Stanford historian uncovers a grim correlation between violence and inequality
news.stanford.edu
news.stanford.edu
"This article shows empirically how trade union membership and income inequality are mutually related in twelve countries over more than 100 years. While past research has shown that high income inequality occurs alongside low trade union membership, we show that past income inequality actually increases trade union membership with a time lag, as trade unions recruit more members after inequality has been high. But we also show that strengthened trade unions then fight inequality, thereby destroying what helped them to recruit new members in the past. As trade union density decreases, inequality increases and eventually re-incentivises workers to join unions again. By showing this empirically, we reconceptualise the relationship between inequality and union density as a prey and predator model, where predators eat prey – unions destroy inequality, but thereby also destroy their own basis for survival. By empirically showing that trade union density and social inequality influence each other in this way over long periods, this article contributes to a dynamic approach on how social problems and social movements interact."
"Any kind of group activity requires organization. But as soon as one starts to organize one creates a division within the movement between the organized and the organizers, between ordinary members and officials. The latter quickly acquire knowledge and expertise that set them apart and give them power over ordinary members. The officials begin to derive personal satisfaction from their place in the organization and seek ways of consolidating it. They acquire an interest in the continued prosperity of the organization. For ordinary trade unionists, their union is just one interest in which they have a small stake. But for the paid officials the union is their employer. Preserving the organization becomes more important than helping it achieve its goals. As radical action may bring government repression, the apparatchiks moderate."
Media owners will similarly run false stories, exaggerate and blow out of proportion any instances of union corruption whilst simultaneously downplaying and ignoring vastly worse instances of corruption by the owners and managers.
There have always been unions that organized in a manner that avoids this situation. (The CNT, the IWW, the Zapatistas (1990s) and, more.) In fact, this act of holding on to power has always been one of the major Anarchist critiques of Marxism. And, Anarchists were very present in the unions of the early 1900s.
One of Capitalism's and Authoritative Communism's finest achievements has been burying the history of unions. They've done it so well that many current unions are unaware of alternative power structures.
It's unfortunate because there is so much to love about Anarchism.
Democracies are ugly, inefficient, buggy, and bloated. Most people don't get what they want, but they agree to form a union because they know that they'll get more than if they were ruled by an autocrat. Democracies are pragmatic.
However, some people naturally want to push their vision onto others. And, there are constant forces at play to do so.
I think the democracies that work best have some common culture. They seem to work better because the core differences are more tightly clustered.
I used to know a guy who worked for a trade union who was bemoaning its demise. In 1997 when Labour came to power in the UK for the first time in nearly 20 years, they strengthened employment laws so well, the need for trade union was perceived as lesser by much of the membership. This meant the trade union struggled to survive.
It's interesting to me that the campaigns they fought on and won around employment rights, was perhaps at the detriment at overall income inequality.
We now have zero-hour contracts (utterly horrific for those at the lower end of the skills spectrum), and CEOs earning many hundreds of times the lowest paid in their workforces.
Brexit was caused by income inequality for the most part. The perception by many is that immigration was causing a drag down on wages, but all the data suggests in fact immigration is net benefit to a population, and its the top rising away faster at the top and under-investment in public services that's actually the cause of the country's ills. Fixing this is a big thing, and whoever does it is likely to be long remembered.
In recent weeks, the leader of the Labour Party who is being roundly criticised for ineffectiveness (amongst other things) by those both inside and outside the party had his first bit of good press in some time: he suggested a wage cap inside companies linked to the lowest paid member of staff.
If you set this to say 50x gearing a company that is only paying its cleaners £10,000/year can only pay it's CEO £500,000. If the CEO feels he deserves £4m/year, he'd have to raise cleaners' salaries to £80,000/year - about 4 times the national average wage.
The hope is this will push down CEO wages reducing the race at the top of the pile, but also raise the lower wages a little, thereby improving quality of life for lower-skilled workers. Cleaners get £15,000, CEO gets £750,000. And so on. Net result: income inequality is reduced.
But how do you do that in a free market economy? His answer is surprisingly simple: government contracts that go out to tender should have this as a stipulation in order for the contract to be awarded.
If you are a train operator, eduction or health care provider, etc. and you're only paying your staff minimum wage (£6.70/hour for those aged 25 and over), you don't get the contract if your Chief Exec is earning more than the equivalent of £335/hour (a little shy of £700k/year).
There are a lot of firms who do nothing but government contracts whose CEOs are paid a considerable amount more than this.
Some will argue that this will lead to a situation where these firms can't hire "the best", or that they'll game it by making remuneration more geared to shares/dividends instead of salary/bonuses, but I think that's unlikely to bear out in reality: there is a steady queue of capable people more than willing to work for £335/hour running service companies.
Brilliantly, it even defeats one of the big scares going on at the moment around Brexit reactions and the touted UK/US trade deal being discussed: there is worry that US healthcare companies might start bidding and getting contracts for parts of the NHS.
Critics are worried that these companies are outright profiteering enterprises, evidenced, they say, by the state of US healthcare. This would either stall them from bidding/winning, or promote this policy across the Atlantic into those companies.
And if the remuneration balance does move to shares and dividends, I think that the Left will have won a major goal: they can promise low income taxes and raise taxes on dividends, knowing that this will be popular with very, very large parts of the population. Meanwhile, it'll redistribute wealth and normalise income distribution, all without having to scare the middle classes who mostly end up net winners.
Will it ever happen? Probably not with Mr Corbyn at the helm (his poll ratings are very poor and stagnating even long after last Summer's dramas), however he had party support from all factions, and across the benches. I can see it gaining traction before the next General Election.
Will it happen in the US? Well, if you elect a billionaire who appoints billionaires to his cabinet to perpetuate a system that made them billionaires, it's unlikely they'll nix it. But who knows - it could work.
Now then a CEO might want to outsource those jobs as well, so the company would officially only employ the highest income people.
Either that or split the company up based on earning bands, and have the CEO be the CEO of each company, so even though they could only get paid 500k for the company with the cleaners, they would also be paid 1m for the company with the office admins, and more for each other company in the bucket.
