There has been, as you’ve no doubt noticed, a persistent theme surging back and forth between the polar spectrums of political thought, regarding the question of ‘Class Warfare’. It especially animates many media personalities on the Right, who decry any criticism of the unprecedented rise of the accumulation of wealth within a small statistical segment of the American population. That segment, being the ‘1 percent’.
The word is out that the well heeled are shaking in their boots in fear of the consequences of public sentiment turning against them. I find that rather absurd. The rich live in gated, guarded communities and surround themselves with security at work. If or when there is a collapse due to the unsustainability of welfare, both at the social level and the corporate end, the malcontents and the mobs will turn on the most convenient target – those of us with modest means.
I have a nuanced view of this controversy, that places me somewhat at odds with both sides of the argument. First I should put forth my basic premise on the subject of wealth. It has to do with from where it is derived and how it is obtained. If above average prosperity is generated by virtue of creativity, determination, innovation, hard work and producing things that are recognized as of value in a competitive economic environment – I consider that source of wealth and its existence as unassailable – in other words, beyond credible criticism. An example of such, that is front of mind at the moment, is Steve Jobs and the story of the rise of Apple.
I personally am not a ‘Mac’ person, mostly for reasons of ingrained habits, but I do understand what people see in the Apple universe of products and I think Steve Jobs is the quintessential example of an entrepreneur who embraced the risk of failure and followed the authentically organic route to success. When Apple started, ‘venture capital’ as we know it today, did not exist. So, when you are talking about classic, traditional Free Enterprise – I will defend it with vigor and vehemence. There are many other examples like that of Apple’s founder.
The problem with the whole political football of ‘income equality’ and the ’1 percenters’ is that the discussion seems to be, on the surface, very clear cut, very black and white, with little to no shadings, or what a Russian might call, ‘chiaroscuro’ – to borrow a phrase from the world of art. In reality, however, the issue is much more complex. You can’t categorize all wealth accumulation in the same fashion, nor can you do so with the individuals that make up the ’1 percent’.
Some of the reflexive defenses of affluence, have to do with an historically ingrained notion, that rich people were, by the very definition of their status – somehow more virtuous than the other classes of society, namely the working class or the poor. If a person possessed wealth, it was considered that it was because they were endowed by fiat of the Almighty. To be rich was to be specially blessed and to be impoverished was an outward signifier of God’s displeasure. Public opinion in this regard, has evolved to a significant degree, but vestiges of this sentiment remain, even if they are subconscious.
In contrast to the example of Steve Jobs, (who righteously could have responded to Obama’s declaration that “you didn’t build that” – with, “I sure as Hell, did!”), there legitimately exists an element of the Über-rich, whose wealth can only be accounted for by their expertise and intense pursuit in leveraging government influence. Or, to state it differently – these individuals cannot properly attribute their status to hard work, innovation or the bringing to market of a ‘better mouse trap’. Instead, they have either individually, or collectively engaged in a fruitful process of skillfully bringing influence to bear with politicians and government agencies – and in so doing, have managed to multiply their assets at the expense of taxpayers and workers. In other instances, the payoff from lobbying and influence peddling, is to manipulate the legislative and regulatory environment of government at all levels, to establish market dominance – and in some cases, outright monopolies. A notable example of this is Obamacare, in which legislative enfranchisement is cynically recast as ‘reform’. Be very wary of anything Congress or the Executive branch proposes as a ‘reform’.
There is another example which I think those of you football fans who are awaiting the onset of the Super Bowl with breathless anticipation, will find incredible and that is the NFL. Did you know that in 1966, the NFL lured Congress with graft, to get them to write a carve out in tax law to classify them as a ‘non-profit organization’? A business that is this year raking in $9 Billion dollars? Don’t believe it? Here’s the summary of the code:
501(c)6 business organizations are defined as “associations of persons having some common business interest, the purpose of which is to promote such common interest and not to engage in a regular business of a kind ordinarily carried on for profit – including, “business leagues, chambers of commerce, real-estate boards, boards of trade and professional football leagues.”
When you really stop to consider it, there really is only one reason for the growth of the size of government at all levels and that is the reality that a great deal of prosperity among the investment class, follows the growth curve of government.
