Real Wealth Inequality Is at It’s Worst Since the Beginning of Civilization, Not the Roaring Twenties

Photo by Nick Fewings on Unsplash

Articles on wealth inequality written in 2019 say it is the worst since before the Great Depression—the Roaring Twenties, The Jazz Age. These same articles say it’s getting worse. 

Here is a statistic to better describe the situation. The top 1% possess 40% of the nation’s wealth, the bottom 80% own 7%.

I say it is much worse than anybody lets on. In fact, it is worse than it's ever been. Let me explain why. 

First, let’s have a short discussion about what defines wealth. Some of the poorest citizens in the United Sates possess things that no ancient king or ruler, even Mansa Musa the King of Timbuktu with his estimated $400 billion dollars, could ever have. 

This lower economic class citizen might have at their beck and call a carriage with the power of 200 galloping horses beneath its hood, an air conditioned and heated dwelling that maintains a reasonable temperature no matter the outdoor temp, a fridge to preserve food, a TV for entertainment, a phone to call anyone in the world anywhere, a device to surf the internet or access most of the knowledge of mankind, a pill to make pain or infection go away. The list is long. 

Realistically speaking, this person has a lot of lifestyle advantages over Mansa Musa, or King Solomon, or any number of historic billionaires right up to the twentieth century. Because of technology, one’s quality of life may be equal or better than the wealthy of yesteryear.

As a side note: Keep in mind the 2010 census describes half the population of the United States as “poor or low income”. Extreme poverty afflicts 1.5 million households which live on less than $2 a day before government assistance. Some of these people don’t have cars, clean running water, indoor toilets, refrigerators, or any health care. 

Technology is also the reason a current billionaire’s life has changed by an order of magnitude over those of the past, leapfrogging even an upper middle class person’s lifestyle, choices, and power.

It turns out that a billion dollars now is not the same as a billion dollars back then, and it all revolves around what a billion dollars can currently buy. Once again we turn to the last century as a time when things began to get weird in a science fiction kind of way.

World War II spawned a slew of technologies that forced the expansion and advancement of knowledge resulting in today’s panoply of technological marvels and cleverness. 

For instance, propaganda is a very old practice, but the war forced changes. Film and radio were the added dimensions that made propaganda so effective for both sides during the war. Since that time, it has been an axiom that any new technology that can be used will be used for propaganda. 

Social media has allowed propaganda to take on a sinister disguise to sway the unwary. Propaganda campaigns on social media and in other venues is something the wealthy can now buy that was not available in the past. Back then, the rich could possess the bodies of a population but not their hearts and minds. Things are different now. 

Propaganda has been honed, tweaked, and optimized by Madison Avenue and corporate America to power the advertising technologies that create so much angst in American society by having people desire things they can’t afford. We are a society inundated by constant, unrelenting waves of commercial propaganda. They don't just tell us what to buy. They tell us how we should think and act. I hate to break this to you, although you may have suspected, we are not a normal society. 

The overt and subliminal pressure is so much for some they have turned to drugs for relief. The wealthy, for the most part, are sheltered from this constant pressure. Even if they succumb and buy that Lamborghini, what does it matter? They can afford it. 

About the same time as the Second World War, wealthy individuals started taking advantage of a quirk in the American political structure. They were allowed to give Senators and Congressmen money in exchange for favorable business environments through legislation in a process benignly labeled “lobbying”. In other parts of the world it is called bribery. While bribery has been around for a long time, past billionaires still had to worry about getting caught, unlike their modern American counterparts.

In 2010, the Supreme Court case of Citizens United vs FEC allowed corporations the First Amendment political right to buy ads in any and all American elections. Since that time the floodgates have opened for money to flow into the coffers of political campaigns and super pacs to be used for ... you guessed it, propaganda. 

Having legislators sponsor bills in exchange for campaign money is one way wealthy people and large corporations control enactment of laws to favor themselves, including purchasing monopolies and lowering taxes. This process perverts the idea held by ordinary citizens that our elected officials are working for the good of the general populace instead of certain individuals. 

Another area where the current crop of wealthy have an advantage over their predecessors is medical technology. The fact is that the ultra-wealthy don’t really need health insurance, although they probably have the best money can buy. 

There are many hospitals that now practice what is commonly called “wealthcare” where the wealthy are ushered to the heads of lines for procedures that may very well save their lives. This is in exchange for large donations to go to expansion or equipment. All well and good you say until the realization occurs that someone back in that line was nearing their expiration date and might not make it now. 

The technical advance of weaponry and the art of war has been prodigious. Body armor, fully automatic 12 gauge shotguns, sniper rifles accurate up to a mile away, spy drones—these are just a few examples. Some of the best stuff we’re probably not even aware of. 

A small, well-trained, and properly outfitted army would be unstoppable in most areas of the world. They could be used for security or for much more nefarious reasons. Imagine Seal Team 6 times ten and you have some idea of the sheer physicality of force affordable to some now. 

Don’t get me wrong. Billionaires should be highly compensated for their innovation and job creation. But please don’t buy into the myth that their money is a huge source of innovation and job creation. It’s just money. They may or may not put it to good use. 

For every Elon Musk there are probably a hundred billionaires who are using these absurdly effective tools and technologies I’ve been describing to hang on to or increase their existing fortunes instead of spending money on building new companies and new technologies that create jobs.

