An anti police brutality march in Manhattan ends in flames. Credit: Braulio Jatar/SOPA Images/LightRocket/
Nick Hanauer is a wealthy man. He was the first non-family investor in Amazon. Among the many businesses he founded or co-founded was one that was sold to Microsoft for billions of dollars. He describes himself as an “unapologetic capitalist”, but sees something rotten in the state of capitalism.
In 2014, he made waves with a pointed warning to his “fellow zillionaires”:
“If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.”
Given recent events, one could be forgiven for thinking that “when” is now. Six years ago Hanuaer wrote:
“Revolutions, like bankruptcies, come gradually, and then suddenly. One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning.”
America is burning. The spark wasn’t somebody setting themselves on fire (a reference to the start of the Arab Spring), but the death of George Floyd at the hands of the police.
The anger unleashed last week was, first and foremost, directed at racism. But as important as the foreground issues are, we can’t ignore the economic issues in the background. Looking back at all the political upheavals of the last decade or more, I doubt that either the radical Left or the populist Right would have attracted as much support if opportunity were more widespread.
Money isn’t everything, of course, but if you have (or reasonably expect to have) a decently-paid job, a home to call your own and savings in the bank, you’re less inclined to burn it all down, whether literally or metaphorically.
If one image from last week captured the interplay of these foreground and background issues, it was a photograph of Jamie Dimon kneeling with staff in a branch of Chase Bank. There he was, the notoriously well-paid CEO of JPMorgan Chase, apparently ‘taking a knee’ in front of a bank vault.
It’s all very well for woke corporations to express their solidarity with oppressed minorities, but what we really want to hear from Dimon and the rest of the business elite is why they’ve been doing so well when so many of their countrymen haven’t. Why have wages stagnated? Why is home ownership in decline? Why is the rent too damn high? Why are we individually, and collectively, so deep in debt? Why have so many families and communities been left behind ?
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For Hanauer the answer is that prosperity is being hoarded at the top :
“The divide between the haves and have-nots is getting worse really, really fast. In 1980, the top 1 percent controlled about 8 percent of U.S. national income. The bottom 50 percent shared about 18 percent. Today the top 1 percent share about 20 percent; the bottom 50 percent, just 12 percent.”
In the UK, we’ve also seen the top 1% racing ahead, if not to the same extent as in America.
And, yet, the most remarkable thing is just how little political pressure there is for change. Yes, we’ve seen a surge of radicalism and populism — but most of that energy has gone into fighting culture wars. Attempts by centre-left governments to raise taxes on the rich have been reversed — for instance, the wealth tax in France under François Hollande or the 50% top rate of income tax in the UK under Gordon Brown. Further to the Left, insurgents such as Bernie Sanders and Jeremy Corbyn have been neutralised. As for Right-wing populists, they’ve been kept out of power too. Trump, of course, is the big exception, but he’s no direct threat to the super-wealthy — indeed, he gave them a tax cut. He may go down to defeat this November, but if so, he’ll be replaced by Joe Biden, the ultimate establishment timeserver.
Just about everywhere, governments are plugging their deficits with borrowing, not higher taxation. To keep debt cheap, they resort to quantitative easing (QE) which artificially inflates the value of assets held by the rich.
The position of the wealthy has, therefore, held firm. It survived the banking crisis, the Great Recession and austerity. Whether or not it survives the Covid-crisis remains to be seen. Thus far, in most countries, support has rallied to the governing establishment and populists have struggled to stay relevant. We can be sure there’ll be more public borrowing and more QE. Stock markets are already anticipating the financial sugar-rush and are roaring back after the the Covid-crash in March.
It’s not that the rich won’t make losses. There will be individual bankruptcies. Some corporations will go under, others will be bailed-out. But as a class, their privilege look secure. Riots and culture wars, far from being an existential threat, are more likely to serve as diversions.
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Contrast the situation today with that of a hundred years ago. In the early and mid 20th century, there was an almighty push-back against the inequalities of the Gilded Age. In some countries, we saw the revolutions and police states that Hanauer talks about. Elsewhere, democracy prevailed, but with a shift to progressive taxation, the welfare state and reforms to curb corporate power.
