The Rich get Richer

Sure is quiet. Yep.. Too quiet...

[deleted sarcastic response, because this person may be sincere.]

[ 03 October 2007: Message edited by: RosaL ]

I guess the trouble with being the devil's advocate is that you become associated with your client.

So, why is it that I, (also not an economist)had little problem understanding it, yet you did?

I guess if one defines an economy as the organization of production and distribution of goods and services within a socioeconomic system, (one of many, yet a simple and servicable definition), then for whom is the economy being successful?

If the distribution of material among members of the society for which the economy operates does little for the majority of the participants, and indeed many find themselves exluded as participants, then why should people not vote out of power those who control the economy and benifit so disproportionally. Or maybe just hang the bastards from lamp posts.

Most wealth and power, (to the extent that these are seperate concepts), though not all of course is inherited and largely unearned anyway.

Assuming that you are an honest and humble
seeker of knowledge, and clearly you are starting with a tabula raza, I suggest beginning with The Communist Manifesto. Oh hell, why not go with Das Capital, which will at least keep you busy for a few months.

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(I'm sure oldgoat will give a better answer!)

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I already suggested hanging the bastards from lamp posts, how can we improve on that???

Oh wait a minute *pause* WWGD..(what would Gandhi do?)

Ok, we'll wimp out and go with the re-education camps.

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Originally posted by oldgoat:
I suggest beginning with The Communist Manifesto. Oh hell, why not go with Das Capital, which will at least keep you busy for a few months.

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Actually, that will be less useful than usual in this context. The distinction between workers and capitalists may have played a role in an explanation of the difference between rich and poor in 1848, or even 1948, but it's not very useful when it comes to a discussion of the last few decades.

I posted this in the 'When is a person rich' thread:

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There have been quite a few recent studies about the people at the upper end of the income distribution. One paper I like is by McMaster's Mike Veall and Berkeley's Emmanuel Saetz: [url=http://elsa.berkeley.edu/~saez/canada-oup.pdf]87-page pdf[/url]. The reason I like it so much is that they've put all the results on-line: [url=http://elsa.berkeley.edu/~saez/TabCanVolume-web.xls]here's the excel file.[/url]

It's full of fascinating information, including marginal and average tax rates for people at the very top of the income distribution.

eta: One tidbit that I [url=http://worthwhile.typepad.com/worthwhile_canadian_initi/2007/04/income_d... about:[/url] it's reasonably well-known that the income share of the top decile of the income distribution has increased its share of total income. But this study shows that it's even more concentrated than that: the income share of those in the 90-99.9% fractile hasn't moved much at all; it's all in the top 0.1% - that is, those making well over $500,000/year.

What's even more interesting is the way that the very rich are generating all that income: by working for other people. In 1946, capital holdings accounted for 53% of the income of those in the top 0.01%, and 27% was wage income; the other 20% was entreneurial income from self-employment. In 2000, the very rich generated only 25% of their income from capital, and 74% was in the form of wage income; entrepreneurs who work for themselves have almost completely disappeared from the ranks of the very rich.

Lots of other stuff, too. If you're interested in this issue, there are all kinds of interesting things there.

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The big question is [b]why[/b] certain workers are doing so well. One answer that has been advanced is 'skill-biased technical change': new technologies have increased the incomes of only those who who have the skills to make use of them. But that is at best a partial explanation.

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Actually, that will be less useful than usual in this context. The distinction between workers and capitalists may have played a role in an explanation of the difference between rich and poor in 1848, or even 1948, but it's not very useful when it comes to a discussion of the last few decades.

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While I don't entirely agree with that, I will admit that there is a debate there. However, my only reason for suggesting The Manifesto (no one's gonna read das Capital) was that it's foundational, and good for at least providing a basic vocabulary for the totally uninitiated.

For example, if at some point someone were to call him a useful idiot, he might as well understand just how he was being dissed.

[ 03 October 2007: Message edited by: oldgoat ]

You know it wouldn't hurt to actually familiarize yourself with some good class analysis, SG. At least you'd be more knowledgeable of the way terms like class, labour, etc., are used by those who treat them as serious concepts.

Income is one thing but it hardly covers all aspects of social class in society. Furthermore, the connection between obscene wealth and obscene poverty gets completely lost by myopic and narrow-minded studies.

Why not try E.P. Thompson's [i]The Making of the English Working Class[/i]?

OK. We can have the same argument on another thread.

Every society has such rationalizations of self-preservation, of the "ruling ideas", and so on. Those who dominate economically, dominate politically. Those who dominate politically dominate culturally. And so on.

Of course there is still the battle of ideas and those with less power and wealth try to get their views across. You could say that rabble and babble is a reflection of that fact.

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oldgoat: That America is classless and anyone can make it if they apply themselves is one of the great, and I'd say central creation myths of the society, and remains hugely powerful.

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There are quite a few studies, and lots of data, to suggest that the myth bears little relationship to reality. Societies other than the U.S. are much more "mobile" (or whatever the term is). Yet many Americans continue to believe.

Let's see what I can find ...

OK. Here we have:

[url=http://www.monthlyreview.org/0607wkt.htm]Wage Stagnation, Growing Insecurity, and the Future of the U.S. Working Class[/url]

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William K. Tabb: The most important promises used to justify capitalism are that your children will have a better life than you do, and in President Kennedy’s famous words, “a rising tide lifts all boats,” meaning everyone benefits from the accumulation of capital. These promises ring hollow in a period in which the relative position of the working people of the United States is declining and its ruling class is able to appropriate an increasing share of the national income. This pattern of accumulation and appropriation has become evident to many Americans and this awareness is beginning to affect political consciousness.

