Yves here. Richard Murphy has introduced a much bigger topic, of the danger of concentrated power as opposed to merely concentrated wealth, than he can address well in a short article. So I hope readers will treat his piece as a conversation-starter.
IMHO, he does not adequately consider why the very wealthy of the past seemed more often to be altruistic than contemporary elites. One is that in the US and UK, Christian churches loomed much larger as anchors of community life. I would assume that even the super rich of the past still attended services. Related to that, the very well off were still tethered to where they lived. Due to travel being comparatively limited due to the costs and time involved (“summering” in a community at most a day trip away was the most common form of that luxury), your standing in a circle you could not readily escape. Aside from that swathe of the rich that genuinely believed in help the lower orders, other might engage in generous acts out of well-informed social engineering (think of Andrew Carnegie’s libraries) or image-burnishing. Today’s rich, by contrast, maintain status by how far they can stay away from the masses, such as by flying private class and vacationing in remote and costly spots.
By Richard Murphy, Emeritus Professor of Accounting Practice at Sheffield University Management School and a director of Tax Research LLP. Originally published at Funding the Future
I spent years of my career worrying about inequality and wealth, and I still do. I remain concerned about tax abuse, secrecy, and the toxic consequences of the denial of resources to those who need them, which many of those with wealth deliberately promote, claiming that this is the natural consequence of people’s relative worth, when that measure of worth is just the outcome of an economic hierarchy of definition that they have constructed.
Exposure to wealth did, however, lead me to several conclusions.
The first is that wealth is just a measure. It is an entry in a ledger. It is an estimate. Most of the time, it does not represent money or nearly as much spending power as the figures imply. It is the consequence of another of those hierarchies of definition, in this case, those that have been fabricated by accounting at the behest of those that profession thinks it serves.
The second, which flows naturally from the first, because that first conclusion shows that much of what we call wealth is in fact more akin to myth than it is to fact, is that power is the real problem that we face when we talk about those with wealth, or rather, the abuse of power is the issue.
There is good reason for distinguishing wealth and power, although they are obviously related. That is because it is entirely possible for wealth to be used benignly. As an obvious example, the nineteenth and twentieth-century Quaker families that controlled some of the UK’s very largest companies, including the Cadburys, the Rowntrees, the Frys, the Clark family of eponymous shoe fame, the Barclays, and many others commonly associated with some major railway companies, all appeared to achieve this goal. They were, in general, good employers. They used their wealth for social purposes when they controlled these companies. The legacy of their approach to wealth is still to be found in some of the charitable foundations that they created, many of which I have had dealings with, and all of which appear to be motivated by genuine concern for the common good. Wealth can, then, be benign.
But sometimes it isn’t. We know that too. That can even be seen in the charitable foundation world. I have noted here of late the destructive influence, as I see it, of the Rockefeller Foundation on both medicine and education, rooted in an ideology created in the early twentieth century that sought to concentrate power in the hands of an elite, which Rockefeller thought had the right to set the terms of governance for society, and which deliberately tried to deny opportunity to those of differing views or backgrounds. There have been other foundations with not dissimilar roots, mainly, but not exclusively, based in the USA, where, over my career, I can say I have had similar concerns, and where their involvement has rarely delivered beneficial outcomes.
And then there is the Tony Blair Institute, of which I need say little more, except to suggest that it is true to Rockefeller and the logic that his foundation embraced. Blair and his backers embrace the idea that society should be divided, that those with wealth should have power, and that others should be left to do what is required of them.
This is when wealth and the power it delivers become toxic. And we saw the consequence of that in Northern Ireland last night. Elon Musk, who appears to fund the activities of Stephen Yaxley-Lennon and his toxic branch of far-right politics, intervened following a terrible attack in Northern Ireland, claiming that this was racially motivated when at present there is no evidence of that, and by so-doing fuelled stresses within a society where political extremists have often resorted to violence. There was trouble on the streets, as Musk appeared to demand, the result of which must be a spreading fear in the migrant population in Northern Ireland, many of whom serve the community through its NHS.
