One of the most striking successes of the Occupy Wall Street movement has been the “We are the 99 per cent” idea, and more specifically in the identification of the top 1 per cent as the primary source of economic problems.
Thanks to #OWS, the fact that households the top 1 per cent of the income distribution now receive around 25 per cent of all income (up from 12 per cent a few decades ago) has been widely disseminated. The empirical work on tax data that produced this evidence, done most notably by Piketty and Saez, has been slowly percolating into the mainstream consciousness, but “We are the 99 per cent” has hammered it home with surprising speed.
Even more surprisingly, the analysis as it relates to the 1 per cent has been almost unchallenged by the organized right. Having spent decades denying the obvious growth in inequality, and of the wealth and power of the super-rich, the right has implicitly conceded to reality on this point.
Their response to ‘We are the 99 per cent’ has been the snarky claim that ‘We are the 53 per cent’. This line is based on the lame and long-refuted WSJ ‘lucky duckies’ talking point, that low-wage workers ‘pay no income tax’. It is, of course, true that many workers don’t pay the tax called the Federal Income Tax’ , but they do pay the Social Security payroll tax, which is a tax on wage incomes, not to mention sales taxes and many others. By contrast, capital gains, the preferred income source of the ultra-wealthy, are not subject to payroll tax and attract only half the standard rate of the Federal Income Tax.
What’s more interesting to me is the 53 per cent number, redolent of the Buchanan-Nixon plan to ‘tear the country in half and take the bigger half’. It stands in stark contrast to the hypocritical complaints of Republican politicians about class warfare and turning Americans against each other. The fact that anyone could see this slogan as clever politics is an indication of the costs that are eventually incurred in the creation of a hermetically sealed thought bubble like that of the US right.
Coming back to reality, I’d like to think a bit about the relationship between the 1 per cent and the remaining 19 per cent of the population in the top quintile (that is 20 per cent). Most if not all of the bloggers here at CT fall into the latter group. Given our lamentable lack of market research, I can’t say much about readers, but a reading of the comment section suggests that most of our readers also belong to this group.The top quintile as a whole commands the great majority of US income, and virtually all financial wealth – few households outside this group own much beyond their homes and perhaps some money in a pension fund. It follows that any significant improvement in public services, or in the position of the unemployed and poor, must be funded by higher taxes on the 1 per cent, the 19 per cent or both.
The 19 per cent also have a disproportionate political weight, since they are much more likely than Americans in general to register, vote and engage in political activity. So, it makes a big difference whether, as as implied by ‘We are the 99 per cent’ their interests are aligned with the mass of the population or with the top 1 per cent.
Until quite recently, I would have (and did) argued against this view. The top quintile as a whole has done very well over the past few decades, and (despite some silly claims to the contrary), high-income earners have mostly voted Republican, in line with their economic interests. Certainly there are plenty who don’t vote their interests, but that is also true of many people in the top 1 per cent, not to mention bona fide billionaires like Buffett and Soros.
There was always an argument in terms of enlightened self-interest or class-interest, that it was better to give up a bit of (pre-tax and post-tax) income to maintain a stable and relatively egalitarian society. But in an individualistic society like that of the US such arguments don’t go very far.As far as policy is concerned, my implicit assumption, formed in a relatively egalitarian society, was that taxes imposed only on the very rich might be satisfying but couldn’t raise a lot of money. So, for example, I dismissed Obama’s focus on ending the Bush tax cuts for incomes above $250k (roughly, the top 2 per cent). In the ‘Trickle Down’ chapter of Zombie Economics, I looked mainly at the top 20 per cent (or sometimes 10 per cent) of the income distribution rather than the top 1 per cent.
I’m now much more sympathetic to the ‘99 per cent’ analysis. First, a closer look at income growth figures suggests that, while the 19 per cent have enjoyed rising incomes, they’ve only barely maintained their share of national income. The redistribution of the past three decades has gone from the bottom 80 per cent to the top 1 per cent.
