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The new politics of the English language: Part II

by Barry Bennett

In an earlier post I updated George Orwell’s Politics and the English Language for the 21st century, describing how, by creating a false picture of the political process, the word filibuster masks the undemocratic nature of our political system. In this post I describe how use of other words and phrases creates similarly false images that obscure an equally nefarious phenomenon: the destruction of the social contract and the continuing transfer of the country’s wealth to a small elite.

The longest-serving and least noticed example of this deceptive language is defined-contribution pension. A brief history of pensions will illustrate how this term misleads.

The Bible records history’s earliest known pension. After 37 years of captivity, King Amel-Marduk of Babylon, son of Nebuchadnezzar, freed the conquered King Jehoiachin of Judah, who “lived as a pensioner of the king for the rest of his life. For his maintenance, a regular daily allowance was given to him by the king as long as he lived.” The modern pension, originated by the American Express Company in 1875, is paid upon freedom (or retirement) from a different form of captivity, known as work. Some 2,500 years after Jehoiachin, the pension was embedded in American life; in 1960, over half of workers were covered by pensions.

These pensions were still “a regular daily allowance” (or, more likely, monthly), consistent with Webster’s definition of pension: “a fixed sum paid regularly to a person.” By the 21st century, however, almost all of these defined-benefit pensions (as they came to be called) had disappeared, replaced by a savings plan deceptively called a defined-contribution pension, under which, instead of being paid a fixed monthly sum on retirement, employees contribute a fixed monthly sum while they are working (employers may also contribute). How much the employee receives when he retires (assuming the savings are converted to an annuity to mimic a fixed pension) depends on how much he has contributed and how his investments have performed. Two workers with the same jobs, length of service, and pay — which would entitle them to the same monthly payments under a defined-benefit system — may receive wildly different amounts depending on what they invested in and, crucially, when they retire. Two identically situated workers who both work for 40 years but happened to start working, and therefore to retire, a few years apart, will receive vastly different sums if one reaches retirement age during a market boom and one during a bust. Hard work may mean nothing. It can all come down to luck.

The decline of the pension system has resulted in a massive transfer of risk from corporations to workers. Just as significantly, it also represents a drastic increase in risk. Corporations that offer defined-benefit pensions are able to spread the risk of having to pay the pensions among all workers and across generations. Only a given number of workers will retire every year. If the money a firm has set aside has generated insufficient income to pay one year’s pensions, the firm can draw on other funds. Money set aside for a later retirement class may exceed promised benefits, thus compensating for the earlier shortfall. The risk is collective—like insurance. Under a defined-contribution plan, on the other hand, the risk is painfully individual.

To create a false picture of retirement security, the defined-contribution plan is also called a “pension.” But it no more guarantees a fixed sum than does any investment. Other new words similarly mask the loss of financial security. As firings became routine even among highly profitable businesses, they became layoffs and then downsizing. And whereas layoff merely ameliorated the harshness of firing, downsizing shifted the focus from the employee to the corporation. The word conjures images not of displaced workers but of increased corporate efficiency.

The loss of job security by the working class coincided with the concentration of wealth in the elite. For the last half century increases in wealth and income have accrued entirely to the top five percent of the population; all groups below that level have seen their shares of national wealth decline. Most of the increase has gone to the top one percent, which now controls at least 35 percent of the nation’s wealth, compared to 13 percent for the bottom 80 percent of the population.

A new language has been created to justify the shift in wealth. When polling showed tepid support for repeal of the estate tax, it was rechristened the death tax and support spiked — how dare the state tax death! In fact it is a tax on the transfer of wealth to the beneficiaries of the estate and has merely been deferred until death; had the assets been transferred during life they would have been subject to a gift tax. Transfers and exchanges of wealth have always been a routine basis of taxation — think sales tax, income tax, and tariffs — and the estate tax has a lineage that dates at least to ancient Egypt.

In any case, because of the generous exemption (the first $5,000,000 of any estate), fewer than one percent of estates pay the tax. And despite its alleged “double taxation,” it is imposed mostly on wealth that has not yet been taxed (because the estates subject to the tax consist largely of appreciated capital assets, which are taxed only when sold).

And taxes on those capital assets must remain low, so it is said, since the holders of capital are the job creators, and higher taxes will reduce the capital that provides employment — this despite the studies showing no correlation between capital gains tax rates and either economic growth or employment.

The language used for the working class has a decidedly different cast. Although the inheritors of wealth need only be born into the right family to attain their fortunes, it is the benefits people pay for all their lives — Social Security and Medicare — that we call entitlements. And, yes, at a certain age workers are legally “entitled” to these benefits; but the word suspiciously crept into general usage just as the social contract, with its ethic of sharing the nation’s wealth between management and labor, was disappearing. No one likes someone who feels entitled.

Hence a pattern appears: the words that apply to the wealthy — death tax, job creators — defend their privilege. Those that apply to average workers — defined-contribution pension, entitlements — justify the denial of benefits. Which makes it fitting that the phrase that links the two sides of the economic divide is class warfare. The usual purpose of warfare is to seize land or resources, and its usual means is invasion. “Class warfare,” however, is applied not to the seizure of the nation’s resources by a small group but to the act of pointing the seizure out — to call for a fairer distribution of resources is to engage in class warfare. It is as if war consists not of invasion and capture but of the cries of the injured and the dead.

But if it’s warfare, be on guard. Be aware of the manipulative uses of language, the better to resist them. They aim to overwhelm consciousness, and through repetition become reality. Resistance is not futile. It just takes some thought.

Barry Bennett is an attorney with the Bonneville Power Administration, an agency within the United States Department of Energy, and an adjunct instructor in the Marylhurst MBA program.

Photo:  Kenteegardin via Flickr, Creative Commons License