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The Only Thing, Historically, That's Curbed Inequality: Catastrophe (theatlantic.com)
ColdWetDog writes: The Atlantic has an interesting article on how societies have decreased economic equality. From the report: "Calls to make America great again hark back to a time when income inequality receded even as the economy boomed and the middle class expanded. Yet it is all too easy to forget just how deeply this newfound equality was rooted in the cataclysm of the world wars. The pressures of total war became a uniquely powerful catalyst of equalizing reform, spurring unionization, extensions of voting rights, and the creation of the welfare state. During and after wartime, aggressive government intervention in the private sector and disruptions to capital holdings wiped out upper-class wealth and funneled resources to workers; even in countries that escaped physical devastation and crippling inflation, marginal tax rates surged upward. Concentrated for the most part between 1914 and 1945, this 'Great Compression' (as economists call it) of inequality took several more decades to fully run its course across the developed world until the 1970s and 1980s, when it stalled and began to go into reverse. This equalizing was a rare outcome in modern times but by no means unique over the long run of history. Inequality has been written into the DNA of civilization ever since humans first settled down to farm the land. Throughout history, only massive, violent shocks that upended the established order proved powerful enough to flatten disparities in income and wealth. They appeared in four different guises: mass-mobilization warfare, violent and transformative revolutions, state collapse, and catastrophic epidemics. Hundreds of millions perished in their wake, and by the time these crises had passed, the gap between rich and poor had shrunk."
Slashdot reader ColdWetDog notes: "Yep, the intro is a bit of a swipe at Trump. But this should get the preppers and paranoids in the group all wound up. Grab your foil! Run for the hills!"
Slashdot reader ColdWetDog notes: "Yep, the intro is a bit of a swipe at Trump. But this should get the preppers and paranoids in the group all wound up. Grab your foil! Run for the hills!"
Seriously this article makes it sound like life just after a devastating conflict is better than economic prosperity because most people are equally poor.
That's pretty fucked up, and I'm calling BS.
Income inequality is an indirect, at best, and irrelevant at worst, measurement.
One cares about the average health, wealth, and longevity of a population. That continues to skyrocket as much of the third world becomes modernized due to economic freedom, the one measurement directly proportional to such measurements.
This continues to improve in the west, too. Their health is stalling, but due to too much cheap food and a lack of needing to physically labor.
Both of these are historically novel "problems", where most places and all other time periods, dollars per calorie and dollars per nutrition were the limiting factor to average health and longevity.
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
I have read the original article at the Atlantic. This is a horrific horrific article, written by the sympathizers and apologists of the red terror in France, Soviet regimes (China and Soviet Union). Article also says that reduction of the number of the workers was a factor increasing the income the working class and decreased inequality.
First, it casually mentions Soviet and Chinese revolutions with their confiscation and redistribution. Article fails to mention, that such changes were followed by the civil wars against peasantry and the workers, the use of chemical weapons against insurgents, massive red terror, massive incarcerations, loss of the academic, scientific, professional, business and cultural elite by both troika death sentences and emigrations. Don't try to mention this "equality measure" in Russia, for you risk to be roughed up by those who hate communism. Also, article fails to mention, that these revolutions created a super-elite class which keeps most of the wealth in these countries, basically brainy yet criminally dishonest former communist party members who got filthy rich.
Secondly the article mentions confiscatory rate as the solution. Author simply fails to mention that if a marginal rate exceeds 50% people are less likely to try to make more money, and, most importantly, marginal income tax rate does not touch the principle, which is rarely if ever taxed.
This topic of inequality has been covered ad nauseum by Austrian economists, with the one and only conclusion: it is the excessive government regulation that is causing inequality. Here are some basic examples:... medical profession is completely regulated in the USA. The number of medical school graduates is strictly regulated in order not to produce surplus professionals. Many other factors, such as regulations and, for example, requirement to a have malpractice insurance, do add up to the medical practice costs and, subsequently, to the prices. As such, even now with Obamacare in effect, healthcare is un-affordable luxury for many, and some people are suffering from lack of it. If the profession is completely unregulated, and would allow unlimited immigration of medical specialists from anywhere in the world, combined with loosened importation of medications, malpractice reform, would seriously give death blow to the healthcare industry, which does not provide a meaningful increase in the longevity of lives of Americans compared to the countries such as Costa Rica or Albania.
