Stagflation and the Political Economy of Decadent Monopoly Capitalism

by Doug Dowd

I

The years since about 1950 have been the most persistently and pervasively expansive in the economic history of capitalism. The expansion manifested itself in all areas of economic activity: in per capita real consumption, most notably in the leading countries and in durables; in all aspects of real investment-all forms of construction and equipment, all areas of productive capacity; in technological change at all levels and in all sectors — product and technique, consumer and producer, industry, agriculture, and services, trivial and fundamental; in enormous increases in world investment and trade. In the major capitalist nations, the largest portion of these same years was one of equally unmatched social and political stability.

None of these developments was unique to the post-Second World War era, but all have been more extensive, deeper, and stronger, and their existence more consciously enhanced and coordinated than earlier ones; nor could any have persisted or had its effects except in combination with all the others. I refer to:

(1) The vast increase in both the absolute and the relative power of supercorporations — within and between industries, sectors, and nations.

(2) The equally striking increase in both the quantitative and the qualitative role of the state, in all functional and geographic areas and levels.

(3) The strengthening and spread of “consumerism” in the United States and its replication in all the leading and many of the lesser capitalist economies.

(4) The re-creation and strengthening of the global capitalist empire, under the leadership of the United States.

(5) The concomitant growth of a “military-industrial complex.”

(6) And, required and facilitated by all these changes, the extension and refinement of the techniques of mass communications for commercial and political exhortation and manipulation: the lubricant of monopoly capitalism.

Taking hold in the early 1950s and running strongly by the early 1960s, sustained economic expansion became the rule and the continuing expectation in the capitalist world among businesses, consumers, and governments, producing a state of economic euphoria and, not for the first time, an 'associated relaxation of customary prudence. Interestingly, none of the major institutional stimuli just referred to could find support in the traditional social philosophy of capitalist societies — not monopoly nor its giant state, not imperialism nor militarism, not even consumerism (with its emphasis on borrowing instead of thrift, upon play rather than work). But the strength and the pervasiveness of the economic expansion deflected attention from and altered attitudes toward such ways and means, as it also obscured the negative potentialities flowing from such a process. In the late 1960s, U.S. economists, echoing their predecessors in the late 1920s, came to believe that “the business cycle has been tamed” — just as stagflation loomed up ahead.

The subsequent response of mainstream economists to the startling reversals of the early 1970s — pervasive and sustained severe rates of inflation combined with pervasive and serious unemployment — has been to offer analyses which implicitly assume that this combination is short-run, both in origin and in prospect. Whether in the academy or in government, almost all economists see what is now called “stagflation” as a two-headed chimera, either one or both of whose heads will, in the fullness of short-run time, disappear — its arrival an aberration, its departure imminent. Normalcy is just around the corner.

Some few at the edges of the mainstream have a less comforting view of what began to spread and take hold several years ago. It is that, apart from predictable short-term appearances to the contrary, global capitalism will be unable to shake off either serious inflation or serious unemployment for the foreseeable future — except to lower one at the expense of the other — and that the inability to do so is but one symptom of a deeper malady.

The heart of this argument is that the very institutional developments that created and sustained the long expansion also transformed expansion plus moderate inflation into slowed growth, contraction, plus severe inflation. In short, the social relations that were necessary and beneficial for the capitalist economies of the 1950s and 1960s now yield growing troubles. In the jargon of sociology, what was functional has become dysfunctional.*

It is this alteration that leads me to characterize the present process as monopoly capitalism in decay — meant to suggest a process protracted and confusing rather than swift and obvious. Capitalism may once more find new forms that will allow it to persist, but the institutional combinations of the generation just ending seem to have lost their vitality. If so, stagflation and its associated political and social disorders will find no resolution without deliberate social change going well beyond what is presently accepted or discussed in public. Although future possibilities may well include substantial shifts to the right, or to the left, or into relative chaos in the diversely constituted nations of the capitalist world, what seems most unlikely is a prolonged maintenance of the status duo, with its critical economic component now turning sour.

II

Since “monopoly capitalism” as a designation for the contemporary political economy is not generally accepted usage, a brief comment on its applicability is in order. What is at issue is not the term itself so much as the major structural and behavioral characteristics of the leading capitalist societies. They have little in common with the supposed characteristics of competition and laissez-faire that alone give credibility to the central precepts of conventional (“neo-classical”) micro and macro economic theory, the only theory possessed by mainstream economists. In the world of the textbooks, the current reality of persisting inflation-unemployment could not happen; in monopoly capitalism it has become a stubborn fact.