As a reporter from the Belfast Telegraph said last night when interviewed by Alex Thomson on Channel 4 News, (and I stress that I am quoting from memory), “There is no situation in which Elon Musk gets involved which is the better for it.”
She was right. Elon Musk, more than anyone, now typifies toxic power. Supposedly, the world’s richest man, if you believe the myths of accounting, he is using the resulting influence to breed fear, violence, division, mistrust, and destruction within our societies in a way that he must know can only result in genuine harm arising and the destruction of well-being.
Trump, of course, shares this characteristic. The House passed legislation to approve his $70 billion migrant expulsion programme in the USA yesterday. At the same time, he was nominating his former personal lawyer to be Attorney General, and what that lawyer has persistently demonstrated is his contempt for the law unless it serves the purposes of Donald Trump. This, too, is power turned toxic.
Throw into this whole scenario the fact that there is an ongoing war in the Gulf promoted by Benjamin Netanyahu, in which Trump is now a continuing, but seemingly reluctant, participant, apparently unaware of how he can exit a situation that he clearly regrets creating, and it is apparent that toxic power of the sort that Netanyahu has created by capturing a state, in the same way as Putin has, is having devastating consequences for the world.
These events, and others, leave me muted, deflated, and dispirited this morning. I am lucky enough, as far as I know, not to suffer depression, but I can certainly get knocked down by events, and those becoming apparent at this moment are doing just that. And why not? Why shouldn’t the naked abuse of power affect me? In fact, if you’re not affected by it, why not?
The point I make, however, is that it is not wealth per se that is the problem that we face. I undoubtedly agree that the wealth of the top 0.1% in the world is out of control and needs measures to manage it, including effective taxation, governance, and accountability, when at present so much of it appears to be beyond the reach of any of these underpinnings of a successful society. But the threat that it poses is not created by its existence, but by the abuse of power that it enables.
Wealth, I reiterate, can be benign, even if it appears that so much of it has the propensity to turn toxic. But it is that toxicity that represents its real threat. Wealth can be used for the common good, but it would now rarely seem that the capture of power by wealth has this benign outcome.
So, what does that mean? My suggestion is that a fixation with the taxation of wealth alone is not going to solve the problems that toxic wealth is creating within our society. That is, firstly, because much of this wealth is, as I note, the creation of accounting and economic conventions that attach dramatic numbers to it, but which do not result in the creation of capacity for redistribution, as many would seem to desire.
For example, Thomas Piketty’s new report on global justice suggests that there should be a 20% global wealth tax on top of a 90% income tax. If this were to be applied to Elon Musk, who has wealth that must now be approaching $2 trillion or more, the tax demand might be $400 billion a year. But SpaceX only has total revenues of $18 billion a year and has yet to make a profit. The capacity to pay this tax, which Piketty and his colleagues appear to think exists, is not there.
You can seek to redistribute the supposedly fantastic numbers attached to wealth if you wish, but nobody can live off the resulting redistributed accounting myths when they are nothing more than a set of numbers created by what might be fairly described as false measures. In other words, tackling a great deal of wealth will not solve the problems that the wealth in question creates through inequality, and it is, then, power that is the issue requiring attention.
I would tax the income and gains from wealth at much higher levels than are now charged, and explained how in the Taxing Wealth Report, which was a deliberate and pragmatic approach to this issue that could raise more revenue capable of redistribution than anything that those who promote wealth taxes can dream of. But, much as I believe in those measures, if relative power is left with the wealthy, this taxation solves little or nothing because the wealthy would still be left with the opportunity to influence outcomes in our society in ways that are deeply toxic, as Elon Musk is doing.
What do we need then?
We start with demands for transparency, accountability, and governance, and we apply this right across the financial sector, where at present most of these characteristics are notably absent, with this being most apparent when providing information to people with average levels of wealth, who are usually kept in the dark about what is going on in the world around them.
