12 Responses to “The plutocracy gilds itself in folksiness”

1. Paul Woodland
   April 21st, 2008 @

   I think anyone who uses the word “plutocracy” is on some level an elitist.

   The problem is that our economy is becoming a very inhospitable place for the uneducated, unskilled worker.

   It’s not that you’ve got to be all that smart these days, but you have to know how to do at least one useful thing well. Of course what was useful 20 years ago is not necessarily useful these days.

   Community colleges are doing a lot to retrain the workforce. They’ve always been good at this. I think funding could be provided to help people afford it.

   American technology companies are already making massive investments to ensure that more students graduate from high school at the very least.

   Without a high school degree, you’ve got pretty much no hope at all. Without skilled workers the technology companies have no hope at all.

   It looks like the tech companies have finally realized that the government is not going to fix anything, so they are finally ponying up some money. It will be interesting to see if they can make a dent in the problem.

2. Matt Friedlander
   April 21st, 2008 @

   Yes, High School won’t cut it anymore. You need a degree and lots of college loans to pay off before you even start to join the work force (see educational video below):

   http://youtube.com/watch?v=GAkRoWVmavc

3. Josh
   April 21st, 2008 @

   I think the unskilled worked notion is a red herring in all this. The facts are that top marginal tax rates under Reagan were cut to such an extreme degree that the richest 1% are now a hell of a lot richer than ever before. Similarly, our system of taxation favors the kind of investment that benefits the wealthy to an absurd degree.

   If you or I save our money in an interest bearing savings account, we are taxed on any earnings at the top marginal tax rate for which we qualify. If, however, we invest in high-dividend paying stocks (even historically non-volatile utilities stocks) our dividend earnings are taxed at a LOWER rate than our income bracket. Ditto, long-term capital gains taxes.

   If you have money, the system favors allowing you to keep it and grow it. At this point in the argument, the rich always say that they pay more in taxes than everyone else. Maybe. But that’s simply a measure of how much more they earn than everyone else.

   The argument no one wants to have is that there is a fundamental human right to a base standard of living. We can argue about that level, but once we agree on what it is, we are compelled to use the shared wealth of society to buoy those (such as children!) who otherwise would not have this basic level of sustenance, education, health care, etc.

   We can also agree, on the other side, that all income earned above a certain standard of living is basically a luxury. We as a society can decide to apply this luxury income to the benefit of the entire tribe or we can allow people to keep this money, which they are allowed to earn in our free, open and protected country by virtue of the institutions that provide common defense and stability and that are paid for by everyone.

   If we allow those best able to achieve massive wealth to keep their winnings, we can argue that they have earned this money. Or we can acknowledge that it is not necessarily a right, but a privilege, to be allowed to keep wealth in excess of necessity. Further, we must acknowledge that when we allow individuals to amass wealth out of all proportion to their individual human needs, that we allow them also to spend that wealth in a manner inconsistent with the needs of the many. A good example of this is when a perfectly decent apartment building is razed to the ground so that developers can make “better use” of the land by building houses that only the very wealthy can afford. We must look at this situation and question how it is of benefit to the many. For too many years we have not asked that question.

   When a company is purchased by a private equity firm and then fires numerous workers not because they were unprofitable, but because they were not profitable ENOUGH to satisfy the demands of a certain class of investor, we begin to wonder why society tolerates conglomerations of capital whose purpose is a detriment to the lives and livelihoods of the many simply to benefit the few.

   Tech is a good area of consideration. American technology companies complain that the U.S. government does not allow them to employ enough foreign workers (by limiting the number of visas available), but at the same time WE KNOW there are perfectly qualified and unemployed U.S. nationals who could fill many of those jobs. It is not that the companies can not necessarily find workers, but that they can not find workers they consider cheap enough to allow them to produce a return on capital necessary to satisfy an investor overclass.

   To then turn around and argue that American eduction is deficient is absurd. The rest of the world subsidizes the education of the best of their people at our universities.

   We are being lied to.

4. andrea
   April 22nd, 2008 @

   Just found this blog on another blog. Love it so far. Except – how can you, in one post, decry the Nanny Government, and then talk about how much money some people are allowed to amass? If you are referring to the government permitting crimes when talking about people being allowed to amass money, that’s one thing. But to curb someone’s earnings because it’s more than they should be permitted to amass is bizarre and communist.

5. Josh
   April 23rd, 2008 @

   Andrea: I was beginning to wonder if someone was going to notice this seeming contradiction.

   I’m going to mangle this, but I think it comes down to a notion of rights. If one believes that a person’s rights end where another’s begin, it is a question of which non-infringing rights we allow the government to curb as a matter of course. I clearly have no right to poison the water system, but perhaps I should have the right to walk near a major reservoir, and even to walk nearby carrying a giant vat of poison. However, I think we’d agree the government can take adequate precautions (fences, guards) to keep unauthorized people physically distant from the reservoir.

   However, does that mean we would allow the government to post a guard in my home to keep me from poisoning myself? No.

   So, in the strictest sense, most people (not anarchists) are OK with the government working for the prevention of common harm, but not for the prevention of individual harm.

