Monday, August 17, 2009

More on why the right hates democracy

As promised, here is my response to a right-winger's response to my post about why conservatives hate democracy -- i.e., democracy invariably transfers wealth from the minority of owners to the majority of workers:

First, you assume that once someone in the executive class acquires wealth, that it somehow disappears from the economy, unless of course the government takes it from the executive class and redistributes it to the working class.

Nope, it just gets invested somewhere, like, say, dot-com stocks or housing. I.e., it creates bubbles. That's what happens when you have too much income inequality, the extra income that the executive and ownership class took from the workers using the bargaining power of their position as the owners and bosses gets used in unproductive ways that do not further the goal of maintaining full employment. Some amount of excess investment capital in the hands of the ownership and executive classes is necessary to push further innovation, but more than the amount that we had during the period of fastest economic growth in America -- the period from 1945 to 1980 when the upper classes paid 75% income tax and executives earned 25 times what their workers earned rather than 250 times -- seems to do nothing but create one useless and destructive bubble after another, rather than fostering the increased consumption that would justify the investments.

And why do we want to maintain full employment? Simple. Idle hands are the devil's workshop. We do not want large numbers of citizens idle or on welfare. We want them working, producing goods or services, because otherwise they will be up to mischief or even rebellion. Furthermore, the more goods and services there are in an economy, the more real wealth there is in an economy. Remember, money is just toilet paper with pictures of dead people on it. Money is not wealth. It's what you can buy with money that is wealth.

Secondly, often the truly wealthy will choose to "redistribute" their wealth via charitable activities
The problem is that the wealthy don't get wealthy by being charitable. They get wealthy by being tight-assed and stingy. The figures don't lie -- the more money you make, the lower the percentage of your income that you donate to charity. Surprisingly, the poor donate the largest percentage of their income to charity of any income class. If we redistribute money from the ownership class to the working poor, in the form of higher wages and goods and services that will give them more actual income, we will foster more giving to charity than if we leave that money in the hands of the rich because the rich simply don't donate as much to charity as the poor do.

Thirdly, you assume that we live in some kind of class-based society where workers can only be workers. If you're good, you can start as a minimum-wage hourly employee at Wal-Mart and rise to an executive level one day
There can be only one CEO of a corporation. As I mentioned, the economies of scale of a modern economy dictate that the vast majority of citizens will be workers, not owners or executives. Intel requires tens of thousands of workers to produce microprocessors, but there is only one CEO. This is just the reality. Not everybody can be a CEO, the majority will be lunchpail types who show up for work every day, do their job, get paid for it, and go home (though in today's economy they may well be sitting in front of a computer rather than in front of a factory machine). That's how modern economies work.

Furthermore, as I've otherwise mentioned, class mobility in the United States is a myth. It is far higher in "socialist" countries. So the chances of a line worker becoming CEO are pretty dim in the first place. The reality is that the CEO becomes the CEO because he went to school with, and is chums with, the Board of Directors, who appoint him because they trust him to defend their (the owners') interests. Choosing a CEO from amongst the workers would be counter to the Board's best interests, because someone chosen from the workers would work in the workers' best interests, not in the owners' best interests. So it virtually never happens.

SA and JzB, it is true that some people inherit wealth and I suppose you deem that unfair. Instead I suppose that someone with a lot of money should be encouraged to dispose of that wealth either to charity, or possibly by riotous living, but either way one should not dare leave that wealth to their descendants, because that would put them at an unfair advantage over others, correct? What then, is the difference between inherited wealth and inherited genes?
The difference is that there is no fundamental right granted unto us by the Great Penguin to have inherited wealth, while there is a fundamental right to life granted unto us by the Great Penguin which says that our genes (our life) are ours. (Substitute creator of your choice for Great Penguin).
As for the exploitation of labor: Say I have some money that I wish to use to start a company. I need to hire a worker to do a certain job. What should I consider a fair wage?
What you will consider a fair wage will be whatever allows you to attract sufficient workers while making the most profit from their labors. That is your goal as a capitalist -- to make a profit from the labors of your workers. That is why you hate democracy -- because the workers in turn, in a democracy, take some of that profit from you in order to provide services for themselves, or in order to have higher wages for themselves via negotiations (trade unions) or other democratic methods. This is all natural and self-correcting in a democracy -- if workers get too greedy, the company fails, if the management gets too greedy, the workers vote to impose higher taxes on the management to redistribute it to the workers.