That suggests the possibility of a policy response in which the main redistributive thrust would be to reverse this process. This would almost certainly involve higher tax payments, but this would be offset by the restoration of public services, which are in economic terms a ‘superior good’, valued more as income rises. The top 1 per cent can buy their own services, and are largely unaffected by public sector cutbacks, but that’s not true of the 19 per cent.
Another important factor is the growth of economic insecurity. The myth of the US as a land of opportunity for upward mobility has been replaced by Barbara Ehrenreich’s Fear of Falling (another good source on this is High Wire by Peter Gosselin). Even if people in the top 19 per cent are doing well, they are less secure than at any time since the 1930s, and their children face even more uncertain prospects.
Finally, there is the alliance of the 1 per cent with the forces of rightwing cultural tribalism. The 1 per cent can only rule by persuading lots of people to vote against their interests, and that requires a reactionary and anti-intellectual agenda on social, cultural and scientific issues. As a result, educated voters have increasingly turned against the Republican Party.
I don’t want to make too much of this last point. As Allan Grayson said during his memorable takedown of PJ O’Rourke recently, the 1 per cent own the Republican Party outright, but they also own much of the Democratic Party, and can rule satisfactorily through either. Also, having a college degree isn’t the same as being educated – Tea Party supporters are more likely than the average American to have a degree, and college-graduate Republicans are even more prone to various delusional beliefs on issues such as climate change.
Nevertheless, taking account of all the factors listed above, even the most comfortably affluent members of the professional class, looking at the alliance of plutocrats and theocrats arrayed to defend Wall Street could reasonably conclude that it was in their own interests to support the 99 per cent and not the 1 per cent.
We are therefore (surprisingly to me) suddenly back in a situation where a progressive movement can reasonably claim to act in the interests of a group that is (I’m quoting Erik Olin Wright from memory on the Marxist conception of the working class0
(a) the overwhelming majority of the population
(b) responsible for nearly all the productive activity (as against the 1 per cent’s incomes drawn from a parasitic financial sector)
© economically desperate or at risk of becoming so.
Can all of this be sustained? I don’t know, any more than anyone else. But #OWS has already achieved things that most people would have regarded as impossible a month ago, and for the moment at least, the momentum is still growing.
(Hopefully links to come when I get a bit more time)
John Quiggin 
I’m of the view that the US government will inevitable default on it’s public debts and it’s social security obligations. That which can’t be sustained won’t be. Whether the default is via traditional means or currency debasement isn’t clear.
@Sam
It’s also unclear why Terje would want those who don’t need a tax cut and whose behaviour will not change in a positive way as a consequence of a tax cut to get one, even allowing that serious harm to public interest would not be a consequence of such a measure.
It seems to me that unless one can show that the “greatest good for the greatest number” would be served by this measure or at the very least that the beneficiaries of the tax cut are obtaining relief from an unwarranted and unreasonable imposition there simply would be no case for doing so.
The fact of the matter remains that wealth in the US has become progressively less equally distributed in the three decades since 1979 (even amongst super rich people there is more inequality), yet there’s very little evidence of any corresponding general benefit — quite the reverse. Worse yet, there’s good reason for thinking that this inequality has debauched US politics and the quality of governance.
Even Teddy Roosevelt — no friend of soc|al|sm — thought great inequality subversive of democracy and community. Today, radical inequality is the key marker of US cultural life.
Why is this presumed to be a bad thing? It doesn’t matter if some people have more than other people. Equality of wealth and / or income is an issue that occupies far too much time in public policy debate and those on the left are typically to blame for this preoccupation. There are a whole array of far more meaningful metrics such as life expectancy, literacy, homelessness, health, unemployment, and any number of measures regarding freedom that ought to rate vastly higher in public policy discussions than “equality”. And even worse the word equality is often just a weasel word used when the real intent is “conformity”. It is those that want to enforce more equality that ought to be demonstrating some benefit.
p.s. Also it seems to me that if the rich get richer and the poor get poorer it does not follow that the former caused the later. There are many possible causes as to why groups of people might get poorer and it makes more sense to examine the specifics.
