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(The following is a slightly extended version of my response to an op-ed by Vince Carroll, Putting Fat Cats In Their Place, in today’s (10/30/11) Denver Post: http://www.denverpost.com/opinion/ci_19211159?source=bb.)
Vince Carroll is absolutely correct that we must consider not only the distribution of wealth, but also the absolute growth of wealth, when discussing issues of our economic well-being as a nation and a people. Certainly, if everyone is getting wealthier, then why should we worry if that is accomplished by means of a system in which the wealthiest get astronomically wealthier while the further down you go along the spectrum of income and wealth, the less robust the growth of wealth becomes (less robust even as a proportion of existing income and wealth, meaning a lower percentage of a lower base number)?
There are several reasons why:
1) The growth in household incomes that Carroll cites is due to an increase in two-worker families, and a decrease in stay-at-home moms. In reality, there has been a decrease in real individual average income in that same time period, an anomaly in the modern era of ever-expanding wealth which corresponds precisely with the rise of income-concentrating deregulation.
2) We have an economic system demonstrably less efficient than some others in existence (e.g., Germany, the Netherlands, etc.) at striking an optimal balance between absolute growth and distribution of the fruits of that growth, resulting in far greater levels of impoverishment, infant mortality, homelessness, violent crime, incarceration, mental health problems, and numerous related problems, than have been achieved by other nations that have struck a more sensible balance.
3) Extreme income inequality reduces economic vitality by constricting the breadth and depth of economic activity. The more concentrated wealth is, the less disposable income, in the hands of fewer people, is available to contribute to the consumer engine of our economic vitality.
4) Carroll disregards the role of deregulation (from the 1980s onward) in generating this economically debilitating concentration of wealth, how that deregulation has been implicated in every major economic crisis since its inception, how it has now undermined the consumer engine of our economy in dramatic and enduring ways, and how, as a result, our economy is in a period of stagnation following contraction, with a no-longer-growing pie still obscenely concentrated in far too few hands.
5) Carroll disregards the various costs not measured by traditional economic indicators, referred to in the economic literature as “externalities” (those costs and benefits of economic transactions that affect those who were not parties to the transaction, in either positive or negative ways), which, while helping to author the huge concentration of wealth in America over the past 30 years, also have helped to do so on the back of the population at large by reducing public health, safety, and welfare, and placing increasing burdens of accumulating and devastating negative externalities on future generations across the globe.
6) Extreme income inequality has many other socially destructive consequences, even aside from the ones listed above. It undermines national solidarity and cultivates inter-class resentments, creates subjective feelings of relative poverty, and undermines democracy by concentrating both the means of affecting public opinion (and thus determining the outcomes of elections) and the power to determine the economic well-being of the vast majority of the people of the nation into the hands of a small, corporation-beholden-and-embedded economic elite.
One must look not only at this “snapshot of reality,” but also at the trends revealed over time, and the consequences of such trends. Even if all of the present reasons for considering how equitably distributed wealth is did not exist, a trajectory of accelerating concentration of wealth is clearly untenable in the long run.
Today, 1% of the nation’s wealthiest command 40% of the nation’s wealth, while the bottom 80% command less than 15% of the nation’s wealth. In 2007 (see http://sociology.ucsc.edu/whorulesamerica/power/wealth.html for an overview of 2007 income distribution figures), the top 1% commanded slightly less than 35% of the nation’s wealth (already considered an indicator of astronomical inequity). The current growth trend in capital concentration has been underway since 1980, coinciding precisely with the Reagan-coined “government is the enemy” paradigm of the right; in 1979, the top 1% commanded just over 20% of the nation’s wealth, having fluctuated since WWII between 20% and, in a rare outlier in 1965, 34%.
The last time the concentration in wealth in the hands of the wealthiest 1% of the population exceeded 40% was in 1929, on the eve of The Great Depression, when policies similar to those advocated by the Libertarian Right today had been successfully championed under the Hoover Administration.
