The Real Class War
americanaffairsjournal.org
americanaffairsjournal.org
> At most, working-class voters can cast their ballots for an “unacceptable” candidate, but they can exercise no influence on policy formation or agency personnel, much less on governance areas that have been transferred to technocratic bodies.
> Unlike the working class, the professional managerial class is still capable of, and required for, wielding political power.
I've never seen actual grassroots activism accomplish much, if anything. Protests in DC are like rain; bring an umbrella, but no need to pay it much attention because it will blow over in no time. It's always insiders who make a career out of policy that ultimately shape it. Hill staff, think tank wonks, professional bureaucrats, etc--it's that professional Washingtonian class that really shapes the government's policy, because they are the ones that show up to do that work every day.
Because someone is motivated enough to pay them every day to do that work
As I used to say back when I was a programmer, often in the context of fads like "quality is free," nothing gets done unless you do that thing on purpose.
Besides BLM, one other recent place in which this question of "are demonstrations enough" comes up is, of course, Occupy. (In that case: no, demonstrations were not enough.)
One thing I remember Garza saying is that the ability to organize a large, nationwide march on Washington showcases the scope and depth (down to the grassroots level) of a movement. If your movement isn't broad and organized, your nationwide march will not succeed.
But that's a necessary condition for political action, not a sufficient condition. A movement can't let marches be the endpoint, and in the interview, Garza emphasized this.
Clearly the organizers of the 1993 "March on Washington for Lesbian, Gay and Bi Equal Rights and Liberation" (which I attended) did not view the march as an endpoint. Many of the roughly 600K (+/- 300K) people present had a lot at stake, including their jobs, at that time. The march was more of a focal point, a coming of age. A constituency made visible. But not an endpoint.
For more: https://www.dissentmagazine.org/online_articles/how-black-li...
- Anti Iraq War movement (2003-4), mostly US.
- Anti WTO movement (1999-2010) global (US, Canada, Japan, Europe). Eventually blended into / surpassed by the Occupy movement.
- ACT UP: Gay rights / HIV/AIDS awareness. (1987 - 2000)
Those are the major causes of which I'm aware.
Of the set, ACT UP was arguably the most successful, and probably deserves much of the credit for mainstreaming gay / nonbinary gender culture.
The WTO protests are more mixed, but put a damper on the Washington Concensus / Neoconservative Agenda movement. Global trade meetings are no longer casually-hosted affairs, and now tend to be in remote / secluded locations.
The Iraq War protests were arguably the least effective, though massive in many cities. They simply disappeared off news coverage though. Clearly they didn't stop the war or lessen the catastrophic impacts of it, though they did help cement a strong political divide over it in the US.
Whether or not more recent movements, particularly on the right, could be considered mass / popular uprisings is a fair question. I'd be inclined to say "no", but a case might be made for the Tea Party and alt-right movements.
My favorite study to establish a directional causal link looks at policies enacted after protests, accounting for the effect weather has on protests. The weather is presumably random enough to not be related to where society is, and it affects protest turnout, which lets you connect protest turnout to policy change causally. It's not definitive, but yeah, there's decent evidence.
I disagree with the other poster who is suggesting that marching is a necessary step for change, but it does seem to be a useful instrument for it.
- Dividing the working class on the issue of gay rights is an effective way for the elites to get the working class to ignore the class war.
- Control of reproduction offers some control over labor.
What actually brought about the change was that due entirely to the fact that people in power had relatives that were gay, or were gay themselves. And these people turned the wheels of society toward making it accepted.
The people in power had gay relatives or were gay themselves a century ago and yet nothing changed without activism.
People had to come out in order for their acceptance to be possible. It's really easy to justify not caring when the group you don't care about seems other. When they're people you know it's much harder to justify not caring.
When I read this the first person I thought of was Alan Turing [1]. His was the fate of high profile gay people until the grassroots movement sprang from the Stonewall riots [1]. It was these activists who took the first steps to even make it possible for a high profile gay person to come out in public.
In order for Alan Turing to be charged with “gross indecency”, he had to go the police himself, inform them he was gay (without being asked or prompted), and affirm it in a statement signed under penalty of perjury.
The only reason he did that was because he was so accustomed to people not caring, he didn’t think he was in any danger.
Being privileged has its privileges.
https://en.m.wikipedia.org/wiki/Alan_Turing#Conviction_for_i...
(I'm aware of wikipedia fallibility but I'm on mobile and will generally trust in the citations for this particular individual)
He was comfortable reporting one of his lovers to the police because he was used to people looking the other way.
Obviously, one of the many downsides to criminalizing harmless behavior is that it places people outside the protection of the law.
Okay, 90 percent activists on the street, 10 percent insiders (who generally only stepped in after the 90 percent had already laid their bodies on the tracks, and accomplished the hard part).
Reason i m asking is thay certain countries had 0% activism and it all changed thanks to culture and osmosis. The fact that audiences were prepared for the changes was huge
Who got into a Tardis and went back and organized the Stonewall riots, ACT UP and the Mattachine Society. Yeah, OK.
Federal recognition of gay marriage eventually occurred in America due to a gay widow who took the government to court over a $300k inheritance tax bill on her wife's estate [1]. Of course the changing cultural attitudes towards LGBT people is overwhelmingly due to grassroots activism, but this shouldn't be overlooked.
For LGBT rights, money has played a factor. If wealthy, upper-class Americans did not also suffer from anti-LGBT laws, I'm not sure we would have made the same progress. There are also financial incentives for LGBT acceptance [2]. A more cynical view might be that acceptance of gay marriage was accelerated due to increasing anti-capitalist sentiments within the LGBT community in the 20th century [3]. The continued oppression of gay people might have led to uprisings far worse than Stonewall. Legislative acceptance of LGBT rights has weakened the link between LGBT activism and anti-capitalist ideologies, to the point that nowadays gay pride parades are turning into a parade of adverts for corporations.
[1] https://en.wikipedia.org/wiki/United_States_v._Windsor
[2] https://en.wikipedia.org/wiki/Pink_money
[3] https://aeon.co/essays/the-radical-roots-of-gay-liberation-a...
If a politician is straight, what does two gay persons marrying have to do with him? It’s thus a brownie point issue, same goes with pot.
Once it start affecting their bottom line, i.e. there’s money involved, watch them and the media skirt around the issue carefully.
It seems like social issues are front and center more than ever at the moment. I think economics can largely explain the divide, but it's interesting for the author to talk at length about the top 10% and leave this out -- as if the top 10% is filled with Econs who vote solely on what they think is best for them economically, and not based on how they feel about social issues.
I think the reason the current climate feels so "divided" is because it's more of a social divide than before.
I think it's easier when it's just a class war. But this is a human rights war. When your basic rights feel threatened, it gives you a little more skin in the game.
Federal judges care little about mass opinion, but a great deal about elite opinion.
Roe v. Wade had nothing to do with feminism, and everything to do with the positions of the American Medical Association, the Mayo Clinic (formerly represented by Blackmun), and academic researchers at elite universities.
Not a terribly important distinction if you’re pro-gay rights or pro-choice.
But give credit where credit is due.
How have you spent your career working in public policy circles and come away with so little understanding of what grassroots activism is, and the impact it has historically had?
Where I live, grassroots organizers are doing all the hard work. I'm not talking about protesters. I'm talking about people who are building and connecting organically, who are facilitating workshops and popular education sessions, who are raising awareness about what's going on in local government to enable democracy to happen. Democracy doesn't function without grassroots participation. This country would be a hell hole without the hard work of local organizers everywhere.
This country is not a hell hole? That's a tough argument to make for a lot of people!
It was clear they wouldn’t do it and talked about it like it was a joke. Something poor people do.
Part of it is that unions badly need reforming.
The other part is that nobody cares enough to reform them.
Most folks at my company don’t care because they get paid too much to care. Not a bad reason.
Once the economy goes to crap that might change.
But didn't all that happen almost a century ago?
Basically anyone in public policy circles, even on the right, should know some labor history. But America hasn't seen a major private-sector strike victory in 20 years, and the 1997 UPS strike was a rare exception: "traditional" mass strikes haven't been a major force since the 1980s at best. It's true that pattern bargaining and labor laws have decreased the need for mass strikes since the bad old days, and people sometimes forget that OSHA and the NLRB are not a replacement for labor power but a consequence of it. But it's also true that union membership, labor bargaining power, and the union 'edge' over nonunion labor have been in decline for decades. The heyday of the UAW, the AFL-CIO, and the UFW was over by the 1980s, and even where labor has made substantial gains since they've come through courts and legislation rather than grassroots action. Even for someone who's been in public policy for 30 years, grassroots labor action has basically been a historical topic, not an active concern.
Harlan County was the cradle of the modern labor movement, but for 30 years its only political relevance has been as a symbol of the Democrats losing their labor support. I only know how things used to feel from movies and songs, not from anything that's happened in my lifetime. Maybe that'll change, the miners struck just months ago, but they haven't won yet. I've never seen grassroots labor wield power either, but that's not the same question as asking whether I know what it used to be like, or whether I want it to come back.
It's not a knockout victory, it looks like only 57% of members ratified the new contract, but it's an impressive show of solidarity given how tiered employment has weakened unions. Salaried workers got less overtime, hourly workers got better rates, and temp workers got PTO and full-time opportunities. Plus, post-08 hires will be brought up to pre-08 wages, which has been a concern ever since the bailout.
Even if it's not an overwhelming win, that's impressive news for UAW keeping its influence across a growing range of workers statuses.
I'm not one of those people who thinks the planet is actually going to kill us off. We're a clever bunch, we'll survive. That said our world in 100 years or so will look significantly different, and I don't think in any of the ways people wanted.
The irony, of course, being that government bureaucracies are inherently an instrumentality of the managerial class. It's not as if the Secretary of Labor is a line worker with no college degree.
So the agency becomes subject to regulatory capture the same as any other and private sector unions declined. Meanwhile the public sector unions remained because most government workers are themselves members of the managerial class, so the public sector unions, rather than representing line workers against a corporate bureaucracy that employs them, came to represent the bureaucracy itself against the elected representatives of the people.
Is it so surprising that it doesn't come first to mind as an instance of successful activism?
I think you are confusing stunts with long term sustained lobbying.
For example I got several k people a substantial improvement to their pensions, passed a motion at a union conference got it put on bargaining agenda and successfully changed the companies mind.
As a result, the managerialists double down on what makes them different from techs, which means being extra airy, vague, political, and what most working people interpret as untrustworthy. It's practically a shibboleth, as if to say they don't need to seem honest because they are powerful. I don't think this managerial class is as necessary as people who are a part of it think.
The class disconnect is more pronounced in recent years because of the stark differences in physical competence and the precarious status of people who imagine themselves as "elite." What they deride as populism is much more complex than they perceive. Working people expect their elites to at least be somewhat noble, and when they aren't, history is the story we tell about what happens to them.
And the real question I want to ask: Do you feel that especially the middlest of managers have to fear AI the most, because AI could theoretically replace exactly that middle layer and do it even better than a human could?
The middle class really isn't any less powerful today. Near as I can tell what happened isn't that the middle class became less powerful, but that journalists in particular no longer find themselves in the upper middle class so they spread the perception that the middle class has lost its power because they themselves feel like they have lost power, especially economic power.
I suspect that society is most likely perceived as most stable when those with megaphones and that buy ink by the barrel feel most stable.
https://marginalrevolution.com/marginalrevolution/2016/06/th...
For most of the history of journalism in the U.S., journalists were not in the "upper middle class". Journalism was a poorly paid working class job for most of the 20th century. Maybe a couple decades at the end of it different.
Or maybe it's the reverse, because the field has high prestige and impact, it attracts upper class children who don't need the salary, causing a downward pressure for journalist wages.
"How journalism became a middle class profession for university graduates": https://www.theguardian.com/media/greenslade/2009/jul/21/new...
"The death of the working class reporter": https://blog.usejournal.com/the-death-of-the-working-class-r...
The original claim I was challenging was "journalists in particular no longer find themselves in the upper middle class" -- I don't think they ever were, it's possible that MORE of them are now than previous -- as you say, even as salaries drop.
This article is just standard journalistic myth-making. The journalists cited as examples of success without college degrees, Carl Bernstein and Walter Cronkite (who both went to college, just dropped out), came from privileged backgrounds just like the privileged kids who fill the industy today.
Maybe 10-15 years ago that was true, but today the control of public discourse is no longer controlled by the elite class. Blogging completely ended that control.
Now because of blogging and commodification of the news, the money is no longer in journalism but in clickbait and it's a race to the bottom.
This article about the decline of Newsweek does a good job chronicling what is happening at news media companies all over the world:
https://www.cjr.org/special_report/newsweek.php
Journalists now find themselves among the precariat, especially those in the long tail of journalism working at clickbait factories like Business Insider, HuffPo, Jezebel, etc. News media is now a gig industry job.
The problem is your reference is some kind of broken organisation where people are basically slave labour and managers only serve to dish out the work given from above. Sure bad managers of that description could be replaced by a good AI in the future but that would be awful because a good manager brings vitality to a team, helps individual team members and helps to filter and promote ideas up and down the organisation.
I think colloquially it is called being severely butthurt. Not a phenomenon restricted to the US.
If you were to look at the individual histories of most senior corporate executives, most of them were in various middle management positions at some point before they became executives...
The kinds of people who were able to move above each layer of middle management were basically those who were the most skilled at manipulating others for their own personal benefit; the simple game of taking credit whilst deflecting blame. It's not surprising that the kinds of people who are able to traverse several levels of the management hierarchy to become executives completely lack any self-awareness. Thinking about themselves would distract them from their main activity which is fooling others.
