Plague of Inequality CHAPTER SEVEN Karl Marx “THE SOCIAL GULF”

Marx was the champion of an extreme form of socialism as represented in communism.  In such a system, very little if any private property is in play.  All the means of production are owned in the common, in effect owned as a public property. Also, then, supposedly Marx was truly egalitarian in the extreme, as in everyone having the same income and wealth.  Williams argues that was not the case, as the phrase “From each according to his abilities, to each according to his needs” recognized differences in talent, ability, work habits and other inherent differences all of which did not suggest equality.  It is inherently about inequality.  It was more about finding some version of optimal inequality, albeit Marx did not believe it was possible to achieve it with the focus on mainly private property as capitalism claimed.  Avoiding extreme inequality for Marx meant a heavy emphasis on mainly public property, as in the state owning most if not all the land, all the factories, in effect owned everything other than perhaps a few personal items.  

Neither Pure Communism Nor Pure Capitalism Works

As DIT makes clear, neither the pure communism (extreme socialism) with all public property associated with Marx, nor the pure capitalism with all private property associated with libertarian economists like Milton Friedman --- well, neither extreme can ever work.  Any attempt at building such extreme systems never has, does not, and never will work.  

As DIT makes clear, it is about striking good balance in private & public property, and, in a broad sense, striking good balance in capitalism & socialism. Or, as DIT prefers, strike good balance innovism & socialism, or, even innovism of individualism & communitarianism.  It is about good balance in Market & Community: Government, the “:” meaning an inclusive Government, with the “&” meaning interdependence, each needing the other.  Good examples of such balance in modern times include the Scandinavian countries, as in Norway, Sweden and Denmark.  The US also struck a reasoned balance during the New Deal Order 1930-1980. 

Bourgeoisie Being Unethical

Williams highlights how Marx saw “equality” as in a Market exchange, where buyer and seller in effect both gained.  The equality of main concern to Marx, however, was the need for more material equality to address the extreme inequality in material well being from rich to poor. It resulted in an extreme “social gulf” between rich and poor, a social gulf between capitalist and laborer.  It would lead to such levels of resentment that would lead to radical change driven by the poor, the proletariat (working class) going after the bourgeoisie and demanding more. The proletariat would rise up in protest based on the claim to not being treated fairly, as in unethical treatment. 

Capitalism as Compulsion

Marx claimed capitalism was a form of coercion, or compulsion with labor the subject of control by the capitalist.  So, it was necessary to take the power away from the capitalist owner of the land, the factory, the means of production. The proletariat would take such property and reassign said ownership  to the labor, who would own the means of production in unity with the other. Compulsion to labor under the auspices of the capitalism would be removed in favor of a sense of everyone working with everyone else. It was about replacing the power of the individual capitalist with “the power of united individuals (p. 260),” a kind of communal power in a near pure communism. It was about individual freedom “…from the system of private property, from a government directed by bourgeois forces (p. 260).”  So, supposedly in the communist system a person would have more freedom, less control by the factory owner and manager, with supposedly better pay and benefits, like health care and vacation time.  Extreme inequality in wealth and the power it buys would no longer be a force.  The proletariat would control own destiny.

Equality in the Law Not the Same as Economic Inequality

Marx did not favor the notion of equality in capitalism which was about equality in the right to join into contract with the other.   So, Market trade was about trade among equals in that sense. In capitalism, it came to mean “… equal justice—whereby the ‘powerful and the weak alike’ would be subjected to ‘mutual duties’— (which) had the ring of fairness such that the poor quickly agreed to its terms (p. 262).”  Problem was that such legal equality did not afford an optimal inequality, leading instead to extreme inequality, especially as the law was changed to favor the rich.  For example, in employment and labor law, the employer is obviously in a more powerful bargaining position than is labor.  Also, any attempts by labor to bring more power to the table, as in labor unions, is often if not always simply rebuffed by capitalists. The capitalists --- the bourgeoisie --- argued that any economic inequality that came out the legal equality system was inherently ethical, filled with justice.

