CounterPunch Exclusives

CounterPunch Exclusives

The Myth of the K-Shaped Economy

An example of a K-shaped recession during COVID-19. Image Source: US Chamber of Commerce – Public Domain

The corporate press has a new obsession, the so-called K-shaped economy. This metaphor is meant to describe a system in which one group of people, represented by the top, inclining line of the K, watches their fortunes rise as the other group’s fortunes fall. The idea is that Americans who are already doing well financially are doing better, while conditions worsen for those already struggling to make ends meet.

The problem is that when we use this letter K shorthand, we lose almost all of the information that’s important to analyzing the broader problem, and we therefore help an extremely concentrated ruling class hide the truth of what has happened. First, the group following the upward path on the K is extremely small and shrinking every day, and this group is assisted and enabled at every turn by the power of the state. And the declining group is not roughly half of us, but is in fact the overwhelming majority of people, fed to the wolves by our system. The K gives the false impression that about half are moving up while about half are moving down.

Thoughtful, politically literate people should stop talking about a “K-shaped economy” that doesn’t exist. This way of explaining current economic conditions obscures deeply structural and historical relations of domination; it pretends these results are a merely neutral divergence in outcomes, roughly evenly split amongst the population; and it further advances the absurd notion that the prevailing state of affairs is some kind of post-pandemic anomaly. Instead of “K-shaped economy,” we would do much better to call it an extraction economy or a rentier economy, perhaps an oligarchy. But whatever we call it, it is far worse than is conveyed by the shape of the letter K.

The K metaphor suggests something like two equally split and structurally neutral paths one could take, when these results show our political-economic system’s extractive, exploitative, and shockingly unbalanced nature. In the world we actually live in, domination and exploitation, represented by the state and capital, work together and historically co-create one another. And the beneficiaries of this........

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