The fact that rich gets richer does not imply that the poor will always get poorer. The cause of the middle and lower class gets poorer because there is a thing called “inflation” exist and income of middle and lower class has been taking a pay cut for 3 decades via inflation. I can see that you have economic knowledge from your comments but you are deliberately ignoring inflation.
True, why a person is rich and why a person is poor is a matter of detail rather than yielding to a single explanation. There is one thing thought that is increasingly true in the modern developed world and it is that we are all in this together. No one would manage to get rich in the developed world if it were not for the efforts of others. Once apon a time a person could go out in the woods knock down a few trees, build a house, farm some land and more reasonably claim everything was all down to themselves. (But even then that claim would hardly be completely true.) Nowadays, what we acheive is very much dependent on others. And that is without admitting that what we acheive is also highly dependent on all the things that have been left to us by previous generations – substantial knowledge and physical capital.
Recognising that whatever our individual acheivements, we owe a lot to others ought to be the basis for a more public spirited attitude, as exemplified by Warren Buffet. The distribution of society’s wealth, always ought to be in part a collective decision. And those who think otherwise, ought to be pushed off the ice. (As the eskimos would have it.)
I agree, in US the problem is that workers’ aren’t getting the reward they contributed to the economy. There is nothing wrong with rich gets richer and I am not extremist that believe executives are greedy and lazy. In fact I believe executives works really hard and have immense pressures but it doesn’t justify that they get pay hundreds/thousand times more than average worker that works fulltime. What TerjeP doesn’t get is that he thinks average workers’ contribution to economic growth should not be awarded with a pay rise that at least cover inflation.
Barbara Ehrenreich has just published some interesting commentary on the 99% worth looking at in The Progressive (http://www.commondreams.org/view/2011/10/13-3). Sorry I am too technologically challenged to embed a link properly.
TerjeP – you seem to be engaging in the standard knee-jerk conservative reaction to critique of inequality that equates that critique with a utopian belief in perfect equality. Can you credit that in some (possibly many) circumstances high levels of inequality can be a bad thing – a social evil or contributing to a poorly functioning economy or both.
You do not have to be a socialist or bleeding heart liberal to acknowledge there are some important policy issues around the impacts of inequality that should be considered (though it probably helps).
I think cockney-conservative types like Terje receive some sort of psychic benefit by identifying with their plutocratic superiors. It could just be a vicarious thing but I suspect it’s much more than that. The real reason probably has some affinity with Muslim women who would fight and die for their right to wear the burqa and be kept a de facto prisoner by related males.
Maybe it’s false consciousness meets Stockholm Syndrome?
Anthropogical studies show that high levels of inequality are detrimental in many ways. The real way that it is detrimental in the USA however is in the level of crime and desperation which leaves people homeless and hungry.
The #OWS is significant because it is the first time in a long time when the mainstream media has not been able to massage the message to make the 99% think that there are no other options than have been offered.
Yeah, gross inequity leads to all sorts of lousy social, health and labour market outcomes that Terje mentions; this is well-known and you have to be an ideologue not to acknowledge it. Not to put too fine a point on it, people die unnecessarily early when societies are highly inequitable.
Of course on the other hand under a market system in practical terms there needs to be some level of inequity – rewards innovation and effort, individual responsibility, blah blah blah, the usual stuff that libertarians bang on and on about like it was the *only* thing that was important.
I guess the question is, what is the *optimum* level of inequity for achieving good outcomes and ye olde Equality of Opportunity? It’s not the US, Terje, I can tell you.