So why hasn’t there been anything on the same scale in the 21st century? After decades of neoliberalism, this should have been the Left’s great opportunity to regain the initiative. They failed — and whenever they fail, they cry foul. As they can’t possibly have lost fair-and-square, there must be some kind of cheating going on. It could be Russian interference, the influence of social media algorithms or the eldritch power of a slogan painted on a bus. You see, it’s not enough for the other side to be simply mistaken, they must be conspiratorially deceitful. If the people are voting the wrong way, it’s because they’ve been lied to — indeed caught in a carefully spun web of lies. And this isn’t just about the fake news and propaganda, there are intellectual strands to this web too — bad ideas that lend a veneer of respectability to the low politics.
In respect to the distribution of income and wealth, there’s one such bad idea that comes in for more criticism than any other: ‘trickle-down economics’ — also referred to as ‘trickle-down theory’ or just ‘trickle-down’. Basically, it’s a supposed justification for inequality. The state should help the rich to get richer, because some of the benefit will diffuse to the rest of society. The wealthy trickle-down on us from a great height — and we should be grateful for it.
Except that that, on this definition, almost everyone is a trickle-down theorist. If you see any common good at all in allowing some people to be richer than others, then you’re in the club. From Adam Smith’s invisible hand to John Rawls’ Theory of Justice to Vladimir Lenin’s New Economic Policy — it’s all trickle-down theory.
Clearly, we need a tighter, more technical definition — one that can be ascribed to those who defend the neoliberal status quo. But that’s when you discover that trickle-down theory doesn’t exist.
Do a search on “trickle-down” and you’ll get a long list of speeches, articles, tweets and other arguments against the idea. Politicians like Bernie Sanders, economists like Paul Krugman, business people like Nick Hanauer (see above) — are all vociferous in their condemnation. What you’ll be hard-pressed to find, however, are arguments in favour of it.
That’s odd because there are all sorts of ideas the Left doesn’t like — for instance, monetarism or libertarianism — that free marketeers are happy to defend. But with trickle-down economics there’s nothing there to argue for. It’s a phantom — the cause of much fear and alarm, but lacking substance.
This is what Thomas Sowell, the economist and social theorist, had to say about trickle-down:
“No such theory has been found in even the most voluminous and learned histories of economic theories, including J.A. Schumpeter’s monumental 1,260-page History of Economic Analysis. Yet this non-existent theory has become the object of denunciations from the pages of the New York Times and the Washington Post to the political arena… It is a classic example of arguing against a caricature instead of confronting the argument actually made.”
But might there be a real idea advanced by the Right for which trickle-down is simply the Left’s insult of choice? The most obvious candidate is the proposition that cutting taxes (especially on the rich) can increase tax revenues. That might seem counter-intuitive, but it makes sense. There has to be a point at which a tax rate is so high that it disincentivises whatever activity is being taxed, while incentivising avoidance and evasion. From a revenue raising perspective, the optimum tax rate will therefore be somewhere between 0% and a 100%. If the current tax rate is above the optimum, then cutting it will raise more revenue. This is the principle behind the famous Laffer Curve.
It’s a perfectly reasonable theory — most economists accept it to some extent. To use it to argue for tax cuts isn’t trickle-down economics, it’s just an argument over where the optimum tax rate is (albeit one influenced by ideological biases).
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The big problem with the Left’s trickle-down rhetoric is that it misdiagnoses what the Right gets wrong — and it fails to understand what motivates free market ideology.
Trickle-down suggests that the only benefit that most of us get from capitalism are the crumbs falling from the rich man’s table. But why would free marketeers subscribe to such a limited view of what their beloved marketplace can achieve?
With some justification, what they actual believe is that economic liberalism benefits just about everyone directly: both as producers, by setting people free to achieve their full economic potential; and as consumers, by providing the widest possible choice of good and services at competitive prices.
That’s not to say they don’t also celebrate the special contribution made by the most talented individuals — the entrepreneurs, inventors and other pioneers of material progress. But in doing so, and in asserting the right of such individuals to get filthy rich, they argue that the rest of us get much more than crumbs. In fact, thanks to those pioneers, we enjoy lives of plenty beyond the dreams of our pre-industrial ancestors.