As to the phenomenon of class envy, certainly some of it can be associated with embrace of the tenets of Marxism. That is illogical though, when you consider that the adoption of Marxism by the Bolsheviks and the subsequent Soviet system, did not replace the oligarch class, but simply pushed one set of exploitative rulers out and situated another set in its place, instituting the cover story of Communism as a premise for the coup. The dual track of privilege vs. peasantry continued apace. It could also be observed, that for the Soviet system, as well as Mao’s regime, to function, required the purge of whatever modest middle class (‘Bourgeoisie’) existed. In any such oppressive authoritarian system, the middle class, not the peasant class, represents the greatest political threat. That is true in a nascent Fascist government / economy as well, evidenced by the aggressive destruction of the middle class in America.
So, is there ‘class warfare’ taking place – or is what we are seeing, something else possibly? There is no doubt that envy of rich people exists among some of us. For others though, it is resentment. Resentment that a powerful segment of the banking and investment house establishment on Wall Street, operated in the fashion of a casino operation that would have made the most rapacious mafioso in the boom era of Las Vegas, envious. Resentment that when the whole corrupt scheme centered around sucker bets like derivatives blew up as could be predicted, the working class, the middle class and the taxpaying class, took the hit, while the perpetrators – assisted by their cohorts in Congress, were rescued from the flames of the wreckage they created. Not only rescued and made whole, but rewarded (million dollar bonuses), and catapulted to even greater dimensions of affluence than before, by the infusion of billions of so-called stimulus funds from the Federal Reserve into the closed circuit of the securities markets. Resentment that as new asset bubbles result from non productive financialization in the banking sector, Americans on Main Street still suffer unemployment and wage stagnation. Resentment that the politically connected 1 percenters and multi-nationals have tax attorneys sitting in Congressional staff offices assisting in the creation of tax carve outs that are customized to the particular industry they are in. And resentment that the agents of these locusts, such as the United States Chamber of Commerce, are pushing ‘immigration reform’ as a means of sacrificing American workers and their wages to hoards of illegal aliens, while they profit from the pain of the unemployed.
Senator Mike Lee (R-UT), outlined his definition of “real inequality”, in his response to Obama’s SOTU speech – which he says can be divided into three areas: immobility among the poor, who are trapped by big-government programs; insecurity in the middle class, full of families who can’t get ahead, and cronyist privilege at the top, where insiders are twisting government officials to “profit at the expense of everyone else.”
While Lee said the President’s “lofty rhetoric” ignores poor and middle-class families, he also blamed the GOP. “To be fair, President Obama and his party did not create all of these problems, the Republican Establishment in Washington can be just as out-of-touch as the Democratic Establishment.”
As I see it, there are primarily two capitalistic models. One is predatory capitalism, sometimes referred to as corporatocracy and then there is Free Enterprise capitalism, alternately labeled ‘free market’ capitalism.
Free Enterprise capitalism is a win-win-win equation. It’s good for investors, good for workers and good for consumers, who have access to a wide range of choices in an openly competitive marketplace. Another win, is the win for taxpayers and for folks who prefer smaller, less corrupt, less paternal government. There is no better – in fact, I would say there is no other true answer for income inequality than a seismic shift in government and the economy back to Free Enterprise capitalism. Unfortunately, the heavy hand of the ruling class fears free markets so much that they even employ the emergent Police State to prevent a groundswell of unfettered economic activity.
On the other hand, predatory capitalism is invariably a win-lose equation. When capitalists and government are joined in unholy matrimony, someone – workers, taxpayers, consumers, sometimes all, must be victims in order for the predators to flourish. As one veteran journalist, Bill Moyers, has observed, “It’s no longer possible to tell where the corporate world ends and government begins.” That is the system that is in ascendance and which is reflexively and illogically defended by the NeoCon wing of the Republican party, and covertly by its toadies in the Democrat party, who take the campaign donations, but must maintain a pretense of animosity towards their benefactors.
The Democrats, including Barack Obama, blow a lot of smoke around, alluding to the notion that if possible, they would increase the tax burden on the rich. Nothing could be further from the truth. When it comes time to look for money, they won’t be looking for the plutocracy, they’ll be looking for the low hanging fruit of the middle class small business owner or professional, earning in the $200 to $500K range, because those are the only people who are not protected politically. If that’s you, you will be redefined as ‘wealthy’ and you will have a target painted on your back for the revenue hungry crime syndicate on Capitol Hill.
This 2014 election cycle needs to be a time for resumption of the revolt.