Further to Chris Warren’s point and JQ’s answer, doesn’t JQ’s answer depend on the assumption that money is a good measure of welfare – ie that being “more wealthy” is the same as higher welfare? I would guess that previously it was, and increasingly it isn’t. One can point to lots of technological improvements, but surely a large part of the increase in monetary wealth of the last several decades has been the monetisation of social and environmental services previously outside the monetary economy (childcare, a considerable number of other personal services, access to open spaces, environmental reserves etc), together with the financialisation of hypothetical future monetary income streams? I don’t know how to measure it (the various tries I have seen are none completely convincing), nor even am sure it can be measured. But I think it worth bearing in mind.
No not really. By the way I’m not a conservative. I’m libertarian and relatively radical (although also an incrementalist).
False. You are a capitalist trying to spread capitalism against the interests of all.
Am I your evil overlord?
This is not what the empiracle evidence shows. The evidence shows that inequality and the sorts of things we ought to care about (health, life expectancy, crime rates etc) do not correlate with income or wealth equity. I’m not saying that we should not measure or talk about inequality but I think it is completely crazy to devote so much energy to the topic. The only virtue of equity as a metric is that it can be used to justify socialist policies and that isn’t really a virtue.
Libertarians have done some work debunking the equity myth. See here:-
p.s. Sorry about mincing my grammar. Hopefully my meaning is still clear.
The 1% will obviously agree with you TerjeP. However in the past inequqlity has led to revolution – French, Russian and Chinese and we could even include the two internal wars for the USA and recent uprisings in the Middle East. These have not always been positive outcomes. The inequality experienced in the Wiemar Republic wasn’t all wonderful either. To have an inequitable system which works you need to have a religious or other framework which means people accept their lot in life with a degree of fatalism. This is harder to maintain in a wired world.
None of those revolutions were much about inequity of income or wealth. And plenty of societies have endured without revolution for centuries. And relatively equal societies (eg Soviet Union at least in theory) have collapsed due to revolution. To make the argument that inequality causes revolutions you need to demonstrate some sort of correlation between the two. I don’t think the case can be readily made.
@TerjeP
There wasn’t a revolution in the Soviet Union. There was a coup which was ultimately unsuccessful. The dismantling happened at the top because they had lost faith and were not willing to kill the large numbers of people that would have been required to maintain the current order of things. As for inequality, considerable inequality can be maintained if those in control have the apparatus to meet out harsh treatment. However, without those tools and the willingness to use them the peasants will soon be revolting. Give those peasants half a chance and they will be over their overseers like flies over a pile of offal, and offal it will be too once they are done with them.
@TerjeP
This is just ignorance on a stick. Not even decent trolling.
The opposition to as great equality as possible is, in my opinion, motivated simply by hatred of others. The Right, the ‘libertarians’ at the extremity, follow Rand in holding others in contempt and seeing them as ‘moochers’. Greed, for them, is the highest virtue. Every philosophy and religion with which I am acquainted, save one, regards avarice as a great vice, and preaches some form of fraternity, in some cases of all humanity, in others merely of the in-group. The one exception is capitalism, a doctrine that, I believe it is irrefutable to say, displays an attitude towards existence that conforms more or less closely to the mentality of the human psychopath. The libertarian, following Rand, with her open admiration for a child murderer as some sort of ideal type, is the most grotesquely extreme example of the type.
@TerjeP
“The evidence shows that inequality and the sorts of things we ought to care about (health, life expectancy, crime rates etc) do not correlate with income or wealth equity”
Really Terje? I haven’t been able to watch your video yet, but it is unlikely to be much good as it conflicts with an enormous amount of empirical research.
I can only assume you are ignorant of the vast literature on this topic. Relative (within group) inequality is highly correlated with a large number of social ills, and I believe in some cases it is shown to have a causal effect. By the way this research comes from people like probable future Nobel laureate Angus Deaton (Professor at Princeton) who specializes precisely in this area.