I've worked in enough companies to know that those who get promoted are not those who care about others' (or even the company's) well being. This is provably true because the contrapositive statement would create a contradiction because in such case, the manager would help others to get promoted and thus they would never get promoted themselves.
Forget for a moment about what we might think about people who succeed in business, and look critically at the ones who fail. People who fail in business are the ones who want friends, honour, fame, validation, sympathy, justice, social good, and esteem. They personalize failures against these needs and stop dealing with the higher level abstraction of the success of the venture. The ones who succeed want something else, either because they already have or self-fulfill those other things, or just don't care. We can moralize and say it's the latter, but it's more often the former.
It's easier when an institution has given you the conceit that you are not morally accountable to the uninitiated or uneducated. The thing about class is that barring crime, there is no downside to betraying someone who isn't a part of your tribe, which is usually from a school. If you believe people get what they deserve, they call that the "just world fallacy," for a reason. It's a noble lie. If it weren't, you'd see more nurses and veterans in business class seats.
Anyway, long topic, but in spite of my opinions, I think it is difficult to accurately criticize management and class without the perspective of an elite education, as (perhaps horrifically) what can instruments know of their players?
Instead of working their way up within a single institution, they make lots of “lateral” transfers.
The government/lobbyist revolving doors are a good example, but not the only one. How many tech workers go back and forth between big tech companies and startups, each time rising more than if they stayed put?
It creates an administrative class that has little commitment to the institutions they “serve”, and an overly valued senior class that is able to run out the door, taking the company with it.
Meanwhile people who stick with the same company - often for reasons beyond their control - end up in “lower management” positions at best.
BTW, my own experience with executives is that most have a sales or engineering background. Very few, of any, have a background in true middle management background (HR, accounting, governmental compliance, etc.)
It sounds to me like you're allowing aesthetic considerations distract you from your common interests.
> it's that professional ... class that really shapes the government's policy, because they are the ones that show up to do that work every day.
Yup.
"Activism is a way for useless people to feel important, even if the consequences of their activism are counterproductive for those they claim to be helping and damaging to the fabric of society as a whole." – Thomas Sowell
My friends have worked on marriage, marijuana, human trafficking, consumer protection, etc, etc.
(My own efforts weren't as potent. At the time. Though I'd like to think my cohort moved the needle on election integrity issues. All the "radical" stuff we pushed 10 years ago is now received wisdom.)
In fact, I'd argue that most progress is bottom up, happening locally.
I highly recommend Camp Wellstone training for activists. Of course there's many others. On the left.
The political right has no shortage of resources for their activists.
Did the Vietnam War end because the Washington insiders (who were, if you'll recall, the ones who started it) had a change of heart, got together one day and decided to stop it? Or because the country threatened to become ungovernable if they didn't?
Really, the blithe dismissal of the impact of public protest expressed in your statment is astounding.
I was in high school before I realized that the Vietnam war had happened while I was alive.
I think the point is that grassroots activism has been effective once upon a time, but has not been effective for decades.
Eh... Martin Luther King Jr?
If you are rich serious people concerned over an issue, you create a forum or gather a summit. If you are poor, or rather, let's be realistic, middle-class, then you do a protest. It's rent-free, it filters out people who can't be bothered to move from the couch and the nay-sayers, it shows a wide range of groups with varied interests.
Protests are the first step in making policy change, but it takes several bounces before it affects people in DC.
The biggest counter example I can think of was Occupy Wall Street. AFAIK nothing ever came out of it, not even a small organised group.
Most protests I've seen have actually been the other way around. They were organised by pressure groups or unions and the protesters were already members of those groups. They existed primarily as a chest-beating exercise to show politicians their power. A few protests are more spontaneous especially the sort when democracies get overthrown or established. But in the west protests don't ever seem to create new organised movements.
It is remarkable reflecting after an article like that on the complete inability of the US political system to organise itself to reward work done rather than access to the super-elite social circles. I'd love to know if this Julius fellow has a take on what mechanisms the 0.1% are using to drive the growing wage gap.
I already have an opinion; I just think if he has one it will be more insightful.
How do you decide which work is valuable and which work isn’t?
By viewing the profits generated. As profits are nothing more than unpaid wages.
Who's wages are unpaid?
Hence, profits are nothing more than unpaid wages.
Further, your definition doesn't include situations in which there is no employee (such as the one I gave).
It is more correct to say that the profit is the gains made to some agent in a market transaction.
That's why I asserted that profits are nothing more than unpaid wages. Since it's objectively a trade of your life for wages, paying others less than the value you produced is simply not valuing human life. The worst sort of theft.
For your example, it doesn't hold up because most people only make enough to live, there's nothing to optimize other than going "full ramen". While others have far more than necessary for basic food, shelter and medical care. Those who are just-surviving aren't doing anything wrong, when an economic ponzi scheme simply doesn't value their life by paying them less than the value they produce.
And yet, both the planet and individual people are far wealthier today than when they were producing and receiving "full value" for their labour.
This is ridiculous. As someone who has, in the past, run their own business, and now works for a living, the fact of the matter is that my employer does a lot of work I am unwilling / uninterested in doing, such as making sure there is money to pay me and advertising the product to others, as well as figuring out how to accept payments, get the requisite insurance etc.
The profit retained by the company is the share agreed upon in advance paid to those who, through their own labor, at some point made the company possible, whether it be by direct action, or by stored labor output from a previous position (i.e. capital).
Each cycle A makes $200 in profit, nobody loses out as everyone agreed to the terms.
This is enough margin for A to pay an independent manager $100 each time he repeats the process, ultimately netting A $100 without A doing anything. Is A taking advantage of everyone here? No, of course not, everyone still agreed to all the terms, A was just aware of a business opportunity the others were not, risked his own money paying for goods and labor he wasn't sure he could sell and now everyone is richer as a result.
This is how businesses works. Of course in practice sometimes businesses does scummy things, but that is why we have laws which are meant to ensure that all businesses are net positive for society. If a business is not net positive then we send the police to them and shut them down. That doesn't work when businesses have politicians in their pockets, but it works in parts of the world where workers have more political influence.
It muddies the argument because it enables a circular argument whereby the transaction of employment can be labelled as exploitative, where it's easy to defend against the claim of exploitation if the original definition of the word is preserved.
In other words, profit generation as it comes from an employer/employee relationship is Exploitative but not exploitative.
In other words, I think the definiton used by Marxists is somewhere between the two. It not only means to use something up (to exploit resources) but also the Marxist idea that exploitation relates to workers being forced (by man-made historically arisen structures, that is) to sell their labour-power.
Nevertheless, newer schools of Marxism (such as the ones from the 80s which attempted to use neoclassical economic models) have axiomatic definitions of exploitation. For some simplified models of a commodity economy, researchers such as Veneziani and Yoshihara (and Roemer on different grounds) prove that the axiomatic definition of exploitation is satisfied. Defined axiomatically, we can escape the talk about morality. But you can easily rephrase Marx without the word "exploitation" - the claim is, rather simply, that there is some amount of labour that is unpaid, this labour forms the substance of surplus value, which is appropriated. No judgement, no morality, no right or wrong - that's just the fact, and of course it may well be a good thing(!) that workers are "exploited" - Marx certainly said as much, when writing that the capitalist's point of view, his idea of "fairness" is just as worhless as anyone else's.
What is unpaid labor? If I employ a carpenter, and pay him $10 for a chair I later sell for $15, is this labor paid?
What about risks and decision making, investing in the future products and potential failures? How much is "paid risk" and "unpaid labor", how to objectively evaluate that?
I would argue that $2 is paid risk, not unpaid labor, how to prove that that's not the case?
Also, if I paid you a salary, and than the product failed in the market, is it just according to marxists to ask your salary back, or, if the product was net loss, to ask you to pay for it as an employee?
Let's say that it is risk. The capitalist labours the monetary equivalent of $1, i.e he spends $1 on his labour power, producing a total of $2 worth of labour. When the product is sold he is still given $2, but not all of that is profit, only $1 is, since the $1 paid is now a cost, he only gets $1 "for free", not $2. Therefore it's clearly in the interest of every capitalist to minimize the amount of work he does himself and instead "exploit" a waged worker for it.
Marxists have never argued that the worker has a "right" to the surplus value, only that it would be, in the most non-moral sense possible, in the interests of labourers who have this surplus appropriated due to the structure of production to ensure it is no longer appropriated in this way - i.e. a socialist or communist society.
But I'm asking you about the proof of the labor theory of value in fact. I didn't thought that there exist people who take it seriously after marginal revolution.
> and I think that's shown in cases where many busniesses, no matter how risky
Business shows exactly the opposite, the most risky (volatile) domains have the highest gains and highest losses: pharma, construction, fintech.
> value of a commodity is objectively determined by labour-time, not by "risk"
So when the value of a bottle of wine inflates with time, somebody is working on it?
> no matter how risky
Did you ever run a business? When you pay for a snack, you pay not only for a snack, but also for a stolen snack. When you pay for a Intel x86 processor, you also pay for failed Intel iAPX 432 which never appeared in the market.
Risks are pretty material, and should be payed for. When you are starting a project, you never know in advance whether it would be successful or not. If it fails, the only way to pay the salaries and costs is through revenues of other projects.
> If it were the reward for decision making, the rate of profit would diminish the more you sell something the same way and in the same place, since there are fewer decisions to be made for each subsequent commodity.
Strange inference. Not the number of decisions matter but their impact. If you sell something many time, it means that the first one decision was very clever and rewarding. Not to mention that revenues are falling with time and it requires new strategies and decisions to make your company competitive and profitable again.
> The capitalist labours the monetary equivalent of $1, i.e he spends $1 on his labour power, producing a total of $2 worth of labour
Again, I see no evidence that labor creates any objective value on its own. Goods have value, labor has value as a good evaluated by an employer, but it does not "create value". If you make a chair, you apply labor, but if nobody values it and nobody buys it, it has no value, hence your labor has no value.
How did you evaluate that capitalist labors $1? Maybe his decisions and ability to take risks cost $100, and his workers are just freeriding him? How exactly did you infer that he spends exactly $1 of labor power? What is a labor power, how could you measure it objectively?
Forget about capitalists, here is a simple though experiment: there are two workers living in a commune and owning the means of production. They do chairs and sell it to the outer capitalist world. One worker is a carpenter who does the woodwork. Another one make nails. They sell chairs for $1, which share of this $1 each of than created? How to measure that objectively?
After that add a capitalist who start the business, takes risks, credits, make decisions and devise strategy. How to evaluate the "value" of his activity?
The proof is "in the pudding" as it were; there are a few theorists (either heterodox economists or philosophers of economics) who argue that Marx himself did enough to "prove" the theory, either logical-deductively, or otherwise; see Elena Lange[0], Patrick Murray[1], Guido Starosta[2], Andrew Kliman[3], Chris Arthur[4] and a few others - though they approach the matter from different angles. Martha Campbell defends the objectivity of value in capitalist society as opposed to marginalist accounts and Veblen's "habitual action" account[5]. In general, those that hold to Marx's exposition with the "third thing" argument argue that the theory cannot apply to each commodity individually, though it would apply to an aliquot as taken as a sample of the lot of them.
>Business shows exactly the opposite, the most risky (volatile) domains have the highest gains and highest losses: pharma, construction, fintech.
These are not businesses, but fields of businesses, within them it is possible to find the greatest variation in risk. It is also not clear whether the risk is taken by the owner of the capital, or by the labourers themselves - in construction, a major risk falls on the safety of the workers. To say that they have the highest gains and the highest losses implies risk is a mere tautology (of course! that's what risk means, you win big or you lose big), but it says nothing about profitability.
>When you pay for a Intel x86 processor, you also pay for failed Intel iAPX 432 which never appeared in the market.
Again, offsetting the effects of failed developments and theft is what capitalists do with profit, it is not an explanation as to the origin of profit.
>Goods have value, labor has value as a good evaluated by an employer, but it does not "create value".
What you're saying is absolutely true, but it's an equivocation on "value". When you speak of the value to someone, from someone's perspective, that's not what Marx means by "value". Marginalist accounts of value are semi-compatible with the labour theory of value, so long as we're talking about different things when we say "value"; for example, it's clear that what the LTV means by "value" is not "artistic value" or "moral value" or any of a huge range of values. In the same way, it does not mean value as a subjective preference for one thing over another. That concept gets a look-in with the Marxist concept of use-value - but not exchange-value.
>If you make a chair, you apply labor, but if nobody values it and nobody buys it, it has no value, hence your labor has no value.
Only use-values count as values, because according to Marx, a commodity is a complex of a use-value and value (expressed in a given magnitude of exchange-value). Therefore it's meaningless to talk of something usunable and undesirable as having value. Even Ricardo knew this was the case. Wine is a more interesting matter; depending on how one looks at it, either the very act of storage is (objectively) highly valued, or the good is not entirely freely reproducible (i.e my wine aged for ten years will never sell as well as a brand name aged for five years), or along with Murray, the theory does not apply to this individual commodity, but if you were to take a sample of all capitalist commodities, you'd find that the identity of total value = total price holds in aggregate.
> They sell chairs for $1, which share of this $1 each of than created? How to measure that objectively?
There is no way to determine that; it is just as impossible as quantitatively determining "utility". Value is not sensible, it is a socially-determined supersensible aspect of commodities. In other words, the essence behind the appearance. See Murray on the neoclassical focus on capital's shadow forms[6]. In the same way, measuring skilled versus unskilled labour may not be possible quantitatively, but it clearly happens qualitatively - what the market rewards in wages on average to two groups of people with different skill sets means the abstraction and calculation is already quantitatively done for us in the real world. This is exactly the same with the neoclassical concept of utility, in which we can actually see prices, but not a drop of utility, no matter how we twist and turn an object.
