unchecked capitalism and massive inequality

How unchecked capitalism and massive inequality made America a bully nation

A guide to the systemic origins of America's bully culture.

Charles Derber and Yale Magrass / University Press of Kansas Alter-Net

The following is an excerpt from the new book Bully Nation by Charles Derber & Yale R. Magrass (University Press of Kansas, 2016):

On October 1, 2014, the National Labor Relations Board ruled that a Burger King franchise in Ferndale, Michigan, near Detroit, had bullied a part-time worker, Claudette Wilson, by sending her home two hours early for not positioning pickles correctly on her burgers. As Judge Arthur J. Anchan put it, the company illegally sent Wilson home for failing to “put pickles on her sandwiches in perfect squares.”

Such absurd but intimidating and humiliating bullying of a very low-paid worker was retaliation aimed at intimidating Wilson from continuing her efforts to organize low-wage Burger King workers. A few days earlier, she had stopped at the store to ask workers coming off their shifts to fill out a questionnaire about their wages. A manager had written her up for violating the store’s “loitering and solicitation” policy, something that Judge Anchan also said was “protected activity” and thus illegal. Wilson said she had not done the pickles quite perfectly because of her anger about the earlier unfair treatment.

The story gets bigger because Wilson was one of several workers, including Romell Frazier, who were members of a group called D15, part of the Fast Food Forward Network trying to unionize Michigan Burger Kings. Wilson’s “pickle problem” was really part of a larger and more serious pickle faced by the workers. The Michigan Burger King franchisee was systematically going after workers who were part of D15 and threatening them with sanctions, including firing.

Frazier, for example, had talked up a union and had spoken about striking to his fellow workers. A manager told him that “if he was talking about striking again, he’d soon be picking up his paycheck,” a clear threat intended to bully any workers who were engaged in organizing others. The company claimed that it had the right to prohibit workers from talking about unionizing on the job, but such activity is actually “protected, concerted activity” under the law. It’s against the law to punish any workers for discussing unionizing or other forms of organizing. And as Judge Anchan underscored in his decision, the workplace is the “particularly appropriate place” for such talk and distribution of material because it’s “the one place where employees clearly share common interests”; further, he said, “this is particularly true in the instant case where some of the workers are lower paid individuals who commute to work via bus.”

The pickle gets even bigger because the incident took place during a nationwide organizing campaign for fast-food workers. D15 and the Fast Food Organizing Network were partly funded by the nation’s largest union, the Service Employees International Union (SEIU). The union was a leading supporter of the grassroots organizing spreading like a prairie fire among workers not only at Burger King but also at McDonald’s, Kentucky Fried Chicken, and other fast-food chains. As the workers organized for unions and a higher minimum wage, the big companies were striking back. The threats and retaliation aimed at workers such as Wilson and Frazier might be called “capital bullying”—a type of bullying that is built into the DNA of corporate capitalism and that occurs at workplaces everyday, much like the pervasive bullying happening daily in schoolyards.

Capital Bullying: Capitalism, Competition, and Winners versus Losers—How the Rich Bully the Poor

Though the bullying of vulnerable kids in schools gets a lot of attention, the bullying of vulnerable workers usually is ignored. If the mass media mention it at all, they typically parrot the corporate view that the agitating workers are troublemakers who deserve punishment. The failure of scholars in the “bullying field” to see even illegal (not to mention legal) corporate threats, intimidation, and retaliation as bullying is another profound failure of the psychological paradigm that views bullying only as a “kid thing” in schools. Such scholars are blind to the adult and institutionalized bullying that is endemic to our economic system.

We refer to the bullying against workers such as Wilson and Frazier, whether pertaining to something as small as Wilson’s pickle bullying or as big as being fired en masse, as capital bullying, meaning bullying inherent to Western and especially American capitalism. We must move from the micropsychological to the macrosocietal paradigm to discuss capitalism as a bullying system. Only a macroanalysis can analyze capital bullying and help create structural changes to reduce it, a deeply destructive type of bullying carried out mainly by corporations. The bullying problem at Burger King and all the big fast-food firms is not a result of the personal psychological problems of the managers; rather, it is something that is systemically dictated and enacted no matter what the psychology of management.