There are ways to work around whatever limitations will be created.
Maybe it's naive to think its as simple as being slightly more verbose: "Salary tied to lowest paid employee or contractor"
Also cleaning and administration services wouldn't be contractors, but services bought from another company. So that wouldn't count either.
If you close all reasonable loopholes and make your intent clear when you write the law, a judge (at least here in the US, I know the UK has a slightly different system) is not going to say "Oh, that's undefined behavior, you get a free pass."
He or she is going to say "That's undefined behavior, but you're trying to circumvent what was clearly the intent of the law. Bring yourself into compliance or face further penalties."
It's surprising how often we had cause to (although maybe we're both borderline).
For all the places that I've worked, the cleaners have always been part of another company, one that was contracted to provide cleaning services. There's also firms and contractors that provide bookkeeping services for small businesses. I'm sure a lot of other administrative tasks could be outsourced as well.
Having these services provided by other companies would raise the minimum salary in a company quite a lot.
The other thing companies do is set up plenty of shell/thin corporations around the world, assign the IP rights to those in minimal tax countries, and then charge massive internal fees so that all the rest of the organisation barely makes a profit. This sort of thing seems to be the same level of loop-hole as setting up multiple companies so that the CxO's can get paid more.
Of course that's forgetting that most of the CxO pay is actually in stock and options, and not so much is in cash, so I don't know how much a law capping CEO pay would do. Some notable CEO's have actually taken just $1 of actual cash for payment (because legally they have to be paid something to receive company perks).
All it takes to end this practice is for the tax authorities to take a dim view of it.
Starbucks and Google were both caught by this and although they didn't pay a fine as large as they should have done, with a nod and a wink, they did end up paying more.
The economic system is nowhere near as immutable to change as certain people would like you to believe.
The swift reaction by BlackRock to the government simply making noises in particular was noteworthy:
https://www.theguardian.com/business/2017/jan/15/blackrock-d...
It's not so easy to apply to a law written in terms of concepts like "two employees of the same company", because "company" is itself something that only exists as a legal construct and "employee" already has a specific legal meaning that's significantly different from its common-sense one.
Wikipedia's background is weak, but Northern Securities Co. v. United States in 1903 [1], one of the first major anti-trust prosecutions, was equally novel by the fact that the US government was choosing to prosecute it at all.
The Sherman Anti-Trust Act (1890) had been on the books for better than a decade. Under a unified government, applicability is rarely as much of a question as enforcement.
[1] https://en.m.wikipedia.org/wiki/Northern_Securities_Co._v._U...
For example in clothes manufacturer, which contracts out the making of its clothes to a company in another country. Would the people employed by that other company be counted?
In the context of sports, this manifests as using procedural methods to run out the clock or interrupt play by complaining that a foul has taken place, or causing a foul because the penalty (letting the other team have a shot at the goal or having a player sent off temporarily) is an acceptable price to pay for interrupting the momentum and scoring ability of the other team. All sports teams want to preserve their options under the rules, but some teams seem to rely more on leveraging the rules than on superior performance onthe field. This may be pleasing to their hardcore fans, but when all the action is on the sidelines I feel it's a sign of the team going into decline.
I feel the same way about business. If a firm's corporate identity is built on clever legal and accounting tricks and PR rather than the provision of a valuable product or service by people who enjoy their jobs, then it's likely a shitty firm. Unfortunately there are quite a lot of shitty firms, and their cumulative effect on the economy as a whole is cancerous.
This has a partial transcript of his presentation at Oxford Uni
http://www.zerohedge.com/news/2016-10-17/daniel-hannan-right...
That said, the Prime Minister has said consistently since coming to power and discussing Brexit negotiations that immigration - and specifically free movement - is a key criteria to their stance. They wish to end it, as much as possible.
During the campaign, Farage's alternative Leave campaign made this the central issue for many of the numerous debates that were had, including a rather sickening photo on the back of a lorry.
When you go into many communities and discuss Brexit - as I did both before and after the vote - the main driver was immigration, specifically in the context of Calais and middle eastern refugees. It doesn't matter that this has nothing to do with EU membership, it was perceived all through the Summer as EU members losing control and us being "at risk".
In the days after the result, there was a recorded rise in hate crime, my local Polish centre being attacked, people being shouted at in the streets. I even had one colleague who is Scottish but has a more olive tone to his skin than most Brits being told to "fuck off home" the day after the vote by a passing van driver.
The fact that immigration was being used like this was a major part of the debate for me. I work with many EU nationals, many of whom were concerned about how the debate was structured, and shortly after felt threatened.
So, we - those who campaigned for Remain - predicted that immigration was going to be the central issue, it became the central issue, attempts to diffuse it by correcting blatant lies about the effects of immigration were not picked up by many, arguments to enflame people did get traction, and after the vote immigration has become a central tension point in both our society and our negotiating position.
It's fair to say, immigration was a major - if not the essential - factor in most people's minds when voting.
What's interesting is how that breaks down. Lord Ashcroft's polling puts immigration further down the list, but then he was sampling people in more affluent cities that were broadly Remain, because more people live there. In fact when you get out into the sticks, it's way higher, especially in lower income homes.
You voted the way you did for the reasons you did. However the main driver of at least one Leave campaign - and to some extent both - was immigration, and all the discussions are now framed in that context for that reason.
[1] https://en.wikipedia.org/wiki/Causes_of_the_vote_in_favour_o...
It's very interesting you point this out. Does the UK have minimum wage now?
I've always pointed this out in discussion with americans about minimum wage. Here in Norway, we don't have it, yet income equality is still very good. Why? Because it is the unions jobs to set a minimum wage per industry. They know best which minimum wage can be sustained within a given business.
I think that's why the unions are still relatively strong here: they have a meaningful job to accomplish. And I get the sense that the unions are very productive in their salary negotiations. They know that they have to strike a balance between getting their members decent salaries, and having the business be sustainable so they keep their job.
In Norway David Cameron's "we're all in this together" phrase makes sense in a way that it plainly doesn't in my 'home' country, the UK. Home in quotes because I have now been in Norway for 31 years, slightly more than half my life.