Finally article fails to mention that there are countries where catastrophe was not required to have exceedingly high standard for their citizens. Switzerland. Super low federal taxes, most of the decisions are done locally by the cantons, historically libertarian governmental approach by the Government. There was never a catastrophe in Switzerland, but their living standard is one of the highest in the world. Also, inequality is not considered an issue, there are plenty of rich people, who live there with many regular Swiss minding their own business and not worrying about inequality: why would they?
I think most people argue that income inequality is bad on two accounts.
At the upper end, they argue based on a kind of labor theory of income. They ask, if a certain CEO makes 1000x the income of the average worker, is their work really 1000x as difficult, or 1000x as laborious? The answer is obviously no, but that's not the way our economy works. You could ask the same of movie stars or professional athletes. I don't think this is a useful argument. People at this income level get paid what they can negotiate.
At the other end, they argue that it isn't right for some to be so desperately poor. That's why raising the floor of income (perhaps by a Universal Basic Income) is the other part of the argument. To this I'm much more sympathetic. I live in Los Angeles and don't have to go very far in any direction to find a tent city. People are hurting and they need help.
In my opinion, it's not income inequality that is the real problem, but wealth concentration. The concentration of wealth into fewer hands is bad for the economy. If there is less wealth for most people, then there are less purchasers for an economy's output. It's a deflationary scenario where less available money means businesses have to lower prices to sell, making profits smaller and debts harder to pay off. Bill Gates is only going to buy so many TVs, cars, and houses. Doubling his wealth is not going to change his spending habits. If that amount of wealth was placed in the hands of a thousand people, then there would be a thousand new customers for TVs, cars, and houses. This more distributed kind of customer base can sustain an economy.
From this perspective, extreme income inequality is bad because it leads to catastrophic wealth concentration. The small number of very rich can only be customers to a small number of luxury businesses. Every other business relies on the existence of a much larger customer base that can actually afford their wares. If wealth is too concentrated, there's not enough money in enough hands for most businesses to operate. Businesses suffer and lay off their employees, leading to greater unemployment, leading to even fewer customers, leading to worse business, and on down the vicious cycle.
The Declaration may not be "Law", but it is _the_ single most important document in American History. The Declaration of Independence is what founded the country. The document provides both the reason for discarding rule from England
When, in the course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the laws of nature and of nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.
And the principles that the Country should, and would, have.
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed.
I'd recommend reading the whole Document. The Constitution is the Law used to protect the rights declared.
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.
So I'm very familiar with two countries, Vietnam and Thailand.
Vietnam, as you all know, went through a difficult occupation by the French, then the Americans, before having their country divided in two and then suffering a devastating civil war which killed millions of people (4 million?) before unification. The result? Everyone, more or less, started out very poor (during the late 70s and early 80s starvation was a real fear). So everyone was equal. Now though, inequality is climbing (fast) as the winners have "capitalized" (ironic comment intended on the supposedly communist country) on their ability to extract a greater and greater portion of the country's rising wealth. Still, for a time, society was remarkably fluid and anyone could be anyone (for example the ex-prime minister came from humble beginnings).
Thailand has not been conquered by a foreign power (ever?), certainly not by the westerners who did so to every other country in S.E. Asia. (That was due to the astuteness of their past king(s) who played the foreigners off against each other). So the power structures in Thailand have remained static for hundreds of years. In the last century, because of the great increase in wealth coming from modernization and technology, much of it was captured by the ruling class. Thus you have an urban elite that was (until recently) running the show from Bangkok (the "Hi So" or High Society) and getting richer and richer in the process. A populist (yet corrupt) billionaire politician used this great divide to sweep himself into power (sound familiar) only to be ultimately blocked by the military (acting on behest of the existing power structures).
I care about me and my family and we're not doing so hot. Income inequality is a hot button issue with me because the gains since 2008 have all gone to the upper class, of which I am not. My kid just hit college and she'll not only spend her life making somebody else rich but the first 10 years paying them for the privilege. I'm struggling and she's going to struggle. Putting it in historical context doesn't make my objective reality any better.
