The point is, the process which you describe above where pluck and hard work will get you everything is only possible in states whose ruling structure is inclusive and not extractive – i.e. you can open a business without having to belong to the aristocracy.
The analogy being drawn is that the oligarchic elite in western societies are increasingly seeking ways to patrimonialize the state and whether consciously or not move towards an extractive structure.
You require far less pluck and hard work to succeed if you belong to the contemporary 'landed nobility' and, on a vast institutional level state incentives are being redrawn to reward incumbent elites in one way or another.
And its not that very different in India either. To give you an example, being born into a rich family absolutely has some benefits and that is undeniable.
My point is how is that default advantage the rich have, a disadvantage to the poor? Unless the poor want it to be, it really can't be. And here is where things go wrong, agreed that no one gets a level playing field and game itself isn't fair to even begin with. The moment you enter the game the advantage is already favoring the rich.
But what the game does offer is a way forward to improve your chances of winning if you play well along.
Besides it will be nearly impossible in system of economic set up to create a level playing field at the very start and I don't even think that should be the aim of any economic system either.
If you're progressive, the idea is to try to level the playing fields somewhat. We don't have to equalize them, just try to improve everyone's odds a little bit.
>My point is how is that default advantage the rich have, a disadvantage to the poor?
Because the more of the total percentage of economic activity gets captured by an oligarchy the less is available for everyone else.
Further more, the issue at hand is that across the west we're enacting policies that make tilt the balance even more towards elites.
Correct, but I believe that will come through opportunities. The poor will be given opportunities, but however remember using them and converting them to goodness is really their responsibility. And as a rule of thumb, opportunities always present themselves in the form for some work.
I would believe US is far better of at this than any other country I know of. Correct me if I'm wrong, but don't you people have county schools which are free? Don't you people now have some form national healthcare system? Don't you have social security? I would already consider these as very big advantages compared to many other countries. I mean the government can practically support you when you go broke, and then of course its up to you to take it from there.
>>Because the more of the total percentage of economic activity gets captured by an oligarchy the less is available for everyone else.
True only if the percentage of wealth created at any time static, which it is definitely not.
>>Further more, the issue at hand is that across the west we're enacting policies that make tilt the balance even more towards elites.
I think any economic system should reward getting wealthy, because that is good motivator to create more wealth.
It's not a leader overall. It may have the most billionaires, but if you're looking at average outcomes you're probably best off in Norway.
>I think any economic system should reward getting wealthy
Absolutely. It doesn't work nearly as well otherwise.
>The poor will be given opportunities, but however remember using them and converting them to goodness is really their responsibility.
Responsibility and availability of opportunities. The more opportunities, the more people benefit. We're talking about increasing the pool of opportunities.
Don't use Norway as an example of a prosperous society. It's an extremely oil-rich country, and while it's doing much better than most other oil-rich countries are, it's not like a non-oil-rich country could emulate its policies.
Denmark, Sweeden and Switzerland are much more appropriate examples. However, both Sweeden and Switzerland enjoy plenty of cheap foreign labour (I don't know for Denmark).
And what are the progressive schemes for doing that?
Huh? Wealth IS the reward. I don't understand why you would reward someone for getting rewarded. Normally, one is rewarded for doing things that lead to desired outcomes.
A rational society would reward people for contributions to the environment, public safety, education, whatever society happens to need.
No rational society would reward spivs for being wealthy, especially if in the process of gaining said wealth the spivs damage society with undesired outcomes. Which is standard operating procedure.
Examples of this abound, including blowing up the housing market then asking for bailouts, corrupting politics through lobbying, polluting the environment or deceiving the public through misleading advertising and public relations, etc etc etc
That's true in a fully transparent society. But far less so when some players can rig things in their favor by bribes or benefits-in-kind. The article is not criticizing entrepreneurs, but rentiers, people who extract economic profits rather than normal profits. Normal profits are what you have when markets fulfill their function as price discovery mechanisms. Economic profits are what you get when the dominant market players erect barriers to entry of one sort or another in order to fleece consumers.
Although I am no Marxist, you are quite wrong to think that Marx's ideas are irrelevant because he would not understand how wealth functions in the modern world. The product of work has changed, but the fundamentals of capital and production have not altered all that much. If you want proof of this, simply read (or at least browse) Adam Smith's wealth of Nations, which was written long before Marx's birth and which remains an excellent, if extremely wordy, introduction to economics. From the factors of production in a variety of different contexts, basic monetary theory, capital structures of the firm and so on, it remains surprisingly relevant (and readable) today. Marx was certainly aware of this, and while his proposed alternative to capitalism was not really workable, his analysis of capitalism's weaknesses still have considerable merit.
People can and do abuse the market system for their own gain distressingly often; I like the capitalist system, but the notion that it operates without fault is distinctly Panglossian.