Only insects have that sort of thought process. "I may die but the hive will overflow!"
2 dollars a day isn't all that little in places like say, India. Sure, they're not going to be living a life of luxury, but it's very different from $2 a day in the US, and you shouldn't have trouble feeding yourself and having shelter with $2 a day in India, which amounts to about Rs.50,000 a year. In fact even though inequality is increasing, a number of studies have confirmed that poverty and extreme poverty have drastically reduced over the past few decades. It still exists of course, but much better than what it used to be.
I don't remember if it was that book or something similar I read around the same time, but I have a faint memory of membership in the Indian middle class essentially being "owns a household appliance".
Those that are recruited in "the west" are younger people straddling two cultures. The one of their immigrant parents, and that of the culture of the community they grow up in. Over time the stress of this life makes them lash out and open for recruitment.
Those from "the east" see their way of life encroached by "westernization" just as much as certain right wing groups in "the west" fret about "islamization". And over time the fear and frustration grows until they become violent.
Go read the Wikipedia article about 9/11, they were fighting against the US attacks on Muslims, their influence on local politics, and their support of Israel. Why do people think it takes more than that?
Edit: Please try not to tell people to "go read" it comes across as combative. Especially since I have read that article.
Saying that's change is misleading. It's foreign control they're opposed to, and that has been normal for over a century.
To say that all those poor misguided young men just need jobs and money misses the point entirely. The problem is with society itself. They yearn for an alternative, but we in the West are too much a part of the system to imagine life outside of it.
Often times it is in the interest of certain capitalists to get our government to engage in imperialism, or destabilize certain regions, which helps lead to the awful conditions for some people in the Middle East, and I think this helps pave the way to religious extremism. They rightfully recognize nations like the U.S. are partially to blame for their conditions, and unfortunately lash out at the everyday citizens who often had no part in the matter.
This is patently false.
The US - and 'capitalists' do not want 'destabilization' - over and above all they want 'stability'.
Case and point: Saudi Arabia. Here you have an 'extremely conservative Islamic state' - which is culturally the furthest thing from the American ideal - and yet the Americans are their protectors - doing pretty much anything to preserve the stability of that regime. And for what: direct access to Oil - at market prices. That's it.
Same thing for Qatar, UAE, Kuwait, Egypt, Tunisia. And almost Libya until Gaddafi went to far oppressing an uprising, and remember the US supported Saddam so long as he wasn't invading allies like Kuwait.
Prosperity is not a zero-sum game. 100% of the Middle East could be thriving and plentiful if they organized themselves in a responsible manner. Most of them should have ample Oil surpluses to found basic progress.
I don't really see what your example of Saudi Arabia proves. We sell them arms and purchase much of their oil, it's in a lot of people interests to keep them stable. I'm saying in some cases it is in business interests to keep a region in conflict, and sometimes imperialism leads to instability or a lack of material wealth, promoting extremist thought.
For starters, you're assuming that the US government and it's intelligence agencies always understand the actual consequences of their actions and are always successful, which is hilariously false. So instability is a frequently unintended result of meddling in foreign affairs, despite our intentions.
And the idea that all these nations would be "thriving" if only they'd "bootstrap" themselves is extremely naive. Iran is a great example of using "ample oil surpluses to found basic progress", when they attempted to nationalize the oil industry. But that would've hurt Western oil profits / consumer wallets, so we overthrew that administration.
I'm no ME expert but your understanding of the history of these nations is incredibly shallow. The powerless are not the cause of the world's problems.
I didn't assume that at all.
In fact, I'd agree with that assessment.
But the purpose of US involvement in the M/E is not to 'destabilize' - it's the opposite.
Even out of pure self-interest - the US gains from a stable M/E not a 'unstable one'.
If you were Exxon - would you rather a stable political regime with which you do business? Or one that is changing all the time - wherein it's so dangerous oil deals are impossible?
Do you know how many deals US Oil companies got in Iraq?
ZERO. Nada.
100% of Iraqi Oil is extracted, and exported by local entities - and European, Russian and Chinese companies.
The US got nothing out of it - granted - some Oil 'services' companies got some decent contracts.
It's contrarian and unjustified to indicate that the US wants to engender instability in the region.
"I'm no ME expert but your understanding of the history of these nations is incredibly shallow. "
Save your ad hominem for Huffpo :)
"The powerless are not the cause of the world's problems."
The US is not the creator of terrorists.
Terrorists (and their ideologies) are the cause of terrorism. Some of them are powerless, some of them are not.
The Middle East is rife with natural resources, it's 100% their own fault, collectively, that the ME is mostly a craphole (despite some pretty nice things) and so many of them want to leave for Europe and North America.
(Also, how is pointing out your ignorance of the subject at hand ad hominem?)
Your posts reek of libertarian sentiment, which is based on looking at issues as simply as possible. Terrorists commit terror because they chose to in that specific moment, ignoring the X years of history and events shaped that moment. Everyone is 100% responsible for their own situation, no matter what.
You obviously had no interest in looking seriously at the ME or approaching the subject in anything resembling good faith. I knew that when I first commented, but your first post hit a certain nerve. Only the powerful thrive in the simple, just-world position you're promoting, and it's becoming more apparent how bleak a future that is.
I think you might be incorrect there. IMO, Rhetorical tautology is the cause of terrorism.
Because while it seems financial capitalists thrive on instability, because this allows them to extract arbitrage, industrial capitalists are more likely to have their supply lines and similar disrupted.
Prague went from one kind of stability - to a different one.
Without the resulting stability - nobody would have been rich.
Yes - I agree - a 'shock' to a system will create winners and losers, arguably, you could say that there is something to gain for the 'winners'.
That said - the cause of the 'fall of the iron curtain' was not 'capitalists' - their power was not nearly sufficient for this.
There was great sociopolitcal upheaval - and I might add most citizens where 'on the whole' good with it.
Of course there is 'change', and sometimes 'shock' - but on the whole - most businesses want stability, decent governance, baseline growth.
McDonald's would love African regimes to be stable and for their citizens to have $$$.
> There was great sociopolitcal upheaval - and I might add most citizens where 'on the whole' good with it.