A monopoly capitalist society is one whose structures are dominated by the centralization and concentration of almost everything that is valued in the society, but especially of power, in almost all aspects of social existence, most clearly in the economy and over the uses of the state. That such are the patterns is commonly recognized and, for the economy, regularly certified — most conveniently in the pages of Fortune magazine, with its annual listings of the most powerful corporations in the various sectors of the United States and the global economy, and of their relative shares of profits, sales, assets, employees, etc. The benign neglect by the economics profession of the meaning of these intractable data for their theory is difficult to explain in polite language.

The concentration of private economic power is the dynamic core of monopoly capitalism. That core surrounds itself with, and comes to be surrounded by, a dense and proliferating set of supporting structures and processes. Greatest in importance are those embodied in the growth, the concentration, and the uses of state power, all essential to meet rising and changing economic, political, and social needs as well as to cultivate the opportunities of monopoly capital, nationally and internationally.

The dynamics of state power in our era have mirrored those of private economic power: a vast growth in what is done and in the numbers of those who do it, alongside a rapid shrinkage of those who control the nature and directions, and reap the primary benefits, of the process. The modern state, like the modern corporation, has fewer and fewer people presiding over more and more. The top personnel of these two power centers are largely though not totally interchangeable.

Although all this began long ago, its maturity awaited the period after the Second World War. Put together, the elements of mature monopoly capitalism have meant a qualitatively and quantitatively different world from the earlier epoch. To move from the one to the other, at least one more critical change had to be wrought — in the attitudes and the behavior of the underlying population. The technology and the impulses that made monopoly capitalism possible and necessary also provided the means for rendering it popularly acceptable: the modern communications media, and most especially radio and TV. For the success of both commercial and political “messages,” modern radio and TV and their psychological and technological supports are indispensable; the main currents of our society are unintelligible and unimaginable in their absence.**

The foregoing are the principal structures and processes of monopoly capitalism. That this is the condition in the leading capitalist societies seems beyond dispute, whether it be called “the bureaucratic society of controlled consumption” (H. Lefebvre), “technological society” (J. Ellul), or (among the many euphemisms of contemporary economics) “neo-mercantilism.” At its center sits the giant corporation, conglomerate and multinational.

III

Today's giant began to take shape about a century ago; for capitalists it was the necessary and desirable accompaniment of large-scale production: necessary to avoid destructive price competition, desirable as a means of increasing profits through market control. But until after the Second World War capitalist society was neither competitive nor monopolistic in the tone of its leading social institutions; it was an unstable mixture of both. The growth of monopolies is not in itself sufficient to the regime of monopoly capitalism.

Monopolies in the pre-1917 era had gained much in the way of both economic and political power, but the nations and the world in which they existed had not altered in comparable and necessary ways: national and international social and political relationships in principle remained very much dominated by the ideology of early national capitalism; in practice, the society's political economy moved fitfully between substantial elements of both competition and monopoly, and came to suffer the disadvantages more than the advantages of both, nationally and globally.

The two world wars and the protracted political and economic chaos producing them may be seen as consequences of the inability of national and international capitalism to manage its affairs; the relatively prosperous and stable capitalist societies after about 1950 were the reward for having learned that lesson. Put differently, once modern industry came to dominate the functioning of capitalist economies, it became essential either for capitalism to be transcended or for it to find ways to function within considerably more centralized patterns of power — economically, politically, and socially, nationally and internationally. In a word, advanced industrial capitalism cannot function well except as full-fledged monopoly capitalism.

In such a society, the central aim and need of those who rule remains the enhancement of profits and of power; for that to be achieved, however, ever more intricate management of all elements of social existence is required: managed workers, managed consumers, managed voters, managed governments, managed culture. The needs for all that existed well before the Second World War; they were not fulfilled until the destruction and chaos of the war left one nation standing alone with the absolute and relative power to organize the capitalist world along the required lines.***

The Second World War was the critical process making possible what had long been required: in greatly weakening all the major nations, it greatly enlarged the already leading relative power of the United States in the world — economically, politically, and militarily; in lifting the United States out of the depression of 1930s, it also pushed the economy on to a new level of technological competence; in-requiring the close cooperation of the state and big business for war production, it enhanced the power and the public's acceptance of both; in bringing about sustained and rising real per capita incomes during and especially immediately after the war years, and in joining this with military triumph, the war stimulated patriotism, linked militarism with economic well-being, and renewed popular confidence in the American system. Last but not least, the extraordinary social and geographic mobility of the war years, in breaking down much of what was left of traditional social patterns, made it easier for the social needs of monopoly capitalism to take hold.

