framework offered by the traditional idea of “capitalism”. Many of these workplaces are amenable to union representation (though relatively few are in fact unionized). But improving access to union rights and workplace consultation would significantly improve the conditions of life for this segment of the US population.
Marx’s view of the unfairness of capitalism, then, comes down to workplace exploitation — the capture of “surplus value” by the firm’s owner from the workers whom he or she employs. Profits derive solely from surplus value, so wealth accumulation is fundamentally limited by the size of an enterprise.
However, current realities seem to suggest that this classical Marxist account is no longer sufficient. To see this point it is crucial to look at the details of the distribution of wealth and income in the U.S. Consider the graph of median US income by quintile above in constant 2018 dollars. Since 1989 only the top quintile of household income has demonstrated significant growth (in a timeframe of more than thirty years); and the top 5% of households shows the greatest increase of any group. 80% of US households are barely better off today than they were in 1967; whereas the top 5% of households have increased their incomes by almost 250% in real terms. The bottom 80% range in household income from “poor”, the bottom 20% at an average household income of about $14,000, to the second quintile (60%-80%) of about $102,000. But virtually all of these households — 80% of all households — earn their livings through wage and salary income, in “capitalist” workplaces.
Further, only a very small fraction of these households are in a position to accumulate significant savings or investments. As the second graph shows, the bottom 50% of households have only 2.6% of all U.S. wealth, and the 50%-90% segment owns only another 30.8%. The top 0.1% owns 13.9% of all wealth, and the remainder of the top 1% owns 16.6%. That amounts to 30.5% of all wealth, held by 1% of households — and almost incomprehensible figure.
These two graphs have a very clear, unmistakable implication: that working people, including service workers, industrial workers, and most professionals have received a declining share of the economic product of the nation over the past 40 years. (Amazon warehouse workers fall in the 2nd-lowest quintile (poorest 21-40%).) Further, the vast majority of U.S. residents have only a tiny share of all property in the U.S. According to the Federal Reserve 2022 Survey of Consumer Finances, median household net worth in 2022 was $192,700, including private savings, retirement savings, and personal property and home value (link). And, of course, this implies that the median household net worth of the bottom 80% of the U.S. population is significantly lower.
It seems apparent, then, that capitalist exploitation is no longer the primary mechanism through which wealth is accumulated by the top 10%, 1%, and .1% of wealth holders. The top group gains income at a rapid rate and increases its share of the national wealth comparably; whereas the bottom 80% have almost stagnant incomes and negligible wealth. And this accumulation occurs almost entirely through rising value of the stock issued on behalf of private companies. The national economy generates all of this wealth; but the vast preponderance of the fruits of this production flow to the top 10% and 1% of wealth holders. This is a different kind of exploitation: not exploitation of a specific group of workers (employees of General Motors, for example); but exploitation of the whole of the U.S. economy for the benefit of a tiny minority of wealth holders.
Essentially it seems fair to say that the contemporary U.S. system involves two economies — one that includes 60%-80% of all people, and who depend on wages and salaried income to earn their livings; and a second economy that is itself steeply stratified, involving only the top 10%-20% of households. This second economy includes highly paid professionals, executives, and individuals who derive a substantial income from investments, financial assets, and other capital assets. The distribution of income and wealth in this second economy depends on ownership of capital (including human capital) of increasing value in a “knowledge” economy.
It appears, then, that the gross advancement of wealth inequalities in the past three decades has little to do with traditional “exploitation” – an unfavorable wage relationship between owners and workers. Instead, the sudden explosion of tech-oligarchy in the US seems to have to do with financial markets, the stock value of private companies, and the environment of business and tax policy in which they operate. The super-wealthy class in the US came into multi-billionaire status through the rapid acceleration of market value of companies like Amazon, Tesla, and Facebook/Meta. And this process reflected a macro-level mechanism that we might describe as “exploitation of the US economy as a whole” rather than “exploitation of a specified group of workers employed by these companies.
Thomas Volscho and Nathan Kelly provide a careful analysis of the dynamics of income inequality in the US economy over time in “The Rise of the Super-Rich: Power Resources, Taxes, Financial Markets, and the Dynamics of the Top 1 Percent, 1949 to 2008” (link). They note that there was considerable variation in the share of income flowing to the top one percent between 1900 and 2020, with a rapid rise beginning in about 1980. And they attribute much of this variation to facts about political power, public policy, and fiscal legislation. (This bundle of hypotheses is referred to as “Power Resources Theory”.) And a key finding in this literature is that the relative levels of political power and influence held by economic elites versus working people have a very large effect on the degree and direction of change in inequality at the top.