   The government, working in prevention of common harm is granted the right to collect taxes to support its efforts. Just how widespread are to be its efforts and how much it requires to carry out those efforts is entirely up to interpretation. I think the government should not make efforts to prevent people from poisoning themselves if they do so knowingly (e.g., people know fast food is bad or they can be reasonably expected to find out). I think the government should make efforts to prevent the common harm (e.g., allowing people to lose their jobs simply because it serves the greed of others).

   I am not against the capitalist impulse. I’m only against the capitalist impulse when it infringes on the good of others. It’s arguable that when a private equity firm fires a whole bunch of people, this action (Smith’s sanitized notion of the Invisible Hand) may do good. To use an extreme example, there are some religious people who, in the interests of preserving their faith, believe we can not judge God’s hand either, and that perhaps the Holocaust is not proof that God allows evil to exist, because it is possible that the Holocaust served a higher purpose. We simple cannot know what this higher purpose is. We must judge the means as if they were ends, and not assume that there are some other, unforeseen, ends that might justify an action that resulted in a common harm.

   So, to be precise, I do not know that I am necessarily always against the aggregation of great wealth in the hands of the few, but the way that wealth is obtained invariably causes a common harm, and I am OK with the government preventing that harm by erecting barriers.

   In France, a bondholder can not simply force a company into default to collect on a bad debt. It may seem unfair to the bondholder, but the government there recognizes the harm that such actions cause to workers. When seen in the light of the prevention of harm, I believe my seeming contradiction makes more sense. We eat a cookie expecting it to be unhealthy. We do not take a job expecting to be fired. We do not drink the water expecting to be poisoned.

   Until I had to write this, I did not know there was such a category as left-libertarian, but I suppose I fall into that category.

   SECOND THOUGHT

   A much easier way for me to conceptualize what I just think is correct (but have trouble articulating to myself) is the notion that there is a finite amount of land. Some people will always be better than others at gathering land for themselves. Any system of government we’ve ever had was all about allowing certain people to own or lease land. If you believe everyone is born on the same land and therefore has the same right to a useful portion of that land, it’s problematic to also think that some people can earn super privileges to not only have more of that land, but also to effectively deny others access to land. Since land, and all the wealth stemming from it (which is, really, all wealth) is finite, we play a zero sum game in which every “winner” creates another loser. This is not communism, just logic. We’ve lately (especially since portable currency) evolved this concept into abstractions, but it’s still true. The end run of this thinking is that the system should, rightfully, stay static, but I can’t abide that because it gives no incentive for the ambitious to create/produce beyond subsistence (since anything above that might be re-apportioned to everyone). But I also don’t like the idea that one talented person could cheat another out of his original share of the land. This is not a new concept: Hebrew law only allows someone to lease land for 7 years after which it returns to the original holder so that he and his descendants can not sell off their land permanently and impoverish themselves. We have no such restrictions in our society. And since a person’s birthright to the common wealth we all share is so grossly apportioned based on the lucky sperm club, we live in a very very unfair set of circumstances. So, I argue for a base standard of living, and when someone is able to disenfranchise another from basic rights by virtue of talent, I cry foul.

6. Paul Woodland
   April 23rd, 2008 @

   I’ve tried to find decent programmers/technology workers in the US. The good ones cost at least $100/hr, and there aren’t all that many good ones, so I think the tech companies have a valid point. You either have to educate or import the talent.

   Regarding excessive wealth, I don’t understand what the problem is. Many of the people that have “excessive wealth” deserve it on some level. Bill Gates and Warren Buffet started and continue to run amazing companies that produce wealth beyond anything anyone could ever have imagined.

   Let’s face it, America is the richest most prosperous nation in the world, because we don’t strip away, with high taxes, the incentive to innovate and create.

7. Josh Friedlander
   April 23rd, 2008 @

   Clearly Steve Jobs doesn’t continue to innovate because he is motivated by money (he has way more than anyone could ever need). So, he must be motivated by something else. Maybe that something else is what motivates people to innovate and create.

8. Paul Woodland
   April 24th, 2008 @

   Nah, it’s money or power or both. Always has been, always will be.

9. Josh Friedlander
   April 24th, 2008 @

   That’s an awfully binary view of human motivation unless you’re defining power so broadly as to dilute the meaning into “anything that makes me feel useful.” I’d agree with you if you’re defining power that broadly, because otherwise it’s hard to explain the actions of anyone who works for less than their market value.

10. Andrea
    April 25th, 2008 @

    Josh – thanks for the thorough and thoughtful response. I agree that there is a balance that must exist. In law there are two concepts – adverse possession and the rule against perpetuities – which are ancient concepts that are meant to free the land so that the living can use it and so it is not tied up by the wealthy. Of course, we lawyers are always finding ways around this for clients, but I like the notions. We can all own what we own, but we shouldn’t keep it at the detriment of everyone. Interesting stuff for sure….I’ll keep reading.

11. Andrea
    April 25th, 2008 @

    Also regarding your poached egg dilemma – the egg drop works best only if you put vinegar in the water – any type will do. Give it a try, you’ll see.

12. Josh Friedlander
    April 25th, 2008 @

    I’m glad you’ll be around to keep me honest. I’m already (on re-reading) seeing problems with my zero-sum reasoning.

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