These new patterns were characterized by massiveness in all aspects of economic affairs, in the development of the megalopolis, in the multiplying activities and relations of the United States with the rest of the world, in the functions and the size of public and private organizations, in the realm of communications and culture. That all this could have come about except under a regime of increasingly centralized economic and political power is utterly implausible. Those who see this as too extreme a statement, or as plain wrong, might seek to envisage the economic process since the war as having come about in the United States (and in the global system) with the institutions and attitudes of laissez-faire capitalism; or, turning that around, seek to explain in some plausible and coherent fashion what caused the economic chaos and bloodshed of this century up to and including the Second World War.****

Concentrated and centralized power in its various forms and extensions was essential if the capitalist state were to be induced and able to take on its many and diverse functions; if American business and the United States were to be able to take a strong enough hand in the rescue, revival, and prosperity of the major capitalist powers of Europe and Japan; if the First World were to be able to hold on to and make use of the Third World; if the advertising, public relations, propaganda, education — call it what one may — of modern communications were to create the markets for modern production and the minds for modern social existence connoted by the terms consumerism, military-industrial complex, and neocolonialism.

In what ways, however, did any or all of this become dysfunctional and produce, among other things, stagflation?

IV

The elements of an acceptable answer may be suggested when we now point to other widely recognized developments of the same era. These, though presumably unintended by those with power, were inexorably associated with the changes that made for monopoly capitalism's health and strength; taken together, they produce the growing dysfunctionality of the system and hasten its decay. Although they are now taken up seriatim, each should be seen as interacting closely with the others:

(1) The vast and unavoidable growth of private and public bureaucracies — and of the costs, the wastes, and the inefficiencies associated with their existence, functioning, and continuing growth — have come to compete with the positive effects of the incomes generated in and by them, as, with the passage of time and changing circumstances, the essential functions of bureaucracy serve less for the creation of new bases of strength and more for the holding on to what exists.

(2) The normal practices within and between businesses, and between them and politicians and governments, conventionally classified as “corruption,” have, with the exfoliation of giant corporate and governmental entities and of their functions, deepened and spread to new and spectacular levels, producing both financial and political difficulties for businesses and governments.

(3) The creation by North American, European, and Japanese capital of capacities for producing durable consumer and capital goods was of course a major stimulus in the long expansion; more recently, these facilities have become duplicative, resulting in intense competition for critical raw materials and for markets, with consequent whipsaw effects — the former yielding upward pressures on costs, the latter downward pressures on prices.

(4) The stupefying increases in the levels of debt and the spread of dubious financial practices from the 1960s on — for individuals, businesses, and governments, nationally and internationally — were essential to finance and to sustain the unprecedented expansion. It is no clear, however, that this process has brought about precarious debt/revenue ratios for all concerned, ratios whose threat to stability can be lessened, if at all, only through even more economic expansion — in turn requiring a degree of further indebtedness which, at least beyond a certain point, is realistically implausible.

(5) The replacement of traditional imperialism by neocolonialism (alias “economic development”) was vital in providing Third World economic stimuli and support to the expansion of the major powers. The inherently inflationary military expenditures facilitated and required by that effort, and by the concomitant Cold War with the Soviet Union and China, also did much to sustain economic expansion. Because these years had relatively low unemployment, it was easier for those previously unorganized to organize and, along with already organized labor, to make and to achieve wage and non-wage demands intensifying inflationary pressures and tax needs while simultaneously straining profits.

(6) And then, of course, the war in Indochina was lost, which must be seen as one of several factors contributing to the subsequent further shrinkage of the neocolonial area and of the power of the major capitalist nations vis-à-vis the Third World. To which it may be added that the enormous amount of military expenditures after the Second World War — in the United States alone, after 1946, well over $1.5 trillion — although it came to mean “more bang for a buck” as military technology became -ever more complex and capital-using, came also to mean “fewer jobs for the buck.” If government expenditures were made on construction or education instead of on arms, it is reliably calculated that 30 to 50 percent more jobs would be created per federal government dollar of expenditure.

