Chapter 7: Economic inequality.

Alienation

A feeling of disconnection or estrangement, especially from work, others, or oneself; in Marxist theory, workers are alienated when they do not control the means or outcome of their labor

Bourgeoisie

The capitalist class who owns the means of production and exploits labor for profit, according to Marxist theory

Capital

Wealth in the form of money or assets used to invest in business for profit

Capitalism

An economic system where private individuals own and control property and businesses, and operate for profit in a competitive market

Caste System

A rigid social hierarchy where status is inherited and movement between levels is generally not possible

Class Consciousness

Awareness of one’s social class and the recognition of shared interests with others in the same class.

Class System

A form of social stratification based on economic position and social mobility, allowing individuals to move between classes

Colorism

Discrimination based on skin tone, often privileging lighter-skinned individuals within a racial or ethnic group

Contradictory Class Locations

The idea that some people occupy positions between the bourgeoisie and proletariat (e.g., managers), experiencing mixed class interests

Crisis of Capitalism

A situation where capitalism leads to economic inequality, unemployment, or instability, threatening its own sustainability

Economic Capital

Financial resources such as money and property that can be used to produce more wealth

Economic Elite

A small group of people with disproportionate control over wealth, resources, and political influence

Enslavement System

A labor system where individuals are legally owned as property and forced to work without pay or rights.

Extreme Poverty

Living on less than $2.15 per day (World Bank definition); lacking basic necessities like food, clean water, and shelter

Glass Ceiling

An invisible barrier preventing women and minorities from advancing to top leadership positions.

Glass Floor

Unspoken advantages that help privileged individuals maintain their social and economic position, shielding them from downward mobility

The Gilded Age

A late 19th-century period of rapid economic growth in the U.S. marked by wealth for a few and poverty for many, with political corruption and inequality

Feudal System

A medieval social system in which peasants worked land owned by nobles in exchange for protection

Free Market Capitalism

An economic system where prices and production are determined by competition with minimal government interference

Income

Money received, typically on a regular basis, from work, investments, or government support

Labor

Human work, especially physical or manual effort, used to produce goods and services.

Labor Unions

Organizations of workers formed to protect their rights and interests, such as fair wages and safe working conditions

Legitimation

The process by which power structures are justified and accepted as normal or natural by society

Living Wage

A wage high enough to maintain a normal standard of living, covering basic expenses like food, housing, and healthcare

Mean, Median & Mode (interpreting income)

• Mean: Average income; skewed by very high earners.

• Median: Middle income; better represents typical experience.

• Mode: Most frequent income value.

Means of Production

Physical and non-human inputs (land, factories, machines) used to produce goods and services.

The New Gilded Age

A modern era of extreme wealth inequality and political influence concentrated among the rich, similar to the original Gilded Age

Precariat

A social class of people with insecure employment, little job stability, and minimal benefits

Proletariat

The working class who do not own the means of production and must sell their labor to survive

Protestant Work Ethic

A value system emphasizing hard work, discipline, and thrift, historically linked to capitalism’s development

Service and Information Economy

An economy dominated by jobs in services (healthcare, education) and information sectors (tech, media) rather than manufacturing

Social Mobility

The ability to move up or down the social or economic ladder

Social Safety Net

Government programs that provide support to individuals and families in need, such as unemployment benefits or food assistance

Socialism

An economic system where the means of production are owned or regulated by the community or the state to promote equality

Wage

Payment received by a worker for their labor, usually calculated hourly, weekly, or monthly.

Wage Gaps

Differences in earnings between groups, often along lines of gender, race, or class

Wealth

The total value of assets owned by an individual or household, including property, savings, and investments

Wealth Gaps

The disparity in asset ownership and financial security between different social, racial, or economic groups.

Welfare Capitalism

A system where businesses provide welfare-like services to employees (healthcare, housing) to promote loyalty and reduce calls for socialism

What is the difference between income and wealth?

Income is money received regularly through work or investments; wealth is the total value of owned assets minus debts

How are income and wealth distributed in the United States

Both are unequally distributed, with a small percentage of people owning the vast majority of wealth and earning disproportionately high incomes

How were classes arranged before modern capitalism

In feudal systems, classes were rigid and hereditary, with land-owning aristocrats at the top and peasants/serfs at the bottom

How did industrialization affect the class system

It created new classes, especially a capitalist class (owners) and a working class (laborers), and increased urbanization and class conflict

What are the features of capitalism

Private ownership of property, competition, profit motive, free markets, and wage labor

What are the two main classes in Marx’s critique of capitalism

The bourgeoisie (owners of the means of production) and the proletariat (working class who sell their labor

What is alienation under capitalism, according to Marx

Workers are alienated from the product, the process, others, and themselves because they lack control and purpose in their labor

What is the "crisis of capitalism"?

A situation where capitalism's internal contradictions—like overproduction, inequality, and exploitation—lead to instability and potential collapse

What did Marx believe would lead to capitalism’s fall

Growing worker exploitation would lead to class consciousness, revolution, and the rise of socialism or communism

How did the Gilded Age align with Marx's predictions

It showed extreme inequality and labor exploitation, but it didn’t result in a revolution or the fall of capitalism

What is welfare capitalism

A system where businesses offer social welfare services (e.g., health care, housing) to reduce unrest and prevent regulation or unionization

What is the New Gilded Age and how is it similar/different from the original Gilded Age

Like the original, it features vast inequality and elite dominance, but today’s economy is more service/information-based and globalized

What are the fastest growing jobs in the U.S., and what do they suggest?

Many are low-wage service jobs (e.g., home health aides, food service), suggesting job insecurity and limited upward mobility for workers

When is economic inequality considered unfair

When it results from structural barriers rather than effort, and when it limits opportunity, well-being, or democracy

How much inequality is too much

When it undermines social cohesion, opportunity, and basic human needs—though the exact level is debated.

What is the extent of poverty in the U.S.?

Millions live below the poverty line; rates vary by race, age, and geography. Extreme poverty also exists, with people lacking basic necessities

How does American faith in hard work affect views on poverty

It leads to the belief that poverty is due to laziness, ignoring structural issues like low wages and systemic inequality

What is social mobility like in the U.S.

It exists but is limited; many people remain in the class they were born into, and upward mobility is harder than commonly believed

Describe the wealth and wage gaps

Wealth gaps are much larger than wage gaps and growing; top earners have far more accumulated assets than the rest of the population

Are capitalism and socialism incompatible

Not necessarily; many economies (e.g., Scandinavian countries) blend capitalist markets with socialist-style welfare systems