Sources of Extreme Inequality were Anything but Idyllic

Marx made it clear that the start of extreme inequality was anything but idyllic.  It was about war, conquest, and violence --- property and the inequality associated with private property came from it.  And, it was then maintained by the myth of meritocracy.  The people managing to take hold of the property believed it was the talent and the industry of same which drove it.  The poor who had little to no property lacked in talent and were lazy.  The poor came to believe it, too,  Marx argues, even though lacking in fact-content. It was the way for the wealthy to maintain it, with the myth of merit. 

Said underlying myth, Marx argued, is what gave the context for the Market economy. It was built on a make-believe system that the rich deserved to remain rich no matter how much the poor protested, even if the protest was based in the fact that many of the poor also had talent and worked hard. The make-believe system of merit for the rich and disgust of the poor --- and the poor often buying into the myth --- sustains extreme inequality. It defined the ideology of the bourgeoisie, the capitalists, the owners of the means of production.  

Even the Puritans Had Been Brutal

Even the pious Puritans who settled New England used violence and conquest:   “… ‘set[ting] a premium of £40 on every Indian scalp and every captured redskin,’ subsequently raising the bounty to £100 to accelerate the violence—all to make New England safe for commerce (pp. 266-267).” Marx weave similar stories about capitalist exploitation across the entirety of the Spaceship Earth.  Marx also claimed labor was exploited in the factories, as capitalists paid minimalist, survival only wages in order to maximize the profit.

Middle Class Was Always Under Assault

Also, large companies would swamp the smaller enterprises, the latter generally owned and operated by people in the middle-class, in effect eliminating the middle class.  It would evolve  once again to an economy  composed of the poor laborers working for a survivalist wage and the wealthy capitalists exploiting same. As Williams frames it, Marx saw “The steady destruction of the middle class is central to the inequality distinctive to capitalism (p. 269).”  Capitalism, as Marx saw it, required the labor to be poor.

Marx referenced, was familiar with the fable of the bees by Mandeville, which came to be used as the justification for Market economies. Self-interest only would work for everyone, in some magical way never explained by Mandeville or any modern economist since that time. The fable was, is, and always will be make-believe. That is, Mandeville believed that the only way to keep the poor laborer working was to pay near starvation wages. 

Hard work would only come from the self-interest in surviving. Paying a living wage --- one with enough time to not only be health because of being well-fed, and time to become educated, and the time to bring talent into play --- was simply not to be applied by the talented, hard working capitalist. Mandeville believed --- and capitalists came to believe it more generally --- that only subsistence wages to make hunger permanent was essential. So, extreme inequality was inherently natural, the way of the Market. Most if not all capitalists, Marx claimed, believed extreme inequality was essential, so, the system had to be replaced.

Physical and Mental Suffering of the Poor Became an Obsession

The physical and mental suffering from both absolute and relative poverty became an obsession of Marx.  The capitalist system had to be an inegalitarian system with the rich dominating the poor, and, could not be fixed. It had to be replaced. The poor were especially short on protein, essential to good health.  Also, the poor often could not even afford beer, which was an essential source of carbohydrates, and also addressed the microorganism problem in the unsafe drinking water supply.  Adulteration of food and medicines was commonplace.  Housing was expensive and of poor quality.  Working conditions were dangerous.  The poor lived dismal lives, indeed. Marx claimed it was all due to the (Williams quoting Marx) “extravagant consumption, coarse or refined, of the rich (p. 272).”

Working Harder Made the Inequality Worse

Also, working harder, becoming more productive in the factories made things worse, at least relatively speaking, as in Williams quoting Marx:  “The worker becomes poorer the more wealth he produces, the more his production increases in power and extent (p. 273).” It seems wages were being kept as low as possible,  no matter how productive the worker.   So, it was not just about absolute poverty ensured by subsistence wages, but relative poverty as the rich became ever richer.