[0] http://www.consecutio.org/2018/11/the-proof-is-in-the-puddin...
[1] https://philpapers.org/rec/PATIDO-2
[2] https://cicpint.org/wp-content/uploads/2017/03/2008_Starosta...
[3] Kliman, A. 2008. The Fourth Thing on the Third Thing: A response to James Furner and Patrick Murray.
[4] Arthur, Christopher J Source: Capital & Class 15-39 no. 73 (Spring 2001): p. 15-39 https://libcom.org/library/value-labour-negativity-christoph...
[5] Campbell M. (2004) The Objectivity of Value versus the Idea of Habitual Action. In: Bellofiore R., Taylor N. (eds) The Constitution of Capital.
[6] http://crisiscritique.org/political11/Dennis%20Badeen%20and%...
Wait, what? I'm asking, how would you subsidize failed developments if you consider 100% of profitable development as wage.
If you consider net income as wage, should the net loss be paid by the workers?
> in construction, a major risk falls on the safety of the workers
Which is also payed by the employer in the form of insurance. And the investment risks also totally lie on the employer here, workers just get wages. If the construction is failed/not being profitable, workers get wages and insurance, employer and investors are paying bills and credits.
> what the market rewards in wages on average to two groups of people with different skill sets means the abstraction and calculation is already quantitatively done
But again, market rewards have nothing to do with created values, but rather the utility of labor. If your labor could be substituted with the machinery for the smaller price. It's based solely on marginal utility of labor.
No calculations based on value creation is done whatsoever, the wage is a result of a bargaining process.
> measuring skilled versus unskilled labour may not be possible quantitatively
> it is just as impossible as quantitatively determining "utility"
But you don't need to, that's why labor theory of value is dead and Marginalism has conquered the world. You don't need to quantify utility to evaluate wages, just let people bargain based on their subjective notion of utility, ability to find substitutions etc. Marginalism is suitable for modeling and planning here, all you need is gather statistical data other how the preferences and desires for the good change with the appearance of substitutes or changes in quantity.
You can't, however, evaluate wages based on labor theory of value, you can't measure the value one has added to the value of raw materials, if it's even the case.
You can't even solve a simple problem of two worker's shares of surplus value with the labor theory, it's totally useless for anything but being a justification for exploitation theory.
There are neither empirical nor deductive evidence that the value of commodity is proportional to the wages. Even if you exclude luxury goods (which is already a clear intellectual dishonesty, because the notion of luxury is vague, and differences between luxury and basic are impossible to be quantified of defined), you would still have a huge difference in prices of buckwheat and wheat, or water simply in different contexts (even if no labor is applied to extract it, as in the case of oasis, oasis water in the middle of desert would be evaluated more than the water being extracted from a deep shaft in a less severe conditions).
Value is inherently subjective, it stems in scarcity, utility, ease of finding a substitute etc. Even labor is such a good, evaluated subjectively.
I would describe the same thing like this: The workers plus tools (capital) create value. The workers don't get all the value produced; capital also gets a cut.
You can say that this is morally right. Or you can say that this is necessary, because the capital isn't invested out of the goodness of the capitalist's heart. We have to give them some payback if we want them to buy the tools. The alternative is to have only the tools that our in-house workers create, which is usually a sub-optimal situation.
Now, any given situation can still be exploitation of the workers (in the common rather than axiomatic sense), and still be morally wrong.
Have you had such a good experience with managers that you
a) have never been assigned bullshit work that should have never been done, or
b) have never seen a manager invent work to make themselves seem important?
The less work you do to achieve a desired result, the better. This is why technical improvements are valuable: they allow you do less work.
There are activities that are rewarding by themselves, like playing games, watching the sunset, or otherwise having leisure. You are not paid for that, you sometimes pay for it yourself, and still it remains worth doing.
But work also has utility for the person who pays the worker, and this is extremely different from what you've described.
This difference in the utility functions for each party (one wants to maximise the return on work and minimize the work; the other wants to minimize the work and the cost on it) is what sets up most of the "classical" marxist class tension. This is despite their agreement that the less paid work that needs to be done, the better.
The fruit of the work done is what's valuable, thus is what the employer buys from the worker by paying wages, or a slave owner forcibly takes from a slave. This is why an employer is interested in technical improvements: they reduce the required amount of work per unit of the resulting valuables.
The tension between the worker and the employer is about the price paid for the fruits of the work. Definitely, with standardized industrial manufacturing, it's about the amount of time and work conditions, because a worker can't significantly influence the performance of the machines he's using, or could not at Marx's times. As the Japanese (e.g. Toyota) have shown, workers with right motivation and right education can influence performance of industrial manufacturing quite significantly, e.g. by spotting inefficiencies and by lowering the defect rate.
Work has positive utility when it creates something of value. Considering the money paid for it as coextensive with the work is a mistake because people can work to create value without getting paid, as sometimes happens to unfortunate people. It is no more reasonable to treat the work inputs into a good as having negative utility as it is to treat the money paid for it as having negative value.
All of our waking day is a mixture of good and bad experiences, intertwined with all manner of internal and external rewards and punishments. A hobby is just a job that pays you more in fun than cash, and a job is a weird club you go to more than you want but that pays you dues in return.
Trying to separate them into strict binary options makes it hard to build a complete, balanced life that has all of the various kinds of rewards that are meaningful to you as an individual.
That is beautifully expressed, and captures the non-dichotomous nature of life. Well-put!
This rather begs the question. In the absence of a market mechanism for determining what work is desired, how do you determine what work is valuable?
If a person desires work but doesn't value it high enough to sustain a person whose time is wholly consumed by it, I would question the necessity of that piece of work. If it's not critical to your business maybe it shouldn't be done. If it is critical then it sounds like it's worth the compensation.
Careful what you wish for. This is awfully close to arguing that millions of people should lose their jobs.
There are much more obscure ways in which work can be entirely useless without anyone noticing, and plenty of ways people can end up with jobs that are pretty obviously a waste of time.
Example 1: companies spending on advertising to increase their share of a fixed market.
Example 2: managers hiring more people for their team to look more important within the larger company.
Example 3: if social status is determined by looking tougher than others, everyone will spend resources to look tough.
I think such waste is the main reason for failure of groups, and coordinating to prevent it is the main reason for success of groups.
Now, of course we could do this probably without spending so much on ads, but just saying ads are zero-sum is incorrect, because there's a bigger picture.
Social status is again not so simple. Because after a certain group size there will be value in being different. See also the classic equilibrium between strategies in any game (as in game theory).
That said, yes the race to the bottom is a real problem, see the oft cited Meditations on Moloch: https://slatestarcodex.com/2014/07/30/meditations-on-moloch/
You made a leap of logic here. The technological innovations in finance directly contributed to a more volatile economy that crashed and inflicted massive losses on huge swaths of the global population, many of whom never recovered.
Smart phones and PCs both coincide with big shifts in global politics, the post 2001 War on Terror, Operation Iraqi/Afghan Freedom, etc. Trillions spent on insurgency control, that could have been spent a lot more effectively.
All the while the middle class shrinks. (David Autor's 'Why there are still jobs?' paper is open access and has striking graphs that show just how much happened/happening.)
Globalisation lifted hundreds of millions out of poverty, while the financial benefits of this economic optimization were not distributed back to those who lost their old socioeconomic status. (They only got the lower prices, but that's not much considering most of those people affected were not living in a distortion-free "free market", they had no idea what to do, they were not used to chasing new skills-in-demand, not prepared to relocate, etc.)
That said comparing healthcare outcomes, civil rights to the 70s is worthwhile, and if you think it was better then, that is mighty strange.
With some positive sides also. Having a free encyclopedia, cheap universal access to educative videos or detailed satellite photos of the whole planet in 70s would have been mind blowing. Being poor today is more frustrating, but the DIY part is much easier, as making connections, and this has also an economic value.
Knowledge is not protected in semi-secretive guilds anymore. The counterpart effect is the disparition of entire sets of steps in the social stair. You can not make a living anymore selling printed maps for example. Poor people could climb, a little, but there is no so many stairs to grasp.
Yes the lack of oversight led to a crash, the lack of social safety net prolonged it, and the lack of effective adult education keeps people chasing low-income jobs and in poverty.
And lo and behold Basel III was signed, now systemic risk analysis is regular part of the financial sector checks, even if the current US administration tries to (and succeeded in) roll back some of these protections. That's the rent seeking regression. (And many people are happy for it, for they don't understand these processes, but they also don't trust "technological change" and economics, because it took their jobs - which is an understandable sentiment, even if incorrect.)
Did this concept come from "Finite and Infinite Games" or your own reflections?
To expect your day to day to serve a larger social purpose is to subordinate either your lifestyle or your cognitive integrity to something you’ll never be able to completely convince yourself isn’t a lie you’re telling yourself.
If you can put your kids through college well-adjusted, you’re already doing better than most on that front. Beyond that, maybe maintain a few open source libraries for awhile?
And thus it's hard to reconcile how trivial it is that people don't see what's going on, yet they are the problem themselves.
This drives people mad on both/all levels.
I think this is only true in very specific circumstances. Ideological divide can also mean disowning your child for being gay, which is why among homeless youth there's a disproportionate amount of LGBTQ children and why the concept of "found families" is very relevant to the LGBTQ community. Certain families also will disown or withdraw from any member who doesn't follow religious teachings.
Often times ideological differences is quite meaningful when it results in the abuse/neglect of vulnerable family members.
Swedens demographic among the MPs. 18-29 år 10,6 % 30-49 år 49,0 % 50-64 år 37,8 % 65+ år 2,6 %
USA Congress Representatives Newly Elected Representatives Senators Newly Elected Senators 115th 57.8 years 50.8 years 61.8 years 54.8 years
I don't think the 0.1% cares much about the wage gap. They don't take wages and the gap simply doesn't affect them.
They care about wages generally in that any wages growth has an effect on investment returns. So they oppose wages growth, and if that means an increasing wage gap that is fine.
There is no reason to think that wage growth negatively impacts investment returns in general. It requires employers to pay more but it also means that customers have more money to buy your products. For legislation that applies to all employers, wage growth is generally a net positive for investment returns because it grows the overall economy. People buy more stuff when they have more money.
The real problem is when industries get specific carve outs, which they do have the incentive to lobby for because most of your customers are not your employees, and the business won't lose as many sales to their own employees as they benefit from paying lower wages, as long as their other customers' employers don't get to pay lower wages too.
Doing that actually harms investment returns on net, because the harm to businesses across all industries lost from your employees is more than that specific industry gains from paying lower wages. But it's the same problem as avoiding pork barrel spending -- one industry will fight much harder to take a billion dollars off the table than everybody else will collectively fight to avoid losing fifty dollars each, even if fifty dollars times everybody is significantly more than a billion. So then that happens over and over and adds up to real money.
The only fix is working with other countries on inheritance tax and anti-tax evasion schemes.
It’s easy to sell 10 dollar bills for 8 dollars a piece. In what world is that considered growth?
Speaking from a mining industry perspective, best time to invest might be after about 3-5 years of price deflation. If you invest in capital when prices rise sharply then you can lose a lot of money; as mining companies generally seem to do discover when there is a bull market :/. I've seen mining companies do a pretty good job of bankrupting themselves by not investing when prices have been dropping for a while then over-'investing' when the price rises.
So, in the real economy, sane people would invest when prices drop. On a sane timeframe. None of this millisecond knee jerk day trading business.
Basically, the argument is that investment depends on anticipated change over some time horizon. If someone has a long time horizon, best time to set up is in a deflationary period. It isn't a general rule but you'd certainly see some canny people getting their hands dirty if they anticipated a shortage of some good or service.
I was reflecting on the increasing gap recently between price and quality. If inflation were the cause of increased prices the expectation is that quality would stay the same. Quality is going down however.
Where is that difference going then? Shareholder pockets.
What is the value of hoarding all that cash? If the Fed didn't print more there would not be enough currency liquidity in the market.
This is what we see today. Deflation is staved off only through QE. It should be through incentives to spend, but there are too many incentives to hoard.
Silicon Valley.
Piketty et.al. showed the exact opposite, for the US and other countries. Economic growth seems to generate more opportunities for upwards social mobility.
But they and you (and me) agree that inheritance is a main driver for the growing inequality, and progressive taxation of capital was proposed as a solution in the book, too.
Economic growth may or may not, but neoliberal trade regimes definitely do, for both more and less developed partners in such trade; they also tend to cement the position of economically advantages (and disadvantaged) ethnic groups by the same process.
> An entire “creative class” ideology was constructed to explain this phenomenon, but its intensity simply concealed the desperation of second-tier elites to assuage their status anxiety.
The author doesn't pull any punch sent the bourgeoisie way.
...in the hope that their venture,by some miracle, is the winning ticket to join the elite - usually by being "blessed" by an elite via a 6- or (preferbly) 9-figure acquisition
Likewise, discussions of wealth inequality are becoming conflated with income inequality.
Yet the professional class has only marginal voting power and comparatively little to contribute to political funding, so it's not surprising that the astute ones are concerned.
Likelihood of voting is highly correlated with education. I wouldn’t be surprised if the top ten percent are three or four times more likely to vote than the bottom decile. Money is also far less important in politics than many think. If money won elections Michael Bloomberg would have been president long ago, Eric Cantor would still be a Congressman, rather than having been beaten by Dave Brat[1]. Joe Crowley would still be a Congressman rather than having been beaten by AOC[2].
