The self-destruction of the 1 percent

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  • spirit
    Senior Member
    • Jun 2008
    • 829

    The self-destruction of the 1 percent

    There is a wonderful article by Chrystia Freeland in the October 14 Sunday Times, with the title above. She documents times when the super-rich in other societies have gathered more and more of the wealth of the society they were in, until they destroyed it.
    She notes that 98% of our government representatives are millionaires+, and asks, basically, "Who do you think they are going to support?"

    The current political clash between our somewhat-more-egalitarian democrats, and the ever-more-don't-tax-me GOP, points up where we are. In Jefferson's day the US was one of the most egalitarian societies on the planet, but since the industrial revolution we have seen steadily increasing financial titans. Even FDR put it: "equality of opportunity no longer exists." Remember how Microsoft tried to shut out its competitors, until stopped by the courts? And "even Apple, a huge beneficiary of the open-platform economy, couldn't resist trying to impose its own inferior map app on buyers of the iPhone5."
  • David G
    Senior Member
    • Dec 2003
    • 89688

    #2
    Re: The self-destruction of the 1 percent

    Yes... allowing the pendulum to swing too far can be dysfuntional. Further, and it can become destructive. Here's a prior post (#75) on the topic:

    David G
    Harbor Woodworks
    https://www.facebook.com/HarborWoodworks/

    "It was a Sunday morning and Goddard gave thanks that there were still places where one could worship in temples not made by human hands." -- L. F. Herreshoff (The Compleat Cruiser)

    Comment

    • Keith Wilson
      Trying to be reasonable
      • Oct 1999
      • 64114

      #3
      Re: The self-destruction of the 1 percent

      From the lead editorial this week in that notorious leftist rag, The Economist:

      Some of those at the top of the pile will remain sceptical that inequality is a problem in itself. But even they have an interest in mitigating it, for if it continues to rise, momentum for change will build and may lead to a political outcome that serves nobody’s interests. Communism may be past reviving, but there are plenty of other bad ideas out there.
      "For a successful technology, reality must take precedence over public relations,
      for nature cannot be fooled."

      Richard Feynman

      Comment

      • Paul Pless
        pinko commie tree hugger
        • Oct 2003
        • 124805

        #4
        Re: The self-destruction of the 1 percent

        Originally posted by Keith Wilson
        that notorious leftist rag, The Economist:
        I know you say that sarcastically, but its hardly a hard core conservative publication either. . .

        <i've been reading it pretty steadily since 1990. . .>
        Simpler is better, except when complicated looks really cool.

        Comment

        • Glen Longino
          Senior Member
          • Jun 2008
          • 28863

          #5
          Re: The self-destruction of the 1 percent

          Originally posted by Paul Pless
          I know you say that sarcastically, but its hardly a hard core conservative publication either. . .

          <i've been reading it pretty steadily since 1990. . .>
          So, what are your thoughts relating to the the subject of this thread, ya danged Pinko Liberal?

          Comment

          • Paul Pless
            pinko commie tree hugger
            • Oct 2003
            • 124805

            #6
            Re: The self-destruction of the 1 percent

            Originally posted by Glen Longino
            So, what are your thoughts relating to the the subject of this thread, ya danged Pinko Liberal?
            I haven't read the Times article. I disagree with some of the historical context given in the original post - there were long periods of time where the income gap between the rich and middle class actually shrank as well as times when the size of the middle class grew. That's not been the case in the last thirty years but certainly was true in the decades after WWII and before the turn of the previous century.
            Simpler is better, except when complicated looks really cool.

            Comment

            • Keith Wilson
              Trying to be reasonable
              • Oct 1999
              • 64114

              #7
              Re: The self-destruction of the 1 percent

              "For a successful technology, reality must take precedence over public relations,
              for nature cannot be fooled."

              Richard Feynman

              Comment

              • Paul Pless
                pinko commie tree hugger
                • Oct 2003
                • 124805

                #8
                Re: The self-destruction of the 1 percent

                Wow, I'm liking this, Keith posting graphs to support my position.

                Who could ask for more???
                Simpler is better, except when complicated looks really cool.

                Comment

                • Michael Beckman
                  • Apr 2008
                  • 1689

                  #9
                  Re: The self-destruction of the 1 percent

                  Originally posted by Keith Wilson

                  Comment

                  • Keith Wilson
                    Trying to be reasonable
                    • Oct 1999
                    • 64114

                    #10
                    Re: The self-destruction of the 1 percent

                    Hey, every now and then you're right.

                    And more:

                    "For a successful technology, reality must take precedence over public relations,
                    for nature cannot be fooled."

