There are a lot of angry people in this country, and although I generally try to avoid that emotion when making decisions, I can’t really say I blame most of them. Although I truly believe America is a great country and will continue to be so for a long time, there are, without a doubt, some things fundamentally wrong with the way things are right now.
The point of this post is not to go into the details of what those things are, but a single example will help put things in perspective. Today’s top hedge fund managers, such as John Paulson, are bringing home annual salaries in the billions of dollars. In 2010, Paulson’s $5 billion dollar salary set a new record. Now, compare this single-year salary to the single-year salary of the typical, working class American family of $50,000. Given the roundness of both numbers, the math here is a simple matter of moving the decimal point over a few spaces and we can see that Paulson’s salary is 100,000 times that of the typical working class family.
But money is an abstract concept, really, and a difficult thing for people to value accurately. $2 to a child, or a Ugandan, has different value than it does to a middle-class American adult. And many people will say, when presented with this discrepancy, “Well, he earned it. It’s his money, he didn’t do anything illegal to get it, so what’s the problem?” Point conceded (although some arguments could be made on the last point, but that is outside the scope here.)
But money really isn’t the best way to measure value; time is. Whereas a given amount of money can have significantly different valuation for different people, at different times, in different places, it is not hard to see that an hour’s worth of one person’s time is, in the abstract, equal in value to an hour of anyone else’s time. So looking at our example above we can see that for a typical American family, let’s say of a self-employed carpenter and a school teacher, they would have had to begin working 100,000 years ago, in the Middle Paleolithic, right around when modern humans began migrating out of Africa and displacing earlier homo species, if they wanted to accumulate the wealth that Paulson acquired between the time the Yankees won the world series in 2009 and when the Giants won it in 2010. (Of course, if you are a Bible-literalist, this wouldn’t even be possible, since God wouldn’t get around to creating the universe until about 10,000 years ago, or a few millennia after the Sumerians started brewing beer.)
How is it possible that the work-hour-value of someone who builds residences to keep people sheltered from the elements plus the work-hour-value of someone who teachers other people’s children how to read and write is worth so much less, 100,000 times less, than the work-hour-value of someone who moves electrons around in a computer? When you additionally consider that Paulson’s wealth comes from short-selling subprime mortgages- i.e. he profits when the house that our middle-class family lives in goes into foreclosure because our teacher has been laid off due to drastic state-spending cuts, and our carpenter can’t find work because the housing market is bunk- then the picture is even bleaker.
It is easy, and tempting, for some, to look at this scenario, well, reality, really, and fall into the warm, comfortable trap of thinking that we should just have someone assign value to different tasks in our society. Sounds great, except time and time again it has proven to be an absolute, unmitigated disaster. Communism is the ultimate fail. The only way value can possibly be assigned is by the market itself, because it is simply the height of human arrogance to assume that any one person, or any group of people, could possibly have the wit and wisdom to perceive and predict the complex interactions of 7 billion individuals. Only the market can do this.
But, as we saw above, the market can clearly become distorted. There are several reasons for this. But the major one is that people don’t understand that there is a fundamental difference between markets in goods and services and markets in assets and capital. Ideologues on the right look at how brainless bureaucratic interference in goods and services markets stifle innovation and wealth creation and wrongly assume that this analogy holds true in all markets and so they push for deregulation in all markets. Ideologues on the left see how deregulation in assets and capital markets leads to endless cycles of boom (for some) and busts (for the rest) and want to throw the baby out with the bath water and do away with capitalism altogether. Both of these positions are moronic.
And right now the extreme voices of both the Occupy Wall Street and Tea Party movements are presenting this as an either/ or choice. Now, before we go any further, I should make it clear that I have deep sympathies with some aspects of both of these movements. Every time I see an “End the Fed” T-shirt at a Tea Party rally, or a “Bring back Glass-Steagal” placard at OWS, I feel optimistic about the future of our country. But what truly dismays me, what makes me slightly less than optimistic, is that these two movements seem utterly incapable of recognizing that they are two sides of the same coin.
I think an analogy would be helpful here. Imagine you live in a city with a fair amount of mafia or gang influence and an equal amount of corruption in law-enforcement, the legal system and politics. Now let’s say it comes out that the mob has been getting away with all sorts of shady semi-legal dealings for the past few decades, racketeering, election-rigging, monopolizing local markets in goods and services… the usual. Now, both parties, the mob-bosses and their bought and sold political lackeys, are profiting handsomely at the expense of the hard-working citizens of this once great city. Who’s to blame?
