Saturday, April 01, 2017

In Biblical Terms

For nearly fifty years, we have bought into a myth -- which we take to be as axiomatic as the sky is blue. Rutger Bregman writes:

These days, politicians from the left to the right assume that most wealth is created at the top. By the visionaries, by the job creators, and by the people who have “made it”. By the go-getters oozing talent and entrepreneurialism that are helping to advance the whole world.

Now, we may disagree about the extent to which success deserves to be rewarded – the philosophy of the left is that the strongest shoulders should bear the heaviest burden, while the right fears high taxes will blunt enterprise – but across the spectrum virtually all agree that wealth is created primarily at the top.

And therein is the source of the mess we now find ourselves in:

So entrenched is this assumption that it’s even embedded in our language. When economists talk about “productivity”, what they really mean is the size of your paycheck. And when we use terms like “welfare state”, “redistribution” and “solidarity”, we’re implicitly subscribing to the view that there are two strata: the makers and the takers, the producers and the couch potatoes, the hardworking citizens – and everybody else.

The truth is that we've got things precisely backwards:

In reality, it is precisely the other way around. In reality, it is the waste collectors, the nurses, and the cleaners whose shoulders are supporting the apex of the pyramid. They are the true mechanism of social solidarity. Meanwhile, a growing share of those we hail as “successful” and “innovative” are earning their wealth at the expense of others. The people getting the biggest handouts are not down around the bottom, but at the very top. Yet their perilous dependence on others goes unseen. Almost no one talks about it. Even for politicians on the left, it’s a non-issue.

The truth is that the those with money these days area a new class of rentiers:

To understand why, we need to recognise that there are two ways of making money. The first is what most of us do: work. That means tapping into our knowledge and know-how (our “human capital” in economic terms) to create something new, whether that’s a takeout app, a wedding cake, a stylish updo, or a perfectly poured pint. To work is to create. Ergo, to work is to create new wealth.

But there is also a second way to make money. That’s the rentier way: by leveraging control over something that already exists, such as land, knowledge, or money, to increase your wealth. You produce nothing, yet profit nonetheless. By definition, the rentier makes his living at others’ expense, using his power to claim economic benefit.

The rentiers have captured the political system. That's why capitalism has failed. In Biblical terms, the money changers have taken over the temple.

Image: Cashchanger


Toby said...

"Are the Irvings Canada's biggest corporate welfare bums?"

Indeed they are.

Corporate welfare is strangling Canada. We pay taxes so that the likes of the Irvings and the Bombardiers can take our money and run. If Canada did not subsidize the oil, tar sands and natural gas industries, renewable energy would be competitive. If Canada did not encourage corporations to bring in foreign workers we would not have such high unemployment. Etc.

This is an important issue, Owen. All Canadians should understand that we are getting screwed.

Owen Gray said...

As the article suggests, Toby, wealth is devoured at the top.

The Mound of Sound said...

“Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.” - Abraham Lincoln

John B. said...

From the libertarian perspective, the value of work by the waste collectors, nurses and cleaners equates to what they're paid. Kevin O'Leary notes that dime-a-dozen journalists should be included in this consideration. It actually applies to any salaried or waged-based occupation. The price that these workers can extract is driven in inverse proportion to the supply and settles at the point of equilibrium with demand. Of course, we all know that. But consider this: as the supply approaches infinity the supply price approaches zero. No need to even consider the demand curve at that point. It's immaculate equilibrium. We'll put everybody to work at that price.

Contracts and seniority clauses produce false scarcity. Jail the union leaders for promoting restrictive practices. Subsistence remuneration will suffice. When the wealth creators remembered that, they ended slavery. It should still suffice. So let's get to work on the next phase now that we've overcome our late 19th through 20th Century delusions and deal with one of the last of the major impediments to economic freedom and prosperity: the culture of dependency fostered by the minimum wage.

Owen Gray said...

It's interesting to note how different the first Republican president was from the present one, Mound.

Owen Gray said...

Libertarianism is very appealing, John -- as long as there are no "extenuating circumstances" -- the price of living in an imperfect world.

The Mound of Sound said...

The Libertarianism John describes cannot survive capitalism, at least the consumer economy capitalism that prevails today. Carried to its inevitable conclusion we devolve into economic feudalism in which the aristocracy accumulates capital, locks it away behind a reinforced door in the keep and extracts rents from their subjects.

That hasn't worked out too well over the past couple of centuries, not once the peasants gained access to guns and guillotines. Eventually some bargain must be struck at some bargain basement level until circumstances return in which the struggle between capital and labour resumes and we have another age of progress. Maybe that's what we're experiencing today, the end to the first great progressive cycle. Only we don't see our modern condition as just one stage in a continuum of alternating ebbs and floes. I think the span of human consciousness is much more narrow than some of us had imagined. Those who manipulate us politically have a term for it, "creeping normalcy." Whether it's the historic struggle of labour versus capital or an existential crisis such as climate change, we lose our ability to view it in the context of the past and that leaves us in a moribund, weakened state.

Owen Gray said...

The powers that be would much prefer that we live in the unending present, Mound. Without a knowledge of history and without an eye on the future, there is no need -- and no hope -- for change.

Steve said...

People who dont believe in God
still believe in money
and both are a question
of faith

Owen Gray said...

And faith is a question of choice, Steve -- that is, choice in what you choose to believe.