Tuesday, May 15, 2012

You Don't Become Pharoah By Working On the Pyramids

Courtesy Angry Bear:
Your island has 1000 people. 500 are working age, 500 are children or elderly and can’t do much.  That’s normal, and not a problem.

The 500, working together, easily produce enough food and stuff for 5000 people, while also supporting the 500 young, old and disabled.  In fact, the working 500 are so productive that in good times they have plenty of time to create music and art, write books, do research, and explore the sea, the land and the heavens.  And when members of the 500 grow old, there are youngsters ready and willing to take their place.

With 5000 livings floating around, no-one expects each person to have 5 livings.  Some will always have a bit more, others a bit less. But this variability can go too far.

By 2007 on the island, 200 people control 4250 of the 5000 livings,and of that group ten people control 1730 livings.  One of the 200 has 615 livings all to himself.

The other 800 people on the island have 750 livings to share, 0.94 each.  Half of these people are not workers, and need to be supported by the remaining 400.

These 400, subsisting on less than a living each, produce 80%of the island’s economy of 5000 livings, or 10 livings each.  In return they receive 1.88 livings with which to support themselves and one dependent.

There’s your inequality.  How does it look to you?
What I find amusing are the Republican chest-pounding defenses of inequality as what makes America great (usually from the parasitic financial/rentier/political class). In fact, if they knew their history, extreme inequality has always been correlated with a pre-collapse situation in every society, from the Western Roman Empire, to the fall of the Han Dynasty to the Lowland Classic Maya, and to contemporary scenarios like the Great Depression and the demise of the Soviet Union. And see this: Why Are Teen Moms Poor? Surprising new research shows it’s not because they have babies. They have babies because they’re poor. (Slate)
When it comes to early pregnancy, surprising new evidence indicates that Romney and most everyone else have it backward: Having a baby early does not hamper a young woman’s economic prospects, as Romney implies. Rather, young women choose to become mothers because their economic outlook is so objectively bleak.

[Melissa Kearney and Phillip Levine] conclude that “being on a low economic trajectory in life leads many teenage girls to have children while they are young and unmarried and that poor outcomes seen later in life (relative to teens who do not have children) are simply the continuation of the original low economic trajectory.” In other words, it is a mistake to the leap from the observation that women who gave birth as teenagers are poor to the view that they’re poor because they gave birth. Lexus owners are much richer than the average American, but that doesn’t mean the average person can get ahead by buying a Lexus. Women with better economic opportunities tend to do a good job of avoiding childbirth.

The upshot is that teen motherhood is much more a consequence of intense poverty than its cause. Preaching good behavior won’t do anything to reduce its incidence, and even handing out free birth control won’t contribute meaningfully to solving economic problems. Instead, family life seems to follow real economic opportunities. Where poor people can see that hard work and “playing by the rules” will reward them, they’re pretty likely to do just that. Where the system looks stacked against them, they’re more likely to abandon mainstream norms. Those who do so by becoming single teen moms end up fairing poorly in life, but those bad outcomes seem to be a result of bleak underlying circumstances rather than poor choices.
In other words, soaring inequality has led to the social maladies we face, the poor are not getting poorer because they collectively decided to abandon virtue in the freewheeling sixties. It's evolutionary biology 101: If you have little hope of social mobility, your best bet is to roll the genetic dice and hope you come up with a brain surgeon or pro-football player. That's also why poor women seek out multiple partners. The upper-class people instead seek to maximize their gains by holding for an "adequate" partner (in income, genetics, family wealth, etc.) and pass as much wealth on to their children as possible, and so have less of them.

But of course the rich got that way by being smarter, harder-working and more virtuous than the rest of us, right?
Shortly after Mitt Romney's failed 2008 campaign for the Republican nomination his son Tagg set up a private equity fund with the campaign's top fundraiser. One of the first donors was his mum, Anne. Next came several of his dad's financial backers. Tagg had no experience in the world of finance, but after two years in the middle of a deep recession the company had netted $244m from just 64 investors.

Tagg insists that neither his name nor the fact that his father had made it clear he would run for the presidency again had anything to do with his success. "The reason people invested in us is that they liked our strategies,'' he told the New York Times.

Class privilege, and the power it confers, is often conveniently misunderstood by its beneficiaries as the product of their own genius rather than generations of advantage, stoutly defended and faithfully bequeathed. Evidence of such advantages is not freely available. It is not in the powerful's interest for the rest of us to know how their influence is attained or exercised. But every now and then a dam bursts and the facts come flooding forth.
A web of privilege supports this so-called meritocracy (The Guardian)

Matt Yglesias (himself a member of the lucky sperm club) adds:
There are any number of struggling debt-burdened recent college grads who'd love to collect two and 20 managing a medium-sized private equity fund. The country is littered with Starbucks baristas and UPS truck drivers and unemployed real estate agents who'd love that kind of opportunity. Maybe if they got the chance they'd squander it. Maybe if they got in the door they wouldn't get the money. But they're not getting in the door. As Tagg Romney says, he never could have had the financial success he's currently having if not for the fact that his rich parents' relationships with other rich people got him in the door.

I can't think of any way to purge society of this kind of unfairness, but it's a crucial reality on the propriety of progressive taxation and the general social prestige of rich people. The ability to get in the door is a valuable asset. Tagg Romney had it, and most people don't.
And see this: The Self-Made Myth: Debunking Conservatives' Favorite -- And Most Dangerous -- Fiction (Alternet)
We all know wealth isn't just a matter of hard work, brains or talent. Most of us probably know hard-working, brilliant, or extraordinarily talented people who aren't being rewarded at anything close to their true value. So perhaps the most intriguing and useful part of the book is a long discussion of the many other essential factors that go into making someone wealthy -- factors that are blithely brushed off the table whenever the self-made myth is invoked.

Rich conservatives have to downplay the role of luck. After all, if we think they're just lucky, rather than exceptionally deserving of exceptional wealth, we'll be a lot more justified in taxing their fortunes. But luck -- the fortunate choice of parents, for example, or landing in the right job or industry at the right time -- plays a huge role in any individual's success. Timing also matters: most of the great fortunes of the 19th century were accumulated by men born during the 1830s, who were of an age to capitalize on the huge economic boom created by the expansion of the railroads after the Civil War. Likewise, the great tech fortunes almost all belong to people born between 1950 and 1955, who were well-positioned to create pioneering companies in the tech boom of the late 1970s and 1980s. Such innovative times don't come along very often; and being born when the stars lined up just so doesn't make you more entitled. It just makes you luckier.

Because Americans in general like to think we're an equal society, we're also quick to discount the importance of race, gender, appearance, class, upbringing, and other essential forms of social capital that can open doors for people who have it -- and close them on those who don't. The self-made myth allows us to deflect our attention from these critical factors, undermining our determination to level the playing field for those who don't start life with a pocket fat with advantages.
I've been swimming against rampant nepotism and class privilege my whole life, so I know it firsthand. The only people who actually believe the self-made nonsense are the brainwashed lumpenproles who've never met a wealthy person in their life.There's a secret handshake all right, and the sociopaths on top of all our institutions have a feral, visceral knowledge of exactly what it is. As George Carlin said, "it's a big club - and you ain't in it."


  1. To be fair, Tagg probably deserved to benefit from nepotism the way he did at least a little on account of the awful name his parents gave him.

    1. Tagg, Track, Trig, Newt, Mitt, seriously what's with these names? At least Barack Obama can say his name is ethnic.


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