Pawns of the Plutocrats
The Royal Society for the Arts, Manufactures, and Commerce (RSA) has been sponsoring lectures for 250 years. But only recently have they been producing a series of brilliant animations of the lectures themselves, including this one illustrating a talk on the financial crisis by controversial anthropologist and geographer David Harvey.
The analysis is frankly Marxist. I'm inclined to think he's right, though I don't know how much of a Marxist you have to be to think, "Some people have far too much money and are doing insane shit with it."
I couldn't help but notice, though, that Harvey is a little short on solutions. "We've all got to think and talk about this" is a little lame as a finale, though I guess "We should all have a big world revolution" is unlikely to fly with much of his audience.
The analysis is frankly Marxist. I'm inclined to think he's right, though I don't know how much of a Marxist you have to be to think, "Some people have far too much money and are doing insane shit with it."
I couldn't help but notice, though, that Harvey is a little short on solutions. "We've all got to think and talk about this" is a little lame as a finale, though I guess "We should all have a big world revolution" is unlikely to fly with much of his audience.
Labels: david harvey, financial crisis, wall street crash
posted by dubjay at 10:30 PM
10 Comments:
I instinctively agree that "some people have too much money", but (a) this is an instinct bred into us during life on the savanah, where life is a zero sum game...and I discount that instinct in a positive-sum division-of-labor, high-tech economy like we've lived in for the last 250 years; (b) I am convinced by Robert Nozick's argument that if people build wealth not by theft, but by mutually agreed to interactions between adults, then there is no moral basis for being upset with the end result.
Love your books, BTW!
Going by the standards of 75% of the world's population, American bums sleeping in the street have "too much money". This doesn't mean that the bums' situation is awesome, or that we shouldn't do something--indeed, a rich society has [i]less[/i] excuse for letting its members live in misery--but when First Worlders start busting out the Marxist philosophy it's important to remember that we're jackals arguing over who gets a second bite of the deer's liver.
TJIC, here's what happened between 1980 and 2000: the productivity of the American worker doubled, but his annual income declined. What that says to me is that we're not being paid what we're worth, and that the top two percent skimmed off all this excess productivity for their own benefit.
This might be "mutually agreed to interactions," but it led to the very rich being incredibly reckless with their money, because they had so much of it that it didn't matter to them. This resulted in the vastly inflated bubbles that have grown and then popped in the last dozen years.
Back in the Eisenhower administration, the rich paid 91% of their income in taxes. There was no shortage of Rockefellers that I could see.
I don't want to impoverish our ruling class, because where else would we get our tabloid entertainment? But if the top two percent could be persuaded to own only 60% of the country's wealth instead of 80%, the rest of us could in effect double our income, and we'd have the money to fix our infrastructure, pay for health care, and maybe even pay down the national debt.
"Back in the Eisenhower administration, the rich paid 91% of their income in taxes. There was no shortage of Rockefellers that I could see. "
Back in the Eisenhower administration we were still working off the loans we'd taken out to win World War II. And claiming that the existence of Rockefeller justifies 91% tax brackets is like saying that because Ford exists then there's no such thing as regulatory barriers to market entry.
"...if the top two percent could be persuaded to own only 60% of the country's wealth instead of 80%, we'd have the money to fix our infrastructure, pay for health care, and maybe even pay down the national debt."
Ho, ho, ho. We've got that much money, but we'd rather give it to old people as a reward for having gotten old, and give it to retired bus drivers as danegeld to persuade their non-retired compatriots to not go on strike.
Seriously--if you look at how this country spends its public funds, then you'd come to the conclusion that our society thinks that its most important duty is to keep old people alive for as long as possible.
The government shouldn't do a thing about the 'rich'. The old saying that a fool and his money are soon parted is very true.
Also, I haven't noticed the government being particularly astute in its "business" activities, so I'd rather the person who earned the cas, kept it.
Steve Moss
Steve, the question is who "earned the cash."
Does the executive who earns 300 times the pay of his employees actually "earn" that much money?
