Economist Tyler Cowen, in a piece at The American Interest, arguesd that — despite growing differences in nominal income — inequality in “personal well-being” has declined drastically over the past century (“The Inequality That Matters,” Jan.-Feb. 2011).
“Bill Gates is much, much richer than I am, yet it is not obvious that he is much happier if, indeed, he is happier at all. I have access to penicillin, air travel, good cheap food, the Internet and virtually all of the technical innovations that Gates does. Like the vast majority of Americans, I have access to some important new pharmaceuticals, such as statins to protect against heart disease ….
“Compare these circumstances to those of 1911, a century ago. Even in the wealthier countries, the average person had little formal education, worked six days a week or more, often at hard physical labor, never took vacations, and could not access most of the world’s culture. The living standards of Carnegie and Rockefeller towered above those of typical Americans, not just in terms of money but also in terms of comfort.”
I suppose I would say Cowen’s is a valid argument, in a very backhanded kind of way — or perhaps that it simply proves too much.
We’ve seen a stagnation in nominal, dollar-denominated, inflation-adjusted purchasing power, and the shift of virtually every penny increased GDP from productivity increases upward to the plutocracy and corporate management, as the result of all kinds of subsidies, protections, and monopolies.
What Cowen is really pointing out, when you get right down to it, is that all these monopolies were still unable to prevent the average worker’s standard of living because — despite all the larceny in the plutocrats’ and bosses’ piggy little hearts — the technologies of abundance have developed so fast that they’ve increasingly broken the link between nominal purchasing power and resource distribution on the one hand, and quality of life on the other. In other words, it’s becoming more and more feasible to live comfortably on what you’ve got left after you’ve been robbed by the plutocracy, despite their best efforts.
I’m surprised the WSJ hasn’t run a “Lucky Duckies” editorial on this.
Nevertheless, the fact remains that this trend undermines the basic logic the system was set up to serve, and the robber barons at the commanding heights of state capitalism are fighting tooth and nail to prevent it. Just what do you think the Digital Millennium Copyright Act was about, for example? Or the assorted recurring examples of “safety” legislation to impose overhead costs on small garage manufacturers and truck farmers and make them less competitive against mass-production industry and factory farming?
These people have been doing their dead level best to maximize the amount of rent they’re able to extract from each unit of comfort, to maximize the number of hours we work to produce profit from them in addition to supporting ourselves, by imposing all sorts of inefficiency burdens on production with efficient new technologies. It’s the moral equivalent of those laws the funeral industry used to have in a lot of states mandating the purchase of a casket even by people who wanted to cremate a body.
These people want to “enclose” the technologies of abundance and extract rents from them, in order to force us to work to support them in addition to ourselves. The fact that the productivity of abundance technologies is growing faster than their ability to raise the rents on artificial scarcity is — despite Cowen’s rosy picture of the world — a bug for them rather than a feature.
The propertied classes, the robber barons, have since the beginning tried to extract tribute by closing off and regulating access to the means of subsistence and production — much like a medieval lord forcing the peasant to work two days on the lord’s demesne in return for the right to support his family on his own plot the rest of the week. And throughout history, the ruling classes have responded to increased productivity of the peasantry’s labor by increasing the size of their own demesne so they could appropriate the surplus for themselves. What’s been happening technologically over the past decades is that the peasant’s labor is growing in productivity faster than the lords can enclose land to compensate for it. It’s more feasible than ever before, in the words of the Wobbly song, to “throw the bosses off our backs.”
And they hate it.
Citations to this article:
- Kevin Carson, Damning Corporate Capitalism with Faint Praise, Dhaka, Bangladesh New Age, 01/12/11
- Kevin Carson, Damning Corporate Capitalism with Faint Praise, The Canadian, 01/04/11
I totally concur.
I think Cowen's cultural work is reasonably good, and he'a also one of the few libertarians able to put social democracy in perspective, in a manner not entirely dissimilar from your recent article. I also think that it is important to remember how much technology and social change have enriched our lives, despite systematic injustice- maintaining respect for real progress made keeps that progress and the hope of more alive, and reminds us how bad it will get if the current system crashes and is replaced by something older and worse.
But to extend this to apologies for the capitalist class is too much- especially when one remembers that its only relatively privileged people like most readers here who get anything out of trickle-down quality of life improvements. For the majority of the human race whose labour feeds both us and the ruling classes, capitalism has meant only that the population increase has made it possible for more human beings to live a life of toil and ignorance. To fairly judge the system one has to remember that the genuine humanism practiced in the first world rests upon the oppression of unseen people outside the system's nominal borders. The fact that monarchs have often treated palace servants reasonably well is worth noting but a serious analysis of monarchy has to look at the majority who are peasants in the fields outside.