Any economic or social system based on power inequality creates potential or latent bullying that often translates into active bullying, by institutions and individuals. So this is not a problem exclusive to capitalism; bullying was brutally manifest in systems claiming to be socialist or communist, such as the Soviet Union, and it is also obviously a major problem in China today. But capitalism is the dominant system currently and has its own, less recognized, institutionalized bullying propensities. They are not discussed in the academic bullying literature, but they are directly or indirectly responsible for much of the bullying we see in American schoolyards and among both kids and adults.

In many cases, corporate institutional bullying should not be viewed as personal bullying because the managers involved, though they are threatening and harming workers, are being required to act as agents of the company. As individuals, they may not deliberately be seeking to humiliate or harm their workers. Such “decent” or “nice” managers may cut wages or fire workers, but in doing so, they are carrying out institutional imperatives and orders rather than fulfilling personal motives to dominate, intimidate, and humiliate.

The greatest early critic of capitalism, Karl Marx, firmly believed that unequal power is inherent in capitalist systems—and that this creates power hierarchies and market structures that require institutional bullying.

Capitalism puts ownership of capital into the hands of one small group—the “capitalist class,” often dubbed“ the 1%” today. Most of the rest of the population is part of a huge underpaid working class or a growing poverty-stricken and jobless group, with no or very little capital or power. Marx argued that this unequal class power is the essential capitalist ingredient for profit, enabling capitalists—and specifically their corporations—to bully workers into accepting the wages and working conditions dictated by the owners. Put another way, workers have to accept their inferior position, a hallmark of bullying on which the entire system depends.

Thomas Piketty, in his blockbuster best seller Capital in the Twenty-First Century, has spread public awareness of capitalism as an inequality machine. In his book, Piketty presents data about the distribution of capital ownership in more than twenty countries over the last three centuries. He finds that capitalism, with only one exception in the last 300 years, has created wide, sustained, and often extreme inequalities of both income and wealth. Piketty argues that this does not reflect markets gone wrong; rather, it is the way capitalist markets are designed to work.

Piketty is very explicit about this: “Specifically, it is important to note that [inequality] has nothing to do with any market imperfection. Quite the contrary: the more perfect the capital market (in the economist’s sense), the more likely” that inequality will be created and grow. There are no self-correcting market mechanisms to limit inequality, he argues, but only political interventions that are difficult to achieve. “It is possible,” he says,“to imagine public institutions and policies that would counter the effects of this implacable logic: for instance, a progressive global tax on capital. . . . It is unfortunately likely that actual responses to the problem—including various nationalist responses—will in practice be far more modest and less effective.”

Put simply, inequality in wealth and power is baked into capitalist systems, and it is fundamental to structural and institutional bullying. But why does this inequality lead capitalists to bully workers and the poor—and also other groups, such as consumers, and even other capitalists? The answer has less to do with the psychology of executives than with the structure of the capitalist marketplace.

Capitalism is a ruthlessly competitive system in which all capitalists— whether corporations or individual entrepreneurs—have no choice but to compete furiously. Karl Marx argued that capitalists who do not compete with the ferocity of sharks, going for the kill, will be destroyed by rivals who are committed to the economic battlefield and to winning at all costs. This is an economic version of militarism, and it also mirrors the ethic of the schoolyard bully—dominate or die.

This systemic competition incentivizes even so-called nice or “socially responsible” capitalists to bully workers, consumers, and fellow capitalists. Corporations that do not bully workers—by paying low wages, breaking unions, and constantly harassing those who seek to challenge the power of the companies—will typically be at a competitive disadvantage compared to those that do; this is because the bullying leads to high corporate profits, as in McDonald’s and other fast-food giants, and thus attracts more capital from the financial markets. Investors follow the money, just as sharks follow blood in the water. Corporations that do not bleed their workers by cutting wages and benefits—and intimidating those who challenge their degradation—will tend to see reduced profits and lose out to their competitors in the capital markets. A failure to bully workers into accepting low wages and the loss of other benefits also reduces profits, since increases in wages and benefits are drains on profit. This is a structural reality faced by all capitalists, whatever their personality, and it demonstrates the need to move from a psychological paradigm to one focusing on structural imperatives.

