It’s ecology, stupid.

Kudzu covering a house

Consider the kudzu plant. It’s a beautiful plant, really, until you realize its nature. If you drive through Eastern Tennessee, you’ll surely notice its distinct features. On any hillside where it is allowed to take root, every other form of life is covered by the kudzu, choked to death and deprived of the resources it needs to survive. The kudzu has become like an unstoppable plague in certain areas. Sunlight, water, and nutrients in the soil are used to further its own growth. The survival of anything else depends on what is left.

Now consider our economic landscape. Is it the gentle meadow of textbook examples with cooperative interactions or is it the domination by the few, like the kudzu? How are resources divided among our citizens? An analogy may help. If the total wealth of the United States was represented by a tank containing 1,000 gallons of water, how much do you think would be given to the poorest 40% or about 120 million people? They would have 3 gallons of water total to divide amongst themselves or 0.000000025 gallons per person. It is hard to imagine this is a just distribution of goods.

This level of disparity is what exists with our current level of regulation. Yet, many economic plans propose that we deregulate and let the economy fix itself. But what might this approach require? You would need balancing mechanisms. Market forces would need the ability to stabilize, to change, to retaliate, and much more. Such things happen quite nicely in the meadows of textbooks. But is the patch of grass or even the sturdy shrub able to alter the course of kudzu? The picture sold to us about a self-policing economy is built upon the idea of the meadow. And yet, we are already so much like a hill in Tennessee. Why should we think further deregulation will not take us closer and closer toward the same ultimate end? The lucky few will thrive amazingly well, while everything else may, if it’s lucky, survive on what remains.

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The Imaginary Middle Class

One of the constant refrains of politicians is that “We have to help the middle class.” They intend for this to refer to the average voter, but this concept is actually illusory.

The majority of people will incorrectly say they belong to the middle class.

What does ‘middle’ mean? It is generally used to describe something that is equally distant from two extremes or limits. In many cases, asking where the middle is will be roughly equivalent to asking for an average. Take height, for example. A person of average height will be roughly in the middle of the very tall and very short fully grown people in the world. But imagine if a select number of people were 25 feet tall. Would the person of average height now be correctly described as “in the middle?” No, they would clearly belong more to the group of people in a decidedly lower range of heights.

Now, what does the picture of wealth in this country look like? Is it more similar to the first or second height example? If you know anything about wealth distribution (and many Americans do not), you’ll recognize the landscape looks more like the second. This means that people who think of themselves as having an average income are actually not anywhere near the middle. There are a few people around there, sure, but this idea that most Americans are middle class simply ignores the disparity that exists. The overwhelming majority of us share more in common with the so-called lower class than with the true upper class. I would even guess that the Vice Presidents of most major companies are closer by far to people on welfare than the true upper class.

Why do people think they belong to a middle class?

Studies have shown a remarkably poor estimation of how wealth is distributed in this country, as shown in the following figure from this article:

Actual wealth distribution plotted against the estimated and ideal distributions.[i]

In short, your thoughts about where you actually stand in the world are probably wrong. And the more discrete your measurements, the more stark this picture becomes. The grey bar represents the wealth controlled by the top 20% of the country. But even if we took the top 1%, that bar would be around 40%. I’m not sure if people realize just how astounding that is, so I’ll repeat it. Nearly half of the total wealth in this country belongs to 1% of its citizens.

So, let me ask you. Are you in the middle? No, you’re probably over there on the far left. Hell, your bar might be so small that it doesn’t even show. You are not in the middle of anything where wealth is concerned, and conservative plans that claim to help the middle class ironically do just the opposite—they ensure almost no one appropriately meets that description.

Maybe you don’t believe me and you think that your measly bar on the left will grow to control more wealth if the truly wealthy stimulate the economy. You might be interested to know that in the 1970s, the top 1% controlled a smaller portion of the total wealth (around 20%). So what happened? Among other things, here’s what happened after that, according to the study:

Here are some dramatic facts that sum up how the wealth distribution became even more concentrated between 1983 and 2004, in good part due to the tax cuts for the wealthy and the defeat of labor unions: Of all the new financial wealth created by the American economy in that 21-year-period, fully 42% of it went to the top 1%. A whopping 94% went to the top 20%, which of course means that the bottom 80% received only 6% of all the new financial wealth generated in the United States during the ’80s, ’90s, and early 2000s (Wolff, 2007).

Concentrating wealth into the hands of the already wealthy did nothing to “grow the middle class.” It did exactly what you would expect it to do; it made them even wealthier and all the people who thought of themselves as middle class moved further away from the true middle.

Conclusion

You are not in the middle class. Your neighbor is not in the middle class. Your teachers and friends are not in the middle class. Multi-millionaires are middle class. You are an insignificant blip on the radar of the wealthy, and proposals to concentrate wealth even further will only ensure you stay that way.


[i] Note: In the “Actual” line, the bottom two quintiles are not visible because the lowest quintile owns just 0.1% of all wealth, and the second-lowest quintile owns 0.2%. Source: Norton & Ariely, 2010.

Aristotle, Justice, and Flutes

How do we decide on a just distribution of goods? Following Michael Sandel, I find Aristotle’s conception of justice to be helpful in modern debates. Aristotle, in Politics, said that we cannot dissociate justice from other considerations, like function or purpose, when it comes to distributive rights. Consider what he says about a just distribution of flutes:

When a number of flute players are equal in their art, there is no reason why those of them who are better born should have better flutes given to them; for they will not play any better on the flute, and the superior instrument should be reserved for him who is the superior artist.

The distribution of the superior flutes should not, according to Aristotle, be done according to nobility of birth, wealth, or any such consideration. Rather, it should be done according to skill. The person who will make the best flute music should have the best flute. Why is this? It is because that is the purpose of flutes. They are meant to be played well to make beautiful music.

If that is not clear, consider another example. Let’s say we have a number of goods to distribute, one of which is a hard hat. Among the people to whom the goods are being distributed, there is one man who works in a construction site. The others all work in an office. Isn’t it clear that the man who works at a construction site should receive the hard hat? He is the only one who will put it to its intended use and allow it to serve its proper function.

This will be a helpful framework to answer many pressing questions. For example, how should a society distribute marriages? Well, we can better understand that question by determining the purpose of marriage in society. If the purpose of marriage is simply to have children, then it’s not clear why there should be homosexual marriage. If, however, the purpose of marriage is much broader, then we should say the just distribution of marriages will include homosexual couples.

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