This is an extremely wrong interpretation of the revolution, which I myself was also a victim of for a long time. Czech people were very much for change, afterall, they were literally occupied by an army that used tanks to keep control https://www.youtube.com/watch?v=wW3LCclYoz4 (I'm sorry, I cannot find this video with English subtitles, it is the "last radio anouncement" from an independent Czechoslovakia on the day when Russian forces invaded.) The Russians didn't invade a captialist state, they invaded a totalitarian communist one.
The vast majority of Czechs are "good with" the idea of no longer being occupied by the Soviet Union. The majority of them are "good with" the idea of the Czech Republic being a capitalist state. The VAST majority are very much against the current political structure which is mostly manned by people who were in power before the revolution. To say that they are "on the whole good with it" is just wrong. Indeed, there is, on occasion, signs that there might be a second revolution, only, no one is sure which direction that would go (probably not towards communism... ), sadly, if it happens, it will probably in a nationalistic one. The "lets take care of our old people, break away from the EU, and impose strict laws and draconian punishments for anyone who is the slightest bit lazy or corrupt" is popular among a very vocal minority, which might just have the energy to gain power.
EDIT: Just to back myself up a bit with facts, only 2/5ths of the population or 38% thinks that things are better now than they were before the revolution. 17% thinks that things were better then, and the rest aren't so sure either way. That's pretty pathetic, really, when so few people are sure that they are better off now than they were under a totally insane totalitarian state. It's like asking "is it better to have corrupt capitalism or a pile of shit thrown in your face" and most respondents aren't clear on the answer to that question.
At the same time, %66 say that the revolution was a good thing. Afterall, who wants to be ruled by an occupying force?
https://globe24.cz/domov/19542-mame-se-lepe-nez-pred-rokem-1...
Do you think Czechs would really like to go back to being occupied by the Soviets?
No?
Then they were 'good' with the change, overall.
The prosperity of nations is not a zero sum game.
Many of those 'terrorist nations' have ample natural resources, in the way of Oil - and would be prosperous, glorious civilizations were it not for their totalitarian means, and total lack of intelligent social organization.
The USA is not 'rich' because of something the Middle East gives them. The US purchases Oil from some of these nations, giving them massive trade account surpluses that they should be using to build their civilizations. But they don't.
I'd argue the 'root cause' of their failure may actually have a lot to do with their 'cultural ideologies' which are related to their specific local religion. I'm not against religion or Islam, rather pointing out that some flavours may be detrimental to some forms of secular progress.
Surely - the perception of inequality and anger may be a driving factor, but their anger may be misguided. Also - I think many of them understand this - the #1 ire of terrorist groups such as ISIS etc. is not 'The West' - it's what they perceive to be their local tyrannical governments: Saddam, Assad, 'House of Saud' etc..
Yes, but violence is mostly powered by irrational impulses, at least to get started. It may co-opt reason later in the process, but initially it's just a visceral eruption. So it does not care at all about zero-sum games and whatnot. It only cares that the bastard over'ere seems to have too much stuff and I don't have any.
And a worrying number of them turned out that way thanks to outside meddling in internal affairs...
Strictly speaking, you don't need to redistribute wealth to lower inequality. Destroying wealth is sufficient. Violence and war is pretty good at that.
As long as we're running wars or never ending wars, wealth gets redistributed from all tax payers to owners of factories building war machines or war services (defense contractors). These owners can be direct or "indirect" stock owners.
Sure the people who work in that industry get a "cut" but owners get the most and pay the lest to fund it as taxation on cap gains is lower then earned income.
No. The rebuilding requires additional work/money inputs to create the new building. The value of the original building is lost forever.
Of course, but if you are a building company, why would you care about that?.
There is this idea, that, in a society with very little scarcity, would be almost impossible to make a profit. Your only chance would be to burn everything and start again.
I really hope that theory is false.
If all of them died when the building was destroyed, most of the value of the building is indeed lost. The crater still inherits the unrealized potential value of an expansion or remodel of the old building, from those people who were not tenants of the original building, who possibly might have wanted to occupy building space in the place where it stood, yet were somehow unable to do so. Perhaps the old building was full, or didn't have enough contiguous floor space left, or the space available was too expensive, or installing network fiber was not economical.
Otherwise, if all the tenants survived and continue to have a desire to occupy building space, the value attributable to them is likely to pass mostly to other buildings in the area, as they seek to relocate. They can also impart potential value to the crater, if they wouldn't mind occupying a new building in the same spot where their old one blew up.
Once the potential value of rebuilding in the crater is estimated to exceed the market value of the construction inputs, someone will make the necessary investment and capture the difference by constructing a new building.
Value is only limited by the bounds of human desires. The economy only produces a finite quantity of resources and energy per unit of time, though. Whatever is spent on rebuilding in a crater cannot also be spent on new building in a fresh development site, or on building a luxury yacht, or on programming a machine to make a different kind of "ping" noise, or on making all new Taco Bell menu items from the same old ingredients.
The value per thing ratio is continuously recalculated, and market prices eventually follow. So when you blow up a building, and don't kill all the people who gave it its value (or at least diminish their desire to consume in relation to their willingness to produce), that excess unmet desire redistributes to everything else in the economy. You're making most things imperceptibly more expensive, and a few things noticeably more expensive, such as the cost of occupying the nearby vacant building space.
Flows of resources are easy to calculate, but change in value is nearly impossible to predict.
But in all seriousness I would look at multi-national companies and industries "selling shovels" that benefit for rebuilding both sides of war.
If the sold weaponry is not increasing security for the public, or even decreasing it, wealth is destroyed. It's like buying a car and burning it on the spot.
Also, capital destruction give a chance for building again, and it's building again that you can extract value and make a profit.
Also, capital in its undestroyed form can typically be used to extract value and make a profit. If that weren't true, there'd be little value and profit in building it in the first place.
For example, a building can be used to provide people warmth and shelter in exchange for money. That's why the owner desires to own it, and that's why the owner (or someone down the chain) is willing to pay other people to build it.
