Eat the Rich
Reader Comments (9)


Joeboy (via Michael)

Joe Laltrello sent me the following devastating - and, I think, extremely helpful - counterpoints. He's given me permission to post them here.

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A few quick points you are missing (typed quickly, so bear with me):

-Starting point is key. If the dispersion of people across the globe has created an initial resource disparity among groups of people, it is clear that this will have profound effects (think Guns, Germs, and Steel). People who happened upon resources that have set our evolution as a species and civilization forward (steel, farming, etc.) began to amass resources, and reap the benefits for themselves and successive generations. Those "left behind" were not unlike those individuals that went to college but failed to major in a subject for landing a plum job. However it happened, be it luck, or a sense of adventure, or being chased away from the tribe for being a cheat -- it happened. Now the game is different. Everyone has a different starting point on Maslow's hierarchy of needs. Some kids in Sierra Leone are wondering where their next meal is coming from, or if they will survive disease, or get conscripted into the war machine du jour. Some kids in California are wondering if the new Mercedes Maybach comes in Corvette Red.

-Fairness matters, and the lack of fairness creates unrest, wars, and general instability among the world's peoples. The world is inherently unfair. We are hard-wired to sense fairness. (See this article in National Geographic.)

When things aren't fair, we pick up our available tools and set about correcting them. Maybe we scream, maybe we write letters to the UN. Maybe we try to "take what is ours." The end result of a lack of non-zero is changing the game to zero-sum.

-The invisible hand is now attached to corporations (no pun intended) that are not beholden to the needs of people or society. Corporations are like governments, but with one simple goal: make money. At least governments are supposed to provide for the welfare of their people. Corporations have no such aspiration. Without controls, this can actually stifle or destroy wealth creation and innovation (like GE buying the trains, or Standard Oil buying every competitor). But governments can control corporations, you say? Don't get me started. Even P.J O'Rourke will admit that Adam Smith would not have foreseen the power of corporations. (He even mentioned in one interview how Adam Smith detested them during his day.)

Just "create wealth" is far too simplistic a solution to the world's economic problem. It is like telling a depressed person to try smiling more.




deb


while I doubt I can match Joe's eloquence, I can side with him based on experience. If soceity (ie governemnt) does not provide the "have-nots" with some ability to achieve a personal level of comfort - there will be violent reaction. It's a historical fact.

I lived in the Bahamas for a year - a tax-haven- "create wealth" economy) which you espouse, Mike. And they were having violent riots among the Haitian (and other) immigrants who were being kept out of the circle of opportunity. (in other words guns were used - even though there are no legal guns on the island). The bible says "don't covet", but people always will and some will turn to quick and/or violent measures to achieve it - if they think no other way exists.

Tsarist Russia is your ultimate example. The rich didn't come off too well at the end of that little adventure. Give enough angry poor people guns and they will by sheer numbers probably win.

I'm not saying socialism is better, but unless the rich show some sign of enlightened self-interest, noblesse oblige or whatever, there will be a violent reaction from the have-nots. What have they got to lose?




Michael

I certainly agree that with sufficient economic inequality, instability will result, and the destitute will revolt and take things by force. I agree a concomitant of that is that it's in the interest of the rich to head it off - and that, moreover, they can be expected (and obligated) to pay a premium for 'social stability', since they benefit the most from it.

But you're not quite giving me enough credit on that line: I don't WANT the poor to stay poor. I want the poor to get rich (or at the very least middle class). And I'm pointing out that the most effective way to do that is not to transfer money from the rich. The obvious example is Africa - into which we've poured $465 billion since 1960 (including $49B from the US). The result is basically: nothing. GDP per capita there has treaded water, with 3 countries actually declining, and only 3 showing growth that might close the gap with the developed world.

Point being: poverty is only beaten by economic growth - and economic aid (i.e. redistribution) doesn't create any economic growth.

But back to Joe, with whom I agree entirely. The starting points are wildly unfair - though, I'm not entirely a Jared Diamond convert. The disparities in resources and climates certainly played a role; but a strong case can be made that what accounts for the disparities are social and political systems that support - yes, you guessed it - industry, trade, and commerce; and innovation, science, and technology. So, in my view, the question is how you create those conditions in the places where they don't exist. And you don't do it by throwing aid at them - unless they aid is specifically for reform of the systems. (And you'll find that many aid organisations, and lobbyists, are specifically opposed to attaching any 'strings' to aid.)

So how DO you create these conditions? First you liberalize (and note the choice of word) trade. To very slightly paraphrase O'Rourke from a whole different book, you take the US and EU farm subsidies out back and slaughter them with an axe. They're straight-up evil. They starve African farmers, impoverish their people, and make us pay more in taxes for the subsidies and more for food at the shop. The only people who win are agri-businesses. (It does occur to me that this might be the 'economic genocide' to which Barney was referring, in which case I owe him an apology. But it's perpetrated by government.) The US has offered to drop ours if the EU drops theirs, though this was a pretty safe offer to make. Bush has had another fantastic idea, which he announced at the UN in 2006: if we're going to give food aid to Africa (and we are), let's buy it from the frigging African farmers - so they can develop their agriculture.

Re: fairness detectors. Funnily enough, I gave that lecture at my debate club last month, and some people thought it was bollocks. I told them to think of someone they have lunch with regularly, and remember who paid the last three times - they might not WANT to remember, but they DO. It's a fascinating fact - non-kin altruism is a fantastic system, as long as cheats and free-riders are kept to a minimum. Hence the fairness detectors. Situation of course exacerbated by global media - now the people digging in the dirt get to watch the guys driving around in Mercedes. But if we help give those people a rope up to that level, they'll drag themselves up there, rather than drag the rich people down. (Of course, it's really the responsibility of those people's governments to embrace the structures that make economic development possible, but I'm just having a discussion here.)

