One problem I have with inequality discussions is that they rarely seem to discuss inequality between nations. A lower-class person in the US (or France) is living a rich life compared to, say, most Bangladeshis. Is Piketty advocating a wealth transfer from France to Bangladesh?
As I recall, we are living in the middle in the greatest rise in income in the history of the world for people living in Third World nations. So it may well be a problem, but right now it is being solved as it never was before.
Let’s see, 12 percent, that means we’re talking about 40 million people here in the US. I suppose they MIGHT be massacred, more likely TPTB would back off before too many cities got torched.
As for social organization, remember social media and the Arab Spring. Things aren’t like they used to be.
I do think we are not on the brink of anything like that happening … but we’re trending that way.
Again, have there been any historical examples of countries where the vast majority are middle class erupting in revolt? I can think of only one: the American Revolution, history’s only conservative revolution.
Sadly, I’m gonna have to go with adaher on this one. Unions DO have a history of corruption. I don’t trust them for that reason. Sorry, but I don’t see a lot of difference between handing over my pension to a corporate sociopath or a Mafia boss.
The public employee unions don’t work like that. Could be the difference between a male dominated union and a mixed sex union. Put a bunch of hard boiled tough guys together and some bare knuckle shenanigans will ensue. The SEIU, also mixed sex, doesn’t seem to have major corruption issues either. Seems like it’s limited to the industries where males dominate.
I’ll concede that unions, being composed of humans, are just as prone to selfishness and corruption as anyone in a boardroom, but they at least are somewhat of a balance to those boardrooms. Could it be that both are necessary evils? Could it be that two opposing forces, both working towards their own selfish ends, is the best system that we can hope for? It certainly seems better than having the boardrooms running roughshod over the workers.
If that’s true then either:
- Piketty is wrong that the wealthy get faster than the less wealthy (assuming I understand his thesis).
- Piketty is right and while the Third World is rising the Western nations are rising faster. Is that a problem?
No, labor unions have diminished in importance, not because of decline in popularity, but because of changes in the organization of industry. Organized labor works best when you have a very large number of workers in one factory/workplace, a model which was normal in the 1950s but has been gradually eroded by automation and offshoring and various Information-Age factors. See The Work of Nations, by Robert Reich.
Practically no one saw it that way at the time, despite the rhetoric about “restoring” “ancient liberties.”
Well, that’s fewer industries every year, isn’t it.
He is talking about wealthy individuals and families, not nations. Third-World capitalists are no doubt getting richer faster than most Third-Worlders. Collectively, Third World economies are growing simply because they have a lot of growing to do to catch up, and they now have post-colonial autonomy, and Information-Age access to technologies and methods of industrial organization which work the same in every country.
Sure, but with a billion people emerging from poverty in the last ten years, I’m not sure that is a bad result.
I see that many Westerners think that’s a bad result, but I could care less. Time to grow out of that nationalist socialist BS.
The question is whether the key metric is income inequality, or absolute poverty. It’s very easy to confuse the two, because in the 19th and early 20th century the ‘have nots’ were destitute, while the wealthy were not. But it’s not clear at all that rising inequality matters for social cohesion if the economic floor allows you to live a comfortable life, educate your children, and retire at a reasonable age.
Piketty’s book is full of flaws like this. He treats income inequality as if it’s just the numbers that matter, and not the effect they have on the lives of people. I would argue that the ‘lifestyle gap’ between the rich and poor is not growing anywhere near as fast as income inequality, if it’s growing at all. It may even be shrinking.
Consider the difference between a poor person and a wealthy person 100 years ago. The poor person basically spent all waking hours just maintaining his or her life. Cleaning clothes, fetching water, growing food - these were menial, back-breaking tasks. But the rich could afford servants, so their quality of life was completely different.
Now go back to 1950 or so. The middle and upper middle classes started catching up to the rich, because they could afford washing machines, cars, and other appliances that replaced the need for servants. The wealthy on the other hand had bigger houses and fancier cars, but the raw lifestyle gap between the middle class and the rich was way lower, even if income inequality was higher.
Also, consider entertainment and education - the rich could afford to fly or to take expensive vacations by train or ship. The middle classes were destined to load the car up and go camping or visit family for vacations. Before television, if you wanted to see a play or some other form of entertainment, you were out of luck if you were poor, or if you were middle class and not within driving range of a museum, theater, etc. There was still a large gap there.
Move on into the 1960’s and 1970’s, and television equalized a lot of entertainment. Now a poor person and a billionaire might both spend their time watching the same program, albeit on different quality TV sets. Deregulation of airlines and technological improvements in travel gave the middle class access to world vacations.
Fast forward to today. The internet is a huge equalizer when it comes to quality of life. Not only can you find endless entertainment virtually for free. Even the poor in America can afford high-speed internet. And the poor now has access to the same informational media as the rich. Gone is the day when the poor and lower middle class were disadvantaged because they couldn’t afford a $2,000 encyclopedia set or hire researchers or access world-class libraries.