So no trickle-down here, but a gushing torrent of wealth flowing in all directions. That’s the real narrative of economic liberalism — and as a summary of the last 200 years of economic history it’s at least partly true.
However, it’s not the last 200 years that most people care about. The politically relevant timeframe stretches back, say, two or three generations. Basically, we’re talking about the neoliberal era — a period in which taxes have been reduced, industry privatised, regulations relaxed and markets globalised.
And yet, over these same decades, growth and productivity have slowed, wages have stagnated and innovation has faltered. Tax revenues have not kept up with spending and public and private sector debt has grown. Oh, and the global financial system would have collapsed without taxpayer bailouts.
Just as the statist Left struggles to explain the last 20 years of political failure, the freemarket Right struggles to explain the last 20 years of economic failure. The best they can do is point to global progress against poverty, sickness, illiteracy etc. These things are to be welcomed, of course, but ‘the world is getting better’ is not the slam-dunk argument that the neoliberals think it is. Not when most of the progress is being made by implementing the breakthroughs of an earlier era (vaccines, running water, electricity etc) — and not when the countries making the progress (especially China) are openly authoritarian.
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And yet as the liberal West loses ground, the rich are getting richer — taking the lion’s share of our reduced rates of economic growth. The problem with free marketeers is not that they defend this state of affairs, but that they have no convincing explanation for it. Some of them might argue that we need even more tax cuts, deregulation, free trade etc — but who wants to listen that broken record?
Nick Hanuaer argues that economic inequality is itself the cause of slower growth. That’s because the rich spend a smaller proportion of their money than do people on ordinary incomes. Therefore if the rich take a greater slice of the pie, the economy is deprived of consumer demand and slows down.
That is why he wants to replace “idiotic trickle-down policies” with what he calls “middle-out” economics — i.e. measures taken by both government and business to boost ordinary incomes:
“If workers have more money, businesses have more customers. Which makes middle-class consumers, not rich businesspeople like us, the true job creators. Which means a thriving middle class is the source of American prosperity, not a consequence of it. The middle class creates us rich people, not the other way around.”
But if that’s the whole story then how have the rich got richer at a time when the middle has evidently not prospered?
The answer is that they have found other ways of enriching themselves. Instead of competing to provide better jobs, goods and services to the rest of us, they game the system to their advantage alone. Property speculation, asset stripping, tax avoidance, share buy-backs, taxpayer-subsidised low wage business models — there are many ways in which the rich can financially engineer and lobby their way to further riches without creating value. Indeed, they’re all about extracting value from what remains of the productive economy.
What’s killing capitalism isn’t trickle-down theory, but the trickle-up practices of the rentier class.
Peter Franklin is Associate Editor of UnHerd. He was previously a policy advisor and speechwriter on environmental and social issues.
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SubscribeThere’s quite a lot not mentioned in this article which makes the argument for a burning world iffy or at least only a part explanation. Firstly the structural changes flowing from the development of the previously “developing” economies – particularly China and the Far East. The result is that large sections of middle income, middle class, skilled workers have seen their jobs disappear and re emerge elsewhere. Goldsmith predicted this in “The Trap” (if I remember correctly) – and largely dismissed.
The result is that the middle rungs of the ladder have been removed and the knowledge and cultural economy have not managed to replace them. Couple this to a massive expansion of University “educated” (not to be confused with well educated) young people and it’s not surprising that there is a sense of failure, entitlement and grievance.
The unrest facing the west is not just a result of “inequality” even though the points made in the article are all valid. It’s not monocausal. We have a conjuncture of many factors of which the lack of a shared culture and balanced reading of history and economics is probably more important in understanding a burning world. ……in my view.
I am reminded of the Roman Empire when reading that. I once heard a comment (one of those TV programs when there is nothing but football and Enders), that said, if income wsa any more unequal, there would have been massed in Rome. Yet the Roman empire survived for over 4 centuries. That does not auger well for our generation and grand grand grand children!
But what really puzzles me is the why of it?
After the super yacht in Monaco, the island in the Bahamas, the pad in Mayfair, …. what is the point in another super yacht, island, pad in another city?