If we were to apply the arguments of Tea Party and OWS to this scenario, each would yield a different answer. According to the Tea Party, the political establishment, and only the political establishment, would be at fault. After all, if the mob can buy politicians, and get them to bend the rules in their favor, why shouldn’t they? This is America, baby! This is capitalism! On the other hand, if we listen to OWS, we should blame this primarily on the greedy mob for not having the self-restraint to stop themselves from getting away with something that was all-too-easy to pull off. Our spineless, gutless politicians had little to do with it.
Now, I recognize that this is an over-simplification. There are many Tea Party supporters who recognize the role of corporations and finance in producing our current economic situation. And there are, I think, an even larger number of Occupiers who recognize the extent to which they were sold out by the people they put in office, including, perhaps especially, our current president. But what I am saying is that I think, on a fundamental level, Tea Partiers tend to think that corporations and banks, left entirely to their own devices, will do little but good, while Occupiers think that if it weren’t for those same corporations, our politicians could get back to the business of governing justly and fairly.
It just ain’t so, folks. Money and politics go together like ham and cheese. They always have and they always will. The market for political influence is as old and pervasive as the market for sex, and it is unlikely either will disappear anytime soon. History is the story of the struggle of the few to dominate the many. And if we were to tally up a score at the end of each year, since the beginning of recorded history in about 3,000 BCE, it would be roughly 5,000-to-zip. Of course, there have been times where things were better than others. At the founding of this Republic people were hopeful, having shaken off the tyranny of the Church and the inherited aristocracy, that a new day of justice and equality was dawning- while meanwhile hundreds of thousands of Africans were held in slavery. The middle decades of this century saw a historically unprecedented distribution of wealth, the greatest realization of power the middle class has ever seen- and meanwhile the ancestors of those slaves couldn’t be served at a lunch counter in much of the country.
There will always be battles to fight, injustices to correct. And the energy of both these movements is a potent and necessary thing. But we can’t lose sight of reality. There are some fundamental truths we must maintain a hold of.
One, we must recognize that just because something has been made “legal” that doesn’t make it right, or the way things should be, or, to put that on more concrete footing, the way we, in a democratic society, want things to be. If a group of pedophiles raised a billion dollars and lobbied Congress to make kiddie-porn legal, they would almost surely succeed. (Do you really doubt that a billion dollars couldn’t buy you anything in Washington?) But would that make kiddie-porn right? Of course not. So just because banks can use predatory lending practices, mislead their investors, and bet against their own customers, it doesn’t mean they should, or that we, as citizens of the Republic, should accept that as the way things are, simply because they are still following the letter of the law (the letter of the law that they essentially wrote.)
Two, we must recognize our own role in this. It is facile to say that “our society has become” lazy, indolent and complacent. No. People are lazy, indolent and complacent, when they lack the motivation to be otherwise. Let’s face it, folks, while it is pathetic to see a politician sell a multi-million dollar tax break for a kickback of a few tens of thousands of dollars, we citizens have let it all happen for a ticket to a 3D movie, the power to text-vote on American Karaoke, and a new Mrs. Fields at the mall (cause actually chewing a chocolate-chip cookie is now too much work.) Just as most of us find it shocking that on our grandparent’s watch people of color still had to fight to be served a grilled cheese at a white diner, our grandchildren will be shocked when they learn of the injustices that we tolerated on ours.
Third, and finally, we must recognize that no single “fix” is going to make things right, forever and all time, or even a short while. Not neutering the federal government or reigning in greedy corporations. Getting some 300,000,000 mammals to share a finite number of resources without killing each other is a messy business. There probably isn’t a single other one (species of mammal, I mean) that could even hope to pull it off. There will always be cheats trying to game the system, and they will often end up with the reins of power. Those of us who want to live a simple, quiet, peaceful life, who have no interest in benefiting from the pain and misery of others, must be constantly vigilant, always ready to knock them off the cart.
As Occupy Wall Street and the Tea Party seem ready to do.
Now, if they just recognized their enemy, our enemy, was one and the same, that would be a force to be reckoned with.
And then those in power might realize that we're on to them this time around, and that we're not likely to keep playing a rigged game.