What is so very wrong about the current situation is that the tools, the privilege, and the technology available to this elite group of people allow them to keep increasing this disparity of wealth between the one tenth of one percent and everybody else. It is an unfair advantage that the wealthy of generations past did not have. 

We may nearing a tipping point beyond which there is no way to regulate this historical anomaly. 

And these are the “good” billionaires. There is another group of billionaires that are the bad actors of the wealthy set. These are people like the heads of Mexican cartels. Once these people fully realize what is possible with their money, this world will become a much more dangerous place. 

The marginal tax rate for the poor is approaching 90% in many cases while that of a lot of corporations and wealthy individuals is at or getting close to zero. It used to be the other way around. Even some billionaires, notably Warren Buffet, are embarrassed by the low taxation on the wealthy and want it changed. 

It is time for the United States of America to just say “no” to the continuing trend of lowering taxes for the rich and corporations and penalizing the poor for being poor. We can only do it at the ballot box. Vote for those who want to increase the tax on the wealthy and change the lobbying and campaign finance laws. No matter what our economic status is, we can still wield that small amount of power left to us to send a message to the ultra wealthy, “We’re on to you! Pay your fair share!”

Something Is Eating Away At Our "Blue Marble". . . and It Is Us

by Glen Hendrix

courtesy NASA

Humans can safely use 50 billion tons of material per year. Currently we use 80 billion tons per year and that is rising to approximately 180 billion by the year 2050. This is according to a Fast Company article written by Jason Hickel “Better Technology Isn’t the Solution To Ecological Collapse”. The population will be 9.7 billion in 2050. That means individually we consume, on average, about 10.7 tons of material per year and, by the year 2050, 18.6 tons per person.

Business and governments believe they have to have continuous growth. Economists swear we have to have growth of the GPD every year or dire things will happen, and the more growth the better. Yet, even the inventor of the gross domestic product, Simon Kuznets, wrote in 1934, “The welfare of a nation can scarcely be inferred from a measurement of national income.”

One simple solution to plastic grocery bags.

Remember people telling you about or reading articles about the power of compound interest? That is exactly what we are talking about here. The same principle that allows someone to become a millionaire by starting to save a thousand dollars a month when they are twenty is the same principle by which the nations of the world will use up the world’s resources. Next year’s 3% growth has to be on top of the combination of last year’s economy plus the 3% it grew. Ad infinitum. Except it doesn’t go on forever. It has to stop somewhere.

Technology has kept us ahead of Malthusian limits so far, but how long can it continue to do so? The pressure of population growth demands that we use more and more material, no matter how efficient we are at doing it.

If you’re thinking “alarmist”, I hope to God you’re right. If you’re thinking “Cassandra”, you probably are right.

It is like we are all living in a giant ponzi scheme nightmare. We are the ones harvesting the profits of this scheme, some of us anyway. Our immediate descendants; children, grandchildren will be left holding the empty bag.

This insistence on ever-increasing growth is destined for abject, unmitigated, utter failure. And it won’t be pretty. There could be starvation on a scale that will redefine disaster. It may knock back civilization a thousand years.

All because we cannot visualize what happens with incremental change. Tomorrow isn’t that different from today with 3% growth in GPD, but what about 1000 years from now? We are already on our third industrial revolution and the first began only about 250 years ago. Homo sapiens have been around for about 200,000 years. In about 1/1000 the time we’ve been on this planet, we are on track to ruin it.

Humans have a definite species disorder. We are very short-sighted and tend to be selfish. If we had life spans like Methuselah people might care about what the world would be like in a few hundred years. As it is, we can’t see this existential crisis staring us in the face. Or, perhaps we do. I can not imagine that I am the only one that sees this crisis coming. I am not that damned smart.

Here’s the problem. Practically every person in a developed country is richer than the richest rulers of antiquity. Richer than King Midas or King Solomon. We have chariots with 400 horses at our constant beck and call to ride at dizzying speeds. We have magic carpets that fly us thousands of feet in the air to anywhere in the world we want. We have indoor plumbing and air conditioning. We have the knowledge of the world at our fingertips. We don’t want to hear a whisper about how that all could change. We are whistling past the graveyard.

Plastic grocery bags prefer this as their second career. 

Imagine those people with a million times, a billion times, the average person’s wealth and the commensurate power. They will be actively suppressing this idea that there are limits, that we need to tread more cautiously and slow or still growth. It is conceivable they could use the media to brainwash the population into thinking everything is okay so that they may continue their inflated existence.

Aside from hoping for a singularity event and a benevolent and understanding AI master, there are few solutions. Population control is taboo in western society. We are willing to control deer populations to keep them healthy; but when it comes to humans, sorry, no hunter associations to collect money for our welfare. Personally, I’m pretty okay about that.

Perhaps we need to get away from an income marker and go to something else, like a “wellness and happiness” index. This does exist. The OECD, or Organisation for Economic Co-operation and Development. The U.S. is #14, ahead of Ireland, behind Austria. Number one is Norway. They don’t make the news like the GPD. Maybe they should. Maybe they should be the focus of the news. Perhaps if there was more leeway in the choice of country to reside we would have countries competing to get to the top of the OECD, taking pressure off the GPD as the most significant marker of advancement.

One of the greatest breakthroughs for the human race will be significant life extension technology. We need to be living hundreds of years, not decades. This will force us to plan far into the future to mitigate these problems.

Another solution is to get into space on a large scale. If we can’t fix our unfettered greed and shortsightedness, we have to go where there is unlimited energy and matter. And we have to do it very soon.