Does Bill or Elon have friends who would help him out if he finds himself in a spot of bother? Of course not, they have armies of flunkies where us mere people have friends. I am not eating sour grapes, rather I genuinely do not understand the need to keep getting richer.
Status
Elon Musk says he’s selling most of his stuff for exactly this reason. It awaits implementation from what I understand, but on the face of it it’s a good sign. Steve Jobs was also I believe somewhat frugal. I’m certainly not of Gateseian wealth, but my family did briefly appear in the Times rich list, I built a very successful company and I can only agree with your puzzlement. I’d already reached the stage where the stuff I had was much more a burden than a pleasure and clearly drove a wedge between myself and many people I knew. I’m afraid what I think drives it is a, possibly subconscious, desire to attract the sexiest mate you can, not so much from the things themselves as the power they suggest you have in the world. It is of course not a spiritually or practically productive way to proceed and indeed, having been at least at the margin of that sort of position I’m actually reasonably optimistic that there will be an increasing voluntary retraction from excess as it is quite obviously really not what it’s cracked up to be. The other side of it is of course that it does make sense that people that do a good job efficiently should get to manage a greater proportion of society’s resources as they’ve shown themselves to be capable and diligent. I saw enough people that set up successful businesses from hard work and skill to know this does happen, despite the concentration of wealth, and we should not throw that baby out with the inequality bathwater.
I think the issue is that once the bank balance and material assets of the super-rich get to a certain level, the money just accumulates and much of the excess simply sits there doing very little but earning interest. It wouldn’t be easily possible to spend or use anything but a tiny fraction of it. I also think there must be those for whom watching their bank balance rise becomes an end in itself. I bet they log on to their online banking just to see the number increasing in realtime.
Sir, you write “And, yet, the most remarkable thing is just how little political pressure there is for change. Yes, we’ve seen a surge of radicalism and populism ” but most of that energy has gone into fighting culture wars.”
I find this statement quite incredible. The last elections in the UK, USA, Brazil, India and Australia, as well as the Brexit referendum have, from where I’m sitting, been almost entirely driven by economic principles, however much the mainstream media would like to claim they were cultural.
The reasoning as I see it is the realisation that the move over the last 30 years to a globalised economy has started to create a feudal society where those at the top become immeasurably rich, those at the bottom dependent on the state are more secure, but those in the middle’s lives have deteriorated, at least in comparison to the other 2 groups. The inherent contradictions of globalisation are there for all to see, but never covered in the media. Multinational companies are able to move their operations to anywhere in the world where Western concerns such as minimum wages and environmental taxes don’t apply, thus gutting entire industries in countries such as the UK and the US, rendering smaller businesses uncompetitive but at the same time making the super rich even richer. This is not a global free market in any normal sense of the world.
Wall Street benefits while Main Street is gutted. This is absolutely the reason why Trump was elected and is still the reason why he has a chance of reelection in November.
Add to this the clear picture that the political class is becoming more powerful, yet seems not to care a jot for the concerns of wide swathes of its population. Furthermore, politicians like Blair, Clegg, Grieve, the Clintons, the Bidens and Pelosi seem to have become incredibly rich despite their apparently modest remuneration – and people suspect that they have done so by serving the interests of those whose own interests diverge enormously from those of their own middle classes.
I could go on – but to conclude, you have correctly identified a huge issue but not realised that people have been fighting on economic grounds for a few years. Not many voted for Trump because he had great views on culture. It’s the economy, stupid.
“Racism is the driving factor behind current protests ” but there are other issues at play”.
No, racism is not the driving factor behind the protests and riots. A perception of racism, blown completely out of proportion by agitators, opportunistic politicians, ivory-tower academics, utterly corrupt, money-grubbing media moguls, an uninformed and muddle-minded public and wealthy social engineers.
What is at work here is fully described in the book by Rene Girard, “I See Satan Fall Like Lightening”. The phenomenon, old as mankind itself, is called “mimetic envy”. It has stoked the fires of hatred for millennia, and is doing so now. It is the motive force, the animating factor, behind the human behaviors we are witnessing. No amount of “justice system” reform will quench it, because that is not the goal toward it is ineluctably directed. The truth is, as an unbridled passion, mimetic envy cannot be satisfied. It can only be mollified by crucifying a scapegoat.