Or has the employee whose productivity has doubled actually earned that money, and the executive just grabbed onto it because the employee didn't have the information to know how much his labor was worth?
So much money has been made in the last couple decades that the hyper-rich were able to grab 90% of it without anyone noticing.
I think their unearned profits should be taxed. Maybe a law saying that any money paid over 75% of a company's least-paid employee should be taxed at a special, high rate would be in order.
HaloJones>> "Back in the Eisenhower administration we were still working off the loans we'd taken out to win World War II."
Well, yes. And guess what? We have two wars on our hands that aren't paid for! Who's going to pony up the cash?
"I think their unearned profits should be taxed. "
Did you dig the silicon out of the ground and then personally fabricate the computer chips that became the core processor of the computer you use to type your books? No? Then you've got some measure of "unearned profit".
Unless, of course, you entered into a negotiation with the computer manufacturer to secure an individual price for the system, taking into account an estimate of your future earnings resulting from works created using that machine.
******
And you've got the wrong attitude about this anyway. The CEO doesn't decide things anymore. The CEO is a figurehead. His job is to be a tall middle-aged man with impressive hair and Alpha body language, which makes potential clients willing to trust the company with hundreds of millions of dollars of their money.
The CEO's salary is, really, part of the marketing budget. A good CEO returns far more money to the company than he gets paid--and all that money he brings in is how the company pays its employees.
"Does the executive who earns 300 times the pay of his employees actually "earn" that much money?"
-- you're worth what someone will pay you, neither more nor less. Whatever you can get in open competition is your worth. It's certainly that way for us authors; what we get is set by how many books we sell.
There is no "just" price for labor or anything else; that's a medieval fantasy. There's no objective or inherent standard of value; that's a Marxist fantasy.
There's only what someone is willing to pay. Exchange value -is- value.
What happened between 1980 and 2000 is that enormous parts of the world stopped being inaccessible to the market because they were Communist, or hoplessly backward.
So now American workers are competing against a lot of other workers. Supply she go-a up, price she go-a down. (Groucho Marxist economics.) Mexican and Chinese workers get more, Americans get less.
And if someone in Mexico or China can do the same job on the same machines as an American worker in Indiana, then the American worker isn't going to get more for it. That's impossible, like water flowing uphill.
Meanwhile, since the world has been developing rapidly, capital is in shorter supply than it was in 1980. So the returns to -capital- (and some rare skills) go up.
Demand she go-a up, price she go-a up.
The UAW managed to get middle-class wages and bennies for what's basically at best semi-skilled labor because car manufacturing was an oglipoly. They put the knuckle on the Big Three and the Big Three passed it on to consumers who had no choice but to pony up.
Ford's proudest boast when the Rouge River plant opened was that 50% of its jobs could be learned in one day by an immigrant fresh off the boat, speaking no English, illiterate even in his own language, and who'd never handled anything but a wooden plow before.
And 90% of the remaining half of the jobs in the plant could be learned by the same immigrant in a week or less.
But now anyone can make cars, or earthmoving machinery, or machine tools, or computer components.
Also, "regulatory capture" is inevitable.
If you set up a government agency to regulate Industry X, eventually it will become an agency which -serves the interests of- Industry X at the expense of others, particularly the public and would-be entrants to Industry X.
You can delay this, or temporarily reverse it, but it will always relapse because altruism is fitful and greed never sleeps.
The Abyss looks back into you, as the philosopher put it; or in less poetic terms, the industry will offer post-government-service jobs and other bribes and eventually the agency will be full of shills and corrupt stooges.
This is like water running downhill, or the inverse-square law.
This process also corrupts the businesses involved, which become complacent rent-seeking monopolies because they've captured the agency which acts as a gatekeeper and they use it to supress competition.
"Crony capitalism" is the demotic term for it all.
Stirling: Well, to be honest, it's not like there's some kind of magic Chinese power that makes Chinamen better workers. We've just decided that it's criminal exploitation to pay white men less than $7.50 an hour. If you want to pay your workers less than $7.50 an hour then they can't be white.
China may have a larger "supply", but it's better stated as "supply of workers who can be paid a dollar a day".
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