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from the picthfork-futures-accelerate-to-new-highs dept.
Nick Hanauer, a self-described "plutocrat" says history shows that the current economic and governmental situation can't last, and the USA should should get busy changing before the system breaks down.
From the memo to his "Fellow Zillionaires":
I founded aQuantive, an Internet advertising company that was sold to Microsoft in 2007 for $6.4 billion. In cash. My friends and I own a bank. I tell you all this to demonstrate that in many ways I'm no different from you. Like you, I have a broad perspective on business and capitalism. And also like you, I have been rewarded obscenely for my success, with a life that the other 99.99 percent of Americans can't even imagine.
But let's speak frankly to each other. I'm not the smartest guy you've ever met, or the hardest-working. I was a mediocre student. I'm not technical at all - I can't write a word of code. What sets me apart, I think, is a tolerance for risk and an intuition about what will happen in the future.
If we don't do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn't eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It's not if, it's when.
(Score: 1) by tftp on Thursday July 03 2014, @09:26AM
You show me a highly unequal society, and I will show you a police state [...] not if, it’s when.
The guy spends too much time on his yacht and in his airplane. He does not debase himself by walking the streets, where the police state is already in full swing.
With some difficulty I read through his tl;dr manifesto. Yes, in part he is correct: the society is full of contrasts. But his proposals (to increase minimum wage?) are laughable. The society exchanges labor for labor; it uses money only as an accounting unit. Would you arrive faster if you fix the speedometer in your car so that it measures higher speed than it really is? But his proposal amounts to exactly that. In the language of proverbs, it's robbing Peter (the customer) to pay Paul (the seller.) The market already manages salaries; and if some job comes with a salary that is below the minimum, it won't be offered. Someone else will work two such jobs for one minimum salary. Should the author then make a law that defines not only the minimum salary, but also the maximum effort that the worker may put in? The market deals with this naturally: if the salary is too low, the owner of the business will be doing the work himself.
There is also that concept of fairness. Capitalism is not built on it. If someone invests $1 and gets back $1M, good for him. It's not fair, probably - if you can agree on some common definition of "fair." But that causes tensions within the society. One would say that the society at large benefits from rich rewards given to few for their great contributions to the society. Perhaps that's true, as examples of socialist countries demonstrated that lack of reward causes lack of progress. But is it fair to reward a CEO with a $10M/yr salary? These figures look more and more like a closed club of privileged individuals; the new elite, the new aristocracy. This guy is relatively young; he is probably not aware yet of how things are done. He should go into politics - they will recalibrate him in no time.
But in general the problem of fair distribution of benefits is very complex. There was no society on the planet yet that managed to do this. It may be that this problem cannot be solved at all, since everyone values his own labor with his own, unique measure. It may be easier to bypass the problem completely. For example, a society with infinite energy supplies and with replicators does not need to bicker about how many man-hours John Doe put in this week. It would be irrelevant, just as it is irrelevant for a common man to claim a certain number of books that he read during last year. Nobody cares.
As technology develops, more and more humans will be out of work. The minimum wage law cannot help if there are no jobs. As matter of fact, it makes the problem worse. As the lawmakers make human labor more and more expensive, even fewer humans will be employed. It is happening not just now - it has happened decades ago; that was one of driving forces behind outsourcing and offshoring. (Among others are red tape, ecology, taxes...) The US society has approached a point where no new jobs can be created by any rational person because that would not be profitable. As long as the society remains capitalist, this is the most important problem. But it is not easy to solve, as value of human labor decreases with every year. There are already sandwich making machines - goodbye, fastfood restaurants. Computers, robots, and Chinese - they all do more work for less money than Americans. It appears that Americans are no longer needed in the USA, aside from farm work and a few high tech industries. But most people cannot become programmers, engineers, or musicians. They are simply not capable of that. They need simpler jobs - and outside of trades (plumbing, car repair, etc.) there are too few such jobs.