Even the social classes are breaking down. In the past, the poor were cut off from ‘polite conversation’. They couldn’t trade ideas with the movers and shakers of the world. They couldn’t attend Harvard lectures. The distinction of class was in their face every day. But today on the internet, that’s gone. The message below mine could be posted by a billionaire or a young woman in Tanzania with a cell phone. Anonymity destroys class distinctions. It breaks down the separation between the famous and the obscure.
You can look at all the other trappings of the rich in the past and see how the gap has closed. For a time, the only people who had portable phones were those who could afford multi-thousand-dollar units and hundreds or thousands of dollars per month in connection fees. They were such a symbol of wealth that Michael Douglas had to be shown using one in ‘Wall Street’. But now everyone has a cell phone. Do the rich have an exclusive communication device that gives them a similar advantage today? Nope.
Or look at cars: At one time, if you wanted fancy stuff like air conditioning, car phones, leather interiors, supple rides, and other high-end features, you had to be wealthy. The middle class drove around in Pintos, Vegas, and Impalas. Today, it’s very hard to tell a $100,000 car from a $30,000 car in terms of safety, reliability, creature comforts, or convenience. And even the cheapest cars on the road now have air conditioning, ABS, full airbag suites, comfortable seats, yada yada. The gap in auto quality between the wealthy and the lower classes has declined dramatically. Again, I know wealthy people who could afford much more expensive cars, but buy cheaper ones simply because they’re good enough.
So while income inequality may be growing in terms of raw numbers, I believe that lifestyle inequality is actually shrinking. So much so that it may be affecting GDP growth - I know a number of people who simply don’t care about progressing financially because they’ve got all they need. Some people are finding that large houses are more of a hassle than a benefit, because they spend all their time online anyway.
This trend is going to accelerate as more of our lives move online, where there is less scarcity and therefore a smaller or nonexistent divide between the rich and poor. The wealthiest man in America’s computer isn’t any better than mine. He probably uses the same iPad I do. His internet connection may be faster or slower, depending no where he lives. Online, there’s functionally no difference between us.
If income inequality continues to grow, but technological change causes the lives of poor people to improve faster than it does for wealthy people, I fail to see the forces driving society into revolution.
I agree completely. Discontentment is strictly academic if the “discontented” are pretty happy. A conservative writer whose name I don’t remember said that the real class war isn’t even between the rich and the poor or the rich and the middle class. It’s between the top 5% and the top .1%. The top 5% want more, and they think they can get it from the top .1%.
You can only get so far in academia, or public service. A lot of people, like Robert Reich and Paul Krugman, have made a lot of money that way. But they’ll never be Mark Zuckerburg or Bill Gates or Warren Buffett. Only people in the private sector can make that kind of money. Obviously, that’s unfair. Reich and Krugman worked hard in school, advanced up the ranks of academia and/or government, and all they got was a few million. Those other kids didn’t even finish college in many cases and they are billionaires. Undeserving.
Another factor that Piketty doesn’t consider is the law of marginal utility, or the law of diminishing returns.
Let’s say everyone grows in wealth by 1 sandwich. Who derives the bigger benefit from that? The guy who doesn’t have a sandwich at all, or the guy who has ten? What if the amount of sandwiches doubles, so the guy who has ten now has twenty, but the guy who had one now has two? Who is better off?
The improvement in products follows a curve of diminishing returns. If I want a product twice as good, I have to pay twice as much. But if it want it twice as good again, I may have to pay four times as much. Then eight times. Every unit of increase in quality or value requires more than a unit of wealth increase. So even if the rich become ten times wealthier, that does not mean their lives will be ten times better. It’s entirely possible that if we looked at the gap between the rich and poor in terms of utility instead of absolute dollars, we’d see the gap actually shrinking because the increase in income inequality is not great enough to overcome the much higher utility of the income increases on the low end.
So why should we be measuring income inequality instead of utility inequality? Isn’t the second a more important measurement when it comes to the lifestyle gap between the rich and poor?
People here are (probably unintentionally) attacking straw men.
Again, Piketty’s concern isn’t strictly about inequality in and of itself, his concern is that massive inequality will shift defacto power to a few who’ve done nothing to earn it other than inheriting the bulk of the world’s capital. Sandwiches don’t enter into that concern. You can give people all of the sandwiches (or cellphones, or video screens, etc.) that you want, but if those people have no power over their own government or even their own lives, and no way to better their lives, what good are those things other than as opiates to dull the pain? Hell, just give them plain old opiates so they don’t feel the boot on their faces.
How do you define “middle class”? The backbone of the Patriots in the American Revolution were the small farmers. Is that “middle class”? What about the English Civil War? In Europe, the 1848 revolts were middle class revolts.
A lot of the anti-colonial nationalist rebellions and resistance were dominated by the middle class. If you take the Indian anti-British movement, for instance, that was largely middle class. Or, take the revolt against white rule in Zimbabwe. Mugabe was a teacher, Banana was a clergyman. Nkomo was a carpenter and trade unionist.
Actually, most Westerners think it’s a great thing … but no justification for destroying the middle class in advanced Western societies. When a rising tide floats only the boats of the wealthy, there is something fucked up going on.