Thanks to the efforts of the Occupy Movement, most people now know that the One Percent accumulate about half the income, and control about half the wealth, of society. The rest of us, the Ninety Nine Percent, share the other half.
This distribution follows a power law, so that 0.01 percent get about a fourth, and 0.0001 percent have an eighth of the wealth, and so on. But the impact isn’t linearly proportional to the amount. A poor man or woman spends his money to survive, but the wealthy have enough left over to use to gain more wealth and power.
The numbers are approximate, but there is wide agreement from researchers ranging from banks to academics to activists. There is disparity among countries (the U.S. is certainly more unequal than many other places) and between “wealth” and “income” (wealth tends to be more concentrated than income). There are problems measuring the values (there are many different definitions of “income”), and various legal structures complicate the notion of defining “control”. Nevertheless, this approximation is close, and a useful working model.
It’s not so easy for the rest of us, the Ninety Nine Percent, to imagine what life is like for the One Percent. Neither television nor film nor books accurately show this; a little reflection shows that the pictures they portray don’t often make much sense, and are replete with impossibilities and contradictions. Imagination doesn’t help much, either. So how do we think of this disparity, this inequality, in terms which are meaningful to us, personally?
Let’s try and put this into numbers. Imagine that there are one hundred people in the world, and that they have among them a total of one hundred dollars. As things stand now, the man at the top, the One Percent, has fifty dollars, and the other fifty are shared among the other ninety nine. Each person of the ninety nine has, on average, about fifty cents. (It’s closer to 50½ cents, but let’s round it off.) The person at the top has around a hundred times as much as the average person among the other ninety nine.)
Suppose we were to make the top one percent, the top one person in our hundred, give up his special allocation. Suppose he were to be left with an average amount, a single dollar. There are many ways to re-distribute the surplus, but let’s consider the implications of one: there is enough money left to double the wealth and income of everyone else. If your wages were ten dollars an hour, they’d become twenty. If your house were valued at $100,000, then you could move into a home worth $200,000. Your bank balance and the cost of your automobile would double (or you could get a second car of the same value). Surely this is easy to begin to imagine. Think about it! Imagine what you’d do if all of your income and assets were to double!
Now, you might think, is this fair? It was their money, wasn’t it? Maybe, depending on how you think. I think you might have been duped, fooled into thinking that morality required you to hand over half your wealth to those in the One Percent.
You think you didn’t give it to them? Consider how the One Percent obtained that money. There are two main sources of their loot. First, they paid you – as a working person – less than you were worth, they cheated you. Second, they simply stole it outright.
One argument starts from the hypothesis that your worth as an employee is derived from the free market. Supposedly, your wages are determined in a non-compulsory environment, where an employer must pay whatever price the competition requires, if, indeed, he hires anyone at all. But this argument is flawed in numerous ways: the market for employees is distinct from the market for the goods and services being produced; competition is limited to those who can afford to compete (do you own a factory? an oil well? a retail store?); laws, including tax policies, make it difficult for employees but not so much for employers; and so on... a later issue of the Buffalo Bull will cover this in more detail.
An employer won’t hire you unless he can make a profit from you, so he cannot pay you what you’re worth because he wouldn’t gain a profit. It might be a large profit, it might be a small profit, the profit from one employee may differ from the profit from another, but he expects a profit or you don’t expect a job. In a very rough approximation, for every dollar of your wages, the One Percent gets another dollar, be it in the form of profit, capital gains, surplus, or by some other name: that’s their half. This having taken place over generations, they now have half of that accumulated surplus from generations of workers’ giving up their halves to the One Percent. (Don’t forget: despite the high visibility of a few, newer, high-technology companies and other recently-successful enterprises, most of the world’s wealth is inherited wealth, and we have what is largely a hereditary plutocracy. The aristocracy don’t so much inherit titles of nobility any longer, they mostly just inherit money.)