Maybe if you're in Europe things are getting better. Here in the States millennials make 20% less than boomers adjusted for inflation. We're losing ground while our ruling class is gaining. Those aren't feelings. Those are cold, hard facts. 20 minutes in google will prove that.
I want Americans to stop settling for less. I want us to stop fighting among ourselves while the ruling class take everything. Everything you just wrote and every sentiment you just expressed makes it that much less likely that they will.
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Attempting to analyze the causes and effects of war on Economies would require a rhetorical eloquence no less than those that authored the Federalist Papers, and, at the very least, the same volume of words. Fudging it all down to something as small as your typical The Atlantic commentary read is proportionally equal to asking a five year old to draft their own theories of government.
But, let's at least have a little fun with this, and perhaps attempt at sharing something of insight. Here goes:
A brief study of the history of the United States economy would generally yield a result looking no different in approximation than an increasing sine wave, generally increasing at an exponential rate. While there are upward trends and downward trends, of more-or-less of equal duration of time, the economy has been trending upwards since its inception. As for why it's continually trending upwards, no matter how complex the argument, it generally boils down to one simple word:
Balance.
Our country maintains a relative balance between free market and regulation; between public and private sector; between state and federal governments; between taxable income and disposable income...and so on and so forth.
Naturally, given the general liberties our citizens possess, we from time to time will express our displeasure with the existing status quo. Displeasure among a proportion of the populace is inevitable. We all come from different walks of life and form opinions and biases preferring a bias against the balance in the direction of some extremism. As passionate citizens, we may attempt to swing the pendulum hard in a particular direction, as others naturally try to swing it in the opposite. We exercise this through electing representatives who share our views, posting our views online, speaking out at public meetings, attending rallies, drafting petitions, etc, etc. While these motions are a natural result of the state of government that presently exists, they generally do not threaten the state of government itself.
But, occasionally, it does. And it does, because factions within our society generate enough power among the citizens to disrupt the balance in favor of their zealous points of view. Thankfully, the founding fathers created a system of government that generally impedes factions. (To see a much more thorough and more eloquent analysis of this argument, please see Federalist Papers 9 & 10.)
I'm concerned that we may be living in one of those times. Our country is very unbalanced in its political view right now, and the inflammatory rhetoric from a zealous self-righteous minority faction is pouring fuel onto the fire. To make matters worse, one of those zealots is none other than our president. But, I digress.
When it comes to tax policies, balance is key. The United States economy fared very well following both wars, because both wars were funded by high income taxes. The United States economy also fared very well in the 20's, in the 90's, and before 2008, because income tax rates were very low, freeing up vast amounts of investment capital. And then the economies after all these booms crashed hard, much in part due to deregulation and poor investing. My point being this: Creating economic policies that directly reflect the present conditions with the intention of returning to a balanced economy are the keys to success. A zealous application of a tax policy for the sake of the tax policy alone will not contribute to economic success.
He uses the extra income to bribe the government. Regardless of how many regulations or how few, if the local judge is bought off, I'm screwed. Also my rich neighbor will pay far market rates for hitmen or lawyers to make me disappear if I oppose them, either physically or financially.
Have you ever wondered why? It's because they were trying to reduce the influence of slaveholders. A default position of counting slaves as a full person for representation purposes would have led to the slaveholders (who actually voted for representation, not the slaves) controlling the federal government based on the number of slaves they held.
So the 3/5ths compromise as well as granting the power to restrict or prohibit the importation of slaves (also in the Constitution) were the Nation's first two anti-slavery measures, passed over opposition from the slave-holding States. They'd have done more, but then the slave-holding States wouldn't have ratified the Constitution in the first place, making any restrictions in it pointless.
The party of stupid and the party of evil get together and do something both stupid and evil, then call it bipartisan.
Having most of the wealth concentrated in a few hands is stifling to the economy. There are only so many TVs and cars and houses and food one person can buy.
Having more people with disposable income (even if there is less total wealth) is what grows an economy.
If you give 1 man 1 million dollars, he will spend it on something silly like a yacht, but give 1 million people 1 dollar, and most of them will spend it on groceries or rent.