Today, people worry that their children will not enjoy the same standard of living that they have. They know that the benefits of growth are going overwhelmingly to the wealthy and not to working people. [b]The statistics support such an understanding.[/b]

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Read the article and see if you agree with the author's conclusions. It's an interesting and informative read. There are some footnotes to some studies.

We also have:

[url=http://www.monthlyreview.org/0706jbf.htm]Aspects of Class in the United States: An Introduction [/url]

... which looks to be a good intro to class analysis in the US.

There is also this additional piece by Tabb:

[url=http://www.monthlyreview.org/0706tabb.htm]The Power of the Rich[/url]

That's a start.

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Originally posted by Stephen Gordon:
[b]
The distinction between workers and capitalists may have played a role in an explanation of the difference between rich and poor in 1848, or even 1948, but it's not very useful when it comes to a discussion of the last few decades.[/b]

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Certainly when it comes to explaining CEOs and their ilk - a very small minority - the theory requires some refinement. (Even in the nineteenth century, people were aware of these complexities, though.) And for the vast majority of us who are not CEOs, it remains highly relevant.

People have been saying, "we're all workers" or "we're all capitalists" for a very long time. Lately there's a not so subtle implication that only old-fashioned, stick in the mud, boring, dogmatic, badly dressed, uncool, middle-aged people fail to grasp that now, really, our interests are all the same. (If you accept the values of our society, this is a truly devastating critique!) The truly hip understand that "whats good for the rulers is good for you"! Nihil sub sole novum.

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Originally posted by garybsp:
[b]Awesome, awesome conversation. Just what the doctor oredered.

From my point of view, self preservation is innate. I hate to get off topic, as this conversation is just getting good, but it's almost like we are chalking it up to a biochemical/genetic disposition. How do you guys fight something like that(I'm making the assumption that everyone responding is an activist and I know I shouldn't). But all this makes change seem impossible. Depressing.[/b]

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Ever since capitalism became dominant, people have believed that people are basically selfish. (This is one way of rationalizing/justifying the system.) And, unfortunately, the kind of economic and social system we live in tends to make people like that.

That's how I handle it.

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Just what the doctor ordered.

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Spoken like a true pharmacist. You must be having a real slow day at the dispensary there Gary.

Getting bored reading the CPS?

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Stephen Gordon: Actually, no. The next question is what the better alternative will be. I'm more interested in knowing the destination than in squabbling about who gets to drive.

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The destination, in broad strokes, is a socialism that works and is able to find an environmental balance with the Planet. However, it's success is all about the getting there as previous models have so amply demonstrated by their problems and failures.

Besides, the driver should have some idea of where she's going even if she doesn't have perfect directions.

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Originally posted by Stephen Gordon:
[b]Uh-uh. We've had too much experience with the 'trust me with absolute power' line. [url=http://www.lyricsdepot.com/the-beatles/revolution.html]We'd all love to see the plan.[/url][/b]

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I'd say the plan is democratic control of the economy and society, for the benefit of all.

What's your plan?

[ 03 October 2007: Message edited by: RosaL ]

There's lots of info out there and there are some, too few admittedly, concrete examples. And even the failures are useful to learn from.

However, I would strongly caution against too detailed a blueprint for society without identifying the very important question of how to get there from here - where we are today. In fact, it would probably be fair to say that some socialist traditions, like the one I identify with, put more emphasis on this question that on dotting the "i"'s and crossing the "t"'s of any blueprint.

But I've never been Minister of anything, so maybe I'm not the best person to ask.

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Originally posted by N.Beltov:
There's lots of info out there and there are some, too few admittedly, concrete examples. And even the failures are useful to learn from.

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Marx has been dead for how many years? And this is the best you can come up with? What have you been doing all these years?

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However, I would strongly caution against too detailed a blueprint for society without identifying the very important question of how to get there from here - where we are today. In fact, it would probably be fair to say that some socialist traditions, like the one I identify with, put more emphasis on this question that on dotting the "i"'s and crossing the "t"'s of any blueprint.

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`Cheshire Puss,' she began, rather timidly, as she did not at all know whether it would like the name: however, it only grinned a little wider. `Come, it's pleased so far,' thought Alice, and she went on. `Would you tell me, please, which way I ought to go from here?'

`That depends a good deal on where you want to get to,' said the Cat.

`I don't much care where--' said Alice.

`Then it doesn't matter which way you go,' said the Cat.

`--so long as I get somewhere,' Alice added as an explanation.

`Oh, you're sure to do that,' said the Cat, `if you only walk long enough.'

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[ 03 October 2007: Message edited by: Stephen Gordon ]

Why?

Um, yeah. You do realise that I have a life, right? And that I can think of many things to do with my time than to do your bidding without question?

So your contribution to this thread is to tell me that you know the answer to my question, but that you won't say what it is?

Huh? This is the first time you've used that name.

[eta: Apologies, you have used the name before.]

Nor do I recall you ever saying anything how the world would or should be run after The Revolution.

[ 03 October 2007: Message edited by: Stephen Gordon ]

No, if you had said how the world should be run, I'd remember. Unless, of course, it amounted to 'more democracy' or 'real democracy' or some such platitude.

I hope it wouldn't run like this thread, ie: getting bogged down in picayeune nitpicking. That is the fate of so many revolutions.