These days, politicians from the left to the right assume that most wealth is created at the top. By the visionaries, by the job creators, and by the people who have “made it”. By the go-getters oozing talent and entrepreneurialism that are helping to advance the whole world. Now, we may disagree about the extent to which success deserves to be rewarded – the philosophy of the left is that the strongest shoulders should bear the heaviest burden, while the right fears high taxes will blunt enterprise – but across the spectrum virtually all agree that wealth is created primarily at the top.
In reality, it is precisely the other way around. In reality, it is the waste collectors, the nurses, and the cleaners whose shoulders are supporting the apex of the pyramid. They are the true mechanism of social solidarity. Meanwhile, a growing share of those we hail as “successful” and “innovative” are earning their wealth at the expense of others. The people getting the biggest handouts are not down around the bottom, but at the very top. Yet their perilous dependence on others goes unseen. Almost no one talks about it. Even for politicians on the left, it’s a non-issue.
There is no longer a sharp dividing line between working and rentiering. In fact, the modern-day rentier often works damn hard. Countless people in the financial sector, for example, apply great ingenuity and effort to amass “rent” on their wealth. Even the big innovations of our age – businesses like Facebook and Uber – are interested mainly in expanding the rentier economy. The problem with most rich people therefore is not that they are coach potatoes. Many a CEO toils 80 hours a week to multiply his allowance. It’s hardly surprising, then, that they feel wholly entitled to their wealth.
Take the pharmaceutical industry. Companies like GlaxoSmithKline and Pfizer regularly unveil new drugs, yet most real medical breakthroughs are made quietly at government-subsidised labs. Private companies mostly manufacture medications that resemble what we’ve already got. They get it patented and, with a hefty dose of marketing, a legion of lawyers, and a strong lobby, can live off the profits for years. In other words, the vast revenues of the pharmaceutical industry are the result of a tiny pinch of innovation and fistfuls of rent.
The biggest tragedy of all, however, is that the rentier economy is gobbling up society’s best and brightest. Where once upon a time Ivy League graduates chose careers in science, public service or education, these days they are more likely to opt for banks, law firms, or trumped up ad agencies like Google and Facebook. When you think about it, it’s insane. We are forking over billions in taxes to help our brightest minds on and up the corporate ladder so they can learn how to score ever more outrageous handouts.
https://www.theguardian.com/commentisfree/2017/mar/30/wealth-banks-google-facebook-society-economy-parasites?CMP=share_btn_fb
The world as a whole is getting better but I wouldn't say the same is true for developed economies in the world. We've moved significantly backwards on anti-trust and inequality law since the 60s... This article goes into the details pretty well:
ReplyDeletetheatlantic.com - How Post-Watergate Liberals Killed Their Populist Soul - The Atlantic
I disagree that we know what happened to feudalism, unless we use a very narrow definition of the term in order to place it in the past. I'd say the basic structures of feudalism (limited autonomy, some heredity, tax farming) are still working just like they always did. The internal structures of most corporations consist basicallly of fiefdoms or mansabdars - mostly not held in perpetuity by families but... sometimes.
ReplyDeleteI'm not sure when the historians started in with this Dark Ages rubbish. Yes, times were tough - and the waves of plague which washed over the populated world made things worse - but people constantly misunderstand the mechanics of feudalism.
ReplyDeleteThe most ruthless capitalists I ever knew were a bunch of guys who ran a boutique trading firm named for Ayn Rand. The Chief Ruthlesser of that band of merry rogues was a great fan of Karl Marx, who said nobody ever diagnosed the evils of capitalism better and furthermore, that everyone should read Das Kapital.
Feudalism worked so well and so long because its obligations went both ways: both up and down. When someone swore fealty to a seigneur, he placed his hands together and the seigneur placed his hands around his vassal's hands. In exchange for fealty, the seigneur swore loyalty.
Capitalism never had any such arrangement. Still doesn't. Employees are viewed as overhead, not vassals whose loyalty might count for something.
Christian flavoured feudalism saw moneylending as a problem: Usury. Islamic societies still do. And both societies found ways around this ethical construct. Money does grow on trees. They're called banks. Banks make loans. That's the way it works.
Rutger Bregman's crayon scrawlings here do not pass muster. When capitalism began to make headway (we like to call it the Renaissance) it was nothing more than loan sharks taking over some lovely Italian and German cities. Tourists still gawp at their patronage of the arts but the House of Medici was built on loan sharking and their era came to an end because they only had a few percentage points of reserves left. Lorenzo the Magnificent was also a fraud: he stole whatever he could find in Florence's treasuries and furthermore robbed charities. Sounds a bit like some gold plated gasbags in power today.
Rentierism is not merely a question of power. King Louis XIV drove France to insolvency, not with the building of palaces but with his incessant wars. The only reason the Sun King didn't go bankrupt was because he reorganised banking in France, thus allowing him to generate preposterous sums of debt. But because the Sun King didn't reform taxation in equal measure, selling offices (Louis extorted money from everyone) , France's finances rotted at the core.
Though its a pleasant sentiment, to think society is borne upon the backs of the meek and lowly people who work hard all day long, it's simply not true, in any economic sense. The only reason they're meek and lowly is because they lack any economic power. There are only three ways to make money in the world: steal it, work for it - and invest the money you have. Those who work for theirs will never get rich.