Secondly, we need to come up with measures that challenge these hierarchies of power by reinforcing our democracy. That is why we need proportional representation. That is why we need to prevent politics being influenced by donations. That is why the power of think tanks needs to be controlled, and their funding transparency and accountability need to be clear. All of this is because we need to put people back in charge.
Thirdly, perhaps we need to think beyond taxation. Much as I am a fan of taxation, and I am, because it is the single most powerful instrument available to a benign government to shape the society for which it is responsible, maybe we need to go further. Instead of proposing unworkable taxes, which it seems to me many of those promoting wealth taxation are doing, we need to create taxation systems where liabilities can be settled through the diminution of power.
This means making payment by transfer of ownership. So, if you want to apply a 20% wealth tax on Elon Musk, don’t ask him to pay it. Simply ask him to transfer his shares. You don’t even need to go through the process of proving value in that case. All you need to do is transfer ownership, although that isn’t always easy.
Then place those assets in genuinely accountable funds. These funds may not have money right now because SpaceX hasn’t, but if markets are right, they have the potential for future income streams. We have to live with the fact that this is the best we can get our hands on.
And, in the case of those private corporations that have ceased to be microeconomic entities because their actions have macroeconomic consequences, we need to change the power structure of the corporation. Companies were not created to be our masters. Society permitted the creation of limited liability entities to enable the pooling of communal capitalfor communal benefit. Primarily, in the mid-nineteenth century UK, which pioneered this development, they were created above all else to deliver the railway revolution by creating infrastructure for our society.
We have lost sight of that. We now let the corporation be used to enclose private wealth for the gain of an individual. The SpaceX share structure is the perfect example of that. All the power of the company remains with Musk. And, in a world genuinely interested in the well-being of all, that would not be permitted. Constraints on the influence of any one person over a company of significance should be created and enforced.
This is how we challenge power. Tax is important, but it is not enough. We have to go much further. If, as the US Constitution says, all people are born equal, we must treat them as such, never treat the corporation as superior, and never let it be used to create that superiority. Power has overreached itself, and that overreach is the problem that we now face.
We saw that in the streets of Northern Ireland last night.
Now we need to do something about it.
“Today’s rich, by contrast, maintain status by how far they can stay away from the masses, such as by flying private class and vacationing in remote and costly spots.”
I think this is spot on. Personally, I think these ultra-wealthy people don’t feel particularly tied to any nation and don’t particularly care for the success (or not) of their neighbors, where they grew up, etc. A very big problem for the people left in nation-states.
Sidenote: I believe I read recently that Carnegie gave away nearly all of his wealth by the time he died? Someone with historical financial knowledge on philanthropy please elucidate if you can.
Is another piece of the puzzle because none of them have built anything worth being proud of?
Either trust-funds kids having done jackshit to be rich or predatory parasites making a fortune based on legal arbitrage and slave labour, Bezos, Zuckerberg, Musk
Great comment. Yes, look at the AI firms too. “We built these great data centers” **that will suck up all of our water, poison it, and also jack up electricity prices as well.
I guess for the old robber baron types you could say at least their companies produced physical things (like cars, tools) that at least, arguably, improved livelihoods.
Maybe the great pyramids were the Pharaohs’ “Data Centers”….
I wager that for every Carnegie there are 10
Jay ‘I could hire half of the working class to kill the other half’ Goulds.
Let’s try this again. Money is power. When you have large amounts of money, you have power.
How much money did Marian Andelson spend to unseat Thomas Massey in Kentucky’s 4th district Republican Primary? $30 Million. That is power.
How much money did NVIDIA donated to Trump’s Ballroom. $300 million. How much money did AMD donate to MAGA INC. $1 Million. Both companies are getting favorable treatment from the Trump administration in regards to export restrictions and AI backing. That is power.
And yes the equity stake idea was tried with Tesla. The Unites States gave Tesla a half-billion-dollar loan in 2010. The Unites States could buy three million shares of Tesla stock at a low price. However, Tesla repaid the loan early, which cancelled the government shares. Tell me future equity stake plans will not have clauses that will undo the government owning equity stake – let alone the idea of government owning a stake in a private company being more palatable than taxing. Not too mention what happens if those companies go belly up – how much will the stock be worth then?