I only wish that less people responded to such awarenesses by yelling that the house slaves should be made to suffer and stagnate like the field slaves, a praxis that doesn't advance anyone's freedom.
I ask forgiveness for two things: 1) such a long post and 2) not providing sources myself – I’m just posting a response and offering an example of how easy it is to generate unsubstantiated claims.
One overarching problem with Cowen’s article, a common one, is he is working with a basic error in thinking. He is assuming a scenario from a counter-factual: That if things hadn’t been the way they were, we would not now have x, y, and z. One can argue anything from a counter-factual – it is the nature of the beast.
Much of what he is promoting in the comparison between today and 1911 is not about wealth inequality at all, but about the advance and spread of technology. He is, confusing the issue. If we go far enough back in time both the poor and the wealthy both shit outside or in bed pans or chamber pots. Sure there was a difference between who had to clean the can – but that still exists today, right?
Comparing today’s standards to 1911 – a notoriously harsh time for workers, a harshness that prompted worker’s movements. The similarity of unjustifiable conditions strikes me much more than the difference.
(On the implied greater discrepancy in 1911 than now: I could argue that the true discrepancy was less then, compared to now. I could very well argue that the medical care in 1911 was actually less unequal then, considering the state of medicine at that time. The discrepancy between having great health care, and pharmaceuticals, today is much greater when you consider the relative cost, quality, and availability of health care, particularly to the best health care. Was it that great a discrepancy to rely on a home remedy versus a doctors “tonic” in the day? Considering a time when the option was yanking a tooth for the rich and the poor, how is the greater discrepancy really implied – and the tooth can be yanked without putting one off his/her monthly budget. How much overall contact with world culture was possible back then, even among the very rich, compared to today? It is a very different thing when the means and availability are there but cut off from people, than when it generally was not available. )
“Most people today may not articulate this truth to themselves in so many words, but they sense it keenly enough.”
What people sense is that overall technological advancement and medical quality has advanced, they have more creature comforts, but this is confusing the issue with income inequality. The fact that an average person today has more creature comforts than a king of past does not equate to an easier life overall outside of those refinements.
“So when average people read about or see income inequality, they don’t feel the moral outrage…”
Does he have anything to back this up, or just his opinion? He is a professor at George Mason and considers the average person those people he bumps shoulders with – since they are not elite blue bloods – they must be average. But his limited anecdotal experience doesn’t constitute data on what the average person feels.
Likewise, there may well be a lot of learned helplessness and a learned social norm that “we don’t talk about those things,” going on. How much is it ingrained in the American psyche to not talk about money issues and, whatsmore, to speak of issues of class is, in and of itself, to relegate one to an uncouth, lower class than one is at.
“Instead, they think their lives are pretty good and that they either earned through hard work or lucked into a healthy share of the American dream. (The persistently unemployed, of course, are a different matter, and I will return to them later.)”
Again, he is going on his assumptions, and, conveniently cutting out cases that do not fit into this – “cleverly” so by setting up two distinct classes, those who by hard work have earned a happy, comfortable life and the “persistently unemployed.” He hasn’t been paying much attention to the broad society he speaks of if he neglects to notice those in between.
“This is why, for example, large numbers of Americans oppose the idea of an estate tax…”
And this has nothing at all to do with how the question is framed to them? A lot of those American’s have been tricked into thinking they won’t be able to leave their little share to their children. A poll today stated, “61 percent of Americans prefer increasing taxes on the wealthy as the first step to balancing the budget.” This is as the first step! I’d wager that most of those people would include an estate tax as part of “taxing the rich” if they did not think it would hurt them personally. This type of reasoning on Cowen’s part neglects both polling tactics and ideological nuances that come into play. Ask me if I think the estate tax should be increased, given our current system, and I will say “yes” or "no" depending upon the details I hear or infer. Ask me if I would as a first step, I would say “no” but as part of the solution, "yes." Further, tax questions are hard to get at because of underlying assumptions such as “somehow they would just find another way to get the money from my taxes.”
( A quick digression: For years you could look at a person’s job, have a decent idea of what income bracket he/she was in, and look at his/her house, car, lifestyle, etc. and ask yourself, “how the #$@% can they live like that with those salaries? Often the hidden factor was inherited funds and/or property. After going through a shift in the attitude from leaving stuff behind for one’s kids to spending it on one’s self – “I’m spending my kids’ inheritance” bumper stickers? – and coupled with the decline in property values and assets held to be left behind, we are going to see the pinch start to come down harder when a lot of people did not get the mid-life financial boost their parents did.)
“A neglected observation, too, is that envy is usually local. At least in the United States, most economic resentment is not directed toward billionaires or high-roller financiers—not even corrupt ones. It’s directed at the guy down the hall who got a bigger raise.”