Damn you found me out. The truth is I hate humanity and so I spend my spare time trying to trick decent people into loathing equality. It’s all part of a cunning human hating plot that I hatched one evening whilst boiling babies alive. 😉
Well you should watch it if the topic is really important to you. Even if you don’t agree at least you will be in a position to strengthen your pro equality arguments.
You can’t say the downside of unequal societies is that they have revolutions at a higher rate then equal societies, and then also argue that inequality prevents revolutions. That kind of entails a suspension of logic.
“None of those revolutions were much about inequity of income or wealth.”
I think that’s wrong. Of course, they were more more about power, but wealth is power. At a more abstract level, they were about justice, and inequality features greatly in people’s perception of justice.
Perhaps you’re making the same mistake John Humphreys has made when I’ve discussed this topic with him – assuming there has to be a linear relationship between inequality and unrest. My contention then (and I think others on this thread are making the same point) is that there is a threshold of inequality above which people revolt. Not that steadily increasing inequality means steadily increasing social strife.
“This is just ignorance on a stick. Not even decent trolling.”
Terje doesn’t troll. You should know this by now.
“an enormous amount of empirical research…the vast literature on this topic…Relative (within group) inequality is highly correlated with a large number of social ills, and I believe in some cases it is shown to have a causal effect.”
Actually, the correlation (below certain tipping-point thresholds) is minimal if not non-existent after taking into account other factors, and no plausible causal mechanism has been identified.
“By the way this research comes from people like probable future Nobel laureate Angus Deaton (Professor at Princeton) who specializes precisely in this area.”
I’ve just read two papers by Deaton on this topic. His findings do not support your claims. Perhaps you are taking your information from third parties who may have distorted or misunderstood him?
@TerjeP
Sure I will do that. Any you should read Deaton and the (quite possibly) hundreds of other pieces of peer reviewed literature appearing in top international journals (as opposed to youtube videos) that say just the opposite.
@TerjeP
Might be too you. But it is quite simple. If societies have considerable inequality the haves have to resort to strong measures to keep the have nots in their place and to maintain the status quo. Sometimes they are successful in doing that and sometimes not. I don’t know what equal societies you seem to be referring to as having revolutions. In fact, I wouldn’t know what equal society you could refer to full stop.
You seem to be channelling Alf Garnnet or Archie Bunker or both, I suppose your support for the status quo could be called aspirational.
@Jarrah
I don’t think so. Deaton talks about relative (within-group) inequality and the relationship that this has with health. People with high incomes that are relatively low (i.e. lower than their peers) have greater health problems than people with the same absoulute income whoe are relatively rich. There is plenty of other research along these lines.
BTW I was exaggerating a little with my previous post – I suspect that the number of papers that support this argument is more like a hundred rather than several. It could be more (or less – I haven’t counted) although it is very substantial.
@Jarrah
Apologies Jarrah and Terje – it does appear that Deaton’s position on this is not as strong as I thought it was. Although a great deal of other research on this does support this argument Deaton is not as persuaded as I thought.
Generally speaking revolutions are where the regime is toppled. Revolutions can be violent and bloody or relatively peaceful. What defines a revolution is that the preceding regime is swept away.
Revolutions happen either because a few people are trying to acquire power or because a lot of people feel that they have suffered an injustice and will continue to suffer injustices under the existing regime. Or it could be a complicated mix of the two and usually is. Those that want power through revolution always promise to impose a more just regime because that is how you get your interests aligned with the masses. Whether or not it works like that varies.
I’m not saying that inequality of income and wealth will never be a factor in a revolution. I just don’t think it is ever likely to be a primary factor. If the people are poor because the King is stealing their land the key injustice is the theft of land not income disparity. Nobody much minds a rich King so long as he mostly respects the rights of the people.
I do regard what happened in the Soviet Union following the fall of the Berlin Wall to have been a revolution even though it was relatively bloodless. The old regime is gone even if some of the old players are still playing.