(7) The swift alteration of rural/urban and occupational patterns and, within the cities, of the prewar urban political economies, was an integral and profitable ingredient of the accumulation process. Investment and incomes boomed with the expansion of industrial and residential suburbs and all that attends them; but recently attention has had to focus on the loss of city jobs and tax bases, joined to rising expenditures. Virtually all major cities now face a seemingly intractable set of economic, political, and social problems, much intensified by the continuing demands of organized groups — demands which, Whether granted or refused, worsen the urban condition. Much of the fiscal crisis of the cities can be attributed to the astronomical level of federal expenditures on the military — rising, as of this writing, by about 15 percent for the oncoming fiscal year-as cities face ever more hopeless revenue expenditure/taxpayer relationships.

(8) Consumerism, a major contributor to the long expansion and to the political stability associated with it, necessarily employed the mass media and its universal audience for purposes of persuasion. The entire population, not just those of middle and higher incomes, was led to accept, to want, and in an important sense to need, a level and composition of consumer expenditures that is quite simply beyond the present or potential income capacities of a good half of the population.*****

Consumerism, which means, creates, and depends upon rising expectations throughout the population, has thus raised the popular definition of what is economically necessary to keep the social peace, while at the same time lowering the economy's ability to satisfy that definition for a third to a half of the population. This is a unique development. It comes now not because of some new inequality in the distribution of income and wealth (even though the degrees of inequality have probably increased in recent years) : severe inequality is a constant in the history of capitalism, essential if capitalism is to exist and capital accumulation to occur. What is novel today is the social definition of an adequate level and composition of consumption which, as a necessary accompaniment of recent accumulation, has produced in the same process a new and higher level of socially necessary waste: in monopoly capitalism's advertising and sales promotion, in its vast bureaucracies, and among other areas and most draining of all, in its military expenditures — not waste of human potentials, but large-scale waste of scarce raw materials and advanced technology.

V

The foregoing brief survey of the negative and crisscrossing tendencies of the recent period suggests substantial and persisting difficulties for economic stability and growth on the one hand, and political and social stability on the other. They arise from the long-term existence and practices of concentrated and centralized economic and political power, in the context of capitalist needs and impulses. The power that enabled capitalist society to regain health and strength after the Second World War now works to eat away at its prospects for survival. This is so because of the ways that both business and the state use their powers in monopoly capitalist society, as a brief summary statement will now suggest.

The costs of business have risen as a result of rising prices for raw materials and labor and the inefficiencies of modern corporate organization. Monopoly power enables these costs to be passed on to consumers and small businesses as higher prices, with only token interference from the state — as demonstrated in the past two years of faltering demand joined to rising prices in, say, auto and steel. Increased interest rates are also passed on by the giant corporations, and because the giants dominate the production and sales of the entire economy, a restrictive monetary policy may do nearly as much to promote more inflation and increased hardship for small businesses as an easy money policy. A perverse question not yet pondered by conventional economists: Which is more inflationary, a tight- or an easy-money policy?

But inflation never means merely rising prices; it also means upward income redistribution, favoring the sellers of commodities. One notable consequence of the recent inflation was thus increased demand for “luxury goods,” combined with softened demand and excess capacity for the general run of manufactures. In the worst months of the serious slump in auto sales, for example, it was remarked that Cadillac plants produced on overtime schedules while Chevrolet plants laid off tens of thousands of workers.

In this latter way, among others, prolonged inflation under monopoly capitalism tends to exacerbate the processes producing stagnation. Within the leading capitalist powers, and between them and the lesser nations in the global economy, buoyant levels of effective demand are maintained at the top levels of income while desperation mounts at the bottom end. In the present, as in the past, the latter inexorably creeps upward, wearing down the levels of demand required to allow economy-wide buoyancy. It is this that helps to explain the persistence of widespread unutilized capacity in industry since at least 1973, and that makes dubious any revival of real private investment — as always, the key to capitalist economic expansion.