(Score: 4, Insightful) by GreatAuntAnesthesia on Thursday July 03 2014, @11:30AM
Did you? It seems to me he directly addressed some of things you accuse him of not seeing.
[citation needed] TFA cites two cities where raising the minimum wage has increased prosperity for everyone - the rich and poor alike. Please give us your couterexamples.
I'm not really sure I understand your argument here. Yes, money could be viewed as an abstraction for trading labour for labour. But it sets the exchange rate for that exchange, and that exchange rate is currently badly out of balance. Is one hour of Mr Website-Startup-CEO's labour really intrinsically worth 1000 or a hundred thousand times more than one hour of Mr Would-you-like-fries-with-that's labour? 50 years ago it wasn't. Nowadays, the rich would have you believe that it is. That's the question being asked by the article.
You also fail to address TFA's counter argument, that if nobody can afford to pay high wages, how is the economy able to support more millionaire CEOs than ever before?
Nobody is saying that it is. In fact, TFA explicitly says that campaigning for the minimum wage on the basis of fairness is pointless. You can view a more fair, more just society as a side effect of stimulating the economy. Whether you think that's a welcome or unwelcome side effect depends entirely on whether or not you're a sociopathic turdgobbler.
He says in TFA that he has started dabbling in politics.
Again, nobody is arguing for a completely fair distribution of benefits.
This is a possibility in the future, yes. Not the only possibility, but definitely one we need to look at. It's a different issue though.
Plenty of new jobs are being created. Look at SpaceX, there are creating a whole new industry out of thin air. They are employing people, and paying them too. The "race to the bottom" of outsourcing makes it hard to sustain decent wages in an economy where every is blind to everything but price, but you have to convince your customers to value things other than price. Of course, that's a lot easier if your customers aren't struggling to survive on a less-than-living wage...
Then create new jobs. New classes of simple jobs that a plumber or a car repairer or a streetsweeper could retrain to do. Use your imagination. If people had spare money to spend on luxuries instead of putting everything they earn into rent and dried noodles, then the economy would be able to support all sorts of delightfully frivolous services that just aren't economically viable today.
Thing about economics is, it's not about where the money is, it's about how money flows. Money is a strange thing, when it flows, it grows. As long as it's moving about, new businesses and industries and jobs are emerging and the economy grows to encompass things that didn't even exist before. Look at the internet. If you could go back 50 years and tell people that their grandkids would one day be taking out contracts and paying dollars per month for a bunch of imaginary 1s and 0s they'd lock you up.
Conversely, when money stops moving, it shrinks. What we are seeing now, and what the author talks about, is more and more money being diverted in to great big stationary pools, where it stagnates. The uber-rich are hoovering up an ever-increasing slice of it but they simply can't spend it all. A rich man has one mouth, one stomach, one dick, one body. So the rich guy buys a fleet of supercars and a hundred overpriced suits and a yacht and a jet and 5 houses and the remaining 99% of his 6 billion dollars go into his giant swimming pool full of gold coins ^H^H^H savings and investments. There, the money does nothing useful except gravitationally attract more money to itself. As the moneypile gains mass it influences more power, which means that the labour exchange rate I mentioned above becomes more and more disproportionate. The poor people have to work harder and harder for less and less, just so some guy can add an extra zero to his bank balance that he will never spend. As the author says in his article, one guy with ten million dollars will spend less than ten guys with a million each, who spend less than a thousand guys with 10K each. Yes, you need some disparity in wealth to motivate people to work, but would you really work any harder for 10 billion than you would for 1 billion? Or for 10 million? If you answered yes, are you sure that's sane?