Wealth used to be food, livestock, people (because they can make food and manage livestock), and things generally coveted by all, like jewelry. It was easy to imagine how going to war might increase one's wealth; you simply take their food, livestock, jewelry, and enslave their people. You have to whack their warrior class to do it, but beyond that, conquest was a pretty good deal.
Nowadays, actual physical conquest is not that useful for wealth acquisition. Bombing a skyscraper does not give you a skyscraper; it gives you an enormous mess to clean up. Too much modern wealth is in people's heads, or immobile infrastructure, or even just embedded in the ambient relationships between companies and people. A lot of that wealth is so fragile that it can be destroyed by a bad tax policy or poorly-conceived regulation, to say nothing of being literally bombed.
Modern wars are still about wealth, of course... it's just a lot more subtle than it used to be, and no longer has much to do with redistribution. Now it's about suppressing a rival, or enforcing your economic will on another country (like what appears to be our current war in the middle east because we wanted a pipeline to go here instead of there, which has since spiraled out of control), but to a large degree even these actions are the exceptions. A lot of what used to be armed conflict now happens in treaty negotiations and diplomacy, threats of embargo and threats of tariff, negotiations in the UN, stuff like that.
So it depends on your point of view. The really old ideas of war, that involve actually violence, is generally wealth destructive. If a war is going to stimulate an economy, it's going to be a subtle sort of economic stimulus from producing real goods and providing an impetus to reorganize the economy, not because of the spoils of war, which are all but useless in the modern era. But if you look at war in the broader sense, it has been almost entirely about redistribution, albeit mostly of future wealth (since current wealth is generally too expensive to move around). For instance, you don't really understand modern international climate negotiations if you think it is truly just about "climate"; it may be about that, but it is also a battle on the redistributive battleground.
The other problem with it is that the elite of a given culture draw their eliteness from the wealth of the culture itself. The elite of the US and the EU draw their outsized influence from the fact that they are the elite of a wealthy, powerful culture. If they set about making their cultures deliberately poorer, they are cutting their own influence off by destroying the things they're being the elite of. The elite of China aren't just trying to make their own countrymen relatively wealthier for its own sake (though that probably has an impact), it is also because it raises their own power in the rest of the world.
I don't think he was correct about this. I think he just had a couple points from very early in the modern era, and drew the wrong extrapolation through them because they weren't representative. He was very intelligent, but having bad data is hard to overcome.
The marketplace is global, and wealth is easily siphoned off from other cultures and peoples across the world whom the elite are likely to never interact with otherwise. Cultures do not exist economically independent of others. Where do you think empires get their wealth from?
>If they set about making their cultures deliberately poorer, they are cutting their own influence off by destroying the things they're being the elite of.
This assumes the elite are idealistically patriotic rather than self-interested. On the contrary, they are increasing their margin of power over their subjects by taking their wealth and increasing their debts, and can easily move across to other cultures, bringing their wealth with them, if need be.
What causes resentment between classes is lack of mobility. This, IMO, is caused by government regulations and a banking system that hurts the middle class and below and benefits the people at the top.
We have a banking system where the federal reserve can make money out of thin air and inject it into banks. This shifts purchasing power to people in finance.
Regulations like minimum wage and higher taxes on larger income make it hard to hire the next marginal employee. Minimum wage prices out low skilled workers, who would like to work and obtain on the job experience needed to climb the ladder. High taxes makes it more expensive for business owners to hire someone. I'm not talking about large businesses like Walmart (they actually support minimum wage). Small businesses are going out of business, or are just not able to start with increased costs of doing business.
This is a vicious cycle where government intervention leads to rich getting richer, and the poor being more dependent on government programs and finding it harder to move up the ladder. So to fix this people beg for more government intervention, which worsens the problem...and on and on it goes.
If you read the OP, a primary counterexample is mass mobilization (e.g. government efforts to support WW2) which are a great leveler.
Any engineer who has built systems should understand how complexity increases non-linearly with scale and that interaction effects are complicated to reason about. Debugging the performance of a large system is often really unintuitive. So it is surprising when these same people think there is a simple black and white diagnosis that explains away our socioeconomic challenges, which is a more complicated system than anything we've engineered.
How are you proposing that we encourage powerful concerns to not externalize their costs to others in their drive to increase private profits?
I’m hoping you might expand on this a little. I’ve never quite understood this line of reasoning mostly because it seems like there is a lot of money to be made in finance and yet I’m not sure how hedge funds “produce” anything. I really do mean this earnestly, I don’t know a whole lot about economics so from my laymen’s perspective it is unclear how fund managers are compensated for the value they produce if they are just buying a selling stocks.
I believe bankers add value this way. To my eyes "bankers don't produce" is just as unfair as "coaches don't score any goals."
This is not a binary issue, but a matter of proportions.
When the top is say 5 times that of the bottom, society tends to be calmer than when the top is 500 times that of the bottom.
Minimum wage creates a much larger purchasing force, which creates more rotation on the market, thus making everyone richer.
First you mention higher taxes on larger income, but then talk about small businesses? So which is it? Are you arguing that we should tax the rich less, or that we should subsidize small businesses with lower taxes?
But if you have looked at curves over tax rates and curves over income inequality, I think it'd be hard to argue that "trickle down" has every worked or ever will.
Tax rates per income over year since 1913: https://qz.com/74271/income-tax-rates-since-1913/
What's happened since the 80s: http://www.npr.org/sections/money/2015/02/11/384988128/the-f...
Why is it ok to tax profitable businesses/people for the sake of equality? I get it if they don't earn their profits fairly. Why should we steal from top producers and redistribute? Taxes should not be a means to redistribute wealth. It should be directly tied to whatever they are funding. More importantly, people should be free to chose what to spend their earnings on. Does the government own the people it governs? Does it have a claim in what people chose to produce? Having income tax forces everyone to pay for things they might not want (like a wall).
Isn't that more or less impossible? The whole point of a tax is that you take money from the broader population and spend it on something (a war, a road, libraries, public transit, food stamps, etc) that benefits only a subset of that population.
Taxation is, by definition, wealth redistribution.
Furthermore,
> Why is it ok to tax profitable businesses/people for the sake of equality?