Mandeville and Adam Smith Got It Partly Correct

Marx fully understood the claims of both Mandeville and later that of Adam Smith that economic growth helped reduce absolute poverty.  Marx also claimed, however, that relative poverty was also a substantive problem that needed to be addressed.  It ensured instability in the economic and social system, and, had to be moved toward a more optimal inequality, not just absolutely by relatively. Extreme inequality had psychic costs, the poor feeling inferior and increasingly worthless as the inequality widened. The matter of power also affected such feelings, as wealth bought ever more power over the poor. Intellectual faculties would also diminish as the poor labored at repetitive actions in a factory. More animal drives are then motivated, as in eating, drinking and procreation. So, the “general structure of the capitalist economy, on Marx’s account, ensures inequality, envy, dissatisfaction, torment, ignorance, and misery (p. 279).  The structure had to be replaced.

Child-Labor Also Became a Key Way to Increase Profits, Exacerbating the Inequality

The new machinery was often better integrated with child-labor.  Small hands, small bodies sometimes worked better with the machines,  and pay could be even lower. Profits could be substantively increased with child-labor. Williams quotes Marx, as pertaining to the lace factories: “Children of nine or ten years are dragged from their squalid beds at two, three, or four o’clock in the morning and compelled to work for a bare subsistence, until ten, eleven, or twelve at night, their limbs wearing away, their frames dwindling, their faces whitening, and their humanity absolutely sinking into a stone-like torpor, utterly horrible to contemplate (p. 281).” Children were also often fed opiates.  Life was short.  So, it is with unfettered, unethical Incentive only driven self-interest.

Bourgeoisie Who Became Wealthy Also Paid a High Cost

Marx saw the war among the greedy as characterizing the competition of the Market.  It could become brutal. Marx believed excessive greed was actually caused by capitalism, not the other way around.  Avarice as in pleonexia was the result, not the cause. Marx claimed Bentham --- and others --- claiming Bentham was the main source of the claim about excessive greed, as in people learning to be extremely greedy.  It was not natural.  It was learned. And, the structure of capitalism ensured it.

Actually, as made clear in DIT, both Bentham and Marx got it wrong, as the dual nature of the Human is the product of evolution.  Said dual nature points to a more primal ego-based self-interest in every Human, who must work to temper the arrogance of it with the empathy-based other (shared with the other)-interest. To Marx, once greed is a possibility it goes to the extreme of pleonexia, and capitalism has no bounds. Capitalism nourishes the vice of pleonexia, the fascination with and compulsion for seeking insatiable wealth and the power it buys.

Money made it all possible.  One could only accumulate so much in physical terms, but, with money (gold, silver, and especially currency) it was insatiable. The rich become poor in character as the pursuit goes to excess. Also, the pleonectic capitalists are always plotting the demise of the competitor, making life miserable. The war among the greedy was in effect a war of all against all, like Hobbes had pointed to as inevitable. The capitalists would become ruthless, both in interaction with labor and other capitalists. One outcome would be wages at inhumane levels, contributing to extreme inequality and the downward spiral for both economy and society such inequality would produce.

Social Costs of Inequality Driven by Pleonexia Among the Capitalists

It works in the following way:  Pleonexia among the capitalists results in ruthless competition to increase Market share, which means cutting costs. And, what is the easiest way to cut costs? Well, cut the compensation packages for labor, perhaps even outsourcing the production to low wage countries. Profits are served by cutting wages to the bare minimum for labor to survive, or even below by going to low wage countries, while profit margins go up for the successful competitor.  

Communities lose their factories.  Laborers end up working at low wage jobs like at McDonalds.  Things go down in a spiral of economic and social collapse, while the capitalists cash in. It is like a mining process taking everything out and then abandoning the dig, having mined it all out:  “It attains (the) objective by shortening the life of labour-power, in the same way as a greedy farmer snatches more produce from the soil by robbing it of its fertility (p. 292).”  