Enter law enforcement. The institution set up to corral the most dangerous expressions of mimetic envy. Peopled for the most part by dedicated, hard-working men and women who put their lives on the line for others.
The perfect scapegoat.
‘Twas ever thus.
There’s a bounty of nonsense in this. Let me focus on one part – the statement that under neoliberalism (a horrible term, but one that betrays the bias of the writer) “productivity has slowed and innovation faltered”. Couldn’t be more wrong. The last 35 years have probably been the most inventive and innovative in history. Think of the IT innovations that have allowed economies to stay functioning under lock down. Many of the staples of life (food, textiles, utilities, cars, appliances etc – unfortunately not housing) have never been as relatively cheap (measured, say, against average income). That’s a function of productivity. Most things important to our quality of life are cheaper and better, by a substantial margin, than 35 years ago. The next person can have a whinge about the things that aren’t!
I agree – the ‘innovation has faltered’ comment left me aghast. The technological advances of the past 35 years have been truly life-altering for the majority of the planet.
However, an increase in inequality has clearly occurred over the past 3 decades. Human beings are social creatures and we will always look to the lives of others for comparison. If our children struggle to buy a home of their own, they will question what has gone wrong and look to change society – regardless of whether they have the latest i-phone.
How wonderful, production has gone up and we are all doing much better than 50 years ago. Technology gives us electric windows in cars and fuzzy logic air conditioning and lots of other wonderful stuff, an thousands of engineers all over the world are racking their brains on making production more efficient and effective, which means more profits, and the bottom line is making 0.1 p.c. Smile all the way to their billions.
While you zoom in on the treats provided, take a second or two to focus on how long this crap is going to continue to be produced, how much raw materials are there waiting to be exploited, in 20 years time, according to estimates, a lot of it will exhausted, and we will never be able to replace it once it has s gone, another 20 years and any oil left on the planet will be extremely difficult to exploit, and so societies will start to meltdown, as we cannot satisfy our greed and survival kicks in. We see the same thing happening to our oceans, some will say, but technology will give us the answers, no it won’t, because technology cannot make your average toxin fish plastic free.
Yes, productivity, just what we need for our planet, and another million wonderful engineers who are taught to be the bosse’s b***h, and seldom think outside their problem area. Rip down all engineering schools now and we may have a future, it is probably already too late.
From UK perspective (and incidentally Gordon Brown only raised taxes to 50% in last month of being in office after Labour had been in power for 13 years) the current obsession with identity politics is arguing for an equality of outcome (wealthy BAME people having some of the spoils whereby wealthy white individuals can still retain most of their assets and virtue signal at the same time) rather than equality of opportunity which tends to look at economic classes.
Peter writes that Trump is “no direct threat to the super-wealthy ” indeed, he gave them a tax cut.” Trump did, however, largely gut the mortgage interest deduction as part of his tax reform package. This was something Obama refused to do, even for secondary residences although the deduction massively favoured upper-middle- and upper-income taxpayers. It would be better, of course, if the mortgage interest deduction were eliminated entirely. Besides promoting inequality, it promotes housing bubbles, like the one that led to the financial crisis.
I think we lose the script when we compare one party’s man to another, Aristotle says the sign of an intelligent person is to allow conflicting ideas into your mind and hold both up to the light, (or something to that effect). It seems to me by comparing one politician with another politician, you fail to look at what politicians are supposed to be and do, now if you zoom out and forget the colours of both, what you see is that greed rules and basically big business is pulling all politicians strings, which if you care to check you will notice in the ratio of laws made for business or for the average person. Another question is where do they get their average of 10 million dollars from to be elected? That is not given to them by the Sisters of Mercy or some other charity. So please, comparing Obama to Trump is comparing two totally untrustworthy characters who are both in the pockets of powerful groups.
Not a good article. Look at the world’s richest people. Here’s a link to the top 10:
https://www.foxbusiness.com…
They can hardly be described as part of the rentier class. They include the founders of Amazon, Microsoft, Oracle, Zara and Berkshire Hathaway, as well as three of the owners of WalMart.
Maybe they aren’t typical, but if that’s so then I’d like the case to be made, not just some glib claims put forward with no empirical support (for why the rich have got richer – I am not questioning that they have).