> Add up all US spending on candidates, PACs, lobbying, think tanks, and advocacy organizations – liberal and conservative combined – and we’re still $2 billion short of what we spend on almonds each year. In fact, we’re still less than Elon Musk’s personal fortune; Musk could personally fund the entire US political ecosystem on both sides for a whole two-year election cycle.
https://slatestarcodex.com/2019/09/18/too-much-dark-money-in...
[1] https://en.wikipedia.org/wiki/Dave_Brat
In his challenge of House Majority Leader Eric Cantor for the Republican nomination, Brat was outspent by Cantor 40 to 1: Cantor spent over $5 million, while Brat raised $200,000 and did not spend all of it.
[2] https://en.wikipedia.org/wiki/Alexandria_Ocasio-Cortez
She was outspent by a margin of 18 to 1 ($1.5 million to $83,000)
Mike Bloomberg has won every election he's run in, which is exactly 3 elections. Not the best example.
More appropriate example then. You can add Perot to that pile as well.
I think this is an important point. Wealth in the West knew to stay out of the radar. The whole concept of "old wealth" has the key characteristic of not spending frivolously in public or making a scene. Even in the Instagram age, they largely keep it under control. Their wealth - while beneficial - is not their defining characteristic. Some even argue that the celebrity class exists in part to monopolize the headlines that would otherwise be taken by paparazzi hounding old wealth.
This contracts to the extreme with all the new wealth which spends flamboyantly and spends to get attention. We seem to see this thousand fold with the Chinese new rich and their children - hence the Fuerdai term emerging.
The resentment of the working class against the old wealth is minimal - they stay out of sight and out of mind. The resentment towards the new wealth is tremendous and I don't think it will end well.
There was good reason why the working class resentment of old wealth was minimal, it was because they weren't only hoarding it for hedonism or a lust for power.
Prices have gone up and quality down.
It's not just the wealth gap that is increasing but the value gap even more so.
One drives a used corolla, the other a new one, the 3rd a lexus (made by toyota still). Each has a house with varying levels of pretty etc.
The 0.01% is living in an existence far removed from us. They dont play games of wondering which car has the lowest TCO or signals a little status etc. Instead they're playing power games and games of access to things that go beyond the ability to pay for them.
However, making an extra $100k puts an extra $65k in your bank account. It's basic math. Now, psychologically, I can see it being not so clear cut, especially if one lets their standard of living and spending habits rise up as their paycheck increases.
IMO the only option in the bay area is FAANG or live as frugal as possible and take the wealth to a lower CoL area.
EDIT: or improbably be a highly paid Cofounder / Executive and earn >400K per year.
No. It's the professionals who do that immoral work. They are to blame. Not the wealthy. They just pay for it.
The professionals, most all of us here are the cause of the wealth gap. It is we who exacerbate the divide and decline of civilization by sacrificing our moral duty to those less fortunate to get a little more cash for ourselves.
Listen to us all here now. We know this, yet we continue.
This brought to my mind on old Chomsky comment about civilian casualties in war:
"Evidently, a crucial case is omitted, which is far more depraved than massacring civilians intentionally. Namely, knowing that you are massacring them but not doing so intentionally because you don’t regard them as worthy of concern. That is, you don’t even care enough about them to intend to kill them. Thus when I walk down the street, if I stop to think about it I know I’ll probably kill lots of ants, but I don’t intend to kill them, because in my mind they do not even rise to the level where it matters. There are many such examples. To take one of the very minor ones, when Clinton bombed the al-Shifa pharmaceutical facility in Sudan, he and the other perpetrators surely knew that the bombing would kill civilians (tens of thousands, apparently). But Clinton and associates did not intend to kill them, because by the standards of Western liberal humanitarian racism, they are no more significant than ants. Same in the case of tens of millions of others."
-- https://formicidaefantasy.wordpress.com/2013/04/17/chomsky-o...
My only possible contributions are the following:
1. The author perhaps underestimates the bottom 90%, who are written off as politically irrelevant (in terms of real power) near the start of the article.
I do think there's a good reason for this, but we are only one true crisis away from that changing. For example, suppose India and Pakistan only were to have a nuclear engagement and the outcome was a small global "winter" for a few years from the dust and rubble kicked into the atmosphere. When crops and supply chains fail and famine kicks in, who is going hungry?
That's about the point that true populist revolts happen.
2. The author discusses at length the phenomenon of "the 10%" elites who align themselves (in ideology) with the working class, perhaps blinded by not realizing that they are actually trying to support their own interests.
But I think some underestimate how soon the developers and programmers of the world will crater from "elite 10%/5%/1%" to something resembling median salary.
This is my own opinion, but it's clear to me that the tech industry (and it's associated venture capital scene) are in a state of irrational exuberance as the capitalist class is convinced that tech startups (or the word "tech" attached to non-tech startups) offers incredibly high ROI.
This paradigm will end as easy opportunities and low hanging fruit dry. Maybe we're already there, but nobody has acknowledged it yet. When this happens (and is widely recognized), venture capital will flee to safer vehicles. Meanwhile, the big tech of the world will consolidate and cut costs to grow shareholder value.
When this happens, we will all stop hopping jobs for 30% pay raises and instead we will start hopping jobs (post-layoff) for 30% pay cuts. And this will continue for decades.
I generally agree with this. I think for the traditional programmer building apps and apis this begins to happen in 5-10 years. We'll essentially become mechanics. However, there is always the next front of technology that you can surf.
For millennia those on the forefront of technological progress have done well relative to the rest of people. This was due to having skills that were relatively rare, access to equipment that was uncommon or both. Blacksmiths, photographers, car mechanics, stock traders, etc. Programming in certain verticals will be added to that list.
But imo there is good news. Being able to create or deploy new technology in ways that creates or protects wealth will always be in demand. And the thing about programming is you are first-and-foremost a problem-solver. Couple that with technical math-based skills and you can bring immense value to most organizations.
If you are a "programmer"--I really don't like that term, but whatever. My advice would be to be trained in multiple disciplines across multiple verticals. Know how to look at a business or social problem and deduce it to its fundamental inputs/outputs so that you can then construct a solution that turns those inputs/outputs into the desired result.
Hand-wavy, but that really is the key to being valuable. Solve real problems.
There's currently only 1 measure of success for capitalism, and that's capturing value. Creating value without capturing it is seen as stupid and a waste of time.
I wonder if this is slowly changing due to the nature of "capturing value" having so many negative externalities that it really ruins the spirit of creating value.
Companies routinely crow about charitable work, community involvement, social justice advocacy, cultural benefits of their work, etc. Companies pull out of states with undesirable politics, funds divest from fossil fuels, wealthy capitalists give away wealth, others speak out for higher taxes.... Almost all have some foundation or the other supporting some social good.
Yeah, that disregards that they vote and could vote in a considerably different government which they did to an extent with Trump and could flip the other way to a Sanders or similar.
I sure hope you're right about this. I have no doubts on the rest of what you said, but given enough incentives (both push and pull), there may be a lot more latent ability out there than you think. Especially as the on-ramps from raw talent to real productivity keep improving.
From my direct personal experience, I suspect there are a bunch of current Uber and Lyft drivers who could definitely code if they had enough reasons to. A lot of them have better social skills than your average coder, too.
Regarding the first point, some people have noticed that food price changes can lead to revolts [1], but I'm not sure that says anything about the political power of the bottom 90% nor whether those revolts would lead to meaningful change. I imagine any food revolt in the US would mirror the Revolutions of 1848 [2].
[1] https://arxiv.org/pdf/1108.2455v1.pdf [2] https://en.wikipedia.org/wiki/Revolutions_of_1848
I felt like I had to call them out on it. Though they made the group as a play on "anti social social club" and to counter conservative sentiments their upper class counterparts might've had, I too thought it might've just been punching down on working/middle class Asians who had traditional values and almost can't help but have those values.
I guess that's the real class war; when people punch down on those who almost don't have the opportunity to decide who to become. Not that people completely lack agency in this country but I think a lot of people forget how much your environment can shape individuals and their values.
That's an interesting phrase. Can you say what you mean by it?
> But sustainable growth isn’t what VCs (or the execs that they install in the firms they have stakes in) are looking for. So we pivoted.
> Without going into too much detail, we are now exclusively focused on getting acquired by a big tech firm. Meetings with low-level product managers at a few of the world’s largest companies dictate every decision about which projects we pursue. We’re no longer building a company. We’re not even building a product. We’re building a feature that we hope will end up getting included in an app owned by a mega-corporation.
> When I talk to my friends and peers at other tech startups, they tell me that it’s pretty much the same story at their companies. Everyone is building to the specifications set by Google or Amazon or Apple. This “competitive” industry, supposedly a shining example of the power of the free market, is really just a massive risk-free R&D department for the faang companies.40
ooph.
It works though
I remember working a temp job at a polling call center and although I was just doing grunt work of calling people, it was clearly obvious they were doing polls to hear what they wanted. There was only 1 survey out of maybe 200 that was what I would consider unbiased and didn't have any leading questions or pre-picked answers.
You would screen out people in the beginning of the survey that were obviously not interested in whoever candidate you were calling in regards to, and more often than not the survey itself would have leading questions to get the answers they want so they can take the results and be like, "See our Candidate is winning!!!" - yet they only called people and did the survey with those who were already willing to vote for said candidate.
Polls are literally circle jerking people who were voting democrat and those regarding republican candidate were always negative.
It also could be that the particular call center I was working out of only had contracts with Democratic parties/PACS but from my time there it was clear that polls are a racket.
Yet I think as the public discourse among this group continues to grow in sophistication it will develop a more nuanced worldview and will assert its power with greater wisdom.
A big part of the issue is that people have different definitions for all the various social classes, so it's hard to compare things correctly.
This more affluent middle class of information workers are leading the rest of the folks who punch a clock for a living to a better life. It's not everyone though, there's older folks who are fully committed to a dog eat dog existence, because it worked out easily and well for anyone willing to even try their hand in the post-WW2 era. It's understandable that they don't see the connection between relatively easy prosperity, and destroying all of your industrial competitors. Some of the younger conservatives don't have the life experience of being exploited and tossed out to form well-informed views on labor, and are often afraid of challenging their tribe's view, with their fathers often being the aforementioned Boomer. Then you lose another chunk from those who are not very capable, but inherited wealth. Insecurity that they couldn't duplicate their position in life from scratch leads to extremely anti-social behaviors that we see from the capitalist class.
Claiming some defectors from each of those groups, add in the blue collars who know the score, and add in the "Bernie Sanders" educated folk and I definitely am seeing more support for the movement in American society today than I do for any other grassroots movement. Judging from the strength of support of someone like Sanders, the only competent base of support that rivals it is Trump's. It may not be tomorrow or next year when it succeeds, but we're definitely seeing what you're describing and I suspect it'll continue to build until big money can't stop it any longer.
Why do you say "even though"? Sanders and Warren target upper middle class and people aspiring to it.
Sanders’s left-wing challenge to Clinton found significant support among educated, relatively affluent voters, especially younger ones (similar to Obama’s). As one 2016 Vox headline put it, “Bernie Sanders’s base isn’t the working class. It’s young people.”32 Within any given age group, the article explained, higher-income voters were actually more likely to support Sanders.
Elizabeth Warren’s campaign more explicitly appeals to the professional class, both in form and content.
>This underappreciated reality at least partially explains one of the apparent puzzles of American politics in recent years: namely, that members of the elite often seem far more radical than the working >class, both in their candidate choices and overall outlook. Although better off than the working class, lower-level elites appear to be experiencing far more intense status anxiety.
The "working class" put "their guy" in a certain colored house in the US and got together to tell the EU to screw off in the UK. They might not be using their political power for things we all agree with or you could argue they're all being duped but they certainly aren't powerless.
Furthermore, I think the author is over stating the homogeneity of white collar political professionals. Tech and academia are very homogeneously blue/left leaning (relatively speaking) but other industries less so.
The author seems to be very confident in his predictions of where politics will move over the next decade or two but I see some massive variables that are not controlled for. Things could go any which way.
I'm not even so sure as to how homogeneous tech i if the drama at Google is any indication. Academia probably is as they have a financial interest in the federal government expanding.
I think that what you see here may be some amount of bitterness after watching how events play out and what actually changes. The working class he decries as powerless were his people (he grew up in a small town in South Dakota); it's just that now that we've had 3 years of Trump he sees just how ineffective it's been.
But once in office their guy maintains the status quo even though populist rhetoric got him into office.
So far this theory appears to be true. Historical data corroborates. What is less certain imho is that grassroots activism has ceased to be ineffective. Nobody expects the pitchforks and guillotines until they show up on their doorstep.
On the off chance some unsubscribe from their media streams to create then platform X is well prepared to flag their ideas as too similar to other quarantined fake news items.
However, the poor person in the city is unlikely to vote at all, and the poor person in the country is likely to vote against their own economic interests in favor of perceived social narratives. As long this remains true, I wouldn't hold my breath on a working class awakening anytime soon.
The middle class helped spark the revolution hoping that the proletariat would come around eventually.
The fact that the article, and many of the commenters here are mentioning this again makes me wonder if socialist movements have always been primarily middle class movements.
At a time where the majority of people in Georgia got 4 years of part time schooling at best he spent over 10 years in education.
That resulted in several decades of false starts by what Krein would call the Russian "secondary elite", in the form of the Narodniks, in the 1870s and 1880s. They had almost zero experience with the real "narod", only an idealized mental picture, and when they moved out of the big cities into the countryside (where the majority of the poor, Russia being vastly unindustrialised, lived), most of them got homesick and went back again.
If by "talking to each other" you mean "increasingly consuming only whatever media the machine learning has been trained to foist onto them", yes.
> uncoupled from professional barrier.
This was true ten years ago, but not today. The recommendation algorithms run by the big tech companies are the window most people use to look into the Internet now.