The same logic leads capitalists to compete intensely even with giant rivals in the 1%. The system will not be kind to competitors who are unwilling to threaten, undermine, and destroy their rivals; they are vulnerable to being put out of business. This results in bullying within the capitalist class; it is, we show, both similar to and different from the cross-class bullying of workers that is class warfare. In both cases, the strong must defeat competitive rivals, and they can win only by devouring the weak.

Structural competition in the marketplace encourages other types of capitalist bullying, including bullying of the unemployed, of consumers, and of politicians. These bullying relations, too, are structurally dictated by the marketplace. As on the bully schoolyard, nice guys finish last.

Before moving forward, we must illustrate the generic way in which competition in most capitalist societies leads to the rich (the winners) bullying the poor (the losers). This is particularly true in the United States, where the competition is harsh and the ideology of winners and losers conveyed in a particularly bullying discourse. At least since the nineteenth century, American capitalists have seen the competitive process as a form of social Darwinism, in which the strong overcome the weak and the best triumph. Thus, the rich deserve all their wealth and blessings, whereas the poor deserve their low station and misery. Since the market is seen as a Darwinian selection process, it is only natural and good that the rich—those who have proved their worth—assume control over the society as a whole. The system will not function unless the poor learn that they deserve their fate; workers must be bullied until they embrace this Darwinian view that they are inferior and deserve their fate.

This view emerged in early American Puritanism, where competitive success was seen as a sign of God’s grace. The winners proved themselves a higher order of being, entitled to deference and special power and status. Competitive failure in the markets was, to the Puritans, a sign of being damned, in this life and the next. The degree of loss was a measure of the degree of worthlessness; it justified the winners treating the losers as drags on the social order who had to be controlled and kept in their place. Workers who didn’t accept their inferiority as losers would be bullied until they did so. This sense of inferiority is a “hidden injury of class, the enduring trauma of capital bullying.” This ancient Puritan view has survived in various forms to the present day, with the wealthy winners seeing their success as a sign of virtue—and seeing the poor as losers whose nature is inferior and parasitic. In the 2012 presidential election, Republican candidate Mitt Romney made his famous comment about makers and takers, expressing perfectly his view that the poor were parasites leeching off the wealth created by capitalists like himself. He claimed that 47 percent of Americans were takers, thus condemning much of the population to the status of dependent moochers on the body politic. The implication was not hard to fathom: people in Romney’s class would have to take charge of society and take control of the takers, through political and sometimes coercive means, in order to maintain a prosperous and virtuous social order. They had to bully the takers to embrace the view that the makers deserved to be in power and legitimately claimed their wealth.

This is, of course, a bullying view of society, in which the winners of capitalist competition must assume control over the losers to preserve social well-being. To offer help to the losers—through welfare or other social benefits—is to divert resources to the undeserving and encourage their dependency and parasitism. Politically, this leads to austerity policies that are designed to be punitive to the poor and maintain the “natural” and “fair” unequal order that the competitive selective process has established. All people deserve their positions in the hierarchy, and those who question this primal assumption must be bullied into accepting their inferiority. Austerity has become the contemporary policy most clearly symbolizing capitalist bullying, in which the worthy rich threaten and withhold benefits from the unworthy masses, who in turn recognize their own inferiority.

This bullying perspective was articulated lucidly by the writer Ayn Rand, who turned it into a broad philosophy about the morality of capitalism. Rand divided the population into the strong and the weak, the worthy and the unworthy, the productive or “creative” and the moochers. The virtue of capitalism was that the free, competitive market provided a sure way of distinguishing these two orders of people, and it ensured that the worthy would triumph over the unworthy, the makers over the takers. To intervene and seek to reverse that order by helping the losers was immoral and would lead to social decline. Society thrived only when it allowed—indeed forced—the strong to dominate the weak in the Darwinian world, structured and managed through the market.

Rand is useful because she so clearly described the bullying philosophy and practices that govern US capitalism and its basic social Darwinism. The idea that the strong must dominate the weak is central to the schoolyard bully. The bully is strong and a winner and therefore entitled to control the weak, who are seen as sissies, cowards, and losers. The weak must accept the definition of themselves as inferior. The bullies in school essentially enforce their own austerity on the out-crowd—the loser kids deserve the humiliation, injury, and ostracism administered by the winner kids in the in-crowd.