A lot of anger and fear out there-on both sides of the equation
This is a good start to some of the explanation of the causes
I hope the anger passes soon and debate begins
It,s not just money unfortunately -people are much more than that
Deeply unhappy with their lives-working too hard for too little
Broken homes, single parents,hurt children who are now adults
Bari Weiss had a good explanation Classical liberals have lost the young woke generation
Populists are a equal and opposite reaction
Where will it end? The journey has started
If I was a black American I would also live in fear because of the system that has been ignored for far too long, your gated communities will not protect you, they are delusional, giving you a sense of safety, if blacks are truly equal, why aren’t their equal white brothers manning the barricades with them, that would be a true sign of equality, I admire all the white kids out there who have not been brainwashed into thinking this country is ok, it is far from ok and we have to wake up to that fact.
The problems you outlined (meaninglessness, relationship breakdown, unhappiness) are fundamentally not economic but moral; spiritual if you like.
“Where will it end”?
It would help to remind ourselves of what we do have not by unreasonably comparing our lives with others.
I think it’s a bloody miracle that folk can, basically, d**k around in an office for a few hours a day, contributing and creating nothing tangibly productive or creative and be rewarded with a warm dry house, four weeks holiday, entertainment at the click of a button, markets overflowing with abundance, a social safety net and health care when things go wrong and the best liberty and justice in human history.
That is the life for most in the West and the reason most of the rest of the world, despite the claimed racism and oppression, would crawl over broken glass to be part of. To be part of what we, like spoiled children and to our very great peril, take for granted.
All very true except the timely reminder that Brexit is in itself a type of revolution. However as you begin to point out Race Ideology and the underlying politico-culture war between the Liberal Establishment and the Conservative Establishment is all a huge distraction from the analysis of Class.
To that end, please allow me to cross post a response to Patrick O’Flynn (due to my current time constraints)
https://www.telegraph.co.uk…
which develops the thinking of One Nation Toryism by NICK TIMOTHY
https://www.telegraph.co.uk…
The difficulty the Johnson government faces is the double bind of Race Ideology as it has been inculcated by the #LiberalEstablishment. To deny the #LiberalEstablishment’s conception of Race Ideology is countered by White Fragility.
So it is true, that a counter narrative is needed. At the meta level this is provided by #AllLivesMatter rather than the inherently discriminating #BlackLivesMatter which actively seeks to collapse the difference between black Liberals, black Conservatives and black Populists.
Secondly it needs to be articulated that the #BlackLivesMatter protests are largely driven by Race Ideologues who are mobilising the Underclass. The counter narrative to this is the acknowledgement that inequalities do indeed exists between the upper classes, middle classes, working classes and the under classes.
This basically means shifting the narrative from Race Ideology to Class Ideology with the counter argument, does #BlackLivesMatter really want to culturally construct for itself an ideologically recognised taxonomy of a Black/Negroid Race. Certainly most of my black friends don’t want to be identified as part of a Black/Negroid Race but seen predominantly as human beings.
In this respect, perhaps the strongest counter argument is that the cultural ideological construction of a Black/Negroid Race is not only counter productive since how will a Black/Negroid Race ever win a Race War but it is also inherently dehumanising, as blackness overrides humanness.
Overall then, Race Ideology needs to be called out for what it is. A socially divisive ideology that was divisive in the 1800s as it is in the 2000s. And then needs to be countered with the narrative that #AllLivesMatter with an articulation of a equity framework that seeks to narrow class based inequalities. Since one only has to understand that we do indeed live in a system of structural discrimination against the working poor.
At the end of the day, the working poor do not have equal access to the fruits of national based economic and social productivity. Their relatively low income shuts them out from a large proportion of the goods and services the national economy makes available to Society as a whole.
However the counter argument that equality of opportunity provide a competitive pathway to access a greater range of goods and services is deeply fallacious since it is ecologically impossible to provide everyone with the opportunity of a middle class standard of living. As such, this counter argument abjectly fails to incorporate relative scarcity which is ultimately limited by economic and ecological capacity.