Which stimulates an economy more, yachts or groceries?
Maybe, I grew up in a different USSR. What "luxury goods"? Name one private label, that existed in USSR in 1952...
They were called "collective farms" and weren't "private" at all. Though ostensibly the farm's chairman was elected, in reality the sole candidate was introduced by the Communist Party's representative for the members of the collective to rubber-stamp. Whatever they collectively farmed could only be sold to the government as well.
Neither Coca-Cola nor Pepsi owned anything — USSR-owned factories were producing the drinks under license.
Nope. Some Soviet models tried to emulate foreign cars, but Fiat didn't own any stake in the factories.
In Soviet Washington the swamp drains you.
Why worship a document so clearly penned by hypocrisy - several owned slaves.
Let me educate you on a little US history.
1. Slavery was instituted in the US many decades before any of the 'Founding Fathers' were born.
2. The first slave owner, and the person who argued it through the courts to make it legal, was a black man named Anthony Johnson.
3. Anthony Johnson's first slave, John Casor, and most of the others he ended up owning, were white.
4. Thomas Jefferson, the most-oft cited slave-owning Founder, never bought nor sold a single slave. He inherited them from his in-laws and kept them together so as not to break up their families and treated them as well as he could under the existing laws passed long before he was born.
5. Jefferson could not free his slaves as under the laws of the time, he would have been hanged.
6. Nearly all the Founders despised slavery. The only reason it was allowed to continue was the southern Democrat States would not join the US revolution on the American side if it was outlawed. They enacted the 3/5ths Compromise so as to lessen Southern slaveholders' voting power, so that slavery *could* be banned down the road while still achieving the immediate goal of forming all 13 colonies into a single unified nation to defeat the British and achieve independence.
Sorry about your broken worldview. Fortunately, an education in history can get you a new and better worldview if one is willing and able to change their thinking based on facts.
Strat
Progressivism (aka US 'Liberalism'): Ideas so good they need a police/surveillance-state to enforce.
It might be a bit hyperbolic, but its far from delusional -- especially the part about bribes. Bribes are and have always been a tactic of the wealthy to get their way regardless of the cost to anyone else.
Murder is certainly more rare, at least in the Western world (Russia might have a different take on that.) Financial fuckery isn't as much. You occasionally hear of companies selling their product under cost in order to drive the competition out of business.
And depending on how loose you want to read the term "fuckery," you could consider the 2008 market crash as a high-end version of such -- rich people doing rich people things that screw the rest of us over and we've got basically no say in it because dollars speak louder than words in many cases.
Sure, after the war, everyone in Germany was equal. Equally broke, equally without a job, equally without a stable home, equally without a stable government, equally...
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
You should look in to that education thing yourself as you seemed to have skipped quite a bit. On a side-note, if liberalism needs a police state, why does your ideology of choice need lying?
Consumption is a trivial consequence of production
This is your big fallacy. Consumption is hardly a "trivial" consequence of production. You're right (sort of..) that production stimulates the economy.. at least in so much as we measure GDP by dollars worth of goods produced (you could argue that that's a poor measurement but I won't right now.)
But consumption stimulates production. Nobody produces anything that someone else doesn't want to consume (or at least they don't produce it for long..) A working economy has to be (close to) a balanced equation: Too much production and things get left out to rot (draining value from the economy) and too much consumption can't be sustained (everything will get used up.) There's of course a little leeway in there, especially when you allow for international trade such that you can use imports and exports to shore up whichever side you're lacking, but overall the two have to remain in balance or your economy collapses.
To put it another way, the economy works at the point where supply equals demand. If demand was irrelevant as you claim, we'd only ever need to look at the supply curve.
Economy is all production and exchange of produced goods/services
No, that's GDP. Which is a measure of economic health but its just a number -- its not an economy in itself.
USA cannot stimulate the economy by any extra level of spending because it lives on borrowed money
That's actually the most irrelevant thing in your entire post. The US (and every other country) attempts to control its borrowing to avoid going broke just like any normal person, but just like any normal person can potentially borrow a bit more if things go down the shitter, so can the US. Certainly there is an upper limit on how far you can take that but we're nowhere near the level where they can't stimulate the economy in various ways. Have you forgotten the gigantic corporate bailout from a few years ago? That's exactly the kind of thing you're saying they can't do and recent history proves you wrong.