Bullying for Profit: Robber Barons Show How to Bully Workers and Make a Mint

In 1892, one of the most famous American strikes took place at a Carnegie steel plant in Homestead, Pennsylvania, near Pittsburgh. Andrew Carnegie had been known as one of the less ruthless tycoons of the era, but when the union, the Amalgamated Association of Iron and Steel Workers, organized a strike at the Homestead plant to increase wages, Carnegie decided to break their will and destroy the union for good. Before things were over, workers were threatened and attacked, and some were even killed; proud workers who asserted their right to earn a living wage and enjoy basic American rights were ruthlessly bullied into submission and defeat. The Homestead tragedy is an iconic symbol of capitalist bullying, whereby, in the name of property rights, profits, and prosperity, employers threaten and harm workers who seek a degree of workplace power and decent wages.

As early as 1889, the union had effectively taken over the plant and established work rules to limit management’s absolute power to control every detail of the work. A series of negotiations ensued, and Carnegie, who had nominally accepted unions, decided enough was enough. He instructed his man on the scene, Henry Clay Frick, to lock out the workers. Frick sealed the plant, built a high barbed wire fence, installed cannons capable of spraying boiling liquid, and turned the site into an armed camp.

On July 20, 1892, the Strike Committee resisted the intense bullying pressure that Carnegie and Frick imposed, issuing this defiant proclamation:

“It is against public policy and subversive of the fundamental principles of American liberty that a whole community of workers should be denied employment or suffer any other social detriment on account of membership in a church, a political party or a trade union; that it is our duty as American citizens to resist by every legal and ordinary means the unconstitutional, anarchic and revolutionary policy of the Carnegie Company, which seems to evince a contempt [for] public and private interests and a disdain [for] the public conscience (commemorated on a plaque at the pumphouse of the plant).”

Such open resistance by the bullied was unacceptable. Frick responded by calling in the Pinkerton guards, an armed private security service that would attack the striking workers while helping bring in new, nonunion employees. Fighting broke out when workers refused to leave, and several of them were shot dead. As the fighting continued over the next few days, the union tried to defuse the situation, but Carnegie and Frick were not ready to concede anything. They turned to Pennsylvania’s governor, Robert E. Pattison, a politician who had been elected as part of the Carnegie political machine and was in no mood to tolerate workers confronting his corporate patron. The governor immediately ordered 4,000 soldiers to surround the plant—and within a day, the strikers were dispersed. Some of them were bayoneted to death by state militiamen.

The strike ended, and the plant reopened with nonunion workers. The union collapsed. The consequences were disastrous for workers across America. In the next several years, Carnegie and his fellow robber barons destroyed unions at steel and other plants across the country. By 1900, there was no unionized steel plant left in Pennsylvania, and the labor movement was effectively destroyed.

Homestead is a symbol of the capital bullying that has kept workers weak and intimidated up to the present day. Carnegie called himself a pacifist and had been seen, as noted earlier, as the most compassionate of the robber barons. He had given hundreds of millions of dollars (billions in today’s money) to build public schools and libraries, and he so opposed the expansion of the American militaristic empire that he offered to pay $20 million to “free” the Philippines. But the crisis at Homestead proved that wages and profits require a bullying system that keeps workers disorganized and submissive, with military force being used when necessary. This is true whatever the personality of the managers, with Carnegie exemplifying a “benign” capitalist pulled by the imperatives of market competition into bullying. The regime change of the New Deal led to a peak of about 36 percent of US workers being organized in unions, yet the Reagan revolution decades later resurrected the work Carnegie and the other robber barons began; as of 2014, some 94 percent of private sector workers had no union.

The minimum wage workers at Burger King and other fast-food companies, as well as at huge businesses such as Walmart, are struggling to create a new labor movement to help prevent the return of Gilded Age conditions. They are beginning to see that without the countervailing power of unions, corporate bullying—keeping wages low and workers submissive— will never end and that American workers will be like the bullied weak kids in the schoolyard. Corporate employment in capitalist societies creates latent or active bullying against all employees, including unionized ones. To work in America is to inevitably experience substantial structural bullying, and those on the lower end of the totem pole suffer the most and yet somehow must learn to view it as a fair situation—much like the kids who are far down on the totem pole of power and “coolness” in school.

Reproduced with permission of the University Press of Kansas, Bully Nation: How the American Establishment Creates a Bullying Society by Charles Derber and Yale R. Magrass.