Bonfire of the plutocrats
by Tom Sullivan
Bonfire Night in the United Kingdom celebrates the Gunpowder Plot every 5th of November.
Fiscal conservatives have sold the notion that taxes are theft and government is “inefficient” since the Reagan era. Yet, the no-free-lunch bunch has been selling Americans free lunches ever since. In the form of “win-win” solutions to social problems. In the form of “public-private partnerships” (P3s). Get a new highway, new bridges, without new taxes, and maybe while cutting them. (You’ll pay daily user fees instead.*) Foreign conglomerates will privatize the profits (and offshore them) if they succeed and socialize the costs (to you) if they don’t. Frequently, they don’t.
But “no pain, no gain” applies as much to country-building as it does to muscle-building. At least for countries fit to live in. The win-win ideology promoted by financial elites over the last several decades promised we plebes could have their scraps by letting them grab the rest, writes Anand Giridharadas (“Winners Take All: The Elite Charade of Changing the World“) in a Time magazine cover story:
If a single cultural idea has upheld the disproportionate power of this class, it has been the idea of the “win-win.” They could get rich and then “give back” to you: win-win. They could run a fund that made them sizable returns and offered you social returns too: win-win. They could sell sugary drinks to children in schools and work on public-private partnerships to improve children’s health: win-win. They could build cutthroat technology monopolies and get credit for serving to connect humanity and foster community: win-win.
As this seductive idea fizzles out, it raises the possibility that this age of capital, in which money was the ultimate organizing principle of American life, could actually end. Something could actually replace it. After all, a century ago, America was firmly planted in the first Gilded Age—and then it found its way into the Progressive Era and the New Deal, an era of great public ambition. Business didn’t go away; it wasn’t abolished; capitalists didn’t go into gulags. It was just that the emphasis of the society shifted. Money was no longer the lodestar of all pursuits.
It was a time when America’s dreams were boundless, as I’ve written before.
A series of jarring incidents once again has again challenged metastatic capitalism, Giridharadas explains. Amazon canceled its New York satellite office after citizens objected to granting Jeff Bezos “billions in tax breaks that wouldn’t be available to a regular Joe starting a business.” The college bribery scandal exposed how elites exploit the college admissions system to advantage their kids over the less-heeled. Facebook drew a $5 billion slap on the wrist in July for privacy violations that helped its platform polarize the world and channel Russian propaganda. Finally, the Jeffrey Epstein scandal exposed “systemic rot in our culture,” demonstrating in grotesque terms how with enough money a sexual predator might walk among the rich and powerful untouched by the law, burnishing his public image (as the elite will) by investing in reputation-cleansing philanthropic works.
Giridharadas believes an new Progressive Age may be struggling to be born amidst the decay of democracy and the avarice of “manic hyper-capitalism.” He is not the first to warn the plutocrats (“plutes,” he calls them) a hard rain’s a-gonna fall.
Dutch historian Rutger Bregman told an elite audience at the World Economic Forum this year that their philanthropy would not solve the world’s problems, reduced rampant inequality, or excuse their excesses. It was time they again pay their taxes:
He told his audience that people in Davos talked about participation, justice, equality and transparency, but “nobody raises the issue of tax avoidance and the rich not paying their share. It is like going to a firefighters’ conference and not talking about water.”
“This is not rocket science,” Bregman told the stunned audience that arrived on a fleet of private jets.
They prefer to paint themselves as the world’s benefactors — “job creators,” as venture capitalist Nick Hanauer pointedly explained to a TED conference in 2012:
Significant privileges have come to people like me, capitalists, for being perceived as “job creators” at the center of the economic universe; and the language and metaphors we use to defend the current economic and social arrangements is telling. It’s a small jump from “job creator” to “The Creator”. This language obviously wasn’t chosen by accident. And it’s only honest to admit that when somebody like me calls themselves a “job creator”, we’re not just describing how the economy works, but more particularly, we’re making a claim on status and privileges that we deserve.
TED initially deemed Hanauer’s speech “too politically controversial to post on their web site” before relenting under pressure. In 2014, Hanauer warned fellow plutocrats “The Pitchforks Are Coming… For Us Plutocrats.” Rising inequality will cause a revolution (of some kind). To think otherwise is to inhabit a dream world that ignores history:
The most ironic thing about rising inequality is how completely unnecessary and self-defeating it is. If we do something about it, if we adjust our policies in the way that, say, Franklin D. Roosevelt did during the Great Depression—so that we help the 99 percent and preempt the revolutionaries and crazies, the ones with the pitchforks—that will be the best thing possible for us rich folks, too. It’s not just that we’ll escape with our lives; it’s that we’ll most certainly get even richer.
Because consumers with disposable income actually drive the economy, not plutocrats, as Hanauer explained in his TED talk and now at his Pitchfork Economics podcast.
But more broadly than taxing the rich, reform must rework capitalism’s DNA, the corporate model for organizing business that was poorly designed … by us. Its underlying assumptions, like the myth of the “job creator,” are so ubiquitous as to render them invisible.
In a 2005 op-ed, I likened the modern corporation to Mary Shelley’s creature or Michael Crichton’s dinosaurs. Conceived in law and born on paper, corporations grow, consume resources and generate waste — even mate and spawn offspring. They need not die. Ever. They are intelligent (some more than others) and have personalities (some nicer than others). Corporate behavior is as businesslike as a great white shark’s. Charitable donations give corporations a human face but are ultimately window dressing. When their doll-like, black eyes roll back in their heads and bite through your family’s financial security by moving a factory to a lower-wage country, it’s nothing personal. Except to their victims.
I wrote in 2014:
What Milton Friedman called capitalism in 1962 looks more like an economic cult today. Question the basic assumptions behind corporate capitalism, publicly point out its shortcomings and suggest we are overdue for an upgrade, and the Chamber of Commerce practically bursts through the door like the Spanish Inquisition to accuse you of communism and heresy. Why you … you want to punish success! It’s weirdly reflexive and a mite hysterical. What their blind fealty and knee-jerk defense of this one particular style for organizing a capitalist enterprise says about them, I’ll leave for now. It suffices to say I find it rather peculiar.
We think we invented capitalism. Yet there have been “capitalist acts between consenting adults” [h/t Robert Nozick] since before Hammurabi. We don’t call one capitalist enterprise the world’s oldest profession for nothing. There’s a restaurant in China that has been in operation for nearly 1000 years. And pubs in England that have been in business for 900. All without being incorporated in Delaware or the Cayman Islands. (Communists?)
We upgrade our hardware and software every couple of years, yet capitalism has not seen an upgrade since the last Progressive Era. Sen. Elizabeth Warren wants to upgrade its operating system. Sen. Bernie Sanders wants a “revolution,” however that’s defined. The plutocrats fear any upgrade that challenges their privileged status. They still believe they can hold back the pitchforks and stop the hard rain building on the horizon.
* The Beltway area workweek commute that one day was free the next day cost nearly $60 when a P3 took control, an acquaintance observed last week. Same public road. New, private overseer.