> The aims of these three groups are entirely irreconcilable. The aim of the High is to remain where they are. The aim of the Middle is to change places with the High. The aim of the Low, when they have an aim -- for it is an abiding characteristic of the Low that they are too much crushed by drudgery to be more than intermittently conscious of anything outside their daily lives -- is to abolish all distinctions and create a society in which all men shall be equal. Thus throughout history a struggle which is the same in its main outlines recurs over and over again. For long periods the High seem to be securely in power, but sooner or later there always comes a moment when they lose either their belief in themselves or their capacity to govern efficiently, or both. They are then overthrown by the Middle, who enlist the Low on their side by pretending to them that they are fighting for liberty and justice. As soon as they have reached their objective, the Middle thrust the Low back into their old position of servitude, and themselves become the High. Presently a new Middle group splits off from one of the other groups, or from both of them, and the struggle begins over again.
To be honest I dont know if Orwell agreed with the position of the high or not, but the fact people repeat this propaganda of the "high" from 1984 is absurd.
By Orwell’s definition you can’t depend on The Low to defend themselves
> The aim of the Low, when they have an aim -- for it is an abiding characteristic of the Low that they are too much crushed by drudgery to be more than intermittently conscious of anything outside their daily lives
Or put another way: So long as there is a high that people can day dream about becoming then there will never be equality for the majority of people. Otherwise people will get into the high places, slam the door shut as soon as they can, and the fighting and day dreaming will continue.
I agree with your sentiment and I am probably on the lower end of the middle class now, coming from a working class family, but I can't find a way to avoid that someone will get more than me by simply not caring about obeying the rules.
If you have more resources you can buy your exemptions from the law. Probably from someone who can be "bought" because that money is a significant amount compared to what usually earns.
I hoped in this third Industrial revolution to free us up from labor, but it looks like people don't get it well when you tell them "your job doesn't exist anymore" even if it's generally a good thing.
However on the individual level, you can reap the benefits of the revolutions and will die before the next cycle, so there's always at least some incentive to challenge the status quo.
It doesn't change the fact that it's hopeless on the large scale.
That doesn't mean revolutions are bad from a system point of view, they serve as reboots for a system plagued with memory leaks.
P.S. it’s always a treat to stumble on a non-moderator comment from dang
Orwell is famous for having been early to break with political allies whose tactics he abhorred, even though they were fighting for his side. He had a genius for intellectual honesty, which made his writing exceptionally clear. If there's a clearer writer in English I wonder who it is.
If you've read Orwell's Homage to Catalonia, chronicling his experience in the Spanish Civil War on the side of the socialists, I think that's a reasonable interpretation of his position.
It seems in the last 10+ years, social media empires and big tech have done just that. It seems to me, the High turned the Middle and Low against each other.
And who on earth would seriously think that this would be any other than total nightmare?
"There is neither Jew nor Gentile, neither slave nor free, nor is there male and female, for you are all one in Christ Jesus. If you belong to Christ, then you are Abraham’s seed, and heirs according to the promise."
And that principle is the often (most?) quoted part of the Declaration of Independence:
"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the Pursuit of Happiness."
A few years later, the U.S. Constitution banned titles of mobility. We are probably overdue to follow up with nixing professional titles and titles for government officials (Mr. President, Your Honor, etc.).
"For it is by grace you have been saved, through faith--and this not from yourselves, it is the gift of God -- not by works, so that no one can boast." (book of Ephesians)
The text (and theology) clearly divorce the outcome from the work being done. Frankly a plan reading of the text would be sympathetic to socialism (also see the day of Pentecost, the parable of the workers, etc..). It's very tortured to suggest that somehow this is actually a libertarian "pull yourself up" world view.
/s
On the other side there is new value / securities creation. This is what people like Elon Musk are doing. He took circa $50mln of his own money, added a couple of billion from investors. Added 1000 highly skilled jobs and result is $50bn company.
Extractive capital alocation is offering much easier profits, but jobs working it are mostly the "bullshit" type.
As a democracy we have control of the laws, we can "nudge" the big capital away from rent seeking into new value creation by changing the tax code.
If I invest some money in a passive index fund, what does that have to do with market cornering / scarcity generation / etc?
What are "non-extractive" ways of investing money, aside from starting new companies?
It's extractive in that you are literally bidding up ownership of a rent-seeking vehicle, rather than creating any new value at all.
In theory you might say bidding up asset values creates something like "potential energy" for productive investment: if an entrepreneur (or venture capitalist to-be) wants to liquidate stock to use as capital for starting a new company, inflated asset values would then contribute to a larger pool of capital for that entrepreneur.
Still, I argue that's a stretch. The existence of extractive investment vehicles are the main motivation for capital to invest in new value, yet their continued existence for all eternity leads to an entrenchment of wealth that may threaten the entire system. This is what Marx is all about (although he seems to presuppose a revolution is the end result, rather than say a wealth tax like Bernie / Liz would promote).
Want to invest non-extractively? Invest in companies that you truly believe provide value without explicitly engaging in such activities. Most index investing is incompatible with such a thesis. Some index funds try, for example VFTAX.
If investors put $1B into a company that manufactures commodity widgets, and the company spends that $1B on a factory that produces $100M worth of widgets per year (with no market cornering, monopoly, etc.), this is obviously a value-creating business model. If the original investors sell their shares to passive index investors, that doesn't magically make the underlying business rent-seeking. Twenty years later, the company might still be doing basically the same thing, and the securities might have changed hands many times, but it's still a $1B company producing $100M of genuine value per year.
Conversely, if investors put $1B into a startup whose business model is to build a monopoly, starve the competition, and then jack up the prices (as Uber is allegedly doing), then that's obviously a rent-seeking business model. It's a rent-seeking business model from the very beginning. It doesn't have anything to do with how long the company has been in business.
There's a valid debate to be had over what fraction of the returns on stocks come from value-creation vs. rent-seeking, but the "pre-existing security vs. startup" distinction has nothing to do with it. Personally, my hunch is that the majority is genuine value creation. Every factory, farm, train car, power plant, office building, etc. is an asset that creates genuine value.
Elon Musk signed the most lucrative CEO pay package in history (tied to company market cap, not anything of actual value), SWATed a whistleblower, is being sued by shareholders for self-dealing in Solar City, gleefully built a factory in one state with a horrible human rights record (China) while trying to sell the company to another (Saudi Arabia), and his factories in this country don't look great, either:
https://www.wivb.com/news/former-tesla-workers-describe-host...
He's your example of "good capitalism"? This is what makes Silicon Valley seem so out-of-touch.
Today's western progressivism is taken hostage by the elite.
Disturbing as it is for itself, it is even more freightening what this might lead to. What happens if the bottom 50% effectively looses any political say, because their choices by whom to be represented become completely blurred. If you are like me and considered to yourself to be under-/working class, none of today's "leftist" ballot options are even remotely relatable, the more radical their representatives are, the more they reak of privilege.
So when you say: >Today's western progressivism is taken hostage by the elite.
I agree. In fact, there is likely evidence that it was manufactured by the elite. This discussion is heading to the territory of Hypernormalisation[https://www.youtube.com/watch?v=yS_c2qqA-6Y], a film I recommend.
I watch a bit of US news (CNN et cetera) when travelling and almost never hear it defined in those terms. Based on what I've seen the debate is almost entirely framed in terms of the "middle class" and the elites.
https://en.wikipedia.org/wiki/2018%E2%80%9319_education_work...
Eric Blanc's Red State Revolt is another great source on this
Whether intentional or not, the culture war continues to be the most effective tool in history for sidelining and fragmenting any struggle for economic equality. This is because culture war issues do not slice the electorate along the same lines as economic issues.
Vote totals fluctuate. When users see an unfairly downvoted comment, they often give corrective upvotes. Then the comment goes back to positive, but a post like yours here lingers on, orphaned and inaccurate.
https://en.wikipedia.org/wiki/What%27s_the_Matter_with_Kansa...
Additionally, Kevin Kruse of Princeton has written a great book called One Nation Under God: How Corporate America Invented Christian America. An intro article on this book can be found here:
https://www.politico.com/magazine/story/2015/04/corporate-am...
I'm not normally a conspiracist, but increasingly it looks like neoliberalism's sharp departure from collectivism is very much on purpose.
I think this is what the author meant when saying that the working class has lost a lot of effective power over the last few decades.
There have only been a few other notable strikes in that time, outside of special cases like pro sports. And aside from one narrow strike (UAW vs Kohler), most of them have ended with token concessions (Verizon, which yielded to strikers much further in 2000) or complete collapse (USW Oil Workers, in their first strike since the 80s). It's not a coincidence that the last strike by GM workers was in 2007, right before the company became obviously precarious.
Government employees in general have been insulated from the decline in private-sector union strength. And beyond that, there's real reason that teachers are not a standard example of the "working class", even compared to other government work like the USPS. They are working class by salary, and that's important to remember. But it's also true that schools aren't subject to market downturns and offshoring the way manufacturing has been, and that teachers - who have multiple degrees and responsibility for people's children - are unusually hard to hire and replace.
I think you're right that the working class has more power than it's currently bringing to bear, but it has lost quite a lot of actual and even potential influence over the last few decades.
The article mostly touches on private industry and the economics reaped within that sphere. Your argument is salient, but there is probably room for both the argument in TFA and this one.
This is why "organized labor" is such a perfect term. Yes, the power is there. But without organization, it's not motion, it's just heat.
The real class war is between the 0.1 percent and (at most) the 10 percent—or, more precisely, between elites primarily dependent on capital gains and those primarily dependent on professional labor.
> Moreover, increasing numbers of engineers, even at the most prestigious companies, are hired on temporary contracts. When the artificial growth model stalls, employees can expect mass layoffs, “anti-hierarchy” propaganda notwithstanding.
As an example, I dont find this to be true at all especially for great engineers. Our company is trying to move completely away from contractors.
Full stop.
Here's an article on why he considered it false and even dangerous: https://fs.blog/2016/03/karl-popper-mistake-of-historicism/
What's the basis for this sweeping claim?
And yet, what has changed? Trump hasn't brought back American industry as promised, nor has he made a trillion dollars infrastructure package as promised. He has succeeded in a tax plan (approved by establishment Republicans in the Senate), supreme Court picks (approved), etc.
The authors argument would be that this illustrates that picking the occasional anti establishment candidate doesn't uproot necessary structural change which happens across a large number of both elected and nonelected organizations, and well-connected elites are implied to be the only ones in a position to affect such change.
An example here is the federal reserve. Interest rate decisions and quantitative easing decisions are vastly influential, and famously independent of the president.
I don't subscribe to any conspiracy theories that the federal reserve is being controlled by the rich. However, I think there's no doubt that both the individuals at the top of the fed, and their professional circles, have no overlap with the working class, and in the long run this shows.
For example, when the fed did their last interest rate increase near the end of 2018, the stock market essentially revolted, with a "huge" correction (to about august 2017 values). The federal reserve acquiesced to pressure and proceeded to take a much more dovish tone, following with 3 rate cuts the next year.
There's another story there about a trade war, low inflation, and sustaining an expansion. But if you take a look at a long term graph of interest rates over time from 1980 to present, you see a trend of going down, down, down. It just so happens that interest rates going down also inflates asset values.
I don't think it's a coincidence that the asset-owning class that populates the federal reserve often makes decision that benefit those who own assets.
If you look longer term, after WWII there was this cycle of recession and recovery, but each recovery was at higher interest rates. This lasted until 1979. Then the Fed, led by Volcker, changed policy. Since then, each cycle has been at lower interest rates - but higher unemployment.
The anti-establishment is the bare minimum for structural change to happen. The difficulties that Obama and now Trump have faced in bring change (whatever their version of it), actually make the point more strongly that we need even more out of the box thinking in our leadership.
Would love to hear his perspective on Bill Gates.
It's very interesting to think about this because most people pursue wealth for this very reason - to be freed from constraints of responsibility and to do whatever they want.
However, it seems to be the opposite once you get too much wealth - you all of a sudden become (due to the closed economic and political system) extremely publically responsible.
This is also the first generation of such public billionaires in an era where everyone with power has their lives projected on a live screen for people to see.
The author pointed out the problem but didn't say much about the solution. I was wondering if his discourse on those who aren't the problem would yield insights.
Also, he kind of loses it in the final paragraphs, which weakened my impression of the rest.
The real class war is between the 0.1 percent and (at most) the 10 percent—or, more precisely, between elites primarily dependent on capital gains and those primarily dependent on professional labor.
It's pretty clearly defined.
It's the group that makes their money primarily from investment returns vs those who make their money primarily from wages/salaries/payments for skills.
Although today these workers do indeed have production capital, which is expressed through their knowledge and education in many cases.
With an actual warrior elite vs merchantdom you can subsitute "spoils" vs "profits". Both blocs depend upon both skill and capital in that case and find themselves in tension.
Feudal societies distrust merchants and often consider them beneath even peasantry - but the merchants in turn may force respect and have undeniable advantages for funding the warrior elites.
Similarly take the Antebellum US with the Southern Slaveholder "Aristocrats" vs the Industrialists. Both are capital dependent and rely upon lower classes although the later are far more skill demanding than the previous who make a virtue of idleness to those who can afford it.
Even Soviets and other "nominal Communists" totalitarians who furiously insist that they aren't fascists due to the least relevant distinctions have similar factional elite branches despite their capital being social.
The status of the remainder of the population never really changes as a result.
Revolutions don't happen when people feel that they have political agency in the status quo system. And if people don't have actual agency, the outlets which provide the illusion of agency eventually fail.
lol
Now you could argue that that's deliberately missing the long tail nature of this, but if anything, the theme of outliers of the industry just reinforces the point.