I have mixed feelings about the power of corporations. On the one hand, they are just free associations of people. On the other, the wield outsize power with undersize responsibility. I think some reform of corporate law is indicated. For starters, ending corporate welfare. For another, Canolty has suggested the death penalty for corporations that cross the line too many times: boom, you're not a corporation anymore.

But let me close with more specific prescriptions: end all trade barriers (esp between developing and developed world); somehow root out corruption in dev world govs; reduce government regulation, particularly those affecting entrepreneurism (O'Rourke figures out it takes something like 2 days to start a company in California, and 463 in Nigeria); and pour money into education, particularly science, engineering, business, and agriculture. What these have in common is they will spur economic development, and thus increase (not transfer) wealth.

India, obviously, seems to be an amazing example of pro-education, pro-business, rip-roaring growth. (Oh, speaking of Tom Friedman, you also need a reliable, uncorrupt justice system to enforce contracts; and a reliable infrastructure of telecoms, roads, and power. I'd be willing to help pay for these.)




Jenn


Quote: "Just "create wealth" is far too simplistic a solution to the world's economic problem. It is like telling a depressed person to try smiling more." End quote.

Actually - the true reality of the human mind is that if you fake something for long enough it has a great chance to become reality. Smiling more while depressed WILL actually help you in the long run.

I can't speak to the 'create wealth to save the world' thoughts; I'm just another small corporation who makes money and employs a couple people. At least in my small corner I'm helping to put food on a table, mine and a few others through job creation. And my little company had done this DESPITE government intervention trying to stop me at start up and continued efforts from close-minded local competitors who, sadly, also sit on our municipal government.

Excellent articles; as always very thought provoking. It's too bad I didn't procreate in order to help boost Canada's babies numbers. Or maybe it's better - I have more wealth to distribute now. I imagine that's a whole other debate.




Michael

I realise I've strayed a bit from the original point (usefully, but still): The problem isn't rich people, or even inequality between rich people and poor people - the problem is the poverty of the poor people. Let's fix poverty, which we know only gets fixed by creating more wealth.




Joe Laltrello

If you want the free market to fix poverty (rather than just rely on the magical forces of hope to do their work), why not create a fairness market? Maybe someone has done this, but just thinking out loud I suggest: through an NGO network, you create an index based on factors that make for human misery that are correctable (lack of clean water, electricity, etc.). These indexes are tied to a fund that creates micro-loans or gifts that go directly to affected individuals or specific group projects that address the most egregious apolitical situations (buying a water pump for a village, or developing a clean water source, etc.). In the hands of individuals and small group , there is localized "wealth creation" that reverses the disparity, elevating people up the Maslow's pyramid. Wanna now how things are basically going? Check the index vs funding. It will be slow moving to correct, but the funding will tell a story.

How do you get people in the first world to care about this? Creatively incent them using the biological principles that drive them:


(See this article in The Economist


If this Fairness Fund were somehow blatantly tokenized for the consuming first world, it is possible to make it just as important as items that convey coolness. Like Bono's Red, or other products that are for a cause, you could have products that reflect a share of your gift to the fund. Unlike the others, you buy the item, then buy into the index. You could even take it a step further, and create a Fairness Fund portfolio for people. When you buy your fairness item, you select the fund you want to "invest" in. In this way, it goes from being a moral imperative, to being another way to flash your unmatched sexual prowess. And we all know, whether we like it our not, this is one of the most important driving forces on Earth.

Just a thought.




Jessica

quote "It is like telling a depressed person to try smiling more."

Wow, feeling stupid now.
Can I get away with "My heart was in the right place?"
I always figured that saying something was better than saying nothing.

Sorry to interupt your debate.
Go to it!
I'll do my best to keep up.




Jessica

So I Just read that article that you mentioned that is in the economist. I'm not sure I'm totally on the mark here with what I came away with (apart from 'wow how typical and predictable am I?'), but I must admit that part of me doesn't like the article at all. It's all just to do with sex? I go down to the volunteer bureau and devote some of my spare time every month because I'm not getting any?

I find it quite disturbing that I agree with some of what it says and I think I dislike what that says about me. Oh well, at least I can cancel my charity donations every month because one of you boys is bound to be doing that!

Anyway, don't we already have a rewards points system for how kind you are to others? Isn't that why we were born with guilt?




Barney

http://n/a

"Poverty is infuriating. ... If we can't fix everything, let's fix the easy stuff. We know how to get rid of poverty. We know how to create wealth. But because of laziness, fear, complacency, love of power, or foolish idealism, we refuse to do it." (O'Rourke)

Who are the "we" in this extraordinary (but possibly also rather brilliant) sentence? Whose laziness is in view? Whose fear, or, alternatively, complacency?

Does such a unified "we" exist? I think this question underlies many of the perceptive criticisms that Joe and others have offered.

On the other hand, a generalised love of power over whatever wealth is currently in view, and a foolish idealism - these two do, no doubt, have a rather more universal application.

But doesn't O'Rourke's list of sins here belie some of his optimism over the "easy stuff" of poverty-eradication?

"We" are reprehensibly responsible according to O'Rourke. So, as much with O'Rourke as querying him, I might hold to the provocative "genocide" analogy, Michael's denunciations notwithstanding.

Just so long as this way of speaking doesn't distract attention from literal genocide in, e.g., Darfur, that is.




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