Therefore, the route out of Race Ideology is to recognise the unequal distribution of relative scarcity that drives it and in so doing recognise the structural discrimination against the working poor. This means diverting from Race Ideology to Class Ideology and building up more equitable economic relations between the different classes so that relative scarcity is more equitably distributed so that more people have greater opportunity to access the interdependently produced goods and services made available by the Nation.
…..
In this respect, trickle down and middle out economics both rely on the fallacious notion of discreet independent actors competing within a competitive field. However, the reality, as is informed by ecological science, is that human agency works within a structured interdependent field of cooperation and competition. It is by “focusing on processes and relations rather than entities which will help solve key challenges in sustainability research”.
https://www.stockholmresili…
This therefore requires ‘relational’ economics rather than trickle down which protects the upper classes or middle out which protects the middle classes. Neither trickle down or middle out acknowledges the ecological limits of goods and services and the fact that the invisible hand structurally discriminates the working poor. Both are therefore predicated on the fallacious notion of ecological infinity whereas ‘relational’ economics takes ecological limits (or planetary boundaries) deeply into consideration.
Overall, in many ways, we have already reached our Malthusian Moment in which structured scarcity is not mediated by the just distribution of basic needs fulfilment but is distributed on the basis of distinguishing rank. In other words, we need to start learning how to deeply care about the function each of the Classes play in interdependently creating the goods and services we produce and start sharing what we interdependently produce in order to create just #oneplanetliving.
https://goodlife.leeds.ac.uk/
#AllLivesMatter
If nearly everyone has
– enough to eat
– shelter
– smartphone and 24/4 web
what is the ‘inequality’ ?
If some people have a car and some do not, must eberyone have a car ?
a yacht ?
2 houses ?
another car ?
there will never be ‘equality’ otherwise why would a ‘have-not’ desire what others have ?
Did Caesar have a smartphone ? Was he poor therefore ?
I shall take the 5th amendment on this statement, it reminds me of the famous poem The Dunciad
To answer the question ‘why they (elites) have been doing so well when so many of their countrymen haven’t’: The most destructive fact in the world today is almost a complete
secret. Those who know about it mostly keep quiet, and those who talk about it
are mostly ignorant. And yet it’s a simple fact.
This simple fact is that money is created as fictitious debt; and alongside every bit of
money, an equal amount of real debt is also created. Historically, this method
of creating money has repeatedly been made legal for just one reason: to increase
the power and wealth of those who already have power and wealth. Whenever the
method has been made legal, it’s led to a decline in civilization, as elites get
more remote from the work that makes them rich and less conscious of the
effects their affluence is having on the world. This happened in Mesopotamia,
in ancient Athens, in ancient Rome, the Italian city-states, England, the USA ““
and today it’s happening across the world.
Not only does the method create huge debt and terrible inequality, it also gives
wealth and power to people who only care about getting more. Such people tend not to care about the consequences of what they do; they are the worst people to have in charge. As for most of us, the method is like a magic trick: it is easily concealed, so that reform never becomes a priority.
To explain: money today is debt owed by a bank, which it will never pay. We think
banks pay out cash, but cash is also fictitious debt ““ in this case, from the
government. The system is a collusion between government, banks and plutocrats.
(Marxism is only different in that governments monopolize completely the power
and the profit which the system supplies.) There is no need to create money
this way. Money is abstract property, a token recognized in law. That is its
very essence, which gives it a uniqueness as a kind of property.
The laws which make this possible may not be as obviously unjust as laws that
authorized slavery, for instance, but they are every bit as destructive. As
well as creating widespread debt and inequality, they fundamentally
cripples any hope of real democracy. The world is given over to the money
making for a few, rather than the creative sharing of many, among whom are huge
stores of goodwill that go to waste.
If we want to survive, we should reform and create money in a fair way.
In a long search for a fair and efficient way to bring about a wholesale redistribution of income from capital to labor I happened upon the concept of a graduated expenditure tax (GET), which has a long history in the literature of economics. (For a good summary, see Nicholas Kaldor’s An Expenditure Tax.). A graduated expenditure tax is like a graduated income tax but with one major difference: savings are made tax-exempt. In other words the idea is to progressively tax the consumption of the biggest spenders in society while ignoring inequalities in wealth and income, which, if not consumed, can contribute to the capital stock (and hence to the national income).