When the rich man has an advantage because he bribed politicians into passing laws that make it illegal for the poor man to open a business without special permission from the government, or to take a better job without a college degree, that most certainly is a disadvantage for the poor - and in the long run for everyone.
That is what the article was talking about. It's not that it's wrong to be rich or powerful. It's that it's wrong to use that wealth and power to subvert the machinery of government and create artificial barriers. That is the problem that needs to be fixed.
Which demonstrates just how much the original article gets the issue exactly backwards. It's not the "1%" of income-earners that threaten to transform our 'inclusive' society into an 'extractive' one; the threat comes from the growing regulatory state itself - which the author seems to imply is the solution rather than the problem.
The increasing politicization of every element of society - from economics to education to interpersonal relationships - is the danger; in many jurisdictions in the United States, you already need permits, zoning variances, professional licenses, etc. to initiate even the simplest economic venture. In most of the US, education is already firmly dominated by political institutions, and is increasingly rigid and uniform in structure and content. This situation will inevitably lead to the development of some kind of "extractive" elite - regardless of whether or not that elite ultimately corresponds to those the media currently label "the 1%" - if we can't find a way to reverse it.
It's this politicization of society that threatens to subjugate and exclude everyone who isn't a member of the dominant political class - it's the centralization of power, and not the distribution of wealth, that we need to be concerned about.
Oligarchic elite in western societies converting the state from inclusive to extractive (consciously or not) is not the _analogy_ being drawn, it is the current state (according to the article).
Incentives are not "being redrawn," they already favor the elite.
Give the OP a little credit; his addition to the discussion is pretty good.
Sure it does. But the point is to become an elite you first need to do something to get there. Its not like a lottery selects a few people and just gives them money. Its their money and earn it.
Therefore even the distinction of elite. They earn it, so they get it. Just like everybody else can.
Being born is pretty much such a lottery.
Those relatively wealthy Americans should look at India and see how well-off they are in comparison, and then stop being so lazy, because it really is just that simple.
There is something called as relative value, and people tend to get paid depending on how much valuable their contributions are.
>> Extractive states are controlled by ruling elites whose objective is to extract as much wealth as they can from the rest of society.
and
>> That was the future predicted by Karl Marx, who wrote that capitalism contained the seeds of its own destruction.
The world has changed drastically since Karl Marx, in fact so much that Marx wouldn't ever recognize the world if if he were to suddenly thrown here. The biggest change is the definition of wealth as a dynamic entity which can be created and expanded with work. Unfortunately this didn't exist in the time Marx, or even if it did- the access to such an activity was limited to only a certain set of individuals.
>> You can see America’s creeping Serrata in the growing social and, especially, educational chasm between those at the top and everyone else. At the bottom and in the middle, American society is fraying, and the children of these struggling families are lagging the rest of the world at school.
I laugh when people write things like these. I am an Indian, staying in Bangalore. If you say the US is struggling, I would say you have no clue about other parts of the world. You have no clue what struggling means, no clue what hunger means, no clue what poverty or lack of education or health care means. Think of it this way, even the poorest in the US would be like 10x better of than the poorest in the other parts of the world.
>> Economists point out that the woes of the middle class are in large part a consequence of globalization and technological change.
I would say these changes are good for the US and the world in general. A lot of co operation and competition means things will move quickly.
>> Tolerance for high executive compensation has increased, even as the legal powers of unions have been weakened and an intellectual case against them has been relentlessly advanced by plutocrat-financed think tanks.
Sorry, is the word Tolerance the right word? It makes it sound like some sort of a criminal scam is going around in those circles which every one needs to put up with.
Sorry but the author seems to point what we generally call as 'Socialist guilt'. The problem is people automatically label the ambitious, hardworking and people who look for big rewards as greedy. This problem is an unfortunate consequence of communism and to an extent socialism in general. Unless these people are made to believe that there is inherent evilness in money and desire for it, they really can't sell their philosophy. The direction in which a communist thinks is to visualize money and in general wealth as a minimal thing merely required for survival. And other things are also pushed, like for example glorifying poverty- Promoting rationing of things etc.
The author fails to understand why there are 1%'s anyway. Which is that a capitalist society believes the rewards are not fixed, but vary with effort applied towards the work done to achieve goals. Its not like somebody just called a person in the cabin and wrote them $1 million check. You are selling something and somebody is ready to pay a price for it. This of course requires working hard, taking risks and going through tough times to get there. Not everybody would like to do that, because some people are just happy with what they have now. But just because those people don't want a little extra, it doesn't mean those who want it and earn must share their rewards with others.
The fact is nearly everybody wants to be rich, some just convince themselves they don't want to after considering the effort they need to expend to get rich. But later when they look at somebody getting rich, they just happen to either proceed with all this drama.
Unless you are ill, or disabled or limited for another genuine reason can't work to get successful, you just can't blame somebody else for your problems.