STIGMERGY: The C4SS Blog
0.86% of US Population Receives 17.3% of US Income!

About 2,748,978 Americans are employees of the federal government.

The population of the US is somewhere around 317,940,000.

The federal government takes 17.3% of Gross Domestic Product in taxes.

So the average federal employee controls a little more than 20 times as much of each year’s produced wealth as the average American. And it’s not just production income:  As highlighted in the recent Bundy ranch standoff, that 0.86% of the population claims to “own” 28% of land in the United States.

Oh, they say they control it “for all of us” and “on everyone’s behalf,” but that just doesn’t wash even if it’s true (and we all know it isn’t). After all, many — maybe even most — “private sector” rich people contribute to charity and so forth, but the “wealth inequality” complainers hold that it’s the fact that they have/control the wealth, not what they do with it, that’s important.

What got me thinking about this? Well, a lot of people are talking about Thomas Piketty’s book Capital in the 21st Century. I haven’t read it yet, but I’ve been following the talk, and one blurb stood out to me:

“A landmark book … which brings a ton of data to bear in reaching the commonsensical conclusion that inequality has to do with more than just blind market forces at work.” Paul Krugman, New York Times

That quote caught my attention because I find such a … libertarian … statement rather odd coming out of Krugman’s mouth. I believe it to be true that it is indeed not “blind market forces” which create drastic wealth inequalities. I suspect that in a free market, wealth would distribute itself quite a bit more evenly than it does in a state-managed economy. I’m not saying that there would be no rich people or no poor people, just that most people would be wealthier than they are now and that “the super-rich” would control a smaller percentage of wealth than they do at present.

But is that what Krugman meant? I tried Googling the specific quote and wasn’t able to find the piece it came from. What I did find was his upcoming piece on Piketty in The New York Review of Books, “Why We’re in a New Gilded Age.” In which he holds that:

So progressive taxation — in particular taxation of wealth and inheritance — can be a powerful force limiting inequality.

And he’s just. Flat. Wrong. When wealth is “progressively taxed,” it doesn’t get redistributed equally among those poorer than the people who had it before. It gets redistributed to a tiny bureaucratic minority who are just as interested in acquiring, using and keeping that wealth as anyone else, even if they formally disclaim personal interest and pretend to be acting as agents of “the public.” As history demonstrates, this tiny bureaucratic minority tends to align itself with those “progressively taxed” wealthy rather than with the poor, however deserving or undeserving you might think the poor are (if for no other reason than that even under very “progressive” taxation, the wealthy retain enough wealth to pay bribes, hire lobbyists, elect candidates, etc.).

The state is, as Karl Marx put it, “the executive committee of the ruling class.” And it pays itself a hell of a salary.

[cross-posted from KN@PPSTER — this piece is in the public domain]

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