This is a common misconception. Businesses don't pay taxes, people do. I don't mean " Apple doesn't pay it's fair share". I mean that the burden of the tax falls on the shareholders/owners of a business, even if the business is remitting the money. So, at the end of the day the question is not do we tax business versus individuals but rather a class issue: do we tax shareholders (who earn income from capital) versus labour (that is, people who earn their income through wages/salary).
I think the more important question is what are we spending taxes on? and why does it have to be decided by a bureaucratic monopoly that is above the law a.k.a. government? Shouldn't we have a choice in how we allocate our own resources? Is it not our own time and labor that we use to produce? Why does that belong to anyone else?
I'm not against helping others in need. But the important distinction is that is should be by choice not from coercion.
This is what elections are for, but obviously they could be done better, and with more granularity of choice (more than two).
> Shouldn't we have a choice in how we allocate our own resources? Is it not our own time and labor that we use to produce? Why does that belong to anyone else?
The government IS you, and everyone else, and you (and everyone else) build your time and labor on a society and infrastructure built by common funds. Anarcho-liberalism is insanely naive and can never work.
Didn't they earn their riches by taking advantage of a system that was put in place by everyone? When someone makes a fortune in a society they are benefiting from the society's trade laws, justice systems, military protection, financial systems, education systems, workforce laws, available workforce, etc.
If the society helps you earn a fortune, shouldn't you proportionally pay back the society for all the help they've given you? Even if you only get to directly enjoy 50% of the value you produce, you still have an incentive for more marginal gains and you will indirectly benefit from the other 50% because you will reinvest it in the society that helped you produce it in the first place.
Slaves were given food and shelter for their labor. Sure, they didn't directly enjoy a majority of what they produced, but the marginal gains would benefit everyone else.
I don't know if you do or have ever owned a business (I do), and that is somehow clouding your judgement, but this is a very shortsighted view, and in no way universal truth. Sure, on day one you as a business owner have to pay more, but going forward, every other business has to as well, so your clientele if it's end consumers (employees of other companies) will be richer, and if your clients are businesses their clients (employees) are richer so your business in turn still increases. This is not a a long chain of logic.
> Why is it ok to tax profitable businesses/people for the sake of equality?
I don't understand the motivation behind your phrasing. Is your question literally; "Why is it ok to tax X?". Because the taxing would be on profitable businesses, unprofitable business, rich people, poor people. Taxes are about societal growth, upkeep and yes, to some extent equality, BECAUSE it promotes a healthier market.
The government improving the lives of children through subsidies and high-quality universal education is the most direct means of breaking the link between your own fortunes and those of the family you were (through no fault or efforts of your own) born into.
Also, I would argue that inequality (beyond a certain point, which the US is far past) /is/ inherently bad. The super-wealthy can have their mega yachts, it's their unfair political influence, which is in proportion to their wealth, that's the issue.
http://www.epi.org/publication/usa-lags-peer-countries-mobil...
Why? That is an opinion, not a fact.
My opinion is that people unconditionally deserve shelter, food, healthcare, education, and liberty.
As efficiency increased we could have made everyone work less. Instead those gains were funneled to owners, to capitalists. Who actually don't produce anything and live off of the labor of others.
Having a huge class of people begging and sleeping in the streets and another small class of people with extreme wealth is just begging for violence to occur. Then you get enormous private security firms, walled private communities with hired cops to keep the riff raff out and prevent theft/kidnapping for ransom.
What happens when the unwashed masses decide to vote to take some of the wealth society has generated back? Or, more's to the point, what happens once they do this and realize their vote doesn't matter because the political power structure is rigged to only cater to the interests of the wealthy by, e.g., doing nothing but banning physical force, the kind of force that's exclusive to the poor?
Mobility is a ridiculous red herring; who cares if a poor person here or there wins some sort of lottery and ascends to the elite class of super-rulers every so often, or an elite drops into brutal poverty and abuse? The more things change, the more they stay the same.
Government regulations providing a safety net for the poorest and helping to protect the weak from the powerful is the only thing that makes inequality tenable for any amount of time. Minimum wage and taxes which go to pay for healthcare and infrastructure are the only thing keeping society civilized and livable for the poor. Without it, well, we'd see that violence is a very cheap solution that people turn to if they think they have very little to lose, or if they are hungry.
And profits do not represent value at all, profit is simply the difference between how much something is worth and how much you can force/trick someone else into paying for it.
What I think can really affect violence, is a level of income for lower-class people. For example, in a lot of ex-USSR countries it is quite a problem – people are pretty violent just in everyday life, and we don't see positive trend in Russia, for instance. So, while super big difference between income of top and low classes contributes to the violence, the ability to have decent life, I think, will decrease violence drastically. Of course, it is oversimplification, there are tons of other factors, but I feel it this way, because violence is mostly done by people with the lowest income (and I don't think it is mandatory to be low relative to the highest, it is relative to the good level of life).
This period of peacefulness is a recent phenomenon. One of the big pacifiers of democracy is that people accept the result because the majority voted for it. When you have a situation when 46% of the population is pushing an agenda that at least 48% of the population is strongly against. That group often starts to look for alternative ways to flex its majority power.
Especially when you realize that in large urban areas we are looking at 25% to 70% type splits in some cases.
46% and 48% of voters, not of the population. Neither voting block are a majority of the population.
I would argue this particular part of our current political climate is largely pushed by a minority, and is as much about them believing their own propaganda as it is about the fact that they lost the election. Keep in mind there was quite a bit of violence coming from the left long before the election was over (attacking people at Trump rallies, fire bombing a GOP headquarters). They genuinely believe the sky is falling, so to speak. It's unfortunate, because it makes it difficult for the rest of us to have a discussion about where we've actually gone wrong.
Is it really that surprising there is a fair amount of visible decent?
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...
https://en.wikipedia.org/wiki/Comparison_between_U.S._states...
Where did you get that number from? Hillary Clinton got 65.8 Million votes. That represents 20.6% of the United states population.
>That group often starts to look for alternative ways to flex its majority power.
See above. They were the majority of voters but they defintely don't represent the majority of the US.