If the challenge is to “get it right,” all things considered, then our grotesque and accelerating concentration of wealth in America, accompanied by the highest-among-developed-nations rates of poverty, hunger, homelessness, violence, incarceration, and other social ills, is indeed an indicator of having failed to do so.
Yes, we do not want to seek “equality” in a vacuum, engaging in the folly of imposing an equality of impoverishment. But we as a nation are not teetering on the edge of that particular folly; rather, we are over the edge of the opposite folly, which we insanely avoid addressing by pretending that it doesn’t exist.
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Vincent Carroll, one of several conservative Denver Post columnists that get paid not only to be profoundly clueless, but to help others to be so as well. In his latest display of having missed the boat to the 20th century (never mind the 21st), Carroll waxes indignant that members of the audience in a Bennet-Buck debate hissed when Buck referred to Afghans as “backward” (http://www.denverpost.com/carroll/ci_16350199). Yes, the hissing leaves something to be desired, but not only was Carroll’s civilized sensitivity offended by the hissing, but also by the notion that there is anything wrong with an American senatorial candidate referring to the citizens of a sovereign nation in an unstable and volatile region as “backward.” The irony, of course, is that Carroll is defending a far more expansive and dangerous form of “hissing” himself, a far more offensive and dangerous kind of elitism than that of the intelligentsia daring to recognize that the ethnocentric arrogance of the United States is neither helpful nor accurate.
It seems like just yesterday when we had finally, as a nation and a civilization, come to the realization that our dismissive disdain for cultures different, and, yes, less politically, economically, and technologically developed than our own was a shameful chapter of the past, one whose disdain had conveniently justified enslavement, slaughter, displacement, and, generally, an attitude of moral superiority while acting with distinct moral inferiority. But the Regressives have made headway in turning back the clock, making it okay again to speak with dismissive self-satisfaction that we, who recently condoned and used torture techniques on people kidnapped off foreign streets on mere wisps of evidence of association to terrorism, are superior to those violent heathens, some of whom commit pretty much the same crimes against humanity that we do, only less efficiently. (And let’s never forget the model of nationalistic chauvinism, fueled by a sense of racial superiority, achieving “laudable” heights of efficiency in the commission of their own crimes against humanity, and remember that it’s nothing to aspire toward).
It is precisely those like Carroll, beating their chests while claiming that others who dress differently while beating their own are inferior for doing so, who are proof of just how dramatically wrong they are. But they are not the only proof. History offers plenty of its own.
Trace backward from the present, and find an endless succession of conflicts that “couldn’t be resolved” because the factions involved had been “killing each other for centuries,” that were, alas, resolved after all. Note all of the cultures that were too backward to ever join the modern world, many of which have since joined the modern world. Carroll’s archaic belief in our own cultural superiority is not only the nearly universal folly of the past that is the true measure of “backwardness,” but is is also completely ahistorical.
Of course Afghanistan is a mess; no one’s denying that. Of course their political, economic, and technological level of development is not currently conducive to a sudden leap into a western-style political economy. No one’s debating that. But people less backward than Carroll understant that depicting the variable conditions under which people live, for complex world historical reasons, as proof of inferiority and superiority, is mere cultural narcicism, egomania on a societal scale, and one of the major causes of the wars that humanity continues to propagate on scales large and small.
Vince, go to the bank, withdraw all of your money, and go buy yourself a clue.
Vince Carroll assures us in today’s Denver Post that the federal law prohibiting lying about having received military honors never received is a violation of the First Amendment, and for good reason (http://www.denverpost.com/carroll/ci_16096264). He admits that certain kinds of predatory or destructive forms of speech are not protected by the First Amendment, and that the purpose of First Amendment protections broadly applied, to avoid the chilling of legitimate free speech and preserve the legitimacy of that which is said, is not implicated by this law. But he is concerned about the slippery slope, that ever-ready rationalization for irrationality that insists we draw lines in admittedly sub-optimal places in order to avoid drawing them in opposite sub-optimal places. Carroll is concerned that if we criminalize lying about receiving military honors, then we may end up criminalizing lying about one’s height or weight. And Carroll insists that the concern that permitting such lying devalues the authentic military honors of ours is not supported by any evidence.