Besides the fact that I would claim that the hostility toward one’s neighbor has been largely a culturally nourished one, this is resting on a logical error. That one has hostility toward one’s neighbor does not imply that he/she does not have it toward a billionaire. The fact of more resentment, the felt impact, because it is local, relative, and comprehensible is actually understandable. Scrape the fog and one sees that the reason one does not have a little more, and the neighbor as well, is due to trickling down, not the neighbor. We have also done a very good job of geographically segregating ourselves and hiding what disparity really looks like.
“Gore Vidal put it honestly: “Whenever a friend succeeds, a little something in me dies.”
There are also an awful lot of people who do not see the world as Gore Vidal; but then again Vidal lives a different life than a lot of people, no?
“Occasionally the cynic in me wonders why so many relatively well-off intellectuals lead the egalitarian charge against the privileges of the wealthy. One group has the status currency of money and the other has the status currency of intellect…”
Perhaps if one views the world as nothing but a status struggle, or one seeks these things due to a lack of genuine self-esteem (as opposed to esteem based upon what one has “earned”) it is hard to see. For as much as it is true of the intellectuals, and I would question the expanse of this sentiment, it could be due to intellectual integrity: seeing the facts for what they are, an actual understanding of justice, perhaps the birth of western intellectualism as we know it based in no small part on Plato asking those words, “what is justice?”
Cowen then gets shifty. The question of inequality throughout society, and between the rich and everyone else in particular, is divided into two segments: inequality between the poor and middle, and inequality among the rich. The continuum between the rich and the rest of society is completely disconnected, leading into Cowen crying about the horrible income inequality WITHIN the wealthy class. Cowen offers that there isn’t really any obvious moral or societal problem with inequality as it effects most people, denies or ignores any real, structural, pragmatic concerns with this inequality, then moves on to build fear toward the structural, pragmatic problems of inequality among the rich while implying a level of moral injustice within this realm (celebrities deserve to be filthy rich against the poor masses, but it isn’t quite right compared to the deservedly rich).
Cowen negates the loss of the middle class piece of the pie by indicating that there is not much inequality between them and the poor (a complete bullshit statement when one jumps out of using percentages as evaluative tools and looking what real, actual dollars can purchase) with the consolidation that there is now Wal-Mart and other discount places, offering lower quality products from further exploited peoples, for the non-well-to-do to shop at.
Let them eat cake.
Then, as segue into discussing “threshold earners,” Cowen reminds us that the rich are that way because they work so many more hours, and so damned hard. Forgotten is the time saved by the rich by having other people perform household, business, and social tasks/necessities for them, or the ability to just PAY for what the poor must DO for themselves. (And it is HARD WORK doing!)
Then we get “A threshold earner is someone who seeks to earn a certain amount of money and no more. If wages go up, that person will respond by seeking less work or by working less hard or less often.” And Cowen informs us, my emphasis, “ That person simply WANTS to “GET BY” in terms of absolute earning power in order to experience other gains in the form of leisure—whether spending time with friends and family, walking in the woods and so on. Luck aside, that person’s income will never rise much above the threshold.”
The view of “threshold earners” WANTING to just get by, that they are spending all this time on LEISURE (leisure costs money!) is appalling. The time is spent, often vacation time if they have it, taking care of errands, necessities, getting cars fixed – hell fixing everything, cleaning homes, etc.
Cowen: “It’s not obvious what causes the percentage of threshold earners to rise or fall, but it seems reasonable to suppose that the more single-occupancy households there are, the more threshold earners there will be, since a major incentive for earning money is to use it to take care of other people with whom one lives.”
Taking care of people, raising children. Cowen seems blind to the idea that maybe the reason why these people are threshold earners is because they are taking care of people, not reclining in leisure, and our society is so structured that too many people have to choose between time with people they care for and making more money. Forget about the notion these people are often forced to sacrifice valuable time with loved ones in order to eke out a few more pennies.
And then, “If the percentage of threshold earners rises FOR WHATEVER REASONS, however, the aggregate gap between them and the more financially ambitious will widen. There is nothing morally or practically wrong with an increase in inequality from a source such as that.”
My all-caps emphasis added. For whatever reasons?
I can’t make sense of this. Just how did the shift of virtually every penny (upward, presumably) manage to increase GDP from productivity increases, and just how does the fact that the productivity increases flow upward to the plutocracy and corporate management come into it?
Not so! At any rate between the Agricultural Revolution, with its new methods and crops, and the introduction of farm machinery like the threshing machines that so aroused the Luddites, their response was rather to downsize the numbers of peasants so as to leave more (net) surplus to tap into.