- Economics As If Gross Disparity Mattered -
"The instability of capitalism springs from the disparity of wealth. Depressions, as distinct from recessions, are caused by the extreme concentration of wealth."
Dr. Ravi Batra
"The form of law which I propose would be as follows: In a state which is desirous of being saved from the greatest of all plagues -- not faction, but rather distraction -- there should exist among the citizens neither extreme poverty nor, again, excessive wealth, for both are productive of great evil... Now the legislator should determine what is to be the limit of poverty or of wealth."
Plato, 327 B.C.
"Inequality in the United States is at insane levels. Inequality among Americas is worse than in Egypt, Tunisia or Yemen... inequality is higher in the U.S. than in many banana republics in Latin America. And social mobility is lower in America than in most European countries."
Debates over limiting wealth and power arise wherever enclosure, oligarchy and factor imbalance create great disparities in wages, venture shares, land ownerships, and societal power. Wage-laboring majorities exploited by capital are left without natural freedom or the effective democracy necessary to secure greater equity, and a political means to peacefully "reshuffle" the deck. As a result, we are doomed to redistributive fever and revolution.
Given such conditions it is only a matter of time before disparities reach the point where the poor and over-taxed middle classes have nothing lose, and everything to gain, from general strikes, riots, revolutions, and simply killing the rich. At this stage it matters not how sophisticated are the techniques of social control as nothing will save a corrupt system from implosions ignited by falling living standards, fiat money, competitive devaluations, overpopulation, eco-ruin, and unemployment.
If we recognize no limits to wealth and its attendant political powers, then a growthism driven by enclosure and oligarchy will create deadly disparities of riches and political influence. Such social deformities lead to the collapse of natural economy, effective democracy, progressive reform, and livable environments. A just and stable society then slowly evaporates as growing wealth disparities produce class conflict.
Lacking refuge, most today are urbanized, indebted, desperately employed, and subject to their employer's, at-will, termination of their means to live. Naturally, in this condition, most are eager to become rich in order to fill the gap left by "original appropriation" and one's lack of liberating estate or communal enfranchisement.
Exactly this locked-in condition produces an all-consuming drive for money-wealth, and means we develop a "free market" of dependent wage slaves who must exploit one another in order to gain escape velocity from a game designed to liberate the few.
This very desperation - arising from a pervasive lack of individual or communal refuge - neither defines, or produces, any enlightened and progressive society. Rather, this estate of "labor" produces a frantic self-interest which further empowers capital, and allows ruling oligarchies to create massive "trickle-up" disparities of wealth and power. As a result, freedom is corrupted, creativity mis-aligned, and democracy denied as wealth, land, and freedom concentrate into the hands of the few.
The emergence of gross income disparities, and land redistribution movements, is a sure sign the socio-economic scheme is defective. The root question in then whether freedom and responsibility are not also defective since, given the nature of the game, only a few become free and enfranchised while the rest come to depend on subsidies to exist.
After centuries of "growth" why are the vast majority still landless, mortgaged, and dependent upon capital for their employment, and upon the state for an ever-receding "retirement?" Why, after centuries of "free markets," have not wage-laboring majorities become relatively wealthier, more enfranchised, landed, and less subsidized? Why are urban majorities still wage-bound, dependent on the state, and without natural estate or communal alternative amidst our growing wealth disparities and constant, per-capita, decline?
"In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one's home), the top 1% of households had an even greater share: 42.7%... In terms of types of financial wealth, the top one percent of households have 38.3% of all privately held stock, 60.6% of financial securities, and 62.4% of business equity. The top 10% have 80% to 90% of stocks, bonds, trust funds, and business equity, and over 75% of non-home real estate. Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America."
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