The numbers may be hard to tabulate but to make the case that inequality leads to revolution you would need to look at the timing of various revolutions and show that they were proceeded by periods of higher than usual inequality. However confounding any thesis in this regard is the thesis that rising prosperity causes democratic revolutions. We know that as societies become wealthier democracy becomes more prevalent however we also know that often prosperity arrives along with inequality. Untangling the mix wouldn’t be trivial.
Find what you think is a solid example and I’ll look at it. However please do check out the YouTube I linked.
I would have to agree with inequality will not be the main factor of revolution, but inequality causes problems in which leads to revolution. Through studying much of the history of China as my personal interest, income itself have never been equal.
However in times when people even just be able to afford food and shelter, they will not revolt against the king nor will they protest about income inequality. Whenever there is a fall of a dynasty the state of the society is so bad that people can’t afford food and shelter but when times like these happens; the government officials are so rich that some of them have bigger net worth as the government itself. The latter case does not happen when the time is in economic growth (i.e. the income is more equal in this case). In fact when the economy of ancient China shows good time, a “larger” proportion as comparing to economic downturn/revolutions, the top government officials are poorer (some to the extent that even they themselves can’t afford food).
Now when people are eatting the thousand miles of forests to dead and are trading babies with other families to eat them to surive while the government officials have more wealth than the government itself; does that suggest income inequality? Yes, the cause of that usually comes from corruption of government assistance to natural disasters or high local tax both suggests greed.
To conclude what I want to say (sorry for bad grammar) income inequality might not be the cause but income inequalty are larger during revolts in cases of Chinese history (I’m pretty sure revolts in a lot of other cultures’ history would be similar); and that this income inequality are generated through greed, corruption, exploiting on the general public but are not generated through improvements in work quality, technology advances, increase work time and quality outcomes like it should. This is exactly what the USA have been doing for the past 3 decades if not longer; do you genuinely think that the majority worker’s have contributed so little to economic growth that they shouldn’t be rewarded and the executives have contributed so much that their income are rewarded hundreds percents more than GDP growth of 3 decade while the middle/lower class receives nearly none (in this case not only that they are not receive a reward for their contribution, they are being punished because their income improvements for 3 decades are far less than inflation).
I suppose Paul Krugman is considered the ultimate authority to appeal to around here. In the article you linked to, Krugman repeats the trite leftist populist talking point that large numbers of wealthy individuals are able to use various sneaky means of minimising their taxes. Again, few people seriously deny that significant numbers of wealthy individuals are able to use certain loopholes or financial planning to reduce their tax. But that doesn’t change the fact that, despite this, the overall percentage of taxes paid by high-income earners is still very high. Moreover, if 100% of all taxes were levied on the wealthy 100% of all tax evasion and tax minimisation would also occur among the wealthy, according to logic 101. That a lame partisan hack like Krugman is widely revered as some kind of economic genius says a lot about the general decline of what passes for sound economics today.
Back to the main point though. Even if one conceded to you and Krugman that the US tax system is not particularly progressive if you factor in payroll taxes, where does that leave us? According to much of the US left, programs like Social Security and Medicare are vital features of the welfare state that they are proud of introducing and defending and which evil Republicans wish to cut or eliminate. But at the same time, they are also regressive, unfair burdens on the working poor! The fact that you can only stay remotely competitive in such a debate by bringing up Democratic Party entitlement programs should be a sure sign of the weakness of your side of the argument. Moreover, if one follows the logic of the argument through, the US tax system is apparently less progressive not due to the tax cuts of Reagan or Bush 2, but instead due to the continued existence of FDR’s social programs!
I’m not appealing to authority, I’m linking to a refutation of your silly and contradictory talking points. Krugman is authoritative not because he has high professional status, but because he is so obviously right, and you are so obviously rambling from point to unrelated point.
As I said in the original post, it says a lot for the effects of the rightwing parallel universe that you can imagine that anyone would be impressed by the desperate and self-contradictory line you are pushing here.