In Washington, DC Donald Trump won 4% of the vote.
Is it not surprising those people feel a bit underrepresented right now and might turn to alternative means of flexing their massive majority in the areas they specifically live?
There is no proof of that. "If this person who decided not to vote were a person who decided to vote then they would vote in a similar manner to the other people who decided to vote" is stupid reasoning because that person decided not to vote.
>In Washington, DC Donald Trump won 4% of the vote.
I am shocked, shocked! A city filled with people who's lives revolve around a big federal government voted for the most establishment candidate in history.
>their massive majority in the areas they specifically live
In D.C., Hillary got 282k votes. The population is 659k. That's not even half of the population. Cool it with the 'massive majority' crap.
The US operates on an election system reflecting the house and senate. This should be basic knowledge for most American citizens. Throwing fits because it didn't go your way is pretty childish since it's exactly how the electoral college works.
DC had a very small inaugural turnout and very large protest the day after. I was trying to give some perspective.
I believe it was about 90% in Chicago. San Fransisco was over 90%. New York City had a large margin. We are talking approximately 45 of the 50 largest cities in the country did not vote for Donald Trump.
I took high school civics. I know how the rules work. Im just telling you that civil unrest usually happens when people feel like the rules are unjust and they have little or no power to change it through the democratic process. So Im simply trying to shed some light on it to people who may not understand why people might feel that way.
https://www.google.ca/url?sa=t&source=web&rct=j&url=https://...
You would seriously have to be blind to not realize the the current path of policies is simply incorrect policies that will lead to harm. For example instead of paying for a wall, Mexico will just pay for better ports as Donald Trump and the fools that voted for him seem to forget they have coastal shipping access to both Europe and Asia. Not to mention all of South and Central America.
That's the problem. Replacing social security with private retirement funds is a debate about which is better. With pluses and minuses on both sides. And guess what? The combination of 401k's IRAs and Social Security kind of does that. See how that works? Its actually saner than people want to believe. Same with things like how health care is run. Its not like we have some kind of socialist utopian system. Its a compromise. Or taxation with our 15% cap gains. Both sides have different opinions but both are at least based in some kind of functional reality where they might actually work. And the reality is that they are both a little bit right so in the end we typically wind up someone in the middle despite how it looks.
Stupid crap like building a wall is just plain incorrect policy. I mean if you even asked experts in border security, they would not suggest just building a giant wall. Its like what a 7 year old would suggest. What you would actually have is very similar to what we currently have. Its pretty easy to see a group of people running across the open desert and intercept them with the technology we currently have.
That is the big difference between what is happening now and what is typical in US politics.
OH wait, no it's the opposite, the only way to defeat them is on their own terms.
You keep on appeasing them hoping it will work this time though.
You punch someone, you are certainly not encouraging them to not hate you. You are not making your point that you are something not deserving of hate. If anything you are proving it and cauterizing their hatred for you in the process.
It achieves nothing positive save very brief catharsis.
I share your discomfort with this in so far as we shouldn't normalize violence in daily life.
Interpersonally, I think we need to keep pushing the belief that there is more than unites us than divides us. At the core of it, we all really want the same sort of stuff (safety, purpose, love, fun, etc.) The more we allow ourselves to be divided (by media, by political rhetoric, by rumor and gossip, by hate) the less likely we will be able to hold those with real power and influence to task - the less we will be able to shape policy and investment in such a way that everyone in our communities benefit.
Big picture, we need to create communities in which all people - including disaffected bigots - can feel that they are thriving (rather than merely surviving). If we do that then these groups, and this repressible rhetoric, will find less support and fewer fertile minds to pollute.
That's my belief anyway.
To be fair, he says that it's an "antiquated term" and that it's "unfortunately tarnished" and that he prefers to be associated with ethno-nationalism... So it may be a distinction without a difference.
Evoking the sort of deep tribal behavior Mr. Spencer is engaging in, instinctively often leads to tribal responses (including violence). Which is unfortunate. I don't think Richard Spencer "deserves" to be punched, and I don't see punching as a noble act. Violence is only justifiable as a defense against violence, in my opinion. I actually think aggressor violence plays right into the hands of the "help we're being oppressed!" narrative, that seems to be a lot of the "drive" behind white supremacism.
I cannot see Mr. Spencer's philosophy to be anything but illogical and immoral to the rational mind. I therefore don't have any real good way to combat his (and other) tribalism, other than continuing to emphasize rational thought. Such is a much more difficult job in this current climate, when the current leader of the US got there half by exploiting tribal politics. But what else will work? I can't see the fisticuffs approach leading to anything other than deepening division.
This is especially disturbing because the epithets "nazi" and "fascist" have increasingly become synonymous with "somebody I really don't agree with", rather than a description of somebody who admires the tenets of National Socialism.
That isn't progressive; it's Jacobin.
The obvious follow-on question is whether inequality is actually bad in itself, and is what produces the war. Or is inequality usually associated with societies where the upper classes keep the lion's share of the growth, and that is what triggers these wars?
[1]: https://smile.amazon.com/gp/product/B016APOCZM/ref=kinw_myk_... [2]: http://www.wsj.com/articles/democracy-is-dependent-on-war-14...
* World War II
* Taiping Rebellion
* Second Sino-Japanese War
* World War I/Great War
* Dungan Revolt
* Chinese Civil War
* Russian Civil War and Foreign Intervention
* Napoleonic Wars
* Second Congo War/Great War of Africa
* Shaka's conquests
* Vietnam War/Second Indochina War
* Biafra War
* Mexican Revolution
* Soviet war in Afghanistan
* Korean War
* Iran–Iraq War/First Persian Gulf War
* American Civil War
* Spanish American Wars of Independence
* Angolan Civil War
* Ethiopian Civil War
* Spanish Civil War
[1]: https://en.wikipedia.org/wiki/List_of_wars_by_death_toll
Many of these are not short term events. You have a several years-long war, with a rise in conflict before it and a gradual repair and rebuild afterwards.
There are enough of them that I wouldn't be surprised if the overall graph was smooth.