The great virtue of a GET is that it can raise vast amounts of revenue without destroying the incentives to save and invest. In fact it make them stronger. An entrepreneur with a good idea would actually find it easier to become a rich man if he were prepared to live modestly rather than investing in exorbitantly expensive “positional goods” like private jets or multiple mansions. There would be a complete downshift in what status goods are, to the benefit of the rest of society.
Readers who are interested in seeing what a single parameter version of a graduated expenditure tax would look like, and how the revenue generated could be used to finance a vast expansion in the earned income tax credits to supplelment the wages of ordinary working people can go to this short 3 page exposition on my Google Drive (feel free to comment):
https://docs.google.com/doc…
Would somebody please tell me where all the racism is ?
Well if you go back to the foundation of the US you will see that many US presidents held slaves, that blacks were considered 3/5 ths. Human and so the very basis of your nation is racist, it has never once gone away. We live in bubbles, we do not live in the United States, we live in bubbles in the states where we prefer not to be confronted The powerful truth of reality and that is the nation should be inclusive and just but it’s not and never will be. Just by asking the questions betrays your bubble environment. Wakey wakey
You still haven’t answered my question.
Akthough, in a way actually you have.
Plenty of historical instance and yor own personal values donot make an argument however much you would like them to.
The same train of ‘reasoning’ as yours can be used to create almost any issue.
Please leave your ‘values’ behind and think clearly.
Overall i think the drive for greater equality must never let up, but the real debate is not about tax levels. Its whether equality is best served by increasing opportunity or managing outcomes. So societies need to prevent equal opportunity degenerating into survival of the fittest as much as they need to stop the madness of enforced equality supported by the like of Labour in UK and many modern Dems in the US. The leftist model is as bad as the libertarian rights’s law of the jungle model: we found a guy with no arms or legs so we have to amputate everyone elses to make things equal. Societies can only work at that balance when they are at peace, so though leftist driven looting and vandalism may be cathartic its not going to help. Also it does not fit the Girardian mimetic model. His point is we kill the scapegoat to divert violence from the many to the one and as such restore order. He says Christianity offers an escape from the vicious circle by
recognising the existence of this stumbling block. Maybe that’s true, but no society has yet tried it? I am skeptical abou the memetic theory. I think most people do not intervene to stop mob violence because they are afraid and do not think intervention will succeed. Yet the same people are happy when the mob is defeated and its leaders imprisoned or executed. As far as BLM goes i see they’re not taking on Chinese or Russian cops or even the Italian or Spanish ones.
I suppose because Chinese and Russian cops kill Chinese and Russian people, and these people including the cops are normally the same colour, and are not being killed because of their colour. We have seen very few cases from the amount that take place in the States every year, so this is only what we have videoed. Another point is As soon as talk leftist rightist we are inclined to lose the big picture, and that is the whole system is unfair and unjust.
There’s no evidence that people are being “killed because of their colour”; including Floyd. The deaths in interactions with police are regrettable but occur regardless of ethnicity, European Americans are 27% more likely to die/be killed than African Americans, just less likely to be in these situations in the first place. AAs are also far more likely to kill each other as well as every one else.
“…..But if that’s the whole story then how have the rich got richer at a time when the middle has evidently not prospered?
Oh Peter, don’t kid yourself. The Bourgoisie have lapped up the capita gains since GFC, and now actually believe they earned it ….by dint of their self-percieved inate superiority, ‘educatedness’, and ‘non-racist outlook’
Try suggesting any form of CGT or LVT as a sop to regaining house market equilibrium again, and see how far you get, among the smugglies.
Denise Coates, CEO of Bet 365, was paid £277mn in 2019 and £323mn in 2018. For those of us ‘losers’ on or around average income, this type of egregious renowned excess feels like ritual humiliation. And then these same corporate superstars invest in property portfolios that keep Generation Rent out of the market and unable to save for the future. Is it really surprising that younger people want to tear the whole edifice of Western society down – they are being made fools of and they know it.
Suggested reading: The Great Leveller by Walter Scheidel. Basic thesis: mass violence and catastrophes are the only forces that can seriously decrease economic inequality.