The problem is that you want to have all the power and give the workers none. That is not healthy, because power corrupts, and the problems with our economy over the past 29 years of Republican domination of U.S. politics, where the economy has grown much slower than in the previous 30 years, shows that power corrupts economies too. Our economy has rotted out from the inside because our rulers, corrupted by all the power they amassed thanks to Republican anti-worker policies, exported jobs overseas to the point where we cannot even make our own underwear anymore. Yes, we'll all be going commando if the Chinese decide to quit selling us underwear. And now we're on the precipice of a new Great Depression and I'm not sure that we'll get out of it without descending into a fascist dictatorship, because there's a lot of desperate people out there, and desperate people will turn to easy answers in a heartbeat. Give them an enemy -- Jews, or "socialists", or whatever -- and you have them.

are dollar a day jobs not the starting point for entry into the global economy?
I'm with Pat Buchanan here: The job of the government of the United States of America is to serve the needs of the AMERICAN people. Not of the Chinese or Malaysian or Thai or Filipino people. Some globalization is necessary and good because no one nation has the resources anymore to do everything -- for example, while the U.S. is still the leader in the computer business, we rely on Taiwanese motherboard makers and Korean sound card and case makers to a huge extent. And exporting some jobs overseas is necessary simply because we don't have enough Americans to do everything needed to keep a leading-edge economy going. But we've gone wayyyy past that point, to where our executive and ownership classes are deliberately harming American workers in order to make higher profits, then blocking any attempts by American workers to remedy that situation by taking back some of that wealth from the executive and ownership classes to, for example, provide healthcare for all Americans.

But I suppose you would say that is perfectly fine as long as *everyone* is born equally poor and dies equally poor.
Nonsense. That is not true in European countries -- there is higher class mobility there than here in the United States, and there is inequality there too, just not at the extremes of the American economy. You're throwing out a straw man.
You say that wealth distribution is more askew at any time since 1928 and world commerce is on the decline. Yes, this is a coincidence. Correlation does not imply causation
But we do have a direct causal relationship between bubbles and excess income on the part of our ownership and executive classes. Without that excess income, there are no bubbles. Did we have asset bubbles in the 1960's and 1970's? Nope. Because there was not excess income to have asset bubbles with. Correlation is not causation, but the collapse of asset bubbles destroy wealth, which in turn causes world commerce to decline, so one correlation leads to another which is causative. Unless you're saying that the collapse of the recent real estate bubble was not the cause of the current economic troubles? In which case I say balderdash.

One final note: The usual right-wing argument against socialism is that it takes from the "productive class" and gives to "deadbeats". But as I've shown, socialism actually takes from "deadbeats" -- those who produce no real wealth but, rather, manage wealth -- and gives to the "productive class" -- those who actually produce wealth via their labors, without whom the ownership and executive classes would have no wealth. The question is whether a socialist democracy will ever get to the point where there's a huge number of people on welfare. And the answer is, "yes -- but it is self correcting." The workers, who are the majority, will simply rebel at the notion of subsidizing a huge population of people who are contributing nothing to the economy, and will vote to cut benefits and welfare rolls. We have seen that happening in Sweden, for example -- they had generous welfare benefits, it was abused, so Sweden is cutting back. That's what happens in a real democracy, it is self correcting. But when you put all the power into the hands of the executive and ownership classes, which has been what happened during the past 28 years of Republican domination of U.S. politics, you destroy that self-correcting mechanism. Thus we have the current situation, where our economy is completely out of control, millions are out of work, and every attempt to deal with the situation is fought tenaciously by the small group of executives and owners who created the situation in the first place because they fear losing their power to the people and democracy coming to the USA. Which is sad. But maybe democracy will come to the USA someday.

Democracy. It'd be a good idea. And people who think it's not a good idea... well, in the end, we all know what happens to folks who say "let them eat cake" to the majority. Frankly, as a member of the top 20% of income earners, I value my neck more than that :-).

-- Badtux the Somewhat Affluent Penguin


  1. Wow Badtux - to paraphrase the late, great Wesley Willis: "You kicked the mule's ass!" Next question: Do you think the Obama crew will make a dent in the conservatization of the last 3 (I'd say 4, but who's counting) decades? Do they really want to? Are they too centrist? Too concilliatory? Too nice? This swine awaits the pearls of your wisdom.

  2. BT -

    Nice, thorough job of deconstructing msgnet.

    BTW, msgnet, if you believe that conservatives don't in principle believe in classes you really don't know what the hell you're talking about. Go back and read Kirk.