> Also many of these wars were pretty localized, so we should see the drops and inequality in the immediate area and a reduced effect elsewhere.
In the modern world, few things are truly localized.
I think wars can increase equality, but they are far from the only cause.
Saudi Arabia has extreme inequality, but it has remained stable while exporting violence to the rest of the world. Maybe war against terror provides release for this violence in US too.
I've increasingly been wondering about the links between violence/social unrest and inequality, particularly as we enter a period of time were globalization and automation have the potential to be hugely disruptive to the existing work force, even more so than they already have been.
This is only tangentially related, but I've been curious about the link between violent crime in the US and general societal health. Based on much of what I've read, and I could be mistaken here, I've seen a number of stats cited showing that factors like income inequality, purchasing power and very worryingly to me, social mobility, are all on a downward trend in the US. Even harder to quantify areas, like asking parents if they think their kids will be better off than they were, result in answers that skew unfavorably.
At the same time, it is both rather easy to own firearms or other forms of weapons and there are plenty already in circulation, and yet, unless I'm mistaken, violent crime has been on a steady downward trend in the US for the last 30+ years.
I would assume, perhaps niavely, that as social markers such as decreased mobility, inequality, pessimism about the future and distrust of the government and politicians grew, we would see a corresponding rise in violence. But it appears we aren't seeing that.
What could be behind this? Are we simply getting better at controlling people? Are we distracting them? Are we incarcerating them? Are they simply killing themselves? I know suicide rates for certain demographics have been increasing. Or are things not really as bad as they sometimes seem?
I'm definitely not advocating for violence, but I do feel that violence acts as a kind of societal last resort when a population believes they have exhausted all other options. Again, this could be a misguided interpretation of the situation on my part, but I would assume that violence in society would closely follow decreases in the kind of quality of life metrics we're seeing. I'd love to hear other posters' thoughts or if there are any good sources exploring the topic.
Maybe people are too distracted by the whole theism vs atheism/religion vs religion arguments, the complaints about sexism/racism/transphobia/etc or general debates about whether things like abortion should be legal or not.
Maybe people are being sidetracked too much by party politics and internet debates to actually do anything about income inequality.
Or maybe as said before, the various other changes have decreased crime rates so much that even an increase in it due to this inequality is barely noticeable. If exposure to lead was really tied to crime rates, perhaps the huge drop off there simply masked everything else.
https://www.amazon.com/War-Peace-Rise-Fall-Empires/dp/045228...
No. The history of Anglo culture has been as violent as any other - but not in revolutionary terms.
Same thing for Scandinavian cultures.
UK/Australia/Canada/NZ have relatively reasonable rates of inequality and there has been no revolution.
Sweden, Denmark, Norway, Iceland - have likely the highest degree of 'equality' and yet - there has been no revolution. Their Monarchies and State Churches remain intact to this day.
The American revolution - though important in terms of world history - was a pretty minor affair - the colonies were small and sparse at the time.
It's also very difficult to consider 'revolution' before recorded history as there were no 'social movements' as we understand them, granted, studying revolution before the common are would be worth an academic exercise.
One solution. Make dollars worthless, unless they have been stamped with a stamp, for the current month. Basically force people to pay taxes on money.
Say you have to pay 10% of the value. Got 2bil, congrats. You are paying $200 million each month.
The deeper problem is that companies have a conflict of short term / long term interest. In the short term, they would prefer to sell their products with as little taxes as possible, and hire as few people as possible. But in the long term, their interest is to have a thriving population and a robust market.
If companies don't act responsibly towards society, there is a pressing need to organize self-reliance. We need to create a new economy based on unemployed people. With good management, they could cover a part of their needs without external help, maybe even be self sufficient. In a sense, we could employ the mass of jobless to work for their needs, thus finding employment and solving their problems directly.
Giving people money in hopes that they will buy your product is mathematically a losing strategy, in short or long term.
Population was already reliant on salary, which was a part of the cost of production. It won't change much, just that now it is redistributed more.
The value of money, each month would go up, and printing money could be use to counter act the deflation, creating a stable currency.
Keep in mind that if you use your money before it expires each month, you get more value than if you just sit on it.
I don't think poor/middle class would be that badly affected. With money taxed, you have a lot of incentive to give that money away, to avoid paying cost.
- https://en.wikipedia.org/wiki/Freigeld
- https://en.wikipedia.org/wiki/W%C3%B6rgl#The_W.C3.B6rgl_Expe...
Government still gets to redistribute whatever taxes it accrues.
Yes, the government can redistribute money of poor and middle class people that was collected this way back to them.
And the worst part, it would not even work against rich people. So I got 2bil? Great, I will buy 5 houses and a furniture factory. And move the rest to my shell company in Caribbeans.
Lots of innovation for example Congress it of universities, from people who are not millionaires.
The filthy rich do enjoy this ego-feeding narrative that it was all just talent and hard work that gave them a disproportionate slice of the world's wealth, but it's not borne out by the facts.
For example, gambling on investments, as with Buffet, or on a new idea, as with Zuckerberg. Sometimes just for gambling on Powerball.
The great rewards are balanced by great risks, and many of these gambles are valuable to society. Where would we be without new businesses and new ideas?
But, the idea that a person deserve the financial power of a country in order to be motivate is a little ridiculous. Are we saying that Zuckerberg would not be creating Facebook if he though that it's going to get only 100 million dollars? or that Buffet would not invest if he is only to be the 5th in the Forbes list?
I do think it would be demotivating to know that if you start a really successful company, the government will take it away.
Zuckerburgs wealth exceeds that of thousands if not hundreds of thousands of his countrymen. Do you honestly believe that the risk he incurred was greater than all of our nations oil rig workers, foresters, soldiers and police combined?
Am I missing something? If Facebook goes belly up do his shareholders get to cut off his hands?
Oil rig workers, foresters, soldiers and police have guaranteed pay instead of a very small chance of very great rewards.
the rich can be brought to heel so long as they're allowed to feel as though they're high status. if you take that away from them, they will not "produce" whatever value they're claimed to.
But since you asked for numbers: http://iowahawk.typepad.com/iowahawk/2011/03/feed-your-famil...