                    Richard Feynman

                    Comment

                    • hanleyclifford
                      low information voter
                      • Jun 2010
                      • 9272

                      #11
                      Re: The self-destruction of the 1 percent

                      The most efficient destruction of the 1% occurred in the French Revolution. The Russians did a decent job too.
                      Conferences at the top level are always courteous. Name calling is left to the foreign ministers. (Averell Harriman)

                      Comment

                      • johnw
                        Senior Member
                        • Nov 2001
                        • 28589

                        #12
                        Re: The self-destruction of the 1 percent

                        Why Nations Fail, which is the book this article is based on, is in my opinion, an important book. As the authors point out, the 1% are being rational when they pull up the bootstraps after them. They and their descendents for generations afterward don't have to struggle and compete against newcomers. It is not the 1% that suffers when social mobility declines, it is the wealth of the nation as a whole. Even as the wealth and might of Venice declined, the people at the top maintained their positional status and lived quite well without having to try terribly hard. It's not as if the 1% are being stupid, or destroying their own success within the time period of their own lives. A system which produced very limited social mobility in Mexico has also produced one of the world's richest men. It just hasn't produced a wealthy society.
                        On the trailing edge of technology.

                        https://www.amazon.com/Outlaw-John-L.../dp/B07LC6Y934

                        http://www.scribd.com/johnmwatkins/documents

                        http://booksellersvsbestsellers.blogspot.com/

                        Comment

                        • Waddie
                          Senior Member
                          • Aug 2009
                          • 9106

                          #13
                          Re: The self-destruction of the 1 percent

                          That the upper classes are prospering is apparent. That it will destroy the society is not so apparent. It's a function of current economics, not some secret society plot. Eventually economic conditions will favor labor once again and the power/wealth of the middle class will grow. It may not be in this country, though. The middle classes in emerging countries may do considerably better than the middle class here, but even the middle class here will improve over time. To most of the world's people, ALL of us in the West are the 1%'ers. We are very much the minority but use most of the world's resources.

                          For another perspective on why the middle class is losing right now;

                          Back then, labor unions had considerable bargaining strength and membership. Furthermore, American business was relatively paternalist, with many business leaders convinced they had a moral duty to keep their employees at least abreast of inflation. Most didn't realize that, as a result, inflation was very effectively transferring their profits to labor. And also to government, which taxed under-depreciation and inventory profits. The result was a collapse in corporate profits' share of national income and a comparable rise in the share going to employee compensation from the mid-1960s until the early 1980s.

                          The wage-price spiral peaked in the early 1980s as CPI inflation began a downtrend that has continued.... As inflation receded, American business found itself naked as the proverbial jaybird with depressed profits and intense foreign competition. In response, corporate leaders turned to restructuring with a will. That included the end of paternalism towards employees as executives realized they were in a globalized atmosphere of excess supply of almost everything. With operations and jobs moving to cheaper locations offshore and with the economy increasingly high tech and service oriented, union membership and power plummeted, especially in the private sector.

                          Gary Shilling, INSIGHT newsletter
                          regards,
                          Waddie
                          Last edited by Waddie; 10-15-2012, 08:58 AM.
                          I started with nothing and I still have most of it....

                          Comment

                          • johnw
                            Senior Member
                            • Nov 2001
                            • 28589

                            #14
                            Re: The self-destruction of the 1 percent

                            Originally posted by Waddie
                            That the upper classes are prospering is apparent. That it will destroy the society is not so apparent. It's a function of current economics, not some secret society plot. Eventually economic conditions will favor labor once again and the power/wealth of the middle class will grow. It may not be in this country, though. The middle classes in emerging countries may do considerably better than the middle class here, but even the middle class here will improve over time. To most of the world's people, ALL of us in the West are the 1%'ers. We are very much the minority but use most of the world's resources.

                            For another perspective on why the middle class is losing right now;
                            You are the first to bring up the idea of a secret plot; the rest of the thread is about how various groups are responding to economic forces, and what the proper way to structure a society is. I find your faith that labor will be favored at some point again touching, but how do you explain the reduced social mobility we are seeing? I find that as disturbing as the inequity itself. Acemoglu and Robinson are arguing that this is a natural desire for economic elites, but that it makes the societies they dominate less prosperous.
                            On the trailing edge of technology.

                            https://www.amazon.com/Outlaw-John-L.../dp/B07LC6Y934

                            http://www.scribd.com/johnmwatkins/documents

                            http://booksellersvsbestsellers.blogspot.com/

                            Comment

                            • Canoeyawl
                              .
                              • Jun 2003
                              • 37698

                              #15
                              Re: The self-destruction of the 1 percent

                              Originally posted by hanleyclifford
                              The most efficient destruction of the 1% occurred in the French Revolution. The Russians did a decent job too.
                              Not to mention our own civil war

                              Comment

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