And, also recent, Krugman has a nice opinion peice on the parallel universe that rightwing-nuts occupy:
“Rabbit-Hole Economics”
The 1%.
In my opinion, the one percent view themselves as an arisitocracy and are therefore “entitiled” to their grip on economic power.
The origins of this theme go back to Alexander Hamilton who argued the case for a British style aristocracy in the discussions, debates and conventions that took place prior to the forming of the US Constitution. He was soundly defeated in this aim but went on to be an important force in the building of the new government and its finances. But the US has ever since felt inadeqaute for not having an aristocracy and I believe they now have it in the form of the irremoveably wealthy elite. But most significantly this elite is one to which in the “American Dream” one can rise to join through their own enterprise. It is only now that most Americans are coming to terms with the reality that the “American Dream” is just that….a dream. Not a reality.
http://en.wikipedia.org/wiki/Alexander_Hamilton
Here is a link to Alexander Hamilton. Follow the links of scandal to uncover the “dark” side to American Society.
@Jarrah
Yes, I am one of those on this thread who concurs with your: “My contention then (and I think others on this thread are making the same point) is that there is a threshold of inequality above which people revolt. Not that steadily increasing inequality means steadily increasing social strife.”
The phenomena is better represented by a system with catastrophic points (as illustrated by the example when a dog retreats and retreats into a corner when faced with a threat and then, suddenly, attacks).
For what its worth, I don’t know of any theoretical model of a market economy where perfect wealth equality causes a problem but in all models I know, wealth inequality causes a severe problem for the logical consistency of the model unless the inequality is severely restricted (minimum wealth condition).
*Of course* revolutions arise out of chaotic rather than linear processes. Here is my very incomplete list of some of the factors that would feed in:
-inequity and limited social mobility
-the perception that inequity is morally illegitimate/not sufficiently philosophically justified
-the perception (or reality) that regular political channels are moribund/unresponsive
-armed forces that are ambivalent or friendly to the aims of the revolution
-charismatic and well-resourced leadership
-a window of opportunity
That’s just a start, of course.
The national mythology in the US for a while that they had social mobility, that “anyone could make it” (and therefore social as well as wealth inequity was nothing to be alarmed about), and that their political system was not bought and paid for by special interests. The sounds from OWS suggest to me that’s less convincing than it once was. Rightly so.
Monkey’s Uncle at 36
That article talks only of the income amoungst the 1% that is actually assessed for tax. The real issue is the invisible trading that is not assessed for taxation, or is exempt from taxation. The best way to start to claw some of this back an identify who is benefiting is with transaction taxes. These should be National and International, with the international taxes being used to fund to operations of the United Nations.
Rightwingers like to think that inequality does not cause revolutions and that we should not devote much energy to it. I suppose using this blindfold is the only way they can sleep at night. Anarco-capitalists stridently cry “who cares”, “that’s life” and “move on” when it comes to discussing equality and equity. Although there are other tricks:
Trick 1 – “nobody minds a rich King if he respects the rights of the people”
Unfortunately this is idiocy, because you cannot have a rich King if he respects the rights of the people to own their own production.
Trick 2 – flood the arena with smoke and mirrors – “a whole array of far more meaningful metrics such as life expectancy, literacy, homelessness, health, unemployment, and any number of measures regarding freedom that ought to rate vastly higher in public policy discussions”
Unfortunately this is idiocy because poor people suffer deprivation in all these compared to rich people.
Trick 3 – misrepresent peoples views by claiming they – “argue that inequality prevents revolutions”.
Unfortunately this is idiocy as no-one argues that “inequality prevents revolutions”. This misrepresentation is just perpetual trolling.
Trick 4 – re-write others statements as; “unequal societies have revolutions at a higher rate than equal societies”.
Unfortunately this is idiocy – no data exists and this statement was only constructed to facilitate trolling.
Trick 5 – simply deny. “None of (French, Russian, Chinese) revolutions were much about inequity of income or wealth.”
