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!”