Buying power is really easy with money. Going about controlling power without addressing money, is a recipe for failure. It fails to acknowledge that money is power.
This is an ardent defense of class collaborationism. Every time the author writes with concern about the “[breeding] of fear, violence, division, mistrust, and destruction within our societies,” we get an all expenses paid peek behind the mask. It’s really that our economist friend is so very concerned: ‘Why can’t we go back to normal? When the poor stayed in their warrens and understood how productive those rich men are!’ I expect nothing less from an economics professor. He sees the actions of Trump as antithetical to the functioning of capitalism, a terrible blip, something that must be pushed back on. I’d like to ask, why is Trump so obsessed with controlling migrants and lightning round-ing interventions in oil rich countries? It’s because, similar to FDR, he is tasked with performing a restructuring of capitalism. Or perhaps, as the walls of climate close in, consolidating Fortress America.
I will not get into it, but his meek policy proposals are just half measures to resist the inevitable decline. Yes, FDR gave the American empire 100 more years. But do we really have 100 more years?
He is just a moralist upset about violence happening in a visible way. Let’s not beat around the bush; by visible way I mean something that bothers insulated academics in the first world. Why is Trump doing bad things! Can’t we find a nice way to keep this stick-up going?
To paraphrase Marx, “capitalism comes naked in the colonies.” He does not want to see Naked Capitalism.
I have to put my paw over my nose at the image of Capitalism coming…
Awkward turn of phrase it really is
Agree on the physical separation between elites and the people having an impact on elite behavior, but I think the role of the Church is far more ambiguous.
The Church functioned in earlier societies less as any sort of brake on the depravity of the rich and more like the media today, working to provide justification for the privileges of the rich and powerful through their association with (and large payments to) the Church. The hard power of the nobility and their soldiers ensured the procurement of surplus to cover the cost of running church activities, and in exchange the ideological power of the church heirarchy legitimized the existing secular ruling order and condemned rebellion against it. A great win-win for Kings and Archibishops, with only the millions of peasants suffering the consequences.
Therefore I think the question of “why the total lack of restraint now?” has infinitely more to do with the physical separation as you mentioned, their ability to totally wall themselves off from the masses and extract surplus from them from afar, that has given them the shield of impunity allowing them to drop the mask and embrace their most hedonistic and cruel tendencies.
But I do have to question how much things have even changed, versus our perception of it. For every story of “good employers”, there have always been 100 whose entire goal in life was to squeeze as much profit out of their workforce as possible and live as extravagantly as they can. Philanthropy is also a completely misunderstood concept because it starts from the premise that the wealthy have a right to their money in the first place, when in fact it is money that should have either gone to the workers who produced it in the first place, or been taxed for positive social uses determined democratically by all of society. By refusing to pay tax and demanding total control over where their “charitable giving” goes, these “philanthropists” aren’t giving up anything, they’re just putting a nicer face on their exploitative power and control.
Excellent point.
Also worth mentioning that in many cases Carnegie built a building and left town, leaving the community to by the books and maintain the building. Not nothing. But not the same as establishing a foundation to maintain the library for some period.
I disagree and think wealth and power share an identity. There are perhaps examples of people wielding power without wealth, but a person with wealth necessarily has power. I’ve got my eyes open for a wealthy person with no more power than a retired gas station attendant living on Social Security, for instance, but I’m just not seeing anyone.
Also I think there are problems with his reasoning.
“The first is wealth is just a measure.”
So is power; I’d argue it’s even more abstract than his concept wealth. The number as assets one has a share in owning can be counted, but power can only be measured indirectly, by how much influence a person has over others, for instance.
“There is good reason for distinguishing wealth and power, although they are obviously related. That is because it is entirely possible for wealth to be used benignly.”