They are clearly safer and more convenient, but cars in 1980 made it from A to B most of the time too.
Funny. Obviously this is going overboard with the facts but it makes a good point.
In other words, this potential class war is pacified by telling the upper-middle class that they are culturally superior in spite of their increasing economic precarity. Someone in this class who has to take out massive loans, move across the country, and spend $30,000 a year on rent with no hope of ever owning a home in order to have an insecure job in their field must be assured that living this way, combined with a mix of vague cultural markers, is tasteful and elite, and not an empty bag. There may also be a variety of well-funded social movements that pose zero threat to the economic position of the 0.1% to participate in as an activist.
yup. the 0.1% is really good at hoarding capital, but to what end? none, apparently.
a startlingly coherent summary and critique of the many socioeconomic ills that we tend to discuss opportunistically here.
we non-0.1-percenters need to hone in on undoing the systemic changes since the 70's that has led to this gross and aimless inequity.
You don't need to "advance humanity" - just creating a service or product to satisfy since other human's needs is a good enough goal.
It's a hugely privileged position to be in, and the idea that it comes with exactly zero responsibility to Rest of World is nonsensical.
This is assuming the conclusion.
They could just be collecting a monopoly rent or a land-rent or an IP rent; for example, when Martin Shkreli raised the price of insulin dramatically he wasn't "providing more value to society", he was extracting that value, potentially at the cost of human lives.
https://arstechnica.com/tech-policy/2018/07/shkrelis-former-...
The fix isn't to force billionaires to give out their wealth for free - but instead to fix monopoly laws, as well as to stream line the way approvals can be made for generic molecules made via biological means (like the way generic drugs are today).
In fact, an insulin factory _should_ be easy for a billionaire to fund and if the relevant regulations are better, there'd be more insulin sellers as there's profit to be made (seeing as Shkreli has raised the price).
Of course there is. One is punitive and accomplishes no long term positive effects. The other encourages competition and subsequently innovation.
I get immense value out of my apartment that I pay rent for.
Making a profit is not proof of providing value to society. It's a tempting simplification to make, but it's false.
and tell me if you also spend a portion of your income on donations to under-developed countries. Because that's what you're asking the billionaires to do - altruistic giving.
I m of the position that if they legitimately made their money (i.e., nothing illegal), they are entitled to spend it however they see fit. It's _good_ if they spend it on altruism - but it's not an entitlement that i expect of them.
This notion was reinforced by the Ivy League system.
Bushes, Kennedys, you can see the tradition of service (even if we may tire of political dynasties).
Selfishly, if you're wealthy and wish your progeny to be the same, it's not a bad idea to make sure the cathedral doesn't collapse around you.
For most billionaires the answer seems to be that you buy a moderately upgraded version of all the stuff you had when you were middle class, and then you sit around content to watch the numbers slowly increase.
Do something interesting! It doesn’t have to be noble, it doesn’t have to be for the greater good, just do something! Build a palace to rival the Queen’s! Build an enormous statue of yourself! Hire a thousand concubines on a desert island! Colonise Antarctica! Single-handedly bring back the classical symphony by sponsoring an annual competition for the best one! Build an island and declare yourself king of it! Just do something, guys!
I don’t think you know what billionaires live like. Either that or the middle class you refer to is something very different from the one in the states. A 150ft yacht that you fly to with your helicopter from an airport you landed at with your private plane isn’t really relatable to anything in the middle class... unless you count jumping out of a tree into a canoe.
paradoxically, this is worse in terms of resource allocation, than to attempt to create more businesses.
Making a statue in your self-image, or to build extravagant palaces, are expenses that would better be spent else where (since a statue derives little to no value to any one else, and thus the only expected profit is self-indulgence). Similarly to a palace, unless it is for the purposes of making profit (ala, like disney land, via tourism).
Funding orchestra/competition/arts is similar, but because these arts can be used to derive profits, it means other people will also find them relevant/interesting. Therefore, it is OK to do so, and not a waste of economic resources.
I'd argue that to be inspired to pursue acts of greatness, people need to, in the words of Patrice O'Neal, "Believe in their own righteousness". I'd say that in the Western world today, that is HEAVILY frowned upon, and self-deprecating guilt over economic success is lauded as a virtue. We're in an awkward time, where we haven't reached conditions of post-scarcity, but still have instances of overwhelming material abundance. We are only a few generations removed (if at all), from times when humanity would slaughter each other by the millions to secure resources. It's in our DNA and in our culture, in deep-seated ways. So humans still have an acquisitive nature but have no muse to provide them with direction.
>>>Build a palace to rival the Queen’s! Build an enormous statue of yourself! Hire a thousand concubines on a desert island!
Yeah, that's how you end up with the commoners at your gate with pitchforks when the revolution comes. And on that last one.....arguably Epstein pursued that course of action and nobody says "Well at least he was doing something interesting" about that guy...
There's no reason for _anyone_ to have that much money, or individual influence over public policy.
> Conservative donor gatherings are somehow even more pathetic. Most of the attendees are there only because they are not smart enough to recognize that the Democratic Party offers a far more effective reputation laundering service. The rest are probably too senile to know where they are at all. There is often a special irony to these events: an uninspiring ideologue is usually on hand to repeat a decades-old speech decrying Communism—recounting the horrors experienced in countries ruled by a self-dealing, incompetent nomenklatura and marked by a decaying industrial base, crumbling infrastructure, poor education system, a demoralized populace, low confidence in public institutions, falling life expectancy, repeated foreign policy failures, a vast and arbitrary carceral system, constant surveillance, and even massive power outages in major cities. Imagine that.
For some reason my mental image of the messenger behind the article was that of a well studied and neutral academic throwing out firehouse citations.
his points are thought provoking, but it reduces everything to purely economic competition by a delusional population with only the author to cut through the illusions.
The way you accomplish this is by asking everyone: "What's your total wealth?" and then doing random audits.
The idea that the wealthy can just print off a report from their TDAmeritrade account and turn it into the government is laughable. Even they don't have any real idea how much wealth they have.
Ask and audit, the same way it does income. Of course, it's harder to get filed confirmation data for wealth and even easier to have an alternative valuation for wealth held in non-cash assets than for realized income, so it will be much easier to evade, but that's probably part of why it (which complicates our overall system of taxation) rather than taxing the currently tax-favored income of the rich, primarily capital gains, at the same rate as other income (which would simplify the tax system) is favored by people whose concern is to be seen as doing something about tax fairness.
In other words, your 1-2% tax has reduced the passive income by 33%.
Of course, it would be much easier to grow the retirement account without income taxes, which would likely more than offset offset this reduction. For people who have paid income tax and planned their retirements based on the current system, this change would be devistating.
These two groups seem diametrically opposed to each other, much more so that they are with the actual elite or with the actual working class.
This seems like an odd statement given that the American system of government was designed from its inception to insulate the ruling elites from the masses. The founders were terrified of mob rule. The term "democracy" was used at the time to mean something not far away from "mob rule."
The people don't directly elect the president, the Electoral College does that. The people don't vote on any pending legislation. The House and Senate do that. The people don't set foreign policy - the executive and legislative branches do that. The people don't strike down any legislation - the courts do that, members of which at the top level are appointed for life. The full legislature is never up for re-election specifically to prevent a popular uprising.
One wonders what the article has in mind here. The answer comes shortly:
> ... In countries like France, the working class might still be able to veto certain policies through public demonstrations, but such actions seem unlikely in the United States, and even the most heroic efforts of this kind show little prospect of achieving systemic reforms.
Even in France, that's an extra-governmental action. There's no mechanism to include popular dissent except for routinely scheduled elections in either France or the US.
What's more troubling though is the ubiquitous disengagement from the parts of American government through which people can effect (small) changes:
- jury duty
- elections
The problem here is that we don't have direct democracy. I've noticed that citizens in countries with direct democracy elements like Switzerland seem to feel significantly better represented by their governments.
It blows my mind how little is spoken about direct democracy and concepts like delogative/liquid democracy. There's absolutely no reason we must confine ourselves to a representative democracy conceived in a time when direct democracy was literally impossible because messages were delivered on horseback.
There is a sharp contrast here, but I don't think it'll be the basis for a war – figuratively or otherwise. But this divide deserves more illumination.
US needs new leaders, grassroots political leaders. Many people believe that "change" comes from upper classes, but that happens when class struggle is in the stagnant state, when the conditions are uncertain for the majority. Building a new leadership and activism style for the affected classes will effectively replace the excuses and the fear, that Fear that was imposed by the elites.
This might be true in an economy whose rules about contrantracts, commerce, and property relations were fixed and predictable, but most economic simulations overlook or sidestep the fact that the most powerful economic incumbents can and do adjust the legal conditions to maximize their own gain.
He goes on to conclude that “the mercantile system” allows the “merchants and manufacturers” to pervert legislation towards their “sole end and purpose” – production for profit – and away from the legitimate “sole end and purpose” of production – to satisfy human needs.
He also points out that the interests of these manufacturers, have been “peculiarly attended to” by the government.
UBI now, please
The problem isn't "billionaires" or "capitalism." I would probably rather billionaires lock up their money in Vangaurd stock - where its allocation is at least beholden to market forces - than spent it on misguided vanity projects.
The problem is that market failure is a real thing. Every other country on the planet seems to have realized this.
At least two of the examples you site (healthcare and education) are nowhere near being functional markets, so blaming market failure for poor outcomes in these sectors seems like a red herring.
The author of this piece is a left-wing statist, and they interpret all of the data they reference through this lens. That does not mean that their conclusions are wrong in whole, as there's definitely some intriguing things in this article. Their ending statements are relatively on-point and don't align with any particular political leaning.
A good read, but unfortunately didn't tell me anything I didn't already know just from watching the news and paying attention.
Perhaps the most disappointing fact is that the author hinted at but failed to make the correct mental leap. This change in our society and economy is largely a result of globalism. Those in the top elites were able to improve their personal margins at the expense of the rest of the population by moving both production and knowledge work outside the bounds of the US, and in so doing increase the divide. The interaction of state-backed industrial interests in other countries and the anointing of new billionaires at their behest is not to be overlooked either.
I don't see any immediate solutions, as anything direct action will result in chaos, and anything taken slowly will not produce a positive effect in my lifetime. Like many other people in the professional class, my focus is on my own self-reliance and ensuring that I am not beholden to society any more than I must.
How familiar are you with the author's work? I'm not familiar with it, but Wikipedia says they are a conservative and former Trump supporter.
Most people seem to consider American Affairs a conservative journal, and the author is its editor.
I tend to think there are more than one way to skin a cat, and statism is not automatically the correct answer. Their direct statements disagree.
A statist perhaps, but not left-wing.
https://en.wikipedia.org/wiki/Julius_Krein
Self described conservative nationalist.
Harvard alumni
Investment Banker (Bank of America)
Private Equity (Blackstone)
If that is not 0.1% background, then I don't know what is.
You can't add hundreds of millions of Chinese people to the global work force, now at every level of the global economy, without affecting the market for that labour.
I said I'm a globalist, yes I am. My wife is Chinese, I've been going there regularly since 2001. When I first went private car ownership was near unheard of. It's a different country now, near-empty streets with a few donkey drawn carts are now choked with commuter traffic.
The result has been a pause in income growth in the western world. We've benefited from cheap imported goods, but lost out in domestic growth. The upside is that hundreds of millions of people, not just in China but in plenty of other places too, have been elevated out of poverty. I've seen that for myself and it's done an incalculable amount of good, it's just that all the benefits haven't been evenly distributed.
Could we in the west have benefited more if we'd had less globalisation? I really don't know. We have benefited I think, and we've had opportunities to invest and sell into those markets we wouldn't have otherwise had. I don't know, it's hard to evaluate what could have been as it's such a radically different shape for the world economy. Maybe we'd have ended up even worse off, who knows? But we might have been better off, I can't deny it.
For the future, we can already see incomes in China have shot up. Low level manufacturing jobs are moving out of China, because Chinese labourers have more skills now and can command high enough wages in more upmarket jobs that they don't need the low end work any more. I suspect that's why the employment rate in the US and elsewhere, at the bottom end of the economy, is picking up. I hope that continues, and in future growth will be more balanced across the economic and wage spectrum.
Except that's not true. There's been growth; it's just all gone to the very wealthy in the West.
There isn't just some random "exception" among the wealthy. They've very specifically engineered the economy so that they get vastly disproportionate amounts out of it.
The Powell Memo, written in the 1970s by future Supreme Court justice Powell, specifically called on business to reassert power over American politics:
> On August 23, 1971, prior to accepting Nixon's nomination to the Supreme Court, Powell was commissioned by his neighbor, Eugene B. Sydnor Jr., a close friend and education director of the US Chamber of Commerce, to write a confidential memorandum for the chamber entitled "Attack on the American Free Enterprise System," an anti-Communist and anti-New Deal blueprint for conservative business interests to retake America.[14][15] It was based in part on Powell's reaction to the work of activist Ralph Nader, whose 1965 exposé on General Motors, Unsafe at Any Speed, put a focus on the auto industry putting profit ahead of safety, which triggered the American consumer movement. Powell saw it as an undermining of the power of private business and an ostensible step towards socialism.[14] His experiences as a corporate lawyer and a director on the board of Phillip Morris from 1964 until his appointment to the Supreme Court made him a champion of the tobacco industry who railed against the growing scientific evidence linking smoking to cancer deaths.[14] He argued, unsuccessfully, that tobacco companies' First Amendment rights were being infringed when news organizations were not giving credence to the cancer denials of the industry. [14]
> The memo called for corporate America to become more aggressive in molding society's thinking about business, government, politics and law in the US. It sparked wealthy heirs of earlier American Industrialists like Richard Mellon Scaife; the Earhart Foundation, whose money came from an oil fortune; and the Smith Richardson Foundation, from the cough medicine dynasty;[14] to use their private charitable foundations, which did not have to report their political activities, to join the Carthage Foundation, founded by Scaife in 1964[14] to fund Powell's vision of a pro-business, anti-socialist, putatively minimalist government-regulated America as he thought it had been in the heyday of early American industrialism, before the Great Depression and the rise of Franklin Roosevelt's New Deal.
