Institutionalized Economic Discrimination

-- By KensingNg - 24 Aug 2012

My favorite line from this course is probably: "we are kind to the rich, and just to the poor". I understand this line to be suggesting the presence of institutionalized economic discrimination in favor of the rich against the poor.

What is Institutionalization?

Drawing upon the discussion of personal racism versus institutionalized white supremacy, one can analogize that institutionalized economic discrimination can, even in the absence of individuals exhibiting a personal preference for rich people, help the rich at the expense of the poor. Institutionalization (as I understand it) is the collection of laws and societal rules which favor a particular ideology. Once an idea has been institutionalized, it need no longer remain in the minds of the people in order to take effect. The institutionalization of an idea can help encourage its spread by integrating the idea into societal norms that people then internalize, but even if people do not personally believe in the institutionalized idea their loyalty to the system as a whole might be sufficient to induce them to enforce the idea.

How Does The Institutionalization of Economic Discrimination Manifest Itself?

Institutionalization of economic discrimination can be seen in certain laws and legal concepts. For instance, the system of property ownership protects those with property, giving an advantage to the rich (who simply have more property than the poor). Many other legal fields, such as contract law, focus on the importance of encouraging economic growth and development. In Kelo v. City of New London, the courts determined that economic growth was sufficient to allow for the government to exercise eminent domain on behalf of a developer. Through access to greater economic resources, the wealthy are often able to create more economic growth than the poor, and are thus favored. In addition to helping the rich, laws are often reluctant to help the poor. San Antonio School District v. Rodriguez noted that there was no reason for the court to invalidate a law tying public education funding to local property taxes, since "at least where wealth is involved, the Equal Protection Clause does not require absolute equality or precisely equal advantages."

Furthermore, the procedural process of the legal system is favorable to the rich. Defenders of the status quo sometimes defend the system by asserting that, since lawyers themselves aren’t fit to judge the facts or law of the case, they simply argue vigorously for their client and thereby give them a fair chance to state their case before a jury or a judge who will decide the facts or the law. However, this system only gives a fair hearing to both sides if it is assumed that the lawyers are equally competent. In reality, some lawyers are far more capable than others. These lawyers tend to command higher fees on the legal market, and therefore end up working for the wealthy who can afford their services. The end result is that poor people tend to get lower quality legal representation than rich people. While this is by no means always the case (skilled lawyers may choose to work pro bono or to represent less wealthy clients) it tends to be that the legal market prices quality legal services at a level that only the rich can afford.

Where Does Institutionalization Come From?

The idea that laws and societal rules would favor a particular ideology conforms well with Marx’s theory that a society’s economic system influences its legal and political superstructure. Marx predicted that laws and government systems would be created so as to sustain the economic relations required by a society’s economic system; however, over time, these relations would turn into “fetters”. The legal and political superstructure that was created to sustain the modern economy system of capitalism requires institutionalized economic discrimination.

Is It Class Warfare?

Once the relations of an economic turn into fetters, economic discrimination is necessary to ensure that power remains in the hands of the upper class. However, this is not necessarily a form of class warfare. Class warfare occurs when a class unites in favor of its interests against another class. Institutionalized economic discrimination could certainly be a form of class warfare, if it were used either by a unified economic group (capital), or if it were opposed by a unified economic group (labor). But ironically, institutionalized economic discrimination works to neutralize class warfare. People buy into the economic discrimination not because it’s in favor of their economic interests, but rather because they have been raised to believe in it. As a result, institutionalized economic discrimination co-opts members of the labor class to assist in the perpetuation of the current legal and political superstructure, thereby keeping capitalism alive and viable as an economic model. It is perhaps this mechanism which has prevented the proletariat from achieving class-consciousness and rising up, as Marx had predicted would occur.

Is There A Way Around This?

In detailing the various forms of government, Aristotle discussed the idea of a constitutional government as one where rich and poor are given equal power and protection. He also noted two “perversions” of constitutional government: oligarchies where the rich ruled, and democracies where the poor ruled. Based on the presence of institutionalized economic discrimination, it is not a great stretch to conclude that we currently live in an oligarchy. A democracy as Aristotle describes it may not be completely sustainable, because if power and wealth tend to go hand in hand, so a democracy where the poor rule may be short-lived (either because the rich take back power, or the powerful poor acquire wealth).

This leaves the option of a government whereby rich citizens and poor citizens alike are equal. Going back to Marx’s idea that a society’s superstructure is based off it’s economic model, such a government would require an model where the economic relations do not put any one individual over another. This would essentially require a society to not distinguish between capital and labor, which would mean that the means of production and labor would need to be spread among all citizens equally. Thus, communism would be an effective basis for a society where rich and poor could be truly equal.