But more importantly (because this isn't about fairness, remember) all that money sitting in his savings account can't be used by his customers to buy his products. What's he going to do, buy more of his own stuff? Pretty sure he's already got plenty of whatever it is he makes. Meanwhile, the world is going to shit outside his gated community, and he's wondering why nobody's queueing up to buy his $1600 chocolate-powered bluetooth-enabled rocket ipoodles any more. He can't understand why it's harder and harder to employ well-educated people (poor people have less time and resources for education) and why crime is going up (more poverty==more crime) and why his workers are always taking time off sick (can't afford decent healthcare) and the roads and infrastructure are going to shit... It's a cycle, a feedback loop, an ecosystem. It's all connected. You screw with the balance and it will come back to bite you. If I were a hippy I'd call it Karmic or holistic or something and not be far wrong.
(Score: 2) by Grishnakh on Thursday July 03 2014, @02:34PM
Then create new jobs. New classes of simple jobs that a plumber or a car repairer or a streetsweeper could retrain to do.
So your solution is make-work jobs? How about we set up a factory with two sides: on one side, people busy assembly wooden shipping crates. Then these crates are moved to the other side, where a different team of workers disassembles these crates for recycling. The wooden pieces are then moved back to the first side, where they're used to assemble wooden shipping crates. Repeat ad infinitum.
You think people should spend all their time and effort doing this?
This is why we need to just enact the Basic Income scheme.
(Score: 2) by meisterister on Thursday July 03 2014, @04:16PM
I have a better idea. Convince customers that paying a bit more for goods and services that were made by people just like them is better than paying less for machine-made goods. It would be awesome for PR if a corporation publicly advertised that they were employing more people at better wages.
(May or may not have been) Posted from my K6-2, Athlon XP, or Pentium I/II/III.
(Score: 3, Insightful) by Grishnakh on Thursday July 03 2014, @04:30PM
Convince customers that paying a bit more for goods and services that were made by people just like them is better than paying less for machine-made goods.
Ok, how do you propose that humans build microprocessors which have features only tens of nanometers large? No one has that level of fine motor skill.
Lots of things are made by automation these days because the quality is far superior to human-made stuff. You want to go back to hand-knitted fabrics, so we can all look like serfs from the Medieval days?
When has charging more for something of lower quality ever worked as a general rule? It might work for a few markets when you're catering to rich people who like to show off, but in general places like Walmart thrive because they have the lowest prices.
And finally, why should people spend their lives doing boring, monotonous work that a simple robot could do much better? How is that improving human dignity? It's not. We should all be benefiting from the labor of robots and automation (as long as we keep them dumb so we don't have a Butlerian Jihad). We should be spending time enjoying our lives and doing creative things, not toiling away at mind-numbing jobs just so we can survive. We have the technology to do this now; we should be enjoying the fruits of this technology we've built.
(Score: 0) by Anonymous Coward on Thursday July 03 2014, @04:36PM
You need not be so pessimistic. There's plenty of areas we could put more people into if society deemed it worthwhile. Care of the elderly and children for example. More people to keep our cities/town clean, more frequent garbage pickup, more people to fix the various decaying infrastructures we have etc. Hell, even relatively trivial things like home cleaning would be doable if we all had more cash.
(Score: 0) by Anonymous Coward on Friday July 04 2014, @08:18AM
He wasn't suggesting that jobs should be created purely for the sake of creating job, but to do things others would find beneficial. Take a look around, around where you live and where you work. Do you really not see things people could be employed to do, or is the environment you live and work in perfect already?
Although that said, it may be beneficial to impose a maximum work week along with a minimum wage, this would help distribute the available work more evenly and give people more free time which they could use to take care of their health (e.g. exercise and get a bit more sleep) or learn something, this would lead to healthier, happier workers who are less likely to need to take time off sick.
I don't think we are quite ready for a basic income scheme just yet, there is still plenty of work that needs doing, though someday, probably in the not too distant future it will be necessary. That isn't to say that people who are unemployed shouldn't get a basic income, but they should be trying to get work if they can work and can't support themselves.