Economic Growth Would Not Solve It

Williams  points to how Marx believed that “…economic growth in the developed world was an outmoded and even dangerous policy objective, threatening environmental destruction and social disharmony. Like Mill, Marx rejects the argument that economic growth can resolve most social problems, even where that growth might raise absolute wages (p. 293).”  As DIT makes clear, the  real problem can only be solved with pre-distribution (pay more downstream, as in empathy-based compensation packages at all levels).  And, if pre-distribution does not come into play, then re-distribution for the public good using taxes as the source of revenue becomes essential.  Substantive estate taxes are a case in point.  

Extreme Inequality Amplifies Bourgeois Power

One of the most destructive forces of extreme inequality is the fact that wealth buys power.   Labor loses power relative to the capitalist owners and managers as inequality increases.  Even in representative democracies, the notion that everyone has a vote implying some kind of equal power becomes relatively meaningless as the politicians are heavily influenced --- in effect, bought --- by the wealthy. And, economic growth does not fix the move to concentrating power in that the owners of the capital tend to gain more from the growth than does labor. Marx also claimed that the bigger gain to the capitalists as compared to the gain by labor “… was unlikely to be used for humane purposes because wealth ‘blinds’ the capitalist to humane sentiments (p. 295).”

Wealth Used to Change the Law to Favor the Wealthy

Marx claimed the wealthy had the tendency to change the law such as to not only take but to keep wealth. And, with wealth buying political influence, it was easily done. Marx claimed wealthy capitalists would often support laws that seemingly protected labor, and then in effect gut the law so it was not effective.  Laws to improve working conditions in factories were a case in point. Recent changes by the new US Administration put into power in 2025 which in effect neutralizes the Environmental Protection Agency is another case in point. Williams points to Engels who was even more direct, the bourgeoisie operate  “… ‘as a united class and use the power of the State for their own ends’ (p. 295).”  The law was used to gain and protect private property, and, if one does not have much in the way of private property --- the point is made.  When extreme inequality is in play, including a concentration in private property, labor and ordinary people in general do not have as much power to use the State for their own ends.

Marx also claimed the law was enforced on people at the lower end of the income and wealth ladder more so than on people at the top.  The top was favored by the legal system. Also, the law had been regularly used to convert common (public) property into private property, and, then, used to protect the private (land) property from all regulation and taxation.

Living Off the Crumbs of the Rich

New meaning is given to trickle-down by Marx, as in the similar metaphor of crumbs from the rich loaf. Marx believed the people at the bottom of the income and wealth ladder were not only dependent but dominated and exploited by the people at the top of that ladder.  To Marx it seems the belief was that little in the form of empathy-with was directed in either direction. Empathy going every direction would eliminate dependence, domination and exploitation as people moved to reasoned ground, moved toward a reasoned, shared other-interest. Again, path 0Z is always superior to either path 0G or path 0M.  Freedom can only arise on path 0Z.

Marx did not have many good things to say about the people who were living in pleonexia, using words like “ruthless, degrading, despotic, disgusting, corrupt, heartless, crooked, sordid, petty, merciless, barbarous, and the like (p. 300).”   Intriguingly all said immoral and unethical frames were blamed on the structure of capitalism.  Such behaviors, actions and frames of thinking came to be because the structure --- especially the property rights structure --- was supposedly flawed. Such things were compelled by the economic system (p. 301). And while it was preferred that all individuals be free and morally (to include ethically)  responsible, the capitalist system made it impossible.

Extreme Inequality Drives Antagonism

Marx was all about hostile class relations.  Marx claimed that the differences between the capitalist owners/managers and labor were inherently opposed.  Antagonism was built into the system. Said class antagonisms, to Marx, drive the solution to the problem of extreme inequality and all the negative forces it brings into play.