Consider the short history of Facebook. Mark Zuckerberg’s wealth increased from 2008 from $1.5 billion to $236 billion in 2025. The employee count of Facebook/Meta increased comparably during that period, from 85 employees in 2008 to 76,800 employees in 2025. But Zuckerberg’s wealth does not reflect the “surplus value” created by these workers, but rather the perceived value of the company in the eyes of private and institutional investors. And critically, it is difficult to imagine institutional changes within Facebook/Meta that would lead to greater overall societal equity simply by providing the company’s workers more input into the management of the company. The median income for a Facebook/Meta worker is $257K – hardly an exploitative wage. It is the rest of society that is disadvantaged by Zuckerberg’s $236 billion, not the direct employees. The same seems to be true for Tesla and the wealth accumulated by Elon Musk and for Amazon and the wealth of Jeff Bezos. Amazon’s business operations have many of the same features of domination and exploitation identified by Engels in Manchester; but these operations do not constitute the fundament of Bezos’s wealth except perhaps for the “performative” of a company single-mindedly devoted to efficiency and speed of operations.
The experience of the reforms of the welfare state after WWII shows that capitalist exploitation can be reformed through measures that improve the public provision of some crucial services (education, healthcare, retirement income, unemployment insurance); improve the ability of workers to represent themselves effectively in the workplace (legislation ensuring unionization rights); and improve conditions of health and safety in the workplace (OSHA protection). These reforms are “redistributive” in the sense that they depend on taxation of income and profits of private individuals and corporations to fund public provisioning. But can reforms like these address the inequalities — economic and political — created by the two economies described here? Can the oligarchy economy be reined in? It would seem that the answer is “no”.
So we are forced to ask, what kinds of fiscal and tax reforms could effectively rein in the wealth inequalities created at the very top of the wealth distribution? The annual wealth taxes proposed by progressive Democrats extend to taxes in the range of 1%. But this would represent a negligible reduction in the oligarch’s portfolio, and does essentially nothing to reduce the steepness of the distribution of wealth in America. A “confiscatory” tax of 33% would have a measurable effect by increasing available public funds for expenditure; but even reducing Elon Musk’s wealth from $368 billion to $245 billion – still results in a staggering inequality relative to 99% of US workers. And this still leaves the wealth-holder with a million-fold advantage in his/her political and media influence relative to almost all other US persons. (As mentioned above, the median net worth of all Americans is currently about $192,000. It is of course striking that three of America’s largest tech-oligarchs privately own a media company: Zuckerberg (Facebook), Musk (X/Twitter), and Bezos (the Washington Post).)
It appears, then, that standard “New Deal” or “welfarist” approaches to greater economic equality have no prospect for success whatsoever when it comes to reducing the overwhelming inequalities of wealth that exist between the two US economies described here. A graduated income tax works to moderate income inequalities (when it works at all); but the rapid accumulation of wealth represented by the emergence of the “tech-oligarchy” and the graph of wealth distribution above do not derive from income inequalities. The richest 1% did not primarily gain their wealth through annual savings from their high salaries; rather, they gained their wealth through stock ownership in companies whose value appreciated exponentially during the time of their ownership. And taxing the holders of wealth on the income generated by their holdings does not materially affect the distribution of wealth across the population and across generations.
Suppose we viewed a national economy as an interconnected and highly complex form of “joint production”, in which the efforts of all parties are instrumental in the creation of the new wealth and prosperity of the economy. And suppose we believe that this system should be organized as a “fair system of cooperation” in which all parties benefit in a fair way. Can the workings of capital markets and financial systems be incorporated into our institutions in ways that would give the working public (the 80%) a fair share of the products of cooperation? Could we imagine a fiscal mechanism that would provide the public with a “fair share” of the U.S. economy as a whole, including the growth of the value of private companies (Caterpillar, General Motors, Krogers, Facebook/Meta, Microsoft, …)?
For example, would it be possible to imagine a public investment agency along the lines of CalPERS that would be automatically vested with ownership shares of businesses and corporations as they are created and grow, and that would function as a “wealth reserve” for all citizens? Suppose the hypothetical “public investment corporation” eventually possessed assets worth about 1/3 of the total value of the US stock market. (The value of stocks listed on the New York Stock Exchange is currently $28.3 trillion, so we are imagining a public wealth fund of about $10 trillion.) On this model, private owners and shareholders would own 2/3 of the capitalized economy, and the public would own 1/3. Would such a system be feasible? Could such a system redress the insupportable economic and material inequalities that exist in our country? Could it redress the gross inequalities of influence and power that exist between a tiny class of oligarchs and the vast majority of democratic citizens? Could the shareholder voting rights that correspond to the public shares created in this way serve to alter corporate priorities?
It seems clear that the photo below taken from Donald Trump’s inauguration represents a horrendous flaw in contemporary democracy. The “tech oligarchs” turned out in force for the new administration, and a group of wholly committed political partisans stand behind them to enact policies in the United States that serve their interests. If this is the best that our democracy can currently offer working people, then we need to work much harder at finding political and economic solutions that can elicit broad support from ordinary citizens, workers, farmers, and Uber drivers to push forward a better agenda for democratic equity.