But he’s taking the risks, you might say, and he deserves a return for his risk. After the 2008 banking crisis, who suffered the most, the those of the One Percent who got profits and bonuses or those from the Ninety Nine Percent who lost their homes? Whom did the taxpayers bail out, the bankers or the homeowners? Who risks the most, the worker who stakes everything on his job or the employer who might lose some of his loot? When the worker is unemployed, he can’t pay his bills or feed his or her family, but the employer isn’t going to starve. The employer isn’t much risking his health, and he has little trouble paying his own medical bills. It’s more or less like gambling in a casino: the odds are stacked in favour of the house. If it weren’t that way, then there wouldn’t be slot machines, fancy buildings, and the other accoutrements of commercial gaming. Employees don’t get to work a few dozen jobs to distribute their risks, but the rich can spread their investments among dozens of assets. The One Percent, the casino operators, and the employers win most of the time. The Ninety Nine Percent, the gambling customers, and the employees usually lose. Who is taking the risks?
Doesn’t he, the capitalist, deserve more? Isn’t it fair that he earn more, because he’s, well, the owner, the boss? Tell me with a straight face that the janitors and waitresses and assembly line workers don’t work just as hard! Tell me how the system rewards the worst jobs with the lowest pay, and that it’s a fair arrangement! If someone enjoys his work, isn’t that part of the reward? No, the One Percent aren’t sacrificing for our benefit; in fact, they’re always trying to get more, a bigger piece of the pie. To Hell with the Ninety Nine Percent! they say. In their view – as a factual matter and not based on what they say – those who scrub toilets and work in mines and harvest crops are worth less than those who are “rightly” their betters, less than those who work shorter hours under nicer conditions with more fringe benefits and with more security.
Finally, who or what gave the resources of the Earth to the One Percent? Did God or Nature or Randomness somehow choose them to be custodians of the water, the farmland, the oil, the coal, the other minerals, and of all the other useful and valuable things to be found on this planet? Yet they claim that they own these things, or they claim that they control these things in the best interests of everyone. How is a member of the Ninety Nine Percent to open a factory or to grow crops without paying his personal tax, his “offering” to the One Percent who see themselves as custodians for most of human treasure?
Yes, the rich will grow richer, and the poor, poorer, at least under the current social, economic, and political system. It’s the law. It’s the government’s law. (But it’s not morality, it’s not God’s Law or Nature’s Law.) But who writes those laws? Who owns or rents the government who write those laws? Who owns the studios and networks and web sites and publishers who tell us it’s all for our own good?
And the Ninety Nine Percent, for the most part, just go along with the scheme.
(1) The difference between what an employee is worth, or “how much value he adds to an enterprise”, and what he’s paid is known by various names, depending on whether you’re speaking to a Marxist or a Libertarian or whomever. Most common, perhaps, are the terms “surplus” and “profit”. Technically, however, even the same name doesn’t always mean the same thing. One person might use the word, “profit”, for example, in one way, but another might use it in a different way.
(2) For those who want to learn the Bible’s take on this issue, the most relevant passage I know is from Ecclesiastes: “[...] every man should eat and drink, and enjoy the good of all his labour, it is the gift of God.” (Ecclesiastes 3:13) Later, “Wherefore I perceive that there is nothing better, than that a man should rejoice in his own works; for that is his portion [...]” (Ecclesiastes 3:22) One way to take this is that the surplus (or profit) should belong to the worker and not to the employer, but then, the Bible can be used to justify practically anything in existence, depending on the reader. Yup, a book for everyone.
(3) The term, “power law”, is about mathematics, not about social or economic power. It refers to functions which scale in a certain way, so that small parts are proportional to the whole. You might say that the graphs have a recursive quality. Such things have a special relationship to fractals. That power laws might, in whole or in part, approximate the distribution of wealth, does not necessarily mean that they define or explain it; or, even if they were to explain it, that coefficients are fixed and invariable.
Saturday 2018.06.09 — Initial release.
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