A million people with 1 dollar each is wealth dissipation, it will do nothing to improve the economy
I suppose you've never heard of those things called "corporations?" They're pretty cool. The came into existence precisely because people wanted to do things that no one person could afford on their own, so they pooled their money (via share distribution) and voila.
the dollar came from the theft of taxation
What the hell does that have to do with anything? But to respond anyway.. taxation is your payment for services rendered by your government. Army, police force, road maintenance, infrastructure. Your taxes pay for all that shit. And if you really want to bitch about welfare, you can consider that the "service" of keeping beggars off the streets and out of your sight/way.
And before you start saying its not a true transaction because you didn't choose what to "buy" well sorry but you did -- via your elected representatives. You can argue that the price is too high or whatever, or that your representatives are choosing to "buy" the wrong services or whatever, but calling it theft is rather disingenuous at best.
A poor person gets stuck with a public defender, a rich person gets an amazing lawyer. That means an innocent person without money is more likely to go to prison than an innocent rich person. Or do you seriously think OJ would have gotten off if he was poor and Johnnie Cochran and his team were replaced with a court-appointed public defender? Because if you don't think that's the case, you agree with the person you condemned and owe them an apology.
Yes, we are calling you a liar, because, as your own source points out, John Casor was of African descent. He was not a white man. You are lying.
Being described as "Negro servant, John Casor," doesn't make him sound overly white.
Article *never* does a good vs evil judgement. Never advocates anything.
Article simply states: "Inequality was only curbed by catastrophe. Even in the title, it calls all of those events *Catastrophes*!
The point of the Article is to say that constant, mild and progressive policies have seldom had any impact vs catastrophes. The article calls the chinese and soviet revolutions "bloody affairs" and "murderous mechanisms"
Makes you wonder why you're
Why would you hand pick only one school out of inequality when there are many other economists in other countries producing more investigations that we could take into consideration? Many of them have also investigated inequality as a cause and an effect of market failures, that is, failure by the market to maximize the value creation (ie: an inefficient economy).
Switzerland benefited quite a lot from the influx of foreign wealth, not produced by the swiss economy itself. During some of the catastrophes talked about in the article, a lot of the spoils were transferred to Switzerland, and it has a place in the world economy as the most famous tax haven were the beneficiaries of inequality elsewhere stored their wealth. Also, its economy is *far* from unregulated, not quite a libertarian utopia. You will be able to find many more countries with less industrial, environmental, labor and even financial regulations, why didn't you choose one of those instead?
Did you even read the articles you linked? Some of the "facts" you state are directly refuted in the article. For example you wrote:
3. Anthony Johnson's first slave, John Casor, and most of the others he ended up owning, were white.
But the article you linked says:
Anthony Johnson himself was an indentured servant, just like John Casor, the only difference was that Casor was determined to have a lifetime indenture rather than a limited time like Johnson. A huge number of early colonists were in the US as indentured servants, they just didn't have the capital to move across an ocean and set themselves up without indenturing themselves.
5. Jefferson could not free his slaves as under the laws of the time, he would have been hanged.
Citation needed. You are claiming manumission in Virginia was a capital crime? Sounds like massive bullshit. Reading the Wikipedia article on manumission it specifically mentions laws being passed in Virginia to explicitly allow manumission, exactly what timeframe are you claiming it was a capital crime? Virginia did pass a law requiring a person to get the permission of the government to free a slave in 1723, but that was repealed in 1782:
Heck, he could have freed them even earlier than that, since the 1723 law required permission from the Governor and from 1779-1780 he was the Governor.
4. Thomas Jefferson, the most-oft cited slave-owning Founder, never bought nor sold a single slave. He inherited them from his in-laws
Not completely true, he first inherited 52 slaves from his father, in 1767. He didn't inherit slaves from his in-laws until 1773. Also, Jefferson did free some of his slaves in his lifetime, from this page
I'm not even going to bother with the rest of your claims, are you just making this shit up or do you have an actual source for any of your assertions?
Enigma