Using wealth benignly and wielding power are not mutually exclusive, one could even say using wealth benignly is a form or power. What Murphy says after seems to back this up.
He repeats himself:
“Wealth, I reiterate, can be benign, even if it appears that so much of it has the propensity to turn toxic.”
He seems to assume “power” and “benign” are mutually exclusive terms, and I see no reason to believe that. Don’t the Quaker families he sites, pillars of their communities as he describes, still wield power over their companies, employees and communities?
“What do we need then?”
Murphy gives a good list of propositions. I don’t think there’s anything wrong with them, if only they are too little. The problem is, we cannot enact those because those with wealth have the power to block them. And they have. Repeatedly. And I fail to see how separating the terms “wealth” and “power” is helpful in the least here, and in the end is simple apologetics. I’ll even go out on a limb and say none of these things are remotely possible unless we can separate the powerful from their wealth, and that’s not going to happen by voting harder.
Power is, simply put, the power to decide for a collective. Wealth is possession/control of substantial assets.
They have no necessary connection, as Jack Ma can tell you.
Power is more limited than wealth, there is one American President, nine Supreme Court Justices, one hundred senators, 435 in the House of Representatives. There are 989 Billionaires in America. We don’t even have enough positions to give each billionaire a seat at the head of any of the branches of the Federal Government. We are still short if we throw in 50 governors and Cabinet appointments.
Further, we know that what really happens in Congress is driven by specially placed people in leadership, committee chairs, etc. Having a seat in Congress doesn’t actually provide you with a lot of power, it provides power to the Majority Leader. So actual movers and shakers is much lower than the head count of the highest ranking officials in the Federal Government, its probably closer to 10 noninfluential to 1 influential member. So, of the 989 Billionaires, the majority may be able to get a call back from their Congressperson but they don’t have any real influence on the system.
Not only is it important that there is a distinction between wealth and power, but the asymmetry between wealth and power created by inequality expanding the circle of hyper-affluent is a serious problem, because you have people who are frozen out of the power structures who are at the same time in possession of the resources necessary to fund extremist groups in an effort to capture power. This can often set up a path to civil war. You could look at Trump’s career for an example.
Thank you KD, excellent comment.
Although it’s not mentioned in the article, if we think about how we got here we have to look at the citizens united decision that allowed money to capture political power throughout the country. Money is speech and as such cannot be regulated in regards to campaign financing. And thus a powerful example of how exactly money is spun into power.
But power also comes from threat of force. Denial of markets. Extortion. Kidnapping. Blackmail. Power comes from depravity, money just makes it more effective.
There used to be other sources of power, such as shame. Where has that gone? The only example I can think of is the misapplied “canceling” of people.
I think the idea that money can “buy” power is dangerously naive.
Mancur Olson’s lesser known but more important work involved power and wealth. Basically, in his setup, “power” is banditry: you get meaningful gov’t as a protection racket when the bandits settle down somewhere and decide that dealing woth the locals on a stable basis is better than robbing unpredictably. Wealth enters the picture because the bandits would rather deal with the rich than the poor because you get something when you shake down the rich, but the rich don’t “control” the bandits any more than (any other) robbery victims “control” the robbers.
Not saying it’s impossible, but that takes a lot of evolution in the bandit-rich interactions. In fact, the question to ask becomes, under what conditions might the bandits become so deferential to the rich while openly abusive towards the not rich? Not that I know the answer, but I’m convinced that this is not inevitable. (I do wonder making politics more “civil” and less “thuggish” encourages the “bandits” to pal around with the rich more. If you can’t threaten to break the legs any more, you have to become deferential, right? I got flak the other day for confessing to not liking FDR because of his “thuggishness” under the genteel exterior, but maybe there is sonething to that…but if so, the trouble with Trump is that he pretends to be a thug, but he’s not–a real “thug boss” would not tolerate the kind of disrespect he’s getting from many of his “colleagues.” Instead, he acts like a hired goon, an underling, not a top thug.)