Unfortunately this is idiocy – The French, Russian, Chinese revolutions were based on and driven by savage, fuedal, inequity in property, rights, income and wealth.
Trick 7 – simply contradict – “It doesn’t matter if some people have more than other people.”
This is trolling, the past-time of rightwing idiots.
Trick 6 – erect diversions. Assert some “need to demonstrate some sort of correlation between the two” (inequality and revolution).
This is standard gun-lobby tactics. They also demand correlation between guns and homicide, knowing damn well that many homicides exist for other reasons and there are many guns that cause no deaths.
This is also idiocy – it also creates the opposite obligation ie to demonstrate that either there is no correlation between guns and homicides, or in the case of our troll, to demonstrate that there is no correlation between inequality and revolution. But all they can do is spread the diversion and move on.
Capitalism clearly breeds inequality, OECD nations have generally exported much of it to poorer nations with oppressed working conditions, and capitalism is now leading to a need to get rid of capitalism – the root cause, in modern circumstances.
Re: Terje’s objection to my largely uncontroversial, almost tautological point – I evaluate health policy for a day gig so I know how social disadvantage = lousy health outcomes = social disadvantage.
I did say at the outset: you’d have to be an ideologue not to acknowledge it.
Then he described himself as a radical libertarian.
QED.
I guess if Marie Antoinette had survived she would have agreed with the proposition that great inequality in wealth and power were unimportant. However she managed to flame a desperate situation with her remark that if the poor people were starving “Let them eat cake”. She propobably regretted that remark in her dying mments.
There seems to be a little of that kind of attitude in the sorts of justifications that have been made by the 1 per centers.
@Ernestine Gross
So is there, specifically, a capitalist model where there is a minimum wealth condition. Is the condition a minimal share of output, or a fixed amount irrespective of output?
While I am skeptical about all modelling as society is driven more by politics and games, presumably a model maintaining your minimum wealth condition in the long-run would need to be a market socialist mode?
.
“Capitalism clearly breeds inequality”
It depends. As capitalism replaced Europe’s feudal systems, inequality decreased. Where it replaces highly equal systems – like subsistence living, or China’s mid-century communism – it does increase inequality. But as Terje has pointed out, inequality isn’t always bad – if I’ve got $10 and you’ve got $15, increasing them to $20 and $30 doubles the inequality, but we are still better off.
“OECD nations have generally exported much of it to poorer nations”
Actually international inequality has been decreasing, thanks mostly to liberalisation in China and India.
five facts about the wealthiest 1 percent
http://www.livescience.com/16518-5-facts-wealthiest-1-percent.html
@Jill Rush
Historians now think that Marie might not have actually said this, but then the honesty of historians is always suspect. Shakespeare made just as many valid points about inequality in his plays even though Julius Caesar and Kings Henry and Richard may not have actually said the words Shakespeare wrote.
“There shall be in England seven
halfpenny loaves sold for a penny: the three-hooped
pot; shall have ten hoops and I will make it felony
to drink small beer: all the realm shall be in
common; ”
Unfortunately the real-world Kings and Queens had other ideas.
But the masses have long flocked to Shakespeares plays.
@Chris Warren
The models I have in mind are ‘competitive private ownership economies’ with various market structures (complete commodity markets, complete security markets, incomplete markets, sequence of commodity and security markets, partially segmented markets).
IMHO, these models are very helpful in distinguishing theoretical knowledge from libertarian and other ideologies. There is no government in any of these models, there are no class structures, there is no Politbureau, there is no military or other dictator, there are no feudal lords.. Yes, these models are unrealistic in some sense but they are very helpful in identifying unrealistic policy objectives and policy measures (for example, the direction of financial and labour market deregulatons, new public sector management – roughly speaking the direction of policies marketed under the headings ‘globalisation’, ‘competition’, ‘economic rationalism’ and ‘new public sector management’).