> The Powell Memorandum thus became the blueprint for the rise of the American conservative movement and the formation of a network of influential right-wing think tanks and lobbying organizations, such as The Heritage Foundation and the American Legislative Exchange Council (ALEC) as well as inspiring the US Chamber of Commerce to become far more politically active.[16][17] CUNY professor David Harvey traces the rise of neoliberalism in the US to this memo.[18][19]
> Powell argued, "The most disquieting voices joining the chorus of criticism came from perfectly respectable elements of society: from the college campus, the pulpit, the media, the intellectual and literary journals, the arts and sciences, and from politicians." In the memorandum, Powell advocated "constant surveillance" of textbook and television content, as well as a purge of left-wing elements. He named consumer advocate Nader as the chief antagonist of American business. Powell urged conservatives to undertake a sustained media-outreach program; including funding neoliberal scholars, publishing books and papers from popular magazines to scholarly journals and influencing public opinion.[20][21]
> This memo foreshadowed a number of Powell's court opinions, especially First National Bank of Boston v. Bellotti, which shifted the direction of First Amendment law by declaring that corporate financial influence of elections by independent expenditures should be protected with the same vigor as individual political speech. Much of the future Court opinion in Citizens United v. Federal Election Commission relied on the same arguments raised in Bellotti.
> Though written confidentially for Sydnor at the Chamber of Commerce, it was discovered by Washington Post columnist Jack Anderson, who reported on its content a year later (after Powell had joined the Supreme Court). Anderson alleged that Powell was trying to undermine the democratic system; however, in terms of business's view of itself in relation to government and public interest groups, the memo only conveyed the thinking among businessmen at the time. The real contribution of the memo, instead, was its emphasis on institution-building, particularly updating the Chamber's efforts to influence federal policy. Here, it was a major force in motivating the Chamber and other groups to modernize their efforts to lobby the federal government. Following the memo's directives, conservative foundations greatly increased, pouring money into think-tanks. This rise of conservative philanthropy led to the conservative intellectual movement and its increasing influence over mainstream political discourse, starting in the 1970s and '80s, and due chiefly to the works of the American Enterprise Institute and the Heritage Foundation.[22]
https://en.wikipedia.org/wiki/Lewis_F._Powell_Jr.#Powell_Mem...
Further details of this assault on worker interests by corporate power can be seen in the following books:
https://whorulesamerica.ucsc.edu/
https://en.wikipedia.org/wiki/Winner-Take-All_Politics
https://en.wikipedia.org/wiki/Dark_Money_(book)
https://secure.epi.org/event/the-one-percent-solution-how-co...
But...who would? I mean, that's not the behavior of real people. That's the problem, and the way these things are allowed to happen—people have a hard time understanding that real people, who love their family and tell jokes and have opinions about Game of Thrones, can do terrible, evil things.
It's not that the extremely wealthy actively seek the suffering of those beneath them (mostly; there are probably a few who are weird enough, but it's not enough to make a policy out of). It's that they don't care...or, worse, they see it as some kind of necessary evil to make the pure libertarian utopia they envision. And indeed, the idea that many of them are based in principles of individual freedom is a huge part of how they've sold the whole lot, despite the fact that carrying those principles to any sort of logical conclusion inevitably results in terrible suffering among real people.
But while I agree that there wasn't some intentional conspiracy meeting where they laid out a New World Order-type plot to take 99% of all the world's wealth, that doesn't mean that all the various efforts to enrich the wealthy aren't very deliberate—and to some degree coordinated.
Actions do not have to be taken by cartoonishly evil people to have cartoonishly evil outcomes, and looking around at America today, I can't help but think that's where we've ended up.
Wrong. According to ourworldindata.org the world population in extreme poverty fell by half since 1990. I'm sure there are other sources to match this data as well.
But that doesn't fit your narrative.
"In the West, it's just all gone to the very wealthy" is the intent. Not "All the growth in the world has gone to the wealthy in the West."
Of course those who pay attention to these sorts of things know that the reality is more complex than that, even if you limit your analysis to "The West," which isn't a unified bloc. See the differences exhibited by the change in income inequality by these nations: https://ourworldindata.org/uploads/2018/07/Top-Incomes.png . You can't make a generalized statement about "wealth in the West," because it has exhibited different patterns in different countries over different timeframes. You have to specify all of those parameters before an intelligent conversation can even be started.
Even if the grandparent was worded too vaguely to communicate the poster's actual point, the grandparent turned out to be making a statement that was too low resolution to actually communicate anything beyond hand-waving anti-Capital rhetorical sentiment.
Kind of, but the trends are similar if the magnitudes are somewhat different. States with more distributive policies have less inequality, surprise surprise.
> Even if the grandparent was worded too vaguely to communicate the poster's actual point, the grandparent turned out to be making a statement that was too low resolution to actually communicate anything beyond hand-waving anti-Capital rhetorical sentiment.
I guess technically that's true, but it's also not far off. Because the West is back into relatively low growth, capital's influence is growing [2]. When you consider the only way to get capital is income or returns on capital, this is a simple recipe for inequality growing. And it indeed is the likely trend without (again surprise surprise) more redistribution policies [3].
[1]: https://boingboing.net/2017/12/14/oligarchy-on-ice.html
[2]: https://voxeu.org/article/capital-back
[3]: https://voxeu.org/article/new-globalisation-and-income-inequ...
We've had to ask you this before, and eventually ban accounts that keep ignoring such requests, so if you'd please review https://news.ycombinator.com/newsguidelines.html and take the spirit of the site more to heart, we'd appreciate it.
In Sweden, the median household disposable income doubled in the last 20 years.
So, we shouldn't forget history and be shocked that the US is having its economic secrets stolen, as that's happened numerous times in the past.
The laws for copyright and for trade secrets are quite different. In fact, when someone talks about "intellectual property" rather than about one of the specific kinds (patents, trademarks, copyrights, and trade secrets), they often wind up reaching wrong conclusions. They try to apply concepts from one kind of IP on another kind, and it doesn't work.
So: Theft of trade secrets isn't going to fix draconian copyright law, not only because two wrongs don't make a right, but also because copyright and trade secrets don't have all that much to do with each other.
Sadly, neither do people who have the opportunity to get ahead without facing competition in the first place.
[1]-https://americanaffairsjournal.org/2018/08/the-three-fusions...
That’s been nonsense.
Perot was prescient and he was right. But we laughed him off the stage.
Instead, big biz, some bankers some dealmakers, politicians and other value add service professionals made money.
Joe and Jill Bluecollar and Cindy and Ted Middleclass saw an erosion in job prospects, income, job security and future prospects for their children. These people cannot afford the Chinese au pair to teach their kids Chinese.
These people vote for Bernie and they vote for Trump. The pols made that bed, so don’t cry when people vote for the above. It was a long time coming.
On the other hand he deregulated airlines and telephony which jump started the tech revolution.
Acting like deregulating airlines and busting unions are on the same level is curious. One has created some new companies (and many corporate bankruptcies) while union busting and trickle-down economics helped lay the foundation for the income stagnation the article is largely about.
What good does it do you to have a union without members because all work has been sent overseas? None!
That’s Clinton and his MFN and fastracking into WTO. That’s who we have to thank as well as everyone who didn’t dare challenge that world view but rather cheerled it, including the Bushes and Obama.
Is it possible that weakening of unions made it easier for politicians to pass globalization policies which ultimately lead to wage stagnation?
Is it possible that trickle-down economics (lower taxes on the rich) lead to concentrated political power for the wealthy who were able to push policies that benefit them (Citizens United, Right to Work, stock buybacks, carried interest loopholes, NAFTA)?
Treating 40 years of economic history as a simple binary does nobody any favors. These things are very complex and deserve more than a brush-off.
Some details of his failures can be seen here:
https://prospect.org/health/fabulous-failure-clinton-s-1990s...
https://www.theatlantic.com/politics/archive/2018/02/welfare...
Which was not unexpected, globalization always has losers. But we've failed to help them out.
Inches and markers exist which never existed before.
All those new workers are consumers for goods and services from America.
America soy beans are famously bought in China, as are American bonds.
Economically- if you get cheaper goods, you do more with the same income, meaning your quality of life goes up.
The issue is not the growth of China- the issue is the distribution of wealth.
As the pie has grown, the share of the pie has changed.
Wrong. Middle-class Americans have captured gains through cheaper, higher-quality products than would have otherwise existed without trade and development. Are you using a phone made in China, or wearing clothes made in Bangladesh, or eat fresh fruit in the winter? Then by definition, you've captured gains from trade.
Question is how far into the future are we going to keep pulling.
Vehicles and apparel alone, without even breaking out any other tradable sector, make up the same percent of household expenditures as healthcare and education.
Housing makes up 25%. But the cost of housing, as measured by the median inflation-adjusted cost per square foot of a new house has actually fallen by 8% since 1992.
[1] https://www.bls.gov/news.release/cesan.nr0.htm [2] https://www.census.gov/construction/chars/
That's a relatively meaningless statistic given that new houses don't account for a significant subset of the housing supply.
A better measure of true housing costs is BLS's annual Consumer Expenditure Survey [1], which shows that just from 2013-2018, average annual housing expenditure has risen from $17148 to $20091, an increase of 17%.
Moreover, according to the source shelter only made up about half the increase in expenditures in the category. Expenditures on shelter grew even slower than housing as a whole, 16%.
From the source, Americans spent 32% more on furniture and appliances (including a whooping 50% increase on major appliances), 28% more on housekeeping services, 30% more on their cell phone bill (which is weirdly part of of the housing category), 23% more on household products, and 20% more on their water bill. In other words Americans are splurging on smart fridges, maid service, mobile data plans, organic cleaners and long showers.
That doesn't really sound consistent with the story of cash-strapped workers struggling in an overpriced housing market. That sounds a lot more consistent with the macroeconomic data, which is tells us that since 2013, the economy has been booming and unemployment is at post-war lows.
The point was that new home construction cost (the stat you used) isn't of significant magnitude to be relevant to overall housing price trends. I wasn't addressing price to income ratio.
But regarding that, averages can hide growing divergences between incomes and home prices. Instead consider the median home price to income ratios over time:
https://www.jchs.harvard.edu/blog/price-to-income-ratios-are...
It is also correct to observe that the divergence is most strongly correlated to large metropolitan areas, but that doesn't make it any less of a problem, since that's where most people live, and where most people are moving.
> In fact, the monthly payment for the median single-family home purchased in 2017, assuming a 30-year loan with a 3.5 percent downpayment at the average interest rate, totaled $1,620 in real terms—slightly below the $1,650 averaged in the 30 years from 1987 to 2016, but more than $900 below the real median in 1981 when interest rates were at an all-time high.
Moreover that doesn't even take into account the rising square footage or quality of the modern housing stock compared to thirty years ago.[1]
In terms of the relative comparison between high and low cost metros, the relevant division isn't large and growing metros. The report finds that two thirds of the 100 largest metros have price to income ratios below 4.0. Add in those outside the major metros, and the sizable majority of the American population lives in low cost housing markets.
Figure 19 of the report also shows that high-cost states like California, New York, New Jersey, Massachusetts and Hawaii have strong net outflows of young people. Whereas predominately low-cost states like Texas, Florida, Georgia, Arizona and Tennessee have strong net inflows.
Since 2010, high cost major metros New York, LA, and Boston have grown significantly slower than the US population. San Diego and San Francisco have barely outgrown the US as a whole. Miami, Seattle, and Denver are the only high-cost major metros to grow faster than the rest of the country.
[1] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4532357/ [2] https://en.wikipedia.org/wiki/List_of_metropolitan_statistic...
Sure, we can say that there has been some benefit to the middle class in the West through reduced price on some of the goods but certainly not on big bill items such as housing and education. It's great that I can buy a cheap jacket and keep some of my income, it sucks that my housing expanses went from 1/5 to 1/2 of my income (as an example).
Overall an American worker who lost his well paying manufacturing job and replaced it with a job at walmart lost massively.
Elephant Chart I think tells the whole story[1].
On average, housing expenditures only makes up about 25% of American household income. And education expenditures are nearly a rounding error at 1.8%.
Adjusted for inflation the median cost per square foot of a new home in the US actually fell by 8% from 1992 to 2018. It's true that Americans are spending more on housing than in the past, but that's mostly because they're buying significantly bigger houses.
The median new home saw its square footage increase by more than 50% since 1985. Despite a decline in the average household size. And that doesn't even cover the significant increase in quality in things like central AC, attached garages, fire safety, higher ceilings, high ampere electrical circuits, better insulation, etc.
The HN community is biased on this topic because they tend to live in HCoL metros like the Bay Area and to only recently be out of school.
But the fact of the matter is that the vast majority of middle America in flyover states has not seen any significant loss of affordability in housing. That should tell you that the problem isn't globalization, it's the San Francisco zoning board.
> Overall an American worker who lost his well paying manufacturing job and replaced it with a job at walmart lost massively.
Since 1980 the decline in manufacturing employment have been more than offset by growth in high-paying jobs in healthcare, education, professional services, real estate, and financial services.
