Posts Tagged ‘Inequality’

An astounding sentence (sandwiched for context) from They Rule: The 1% vs. Democracy (2014) by Paul Street:

The contemporary wealthy do not simply benefit from society; they accumulate fortunes at the expense of it. They profit from mass unemployment’s depressive impact on wages, which cuts their labor costs; regressive tax cuts and loopholes, which increase with wealth while shutting down social services for the poor; the cutting and undermining of environmental regulations, which reduce their business costs while spoiling livable ecology; wars and giant military budgets, which feed the bottom lines of the “defense” corporations they own while killing and crippling millions and stealing money from potential investment in social uplift; a hyper-commercialized mass consumer culture that despoils the environment while reducing human worth to exchange value and destroying peoples’ capacity for critical thought; dealing with corrupt dictators who provide natural resources at cheap prices while depressing wages and crushing democracy in “developing countries”; the closing down of livable wage jobs in the United States and the export of employment to repressive and low-wage peripheries; a health care system that privileges the profits of giant insurance and drug companies over the well-being of ordinary people; exorbitant credit card interest rates that lead to millions of bankruptcies each year; predatory lending practices that spread and perpetuate poverty and foreclosure; agricultural and trade practices that destroy sustainable local and regional food cultivation and distribution practices at home and abroad; the imposition of overly long working hours that keep employee compensation levels down while helping maintain a large number of unemployed workers; exorbitant public business subsidies and taxpayer incentives and bailouts of the rich paid for by the rest; and … the list goes on and on. Corporate and financial profits were restored in the wake of the 2008 financial crisis largely because the working-class majority paid for them, through taxpayer bailouts, slashed social services, layoffs, and reduced wages, hours, and benefits. [p. 89]

I’ve grown rather tired of hearing the financial 1% to 0.01% (depending on source) being called the “elite.” There is nothing about them most would recognize as elite other than their absurd wealth. As a rule, they’re not particularly admirable men and women; they’re merely aspirational (as in everyone thinking “wish I had all that money” — the moral lesson about the corruptions of excessive wealth rarely having been learned). The manner in which such fortunes are amassed pretty much invalidates claims to moral or ethical superiority. In the typical case, “real” money is acquired by identifying one or more market opportunities and exploiting them ruthlessly. The object of exploitation might be a natural resource, labor, a product or service, or a combination.

Admittedly, effort goes into exploiting a market niche, and it often takes considerable time to develop and mature (less these days in overheated and overvalued markets), but the pattern is well established. Further, those who succeed are often mere beneficiaries of happenstance from among many competing entrepreneurs, speculators, financiers, and media types putting in similar effort. While capitalism is not as blind as rock-paper-scissors or subtly skilled as poker, both of which are designed to produce an eventual sole winner (and making everyone else losers), this economic system tends over time to pool increasing wealth in the accounts of those who have already “won” the game. Thus, wealth inequality increases until social conditions become so intolerable (e.g., tent cities across the U.S.) the masses revolt. How many resets of this deplorable game do we get?

Meanwhile — and here’s another thing I can’t grok — billionaires seem discontent (alert: intentional fallacy) to merely enjoy their wealth or heaven forfend use it to help others. Instead, they announce their ambitions to rule by campaigning for high office, typically skipping the preliminary step of developing actual political skills, because (doncha know?) everything worth having can be bought. Few sane people actually believe that a giant fortune qualifies someone for high office, except of course them who gots the fortunes and have gone off the deep end. They’re so use to being fawned over by sycophants and cozied up to by false admirers that it’s doubtful anyone is ever bold enough to tell them anything resembling truth about themselves (notably including major character deficiencies). So the notion enters the noggin that the next big project ought be to squat on high office as though it’s a right bequeathed specially to the ultrarich, whether one is Tom Steyer, Michael Bloomberg, Oprah Winfrey, Mark Zuckerberg, Mark Cuban, or (gasp!) that trailblazer who demonstrated it’s possible: 45. In a pinch, mere millions will have to suffice, as most congressfolk and senators can attest.

According to Anand Giridharadas, author of the book Winners Take All, seeking political office and practicing philanthropy is not at all the public service or “giving back” it pretends to be. Rather, it’s an attempt to maintain the status quo (funneling money upstream to those at the top), thus forestalling one of those nasty resets where the rabble overwhelms their betters with a fury known in past centuries to get quite out of hand. A few supposed elites riding herd over the great unwashed masses sounds rather passé, no? The bygone stuff of barbarian hordes and robber barons? But it describes the current day, too, and considering these folks are basically taking a giant dump on billions of other people, sorta gives a new, inverted meaning to the term squatter’s rights.

I learned recently about a new website,, which bills itself as a project of the Institute for Policy Studies (a think tank in Washington, D.C. — we obviously need more D.C. think tanks). Inequality, specifically of the wealth and income type, is a trend that has been underway for decades. One has to be living under a rock not to have noticed by now where trends are pointed. The site linked to above no doubt contains quite a lot of information and resources, but I admit I don’t have the patience to wade in only to discover needless details of what is already well known. So where, in fact, has all the money gone? OxFam International provides a disturbing snapshot:

The Oxfam report An Economy for the 1%, shows that the wealth of the poorest half of the world’s population has fallen by a trillion dollars since 2010, a drop of 38 percent. This has occurred despite the global population increasing by around 400 million people during that period. Meanwhile, the wealth of the richest 62 has increased by more than half a trillion dollars to $1.76tr. The report also shows how women are disproportionately affected by inequality — of the current ‘62’, 53 are men and just nine are women.

The title of the Oxfam report is misleading, of course, because the numbers don’t support the populist reference to the 1%. In 2010, when the estimated midyear world population was 6,916,183,482, (6.9 billion, if you prefer) the number of people who accounted for half of the world’s wealth was 388, or 0.000000056% (that’s seven zeroes before the 56). In 2016, with an estimated midyear world population of 7,404,976,783 (or 7.4 billion), the now 62 people who account for half the world’s wealth (assuming the number 62 doesn’t diminish further between now and July 1) is 0.0000000084% (that’s eight zeroes before the 84). The absurdity of so few people having consolidated so much wealth, a trend that continued (probably accelerated) from 2010 to 2016, cannot be lost on any thinking person. Those dates are relatively arbitrary for purposes of comparison.

To say that economic systems are rigged in favor of the few is a statement of the obvious. No rational argument could be made that the value of social contribution or labor of a mere 62 people is equivalent to half the world’s population. Nor can it be reasonably argued that such large pools of money, stagnant or otherwise, are good for economic systems that require both liquidity and diversity. Is anything being done to dismantle this entrenched and deepening inequality? None that I can observe within the context of geopolitics or economics. However, considering how convinced I am that our economic arrangements will fail utterly when the house of cards we’ve built shakes itself apart, not least because so much of it is based on growth fueled by cheap energy that has been losing ROI for over a century, I would argue that what we are doing to ourselves by doing essentially nothing ought to crash things back to where the value of fiat currency is nothing. Poof: no more 1%, no more 0.000000056%, no more 0.0000000084%.