Marxian Solutions: Cannot Overcome Bourgeois Equality and Meritocracy Short of Revolution

Intriguingly, Marx saw that the United States had done a reasoned job at moving toward a more optimal inequality over the period of 1945-1980.  Yes, it did:  It actually was the main feature of The New Deal Order 1930-1980, taken apart by The Neoliberal Order 1970-2008, and, now under further assault by Project 2025. The return to extreme inequality started in about 1970 and continues as though on steroids (with 100s of Executive Orders and the Big Beautiful Bill being cases in point) to the current time here in 2025.  Incremental change had dramatically reduced the problem by 1980, and, now incremental change going the other direction is exacerbating the incremental change toward concentrating wealth and power that started around 1970. Could incremental change back to something akin to The New Deal Order again fix the US problem?

Marx does not see incremental change as having enough power to solve the extreme inequality problem.  Such change cannot overcome the notion of “bourgeois equality” --- that somehow everyone no matter the position on the income and wealth ladder is equal under the law, and, has the opportunity to go toward any position on the ladder.  Any concerns can be suppressed with the meritocracy myth framing the suppression.  People down the ladder are simply told it is just about talent and hard work.  

Marx basically says balderdash: It is not real, as the wealthy buy the power and ensure people down the ladder cannot overcome the extreme inequality so produced and maintained.  Also, belief in meritocracy works to hold people in positions of poverty and little to no power, as the myth that talent and hard work made the people at the top wealthy while the bottom lacks in talent and is lazy. So, what is the solution?

Every System Has a Breaking Point

To Marx, the breaking point drives the revolution. The breaking point is associated with an extremely unethical concentration of wealth and the power it then buys. At that point, to Marx, the system needs to be taken apart and replaced with a system that works better for everyone.  And, it is just inherent in the capitalist system that the breaking point eventually comes:  “The hidden hostility underlying capitalism … become (s) the open hostility of class war (p. 304).” 

The story goes like the following, as pertaining to incremental change not being effective:  “One can propose luxury taxes, estate taxes, education reforms, commercial reforms, and so forth, but if any of these threaten accumulated fortunes, the rich will deploy their resources to resist them. Consider how much, for example, they employ lobbyists, political action committees, advertising campaigns, and other techniques to resist even modest raises of marginal tax rates. Imagine how they would respond, for example, to Mill’s steep estate tax. Most politicians intuitively understand this, which is why they rarely pursue such legislation…. (so)…  For Marx, in some societies, the only way the rich will part with their money is with violent revolution (pp. 306-307).”

Marx Saw Communism as the Better System after the Revolution

Marx seeing the need for revolution is one thing.  Believing the extreme form of socialism represented in communism is the solution is another.  Marx believed communism was the only away to assure a fair system, focusing on tamping down material inequality. It was essential to move away from bourgeois equality, which addressed at best only the problem of inequality under the law. Problem was: The wealth distorted the law into favoring the wealthy, so that was not enough.

Williams again highlights the infamous Marx call for  wealth and power being considered from the framing in  “from each according to their abilities, to each according to their needs.”  As Williams claims, the framing is not at all about equality, but is --- using DIT --- about some form of optimal inequality.   Using DIT, it is about recognizing and encouraging talent and diligent work among all ordinary and not so ordinary people, no matter where one is on the income and wealth ladder.  It is also, then, not about taking and keeping, but is about making and creating. It is about each person having the capability to do and to be, to innovate, and to test the innovation as a kind of betterment, tested in the Market of self-interest and in the Community of shared other-interest.

Like Deirdre McCloskey would have it, no matter what system is put into play, it ultimately has to be about ordinary people being given the liberty and freedom, as well as respect and dignity, along with the opportunity to build that widget and otherwise innovate, as in innovism rather than capitalism (see Lynne 2025).  And, while any system approaching pure communism assures said innovism could never arise, any system approaching pure capitalism would also fail.  In the real world, something akin to The New Deal Order 1930-1980, and the Scandinavian economies of today are the closest anyone has ever gotten to building and operating such a system. The Metaeconomic Order could help.