    But what really pisses me off is that you make wild mental leaps from what I said, and construct straw men out of what I didn't say; then argue against your own invented fantasy. Not only does this not move discourse forward, it indicates that you do not know how to construct a rational argument. You are either lazy, ignorant, or dishonest.

    Alas, this is typical of what passes for conservative thought these days.

    JzB the snarky trombonist

  3. "Frankly, as a member of the top 20% of income earners, I value my neck more than that :-). "

    This goes to something I was thinking about earlier today - that the reason France has superior health care is because of Madame Guillotine. The French know the history of their revolution; after the storming of the Bastille in the chaos tag followed for years, 30,000 of the Nobility, the Aristocracy were executed. The businessman in France wants to get rich as much as an American businessman, and he hates taxes as much as an American but he knows - and those in the government know what could happen if the gap between the very top and the very bottom gets too wide.

    Unfortunately, a bloodbath where the gutters of Wall Street literally ran red with the blood of CEOs has never happened. Until it does, they will feel entitled to exploit the masses as they wish without fear, and so these at the bottom suffer and even die for lack of basic necessities.

  4. TD, I think a big part of the problem is that our ruling classes no longer study history, having determined that studying history does not contribute to higher profits and thus is not of interest to them. Thus the constant refrain I heard from my high school students as I attempted to teach them mathematics: "Will this help me make more money when I graduate?" Sad to say, that is the only American value that seems to be left: worship of the Almighty Mammon.

    Granted, I like being well off a whole lot better than I liked being poor. But it is a sad commentary on our values as a society... and potentially a deadly one for far too many people.

    - Badtux the History-minded Penguin

  5. You are so much more patient with those idiots than I am.

  6. Good stuff, 'Tux.

    As for the question of inheritance vs talent or "genes" or what have you:

    The system, capitalism, is based on capital. Not talent, or whatever you wish to call it. If everyone starts with the same amount of capital, the game is fair. Arguing that some people are prettier than others (or whatever) and equating that to being born rich or poor is disingenuous. Money begets money, that's the way the system works. There is no capacity for everyone, as you point out, to be a CEO. The economy is dependent on a class of workers who cannot generate enough personal wealth [for themselves!] to stop being workers, and, say, open their own businesses. Not everyone can be an owner/manager/whathaveyou; who would be labor? Presumably, whatever poor saps we can exploit in some other country? Or entice them to come to ours by whatever means necessary to get better paying jobs, even illegally? Hm.

    The game is unbalanced, yes; I will never be a professional athlete--I am not big or strong or fast enough. Fair enough--Ben Rothlisberger is probably not going to compete with me in the academic job market anytime soon (assuming I ever get there); neither is Newt Gingrich. We can pick our battles to some extent--if your goal in life is generation of capital ABOVE ALL ELSE there are avenues you can pursue.

    I recommend cocaine dealer. Talk about a free market.

    But the economic inequality of happenstance of birth and it's effect on your likely options in life suck. Clearly, it'd be nice if we confiscated all the inheritance of everyone and gave each citizen a million bucks (or whatever that number works out to) when they turn 18--they'd be free to buy a Ferrari, start a business, go to Harvard, or have Faberge Egg omelets--whatever.

    This is not feasible of course; even the European "socialists" do not approach this kind of income redistribution. And it radically deincentivizes creation of wealth for you and your family. But as a thought experiment, it'd be more like Monopoly--everyone starts with the same fiscal resources, and luck, skill, and wit are the deciding variables--not starting cash.

    Oh, and educate the shit out of everyone. That'd be a start.

  7. By the nature of the fact that you are still concerned with "Right" vs "Left" shows a dead end view of the nature of human conflict.

    Psychopaths, By their very nature, feel much more comfortable on the "left" and are hidden much easier amongst the them. Psychopaths are comfortable with and can more easily manipulate the "left" using inherent logic and ability to "appear" compassionate"

    Psychopaths can and must work with the "Right" when nessasary - to achieve the power they seek - but the "Right" is a much more risky place them. Right wingers are risk-takers -more emotional/ illogical and do not facilitate a place where a Psychopath, who is inherently logical himself, can feel at ease for long.

    A Psychopath is neither "left" or "right" - he cares not for your labels and will switch to the side where he will gain the most!

    The sooner we stop rehashing the "left" vs "right" debate and start learning about Psychopathology , the sooner we will be on the road to peace.


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