American manufacturing output is at an all-time. There's huge job shortages in the industry, and American factories are desperate for workers. That should tell you that manufacturing jobs were never "replaced", rather Americans workers decided to move to other industries.
Manufacturing jobs are good-paying, but dangerous, physically demanding and unpleasant. Most workers who left decided to either go to skilled construction trades or natural resource extraction, where pay is significantly better. Or they decided to become skilled professionals like nurses, teachers, or realtors, where pay is still good but working conditions are significantly better.
[0] https://www.bls.gov/news.release/cesan.nr0.htm [1] https://www.census.gov/construction/chars/ [2] https://www.census.gov/const/C25Ann/sftotalmedavgsqft.pdf [3] https://www.cnbc.com/2018/08/03/job-gains-for-the-manufactur... [4] https://www.reliableplant.com/Read/30044/manufacturing-worke... [5] https://www.bls.gov/opub/mlr/2016/article/current-employment...
Maybe they went from 1/5 to 1/2 precisely because trade made everything else so affordable? In the world without international trade, housing, education and health care could still be expensive, but cheap jeans would be $100 and cheap jackets $200.
Cheaper products, sure, but higher quality? Retailers like Walmart and Amazon are essentially operating cartels, they dictate the prices they are willing to pay for manufactured goods. For manufacturers to meet these demands, cuts will have to come from somewhere--cheaper materials, less R&D etc. Consumers may benefit in a cheaper price for their widget, but that widget is not as likely to have the service life it would have in the past. Shorter service life results in buying 'cheaper' goods at a higher frequency (which is likely to result as a net loss for the consumer). This is rhetorical, yes, but not hard to defend. Clothing, appliances, electronics (in price-point verticals) all reflect this 'trend'. This is not even going in to 'Planned-Obsolescence', which is another symptom of the same problem.
I don't really hard data for any other major sector, and would be interested in anyone that does.
[1] https://www.usatoday.com/story/money/cars/2019/06/28/average...
This is a huge difference from the sweat-shop in Bangladesh making t-shirts for Wal-Mart or H&M, or the electronics manufacturer in Shenzhen making toasters.
It's all about supply and demand, the demand for a reliable automobile creates a market for that product. Meanwhile, as lower and middle-class people have less purchasing power due to high housing prices, debt, medical expenses etc, the demand for cheap toasters is greater than the demand for a more expensive (but robust) alternative.
The article repeatedly frames the professional class' decision making and motivation as pursuing status or in joining the ranks of the upper-class elite... Perhaps I live in a bubble, but this is not a trend that I observe at all among my peers, most of whom are (young) professionals.
While this might be nominally true, our ability to sell into China is so asymmetric compared to their ability to sell here it might as well be nonexistent.
Well, they used to be.
The entire book is available free on his website: https://deanbaker.net/images/stories/documents/Rigged.pdf
In terms of US policy, the state of American inequality, and the domestic movement of corporate interests to create policies to favor the rich - the book Winner Take All Politics is a concise overview of this history since the 70s: https://en.wikipedia.org/wiki/Winner-Take-All_Politics
A USA blue-collar worker can't possibly expect to compete for labor in the global market and keep their current lifestyle - for an illustrative example, many such workers can afford cars and houses, which is a relative luxury if they would have to compete with workers who live in dormitories next to the factory. Someone who's earning $35000/year is in global top 1% in income; and adjusting for purchasing power doesn't change it that much, they'd still be in top 10% globally, and they can stay so relatively wealthy only because (and until!) they don't have to directly compete with all the much poorer laborers of other countries. Any increase in global labor mobility will only make it much worse for Joe Iowa.
The we in this case being those who have easy access to capital. Those who have seen their wages stagnate or jobs erased could care less about what happens to the citizens in another country when they themselves struggle to put food on the table.
In a knowledge economy, the winner takes all, and that means more and more education is required to play in the big leagues, even as the big leagues become the only game in town. I believe only aggressive wealth and income redistribution like universal basic income can prevent a dystopian future of stark inequality.
Was it worth it? I would say no. We all had a feast of our seedcorn and now we will reap what we didn't sow.
I think what is happening is that the low-skilled laborers can now earn higher wages in service (such as online shopping delivery) because the higher skilled labor force can now command a higher income and generate demand for more service. The point is while the overall skill level is up it is not necessary for the low-skill section to also have higher skill in order to have higher income. This has already happened in the developed economies, but people here seem to look down on these service jobs and pine for manufacturing jobs.
If I recall correctly, sugar of lead was a poor man's sweetener. The rich could afford honey.
https://medium.com/@samo.burja/how-roman-emperors-handled-th...
When people talk about "Rome's fall," they're usually referring to the decline of the western half of the empire which happened 400-500 years after the fall of the Republic. The reasons for this fall are debated, but it's likely due to some combination of plague, invasions, elite infighting, and a lack of rules about succession leading to constant civil wars.
Instead, we have Maddows and Kristols and Matthews and Schapiros--venal persons, who make camps in Siberia seem like maybe not such a bad idea.
And there is a lot of misallocation of resources as people try to hold onto their percentile, or spend an inordinate amount of resources trying to climb to the next one. I think.
US congress men and women sell out on the key areas where crony capitalists need their laws changed.
> The performance gap between the top 1 or 0.1 percent versus the top 10 percent is actually larger than the gap between those right at 10 percent and any part of the bottom 90 percent.
They aren't "separate" in that we're not literally a feudal society. Sure, I can agree that an ordinary engineer has a chance of making it big on stock options and becoming a multi millionaire.
But that's not common. It's like winning the lottery. You can't plan to join a startup that will make you a millionaire, especially if you aren't a software engineer or aren't living in silicon valley. And for everyone else, the gap between the 0.1% and the 1% and the 10% is widening.
And what that means is that "top 0.1%" or "top 0.001%" is not the same group year to year. Especially given the way capital income is handled: in the year when you sell a bunch of stock, or sell a house, or whatever, you suddenly move much higher in the income distribution, but just for that one year.
To make this concrete, let's look at the "top 1%" of the population in the sense that their income is consistently in the top 1% of incomes (let's ignore lifecycle effects for now, which throw extra wrenches into the works). These people buy houses, then sell them at some point. I really doubt they average more than 20 years between sales, so in any given year at least 5% of them are selling houses. Any such house sale is likely accompanied by significant capital gains (from inflation, if nothing else, though the real estate markets in various places have been helping, of course). In what fraction of cases are those capital gains enough to move you into the 0.1% for that one year? What fraction of 0.1% incomes are then due to "top 1%" people selling their house?
If we were tracking lifetime cumulative incomes here, rather than annual incomes, we might be able to say something more useful. But a significant part of what we are seeing in the data is that income at the top has become more volatile, so when you get taxable events those taxable events are larger than they used to be.
Now of course the gap between someone who consistently makes a "0.1%" income and someone who consistently makes a "10%" income has in fact been widening. But I'd really like to see some data on how big those classes of people are. Consistent "0.1%" income accrues to _much_ less than 0.1% of the population, from everything I've seen.
The "Elites" are getting richer because capital is being used to accumulate more capital through dividends on stocks and revenue producing assets. The only reason money is being funneled into these assets is because they have the best return on investment, period. Money goes where it can get the best return.
The script gets flipped if that asset is a hard, un-inflatable asset like bitcoin with a built in scarcity mechanism.
Bitcoin doesn't have a dividend, if you're part of the 0.1 percent you can buy a ton of it, but in order to realize any gains you have to sell it and if you can't replenish it you'll have to go back to work to earn more. Of course all of that is in theory, a lot of the truly rich people in this world have income producing businesses and other assets aside from stocks but you could argue that that's a lot better than money simply producing more money.
The world desperately needs bitcoin to succeed.
It's true that bitcoin creates a disparity in ownership, but you can't actually realize any gain unless you sell what you have. If I'm accumulating and holding bitcoin, that's good for me and everyone else who's accumulating and holding bitcoin because it keeps the price up. If I sell bitcoin at a profit, that's good for me but bad for most other people, but I also lose my position and the price goes down to allow others to enter into the market.
There's no incentive to sell with dividend producing stocks and real-estate because they produce money, if you're strictly speaking about money begetting more money then that's the problem.
The middle class can gain a strong foothold in bitcoin in its nascencey, the elites aren't willing to give up their income producing assets but if bitcoin continues to multiply by 5-10X every four years like many expect it to then that gives the middle class incredible leverage to move up the economic hierarchy like we've never seen before.
I actually think this is how the next decade will play out, bitcoin will continue its historic rise and we'll see economic changes like we've never seen before. Bitcoin is going to restructure the way the economy works over the next decade or two.
Millennials will be able to pay off their loans, they'll be able to buy houses and many will become the new "Elite" until something else comes along.
If they are too old and weak to fight, yes. And given the already decades-old, protracted stagnation of wages this will inevitably happen.
This is merely switching one “elite” for a different, equally arbitrary, but likely less qualified “elite”.
> Bitcoin doesn't have a dividend...in order to realize any gains you have to sell it
So...like gold and silver? We've already had those for millennia. We've also had inequality for millennia - and at times it was way worse than it is now.
> The script gets flipped if that asset is a hard, un-inflatable asset like bitcoin with a built in scarcity mechanism.
I'm trying to understand this. If everyone puts their money into Bitcoin, inflation won't eat the value of their money so they won't try to increase it by investing into dividend-producing businesses? Otherwise how is this "script" "flipped? I don't understand this line of reasoning.
Also if lots of people pull money out of dividend-producing businesses and put it into Bitcoin, the prices of those assets will go down which will make their returns even better. So it seems like it would cause more of the thing ("elites" putting capital into revenue producing assets) that you're saying is the problem here.
> a lot of the truly rich people in this world have income producing businesses and other assets aside from stocks but you could argue that that's a lot better than money simply producing more money.
Money simply producing more money is bad, but selling appreciated Bitcoin to make money is good? I don't see the difference between the two. And flipping Bitcoin is better than using fiat money to start businesses that produce value?
Like maybe you have a good point but I have no idea what you're trying to say or how it relates to TFA.
> yet you mention bitcoin on hacker news and you're down-voted to oblivion,
Maybe only mention it on articles related to Bitcoin or other cryptocurrencies?
> The world desperately needs bitcoin to succeed.
Given the already-well-known environmental cost of mining Bitcoin, one could argue that that's the last thing the world needs.
Yes, except gold and silver don't scale. Bitcoin scales, it's almost infinitely divisible and can be traded without a third party on the internet. It's Gold 2.0.
> I'm trying to understand this. If everyone puts their money into Bitcoin, inflation won't eat the value of their money so they won't try to increase it by investing into dividend-producing businesses? Otherwise how is this "script" "flipped? I don't understand this line of reasoning.
No, but if bitcoin proves to be the better investment (which it has over the last decade of its existence) people will put their money where they can get the best return. Bitcoin is still largely unproven and considered risky but the more times it increases exponentially in value the more stable and secure it will seem.
To put it another way - If I had 1 million dollars ten years ago conventional wisdom would have said the absolute best place I could have put it was either the stock market or into real-estate. Looking back obviously there would have been no better place to put it than into bitcoin but nobody knew that back then.
The more people who move their investments away from "Conventional" investments like real-estate and into more inclusive assets like bitcoin the better it is for society as a whole. It's well documented that one of the big reasons silicon valley is so expensive to live in is because Chinese investors are moving in and purchasing real-estate just to sit on, good for them, bad for people in the area who get no piece of that economic action.
I could go on and on. I'm not going to pick apart every point you made but I certainly can, I think you'll see the light in a few years when bitcoin does what it does and skyrockets again.
Can I ask you this though: Do you think bitcoin will gain in value from this point on or do you think bitcoin will fizzle out, and why do you think that?
If I knew the answer to that, I'd be off making money rather than arguing with random strangers on the Internet :-)
Gold and silver have valid (if limited) practical utility and thousands of years of history as stores of value. Bitcoin has neither. And gold and silver only became synonymous with money and value once they began to be used in coinage i.e. as a currency, issued by the state, and you could pay taxes with it.
Your thesis is "Bitcoin is a good investment because it appreciates". It doesn't answer "why does Bitcoin appreciate?". Practically everything that can be called an "investment" or "asset" has at least one of two properties:
1. has practical use
2. generates income
Say all you want about investors buying up houses and driving up prices (and the Bay Area's housing problems run deeper than that), but they're getting an asset that has actual value. Even if people stop believing in the value of houses, a house will still shelter you, and afford access to good jobs and/or surroundings/weather.
I'll grant you that Bitcoin has one property that can't be found anywhere else. It's a store of value that can be exchanged without intermediaries. So it has exactly one practical use.
But the point of a store of value is to...store value. The idea that "someone will pay more for this later" has been the basis of innumerable bubbles and crashes throughout history - as recently as the Great Recession to as far back as the Tulip Mania, and probably farther still. Volatility isn't a great property for a store of value to have, because most people don't like crazy gyrations in their net worth every day.
And if Bitcoin isn't a store of value, but is a currency instead, then it has a different problem. As you said, it's non-inflationary. So people are incentivized to hang onto it rather than spending it.
> Looking back obviously there would have been no better place to put it than into bitcoin but nobody knew that back then.
Past performance is no predictor of future performance. Someone putting a million dollars into Bitcoin in 2017 would be pretty sad right now. People believe in the stock market, not (just) because of its past performance, but because it represents companies that deliver actual, real-world value.
You're describing all forms of currency. You can still buy stocks with Bitcoin and receive dividends in Bitcoin. Bitcoin is worse in this regard because you don't even need to invest it for it to grow in value. You can literally get rich from hoarding it.
And yes by buying and hoarding bitcoin you can make yourself very rich - that's the point.