Nor can the superstate be expected to find a satisfactory way out of combined inflation and stagnation. Quite apart from the fact that government policies have themselves contributed directly or indirectly to both processes, and that the state is unlikely to move in directions opposed to those of the supercorporations, capitalist states now face deep contradictions in their possible policies. The difficulties of mounting an effective anti-inflation policy in the face of monopoly power have just been noted; anti-inflationary steps are nonetheless taken, with the effect, however, of lowering effective demand and allowing unemployment to persist or worsen. On the other hand, state policies that might stimulate production and sales and employment are seen as likely to send the rate of inflation into new and dangerous levels.

In the global economy, state policies to defend and support each national economy would further weaken an already contracting global economy — and each national economy critically depends upon healthy international trade levels and cooperative political ties: It is worth noting that since 1974 the Europeans and the Japanese have hoped that U.S. demand would revive their economies, while the U.S. has returned the compliment. During the 1960s, the volume of trade between the major powers rose annually by about 20 percent; since 1973, the rate has dropped and was negative in 1975. The investment boom of the 1960s is unlikely to be repeated; and in its absence, the expanding volume of world trade counted upon by all is unlikely to appear. The present “recovery” of the U.S. economy, although it has raised imports, leaves Europe and Japan with unemployment, excess capacity, and stagnant demand for U.S. exports.

Under the watchful eyes of the monopoly capitalist powers, it is quite unlikely that either inflation or contraction will move to spectacular levels separately or in combination for the foreseeable future; in the face of the inflating and depressing tendencies now generated under monopoly capitalism, however, it is even less likely that either rates of inflation or of unemployment will be reduced to levels once considered acceptable in capitalist circles. Already it is necessary to remind economists and politicians that 6 percent for either price inflation or unemployment, let alone both together, would have been seen as substantially ominous as recently as 1970: now 6 percent is seen as a target to be coveted.

As inflation, unemployment, and the rumble of crises here and there have persisted, standards have begun to alter; economic standards of acceptable performance alter all the more easily in the broader social setting where all standards have been crumbling. The decay of monopoly capitalism takes place and is enhanced within a larger process of social decadence, which in turn owes its present dimensions to the social effects of “healthy” monopoly capitalism. It is time to conclude this essay with what can only be a fleeting look at that larger social process.

VI

It is of the essence of monopoly capitalism that it is a social, not merely an economic, system. For its economy to function well, it is necessary for all social relationships to be cut tightly to fit. By comparison, the capitalism of Marx's time and place — mid-nineteenth century Britain — set simple and narrow requirements: a disciplined labor force, reasonable access to raw materials and foodstuffs, expanding markets, and a state ready to assist trade and the flag to move toward the nether regions in suitable order (against very little opposition). The mere mention of processes such as consumerism and neocolonialism suggests the greater intricacies and integration of the contemporary world; the technologies of our world have rendered possible what has become necessary (while also partly creating the necessities).

As mentioned much earlier, the institutional developments of monopoly capitalism, separately and even more in combination, could not have found support in the traditional social philosophy of nineteenth-century capitalism. That social philosophy had to be displaced. Whatever the defects and the crudities of what may be called bourgeois social philosophy, it was at least the work of philosophers, and political, social, and economic theorists. By what social philosophy, devised by which Madison Avenue philosophers, do the rulers and the ruled of monopoly capitalist society live today? It is simple, and can be summed up in three words: “More” and “Why Not?” It is the social philosophy of a decadent society.

Is there some better adjective than decadent for characterizing a society so much caught up in nihilism, despair, violence, greed, corruption, lust, frenzy, and (perhaps needlessly prolonging the list and even saying the same thing in one word) infantilism? And are there those who see any of these tendencies in decline rather than on the rise?

All that may be so, perhaps most will say. But what has that to do with our economic system? The answer is that our economic system cannot function well, perhaps not at all, unless the attention and energies of its population (as asocial individuals) are focused almost exclusively on quantitative matters. Consumerism did not just make people want more of more things; it also narrowed the already narrow social gaze of the population, on the one hand, and, on the other, gave much of the population a material interest in the depredations of monopoly capitalism — not least in its imperialist, racist, and militaristic activities. It is of course true that capitalism, competitive or monopolistic, did not invent geographic expansion, or violence, or racism; it is also true that the use and the existence of these age-old phenomena nourished the capitalist process, and that each of them has been nourished in turn. Capitalism, and more so its offspring monopoly capitalism, profits from bringing out the worst in us.