(Score: 2, Insightful) by bzipitidoo on Thursday July 03 2014, @12:25PM
Having been cheated of my legitimately earned pay by members of the wealthy, and been told that I should feel sorry for them not myself because their precious ideas didn't pan out, their businesses failed, and they're hurting, I have a very low opinion of them. They kept everyone in the dark about the money having run out and not being able to make payroll. Deluded themselves into believing that the business would finally take off this month and they'd be able to make payroll, perhaps helped by the do-or-die pressure. Two had the cheek to ask me to continue working for them for free, would hate to see me go. I told them yes, but with some conditions so that it amounted to no. If they can persuade my landlord to let me live in my apartment for $0 rent, and can persuade grocery stores to give me free food and gas stations to give me free gas, and I can get whatever else I need for free, then sure, I'll work for free.
The wealthy are like those sorts of dogs who cannot stop eating as long as there is food in front of them. Put unlimited food in front of them and those dogs will eat themselves to death. The wealthy are like that with money and power. They can't help themselves, they just have to grab and hoard everything in sight, no matter how senseless, unfair, or harmful to society that may be. They go further. They concoct tons of rationalizations to justify the situation, and start believing their own bull, become very arrogant.
We as a society have really fallen down on this. We've let these dogs get away with it. Not good for us, or them.
As to technology, yes I think robots will eventually be able to do all our manual labor. A big change we may see is a scrapping of the notion that everyone should aspire to having a job. And would that be so bad? We should think more about what kind of world we will have and want. I'm not too sure that heaven is so heavenly, the good life is so good. Can we feel fulfilled spending all our time on leisure while robots do the labor? Maybe we can.
(Score: 1) by tftp on Thursday July 03 2014, @08:20PM
A big change we may see is a scrapping of the notion that everyone should aspire to having a job. And would that be so bad?
It is very bad, but not because of some law of nature. It's simply because idle hands are the devil's workshop. You already have ghettos that are full of people who are perfectly acclimated to not having a job. What do they do instead? Humans cannot sit idly for years; humans are not plants. So they look for an activity that fits their education and IQ. (Not that they got much of education, with everyone knowing that they have no use for spherical trigonometry.) What occupation then befits them? Among non-violent, that would be drugs and alcohol. Among violent that would be crime. This is simply because people always want something that they don't have. But that's not all. Crime will exist even in a society where anyone can have anything without paying. This is because there is one more item that you cannot get in a store: power over others.
Human societies always depended on high employment and on hard, long work hours to pacify the common man. It is just a handy workaround. Officers in the army know it well; that's why they try to keep the soldier busy with something. Remove the need to work, and you get the whole world that is full of people in search of things to do. Even if you personally have no desire to become the King, there is always someone who doesn't mind that - and he will find enough henchmen to make it so. Democracies are weak; they exist only until the new team walks into the Parliament and announces the new order. How many of those lazy, weak people will rise to defend the democracy if that democracy doesn't really give them anything? Will *you* care if instead of a collective dictator you get a singular one?
This problem is not new. It is depicted in many futuristic novels. The root of the problem is in psychology of a man. Do you have a solution? (Please skip mind control lasers from the orbit, they were proposed already, but they simply exterminate humans as we know them, replacing them with something else.)
(Score: 3, Insightful) by LaminatorX on Thursday July 03 2014, @03:21PM
Thing is, we actually have a whole-lot of trades-style work that needs doing [infrastructurereportcard.org], but no one is willing to pay for it. Most cities in the US are sitting on top of pipes that are breaking left and right(lets lay fiber all over while we replace'em). Our roads and bridges are falling apart. Communities are milling asphalt down to gravel rather than re-paving. Storms become logistical crises because so many of our power lines are strung on poles rather than buried. We have coal plants that need to be replaced with sun and wind farms (and here and there a small modern reactor where constant high-current is needed). There is a whole lot of work that we could be doing, but instead of a 21st Century New Deal, we're getting moves to privatize what's left of the old one.