To take Carroll’s last point first, the evidence is indirect but overwhelming, embedded in one of the cornerstones of economic thought, the law of supply and demand itself. If the monetary supply, for instance, is artificially increased without any corresponding increase in actual wealth, it creates an inflationary pressure, a devaluation of money. Worse, if some of that money is known to be counterfeit, it not only devalues money, but undermines confidence in it, leading to greater skepticism regarding the authenticity of any particular monetary note. We’ve seen both of these phenomena well-documented with considerable frequency throughout the course of human history. To apply that knowledge to a new variant isn’t to make an assumption in the absence of evidence, but rather to apply evidence to situations other than those from which the evidence was derived, which is precisely the purpose and function of evidence.
Carroll justifies his assumption that reputational capital defies the laws of supply and demand with the assumption that the stock of admiration is infinite. First, I doubt that it is infinite; it is far more probably that people, psychologically, have limited capacities to bestow admiration on others. (Imagine a person who finds everyone around them presenting legitimate claims to be worth of extraordinary admiration. It is hard not to imagine that they would quickly suffer from “admiration fatigue”). Second, even if the stock of admiration were infinite, the devaluation resulting from reduced confidence in its authenticity in any given instance is not depended on its stock being limited.
Perhaps more importantly, Carroll doesn’t understand how and why the line is drawn between protected and unprotected speech. Any speech that can be proven to be intentionally deceptive either for self-enrichment at others’ expense, or for predatory or malicious purposes, and that does not fall within a range of speech that, despite these characteristics, must be protected anyway to avoid chilling or discrediting legitimate free speech, falls within the range of speech that can be prohibited, if we the sovereign, through the agency of our representatives, determine that we consider the harm done significant enough to warrant such a prohibition. Some may consider claiming to have received military honors never received is not significant enough to warrant such a prohibition, but that is not the issue here; if it were, it would be an issue to be debated and resolved in our nation’s legislature, as it was. The issue is whether it is so qualitatively different from other prohibited forms of speech, such as fraud, that we cannot even arrive at the discussion of whether it is significant enough to prohibit.
But it clearly is not qualitatively different from fraud. Claiming military honors never received, in order to derive some benefit from the false belief that they were received, at the expense of both those who believe the lie and those who have actually received military honors whose honors are devalued and placed in doubt as a result of the lie, is qualitatively indistinguishable from fraud. The only thing that distinguishes it is that the capital fraudulently acquired is reputational rather than monetary. But, in the real world, reputational capital can be just as valuable as money. It is just as valuable to those who acquire it, and just as valuable to those who deserve it but receive less of it, with less confidence, as a result of the intentional deceptions of some. The cost of being deceived into wrongly bestowing such reputational benefit, to the person bestowing it, may even be comparable, in some ways, to the cost of being defrauded out of something of material value. Therefore, it is fair game for a legislature to debate whether the harm is significant enough to warrant legal attention.
Carroll is concerned that making such determinations risks the slippery slope of eventually determining that more trivial forms of fraud are significant enough to prohibit. According to Carroll’s “logic”, we can’t be allowed to draw the line, lest we draw it in the wrong place. But clearly, as is so often the case, this is just a veiled argument for drawing the line in one place rather than another. In this case, Carroll accepts current anti-fraud laws which draw the line at things of monetary value. But his distinction is irrelevant; in fact, his preferred limitation suffers from exactly the same defect as his rejected extension of the concept. For, if fraud only applies to deceptively acquiring things of monetary value, then what is to stop us from criminalizing the deceptive acquisition of something worth only a few pennies? What stops us is that we consider it too trivial, just as what stops us from outlawing lying about one’s age is that we consider that too trivial as well.
We have less to fear from the slippery slope we already adequately negotiate than from the arbitrary distinctions that Carroll insists we should never transcend.
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