Leveling Mechanisms

Posted: December 10, 2017 in Economics, Ethics, History, Idealism, Politics
Tags: , ,

Societies sometimes employ leveling mechanisms to keep the high and mighty from getting too, well, high and mighty or to pull them back down when they nonetheless manage to scale untenable heights. Some might insist that the U.S. breakaway from the British crown and aristocratic systems in the Revolutionary Era was, among other things, to establish an egalitarian society in accordance with liberal philosophy of the day. This is true to a point, since we in the U.S. don’t have hereditary aristocratic titles, but a less charitable view is that the Founders really only substituted the landed gentry, which to say themselves, for the tyrannical British. Who scored worse on the tyranny scale is a matter of debate, especially when modern sensibilities are applied to historical practices. Although I don’t generally care for such hindsight moralizing, it’s uncontroversial that the phrase “all men are created equal” (from the U.S. Declaration of Independence) did not then apply, for instance, to slaves and women. We’re still battling to establish equality (a level playing field) among all men and women. For SJWs, the fight has become about equality of outcome (e.g., quotas), which is a perversion of the more reasonable and achievable equality of opportunity.

When and where available resources were more limited, say, in agrarian or subsistence economies, the distance or separation between top and bottom was relatively modest. In a nonresource economy, where activity is financialized and decoupled from productivity (Bitcoin, anyone?), the distance between top and bottom can grow appallingly wide. I suspect that an economist could give a better explanation of this phenomenon than I can, but my suspicion is that it has primarily to do with fiat currency (money issued without sound backing such as precious metals), expansion of credit, and creation of arcane instruments of finance, all of which give rise to an immense bureaucracy of administrative personnel to create, manage, and manipulate them.

The U.S. tax structure of the 1950s — steep taxes levied against the highest earners — was a leveling mechanism. Whether intentionally corrective of the excesses of the Jazz Age is beyond my knowledge. However, that progressive tax structure has been dismantled (“leveled,” one might say), shifting from progressive to regressive and now to transgressive. Regressive is where more or disproportionate tax responsibility is borne by those already struggling to satisfy their basic needs. Transgressive is outright punishment of those who fail to earn enough, as though the whip functions as a spur to success. Indeed, as I mentioned in the previous blog post, the mood of the country right now is to abandon and blame those whom financial success has eluded. Though the term debtor’s prison belongs to a bygone era, we still have them, as people are imprisoned over nonviolent infractions such as parking tickets only to have heavy, additional, administrative fines and fees levied on them, holding them hostage to payment. That’s victimizing the victim, pure and simple.

At the other end of the scale, the superrich ascend a hierarchy that is absurdly imbalanced since leveling mechanisms are no longer present. Of course, disdain of the nouveau riche exists, primarily because social training does not typically accompany amassing of new fortunes, allowing many of that cohort to be amazingly gauche and intransigently proud of it (names withheld). That disdain is especially the prerogative of those whose wealth is inherited, not the masses, but is not an effective leveling mechanism. If one is rich, famous, and charming enough, indulgences for bad or criminal behavior are commonplace. For instance, those convicted of major financial crime in the past decade are quite few, whereas beneficiaries (multimillionaires) of looting of the U.S. Treasury are many. One very recent exception to indulgences is the wave of people being accused of sexual misconduct, but I daresay the motivation is unrelated to that of standard leveling mechanisms. Rather, it’s moral panic resulting from strains being felt throughout society having to do with sexual orientation and identity.

When the superrich ascend into the billionaire class, they tend to behave supranationally: buying private islands or yachts outside the jurisdiction or control of nation states, becoming nominal residents of the most advantageous tax havens, and shielding themselves from the rabble. While this brand of anarchism may be attractive to some and justified to others, detaching from social hierarchies and abandoning or ignoring others in need once one’s own fortunes are secure is questionable behavior to say the least. Indeed, those of such special character are typically focal points of violence and mayhem when the lives of the masses become too intolerable. That target on one’s back can be ignored or forestalled for a long time, perhaps, but the eventuality of nasty blowback is virtually guaranteed. That’s the final leveling mechanism seen throughout history.


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