Neither Pure Communism Nor Pure Capitalism Works

The Marxian vision of the revolution opening the path to communism as the best system was proven wrong in several attempts. Cases in point are the Soviet Union, Cuba, North Korea and China (albeit the latter has been dabbling with some Market forums, and, dampening the influence of communism).  Similarly, both incremental and drastic changes toward pure capitalism have all failed, such as in The Robber Baron and McKinley Order 1870-1929 that brought the 1929 crash.  The Neoliberal Order 1970-2008 brought another crash, in 2008. It also stirred the political economic chaos starting around 2016 now made even worse by Project 2025.  

The economies of China, especially Russia in the former Soviet Union,  North Korea, and Cuba (to list a few) all struggle. The extremes do not work.  The new patrimonies like Putin-Russia, Orban-Hungary, Netanyahu-Israel, Starmer-England, Erdogan-Turkey, to list a few of the new patrimonies coming into play in other parts of the Spaceship, but now also including Trump-America being framed with Project 2025,  also do not work. Again, The Metaeconomic Order could work, while none of such systems can ever work.

Conclusion

Williams finishes out the story with the claim, highlighting the main point of Marx:  “There is an important lesson to be learned from Marx about inequality. The problems stemming from radical inequality cannot be resolved with modest or cosmetic gestures. For him, inequality comes from economic systems designed to create widely separated winners and losers. The only solution is to abandon the system and replace it with one prioritizing greater equality (p. 310).”  Perhaps, if one is using DIT to make the claim, and see it is about building and maintaining a more optimal inequality.  The experience suggests it is not the extreme socialism of pure communism, nor the extreme of pure capitalism, that is the solution.  DIT does suggest the way to solve the extreme inequality problem is by bringing the ethic back into play, like Adam Smith originally intended.

Another main point from Marx is that charity is a kind of smoke-and-mirrors distraction that also cannot solve the problem of extreme inequality:  “Public displays of charity are very much in vogue today. … Yet Marx would urge a more skeptical lens. The point of grandiose charity, for him, is more fundamentally about forestalling systemic change and protecting the lion’s share of bourgeois assets … Rarely, if ever, have even outsized charitable gestures by billionaires required donors to make lifestyle sacrifices. When the poor or their advocates complain about inequality and concentrated wealth, the rich are often quick to retort with a long list of charitable deeds (p. 310-311).” Yes.  Ex-post charity does not work, as it is more a smoke screen than substantive.  Point is, the self-sacrifice must be ongoing every day, as in finding path 0Z in a pre-distribution sense, not redistribution after the fact. Like, Taylor Swift sharing $190M with the traveling staff, like $100000 payments to truck drivers: All pre-distribution.  Swift was operating on path 0Z for  every one of the Eras concerts in 2024. For another recent example of pre-distribution, see The $70000 Minimum Wage, the case where a CEO cut the take at the top and used it to pay far better at the bottom, on the way to a kind of optimal inequality.

As Williams emphasizes:  “The concern for Marx, Giridharadas, and Reich is that charity is deployed as a means of maintaining underlying structural inequalities that made charity necessary in the first place (p. 311).” Yes. Absolutely.  Enough with the balderdash, and deal with the fundamental need to pre-distribute, to work on empathy-based compensation up and down the income and wealth ladder. It is also about striking good balance in private & public good, Market based self-interest & Community based shared other-interest, the latter facilitated by an Inclusive Government.

Williams points to the virtue of justice, and fairness more generally:  “As Mill insisted (and Marx would likely have agreed) when it comes to inequality, ‘justice is the one needful thing rather than kindness’ (p. 311).” Yes.  It is about empathy-based ethics on the way to justice, not just empathy-sympathy-compassion with limited, real attention to making it actually substantive.  Justice puts the system on path 0Z in the pre-distribution sense, not ex-post.