Extreme wealth inequality will always devour the societies that produce it


#1

Originally published at: http://boingboing.net/2017/04/28/koch-everywhere.html


#2

Well duh!!!


#3

Wise wealthy people who’ve studied history understand the concepts you nicely summarise in this article. Unfortunately, many (perhaps most) wealthy people are foolish and uneducated, and thus we as a society keep repeating the same mistakes as soon as the disastrous results of the last go-round start passing out of living memory.

I wish I could share your optimism about everyone “shoulder[ing] one another’s burdens, grabbing our bags and bugging in to the places were our neighbors need us,” but it’s already happening with “the Big Sort” in a less salubrious way.


#4

“Concentrating power in a few wise hands works great, but it fails badly. Letting the smart, competent technocrats make all the decisions without having to explain themselves to the sheeple can produce remarkable results, but it also means that when the Ubermenschen made dumb mistakes, those mistakes go unchecked, because the emperor’s new clothes cannot be contradicted on pain of defenestration through the Overton Window.”

When I read this I nod in vigorous agreement. Oh, wait. You’re not talking about the government.


#5

If he’s talking about the U.S. then yes he is. One way or another, the wealthy have called the shots when it comes to the government here for the last 35 years.


#6

So, contemporary fiction then…?


#7

even if you accept [trickle-down economics]…

No! You don’t need to bracket this, it is demonstrably false. Forty years of economic data has proven beyond a doubt that Reagan was wrong, Bush was right, it’s voodoo economics. It does not matter how many Fox News pundits disagree. Disagreeing with numbers does not make them change.


#8

In the US, since the very beginning, not just the last 35 years. Most of the Founding Fathers were extremely wealthy. James Madison, who wrote most of the Constitution, opined that the purpose of government is to protect the minority of the opulent from the majority and that’s why you have aberrations like the Electoral College. They are not bugs in the system, they are working precisely as designed.

On the other hand, the premise of the article is demonstrably false. Sweden has far higher wealth inequality than the US, as the majority of its wealth is concentrated in a handful of families like the Nobels or Wallenbergs, but it exhibits none of the pathologies the US does, starting with a complete absence of noblesse oblige. That seems to be a specific failing of Anglo-Saxon countries, and even there developed recently, since the 80s or so (Reagan, but he was probably more symptom than cause), rejoining your 35 year figure. It would be interesting to find out what specific sociological trigger among the American wealthy led to this ruinous course.


#9

Maybe the trickling takes more than 4 decades to reach the “down”? :-/


#10

I think this is one of those patterns that’s easy to see unless you’re intellectually and/or financially invested in not seeing it.


#11

In short:

Income inequality is the sign of a sick society. And if those with power constantly refuse to treat the sickness, the eventual cure will be administered by Doctor Guillotin.


#12

So which is more likely to succeed? To wait and implore entrenched actors to play fair? Or for the average people to re-think how they measure and symbolize wealth in the first place?


#13

In practise there was a significant stretch of time when U.S. governments weren’t completely in thrall to monied interests: roughly 1933-1983. But yes, an effective plutocracy before and after.

The premise of the article remains true insofar as generous state welfare programmes like Sweden’s reduce the extremity of wealth inequality to the point where people don’t feel they’re entirely on their own in desperate circumstances. When one has the lower tiers of Maslow’s pyramid guaranteed and isn’t worried about being driven into the poorhouse by an illness or pregancy or one’s employer going bankrupt or downsizing due to macroeconomic trends, one tends to be a little more forgiving of wealth concentrating at the top – more so when the money there is old enough that it knows better to flaunt itself.

There’s no one specific sociological trigger that most people seem to point to about the pathology in the U.S., just the intersection between the Protestant Work Ethic (from the north), racism-tinged determinism (from the slave-owning south), and the frontier myth of rugged individualism. The confluence of those trends fed everything from the Horatio Alger mythology of the 19th century to the various self-improvement cults of the 20th century to 21st century Libertarian ideology.


#14

You are confusing wealth inequality and income inequality. Sweden combines extremely high wealth inequality with extremely low income inequality. As for the presence of a social safety net, the US is also unique in its near absence thereof. Income inequality is less of an issue in countries that do have functioning health insurance and social programs.


#15

You miss my point. Higher income equality ultimately translates into less extreme wealth inequality (mainly via increased economic mobility) and also mitigates resentment of what there is of the latter. In the U.S. we have both high wealth and income inequality, and the short-sighted powers that be see them as complementary if not sine qua nons to each-other.


#16

Once again, Sweden disproves your assumption that income equality means long-term reduction of wealth equality (it is quite possible the effect on envy you describe holds true). The Social Democrats were in power there for over half a century, instituted income equalization through taxation and transfer programs, but made little dent in wealth inequality.
http://marginalrevolution.com/marginalrevolution/2014/05/wealth-inequality-in-sweden.html


#17

No, it is not. It is just more in fashion to hide it.


#18

I never said it was. The article I quoted (about Sweden) did, as an (irrelevant) aside.


#19

Yes, sorry for the way it quoted it.


#20

From the linked article “In Sweden, because of extensive tax evasion, the number is harder to calculate.” after which it makes claims on stagnant wealth distribution during a period of 20 years, from the 70’s to the 90’s, having already admitted to only fuzzy data to rely upon.

Either way, 50 (let alone 20) years isn’t a very long time for policy that deals with income to act upon wealth inequalities borne through centuries of inheritance. (See wealth inequality among races:United States)