It is not just the consumer side that is responsible; of course not. As Harry Braverman has shown so magnificently in his Labor and Monopoly Capital, among other vital requirements of modern industrial capitalism is the need to reduce work to the level where the satisfaction from it is leached out, where the job is totally alienating. Alienated workers, whatever the color of their collar or their skin, make better consumers, and better spectators — of politics as well as of sports. Life becomes a spectacle, something to be observed and consumed, not something to participate in, to change, to control. As the meaning of life is drained away, the meaning of any particular obscenity within life is diminished: the obscenity of luxurious and idiot consumption and mountainous arms expenditures in a world where millions starve while nature dies — and where “lifeboat” and “triage” strategies are politely discussed to provide continuing rationalizations for the ultimate and repeated obscenity of genocide.

But our subject is stagflation. What has social decadence to do with stagflation? I believe it can be argued plausibly, though not shown mathematically, that where power is concentrated and “more” is the standard, there is no way of avoiding inflation, especially when the state takes its main signals from those who most benefit from it. On the other hand, the process of stagnation derives principally from the unavoidable development of excess productive capacity, occurring, of course, in the permanent context of underconsumption; or, in other words, where capital accumulation takes place in an anarchic setting of capitalist social relations.

That the social process is increasingly decadent has not, in my view, caused economic contraction; but the demoralization and alienation of our day may well have seriously lowered the always low level of popular political acumen and morale in this society. It is conceptually possible for what one might call a “liberalized monopoly capitalism” to reinvigorate the economy — through, for example, what James O'Connor terms a “social-industrial complex.” But not in this society, not in a society where the politics of greed have been carried to levels that make the epoch of Ulysses S. Grant or of Warren G. Harding resemble by comparison the High Table at Oxford.

For the people who live under monopoly capitalism, therefore, the future looks bleak indeed, bleaker still when we contemplate what those who have power could do to maintain their power as the ground shifts under their feet; there are, after all, depths below depths, as the social experiments of the Nazis remind us. Such prospects add considerably more weight to arguments now encrusted with age: at its best, capitalism has meant tragedy for most of the people of the world throughout most of its history. The time is long overdue for every effort to be made to replace it by a social system democratic from top to bottom, in its economy, its politics, in the entirety of its social relations. There is no better name for such a system than socialism.

Footnotes

*Among others who have contributed to this viewpoint, see the essays by Samir Amin, the present author, and Andre Gunder Frank in three successive issues of the journal Socialist Revolution, nos. 23, 24, and 25 (1975), as well as Howard Sherman's forthcoming book, Stagflation: A Radical Theory of Unemployment and Inflation (to be published by Harper and Row).
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**Those who wish to acquaint themselves with the basic U.S. contribution to the delineation and understanding of monopoly capitalism may do so by consulting Paul Baran, The Political Economy of Growth; Paul Baran and Paul Sweezy, Monopoly Capital; Harry Magdoff, The Age of Imperialism; and Harry Braverman, Labor and Monopoly Capital (all Monthly Review Press, 1957, 1966, 1969, and 1974, respectively); James O'Connor, The Fiscal Crisis of the State (New York: St. Martin's Press, 1973); and Herbert Schiller, Mass Communications and American Empire and The Mind Managers (Boston: Beacon Press, 1971 and 1973, respectively).
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***The challenging developments of the century after 1850, and the inability of the major powers to tame them, are dealt with conventionally and comprehensively in William Ashworth, A Short History of the International Economy Since 1850 (London: Longmans, 1964), and W. Arthur Lewis, Economic Survey, 1919–1939 (London: Allen and Unwin, 1949). In his Business as a System of Power (New York: Columbia University Press, 1942), Robert A. Brady sought to show the common tendencies of the major capitalist powers to move toward the political right and political centralization before the Second World War.
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****Lest there be misunderstanding of my position, I interject here that in my own view the years after as well as before the Second World War have been deeply and dangerously destructive for the people of the world, and the rest of nature, while also being essential for the health of capitalism. Such is the stuff which feeds capitalism's “health.”
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*****It seems appropriate to use the U.S. Department of Labor's “moderate budget for an urban family of four” to represent the average standard. In April 1976, to meet that budget required $15,500. (The poverty level income was $5,500.) But the median income for an urban family of four was slightly over $13,000. Connected with the point being made in the text is that the real take-home pay of the average wage earner in the United States today has returned to the 1965 level, as a result of the combined effects of inflation, slowed expansion, and rising taxes.

June 24, 2003