Should We Blame Rich People?

After we published the Broken Capitalism book somebody asked me, "Are you blaming rich people?" Whenever anybody asks that question, we instantly know they have never read our books or any of our detailed articles where we carefully analyze many aspects of our economic and geopolitical systems on Earth today. After one of my friends asked me that question, I wrote Should We Blame Rich People? (a different article at Eanfar.org) as my response to him. However, that article was too oblique and abstract because I was trying not to hurt his feelings. Since then, as I predicted, the socioeconomic and geopolitical problems described in the previous book have become significantly worse. So, let's explore this question in more concrete terms here.

What Does "Rich" Mean? This question is explored more deeply in the Broken Capitalism book, but for our purposes here, the phrase "rich" can be defined as "a culturally acceptable multiple of the median net worth in a given society." The reason this definition is important is because human civilization is shaped and fueled by human culture. Human culture is defined and experienced as the philosophical values that are shared by the majority of humans in each human society. A human economy is defined and perpetuated by the cultural (philosophical) values that determine which items have exchange value. Thus, the puritanical libertarian notion that the denatured principles of an illusory pure free market should govern and dominate any human society is a self-destructive fantasy.

What is a Culturally Acceptable Level of Wealth? Every society should answer this question based on their own cultural values and legitimate economic policies, i.e., policies approved by a democratic majority of their citizens. However, a "rich" human with a net worth that is hundreds or even tens of thousands of times higher than the median net worth is probably culturally acceptable in most capitalistic societies today. But in our world today, we have humans with a net worth that is tens of millions of times higher than the median while billions of humans and entire communities disintegrate into poverty. As the escalating protests in the U.S. and worldwide confirm, these astronomical wealth gaps are not culturally acceptable, nor are they economically or politically sustainable.

Unsustainable Wealth Gaps Create Feudalistic Societies. As the median wealth gap rapidly grows today, puritanical libertarians are dismantling all the social stability programs upon which an increasingly impoverished global population depends. These unsustainable outcomes are only possible within a broken political system that has been captured by a tiny number of super-wealthy creatures. As the labor force participation rate falls, median real income declines, and median debt rises, these conditions are creating societies that look more like medieval feudalism than Adam Smith's conception of market-based capitalism. This is not surprising given that the ideological "precursor" of the modern libertarian movement was the infamous plantation slave owner, John C. Calhoun, who fought tirelessly to preserve the lucrative slave trade so that nobody would ever take his "property" (slaves).^[1]

Should We Blame “Rich People” for All These Problems? The problem is not “rich people”; the problem is a political system in the U.S. and U.K. (and several other countries) that allows humans to use their financial wealth to dominate the political system. More specifically, since the late-1970s, there has been a small subset of the wealthy population in these countries that has twisted Classical Liberalism into a rabid form of modern Libertarianism called Neoliberalism, which prioritizes property above all other considerations in a society. They equate any form of government intervention (including rational taxation) as hostile to their “property,” and thus, hostile to their liberty and freedom.

The Parasite Class. That small group of super-wealthy neoliberals has injected massive sums of money into political systems with the explicit intent of hijacking the democratic process. They are explicitly hostile to the fundamental principles of democracy and the democratic will of the people because they believe the general population seeks only to steal their property, and thus, must be stopped at all costs. They completely ignore all the systemic problems they are creating, which perpetuates the poverty, financial crises, and the conditions that are destroying the middle class in many countries today. Then, they often invoke the phrase "parasite class" to describe the billions of humans who are suffering from their self-serving neoliberal economic policies and destructive corporatocracies.^[2]

The Democide Class. As a result of their explicit and persistent hostility to democracy and their corresponding destruction of civil society, I refer to this small subset of neoliberals as the Democide Class. Some people might object to this, but it’s common to use the phrase “suicide” metaphorically to communicate the idea that something is self-destructive, but not literally self-murdering. In the same way, “democide” can be used metaphorically to mean anything that has a tendency to destroy the people and democratic institutions of a country, but not literally murdering the entire population. With their self-serving and shallow economic ideology, the Democide Class is destroying the foundations of democracy by hijacking the institutions of democratic governance and replacing it with an autocratic form of modern slavery.

The Democide Class Hates Big Government, Except When it’s Their Big Government. The Democide Class is spawning an ever-expanding police-state government to suppress the rapidly growing mass anger caused by their destructive economic policies. Their police state includes massive military and spying operations to suppress the population in countries they exploit with their natural resource extraction and economically oppressive trade and banking policies. (For example, the neoliberal economic destruction of Chile, Indonesia, the United States and many Latin American and Middle Eastern countries.) Yet, they have the audacity to claim they are fighting for human liberty.

Where Does the Democide Class Get Their “Property”? While the rest of humanity suffers in a slow-burning human apocalypse, the Democide Class myopically equates “liberty” with “property” and essentially shouts, mine-mine-mine, like selfish children fighting over their toys whenever anybody tries to support more equitable and sustainable economic policies. They conveniently ignore the fact that their “property” is usually produced by exploiting the natural resources of countries, destroying the environment, and extracting the financial wealth of large populations with financial engineering scams, which destabilize economies and push a growing global population of economic refugees into deeper debt, poverty and institutionalized slavery every day. Who is the "parasite class" now?

Consistency Check. Anybody can invoke the name of Adam Smith or his Invisible Hand to justify their trade and economic policies, but it's reasonable to expect them to be logically consistent. That means acknowledging Smith's explicit guidance to construct societies and economies that are socially and economically sustainable and equitable, which means implementing policies that result in much more evenly distributed income and wealth than we see in the United States and around the world today.

Notes:

[1] For detailed evidence and a deeper exploration of the scourges of Neoliberalism and puritanical Libertarianism, read: Democracy in Chains by Nancy MacLean, Dark Money by Jane Mayer, and many other books in the Gini Book List.

[2] Tabarrok, A., & Cowen, T. (1992). The Public Choice Theory of John C. Calhoun. Journal of Institutional and Theoretical Economics (JITE) / Zeitschrift Für Die Gesamte Staatswissenschaft, 148(4), 655-674. Retrieved from http://www.jstor.org/stable/40751557

NOTE: Nobody will ever know for sure how much James Buchanan was influenced by Calhoun; and whether Buchanan was a racist like Calhoun is irrelevant to the point here. The point here is to indicate that Buchanan's version of "Public Choice Theory" places "property" above all other considerations (just like Calhoun did), even when the gluttonous accumulation of "property" and unabashedly despotic measures to block democratic majority consensus violate deep cultural and social values that are necessary to preserve the institutional integrity and stability of every democratic society and economy. In this particular respect, Buchanan and anybody who subscribes to his theories are deeply misguided and manifestly hostile to consensus-based democracy, which is a recipe for constant social conflict and violent revolution.

Finally, as a former hard-core libertarian myself, I'm still often sympathetic to many classical libertarian principles when it comes to the role of government and markets in human societies, e.g., limited government, encouraging self-responsibility, resisting the corruptive influence of centralized power as much as possible, encouraging relatively free markets, etc. However, after doing the research for multiple books and over 100 economic and geopolitical articles, it's clear to me that Libertarianism (especially rabid Neoliberalism) is a woefully inadequate governing philosophy in a world where A.I., structural unemployment, and the convergent interests of gigantic corporations and politicians are creating a feudal global society that makes a mockery of free-market capitalism and all forms of democracy.