The reason elites were better behaved in the past was because of organized labor. In fact, that statement is only partially true. The ‘elites’ were never well behaved, but they were constrained in what they could do because of a counter-power, i.e. the people acting together, against elite interests.
Why there is no organized labor today in most parts of the world, destroyed by 50 years of vicious class war. So concentrated wealth evolves along its natural course, unconstrained; of moral and cultural decadence.
That is totally false. Labor organization didn’t get going in a meaningful way until around 1900. Carnegie started building his libraries in 1883.
Early labor organizing was kept very effectively to low levels by Pinkerton’s as well as by private armies, such as Henry Ford’s. Labor organizers were regularly lynched and hung. What gave the labor movement legitimacy in the US, sadly and perversely, was the 1911 Triangle Shirtwaist Factory fire.
‘Totally False?’
There is considerable labor history of the United States before 1900. Lowell Mill girls, who came to be known as ‘Factory Girls Association’ was formed in 1836. The ten hour work day was instituted by 1835, as a result of organized labor struggles across trades, including strike actions. The Railroad strike took place in 1877. I suggest The Labor History of United States by Philip Foner among others. The outrage against the Triangle Shirtwaist Factory fire didn’t emerge in a vacuum, but due to much consciousness raising on the part of scores of peoples struggles.
Also, how many labor organizers you know getting lynched and hung today? Not that many, because there aren’t that many, proving the larger point that once upon a time, organized labor proved to be a great source of nuisance for the wealthy.
Token gestures by squillioners (to borrow your much useful term) to gain legitimacy for concentrated wealth, is not an insightful vantage point about behavior of the wealthy. The practice continues today, but much of it goes into technology and is frequently touted as charity. It just happened that libraries are far more beneficial form of giving than the flashy technology stuff.
Sorry, your examples do not prove your contention.
There is a vast gulf between action and effectiveness. Please provide evidence that Carnegie’s giving was even remotely the result of the fear of labor action. That is the issue here and isolated labor action does not prove it.
Industrialists in the 1800s were effective in severely tamping down on worker organizing via thuggery (hired goons) and for large-scale labor needs, by bringing in close to slave labor (the Chinese coolies who built the railroads). There were craft guilds that had reached a peak of 2% of the total workforce by 1870, but most laborers in mills and other big industrial concerns were not skilled and lacked the bargaining power of the skilled craft workers…who could also justify better pay and work conditions by having their members go through training and certification to establish minimum competence levels.
And union membership plunged in the later 1800s with the Long Depression of 1873, which led to low economic activity through 1896.
This is US history.
The union movement in the UK was very active in the last half of the 19th C and it’s off-shoot the Labour Party was becoming a strong political force by about 1890 or 1900. British MP’s were not paid until 1911 and, I believe, that many or most Labour MPs werle supported by the unions. Ramsey MacDonald became the first Labour Prime Minister in 1924.
Canada actually passed legislation in 1872 legalizing and protecting unions after the Toronto printers’ strike. This was under a Conservative Prime Minister but, then, late 19th C Conservatives were very different from 21st C Conservatives.
I believe Australia had an active union movement from the 1850s though I am not too sure how legal it was for some decades after that.
The US, which had very high wealth inequality in the 1800s and extremely lavish display (see the “cottages” at Newport, Rhode Island as examples) disproves the thesis that charitable giving by the well off was the result of union activism. The UK for instance arguably had more bourgeois advocacy of responsible behavior by the elites, see for instance the regular messaging in Dickens’ novels.
Sorry Yves, I was not disagreeing with the thesis though I am not sure it applies comprehensively in countries other than the USA but just to the statement “Labor organization didn’t get going in a meaningful way until around 1900. ”
The thesis seems clearly to apply to the USA. Other countries? I just don’t know.
The Haymarket was in 1886, and the Pullman Strike was in 1894. That generally supports your approximate dating. But there were plenty of instances of effective labor organizing before that, a proto-movement which certainly influenced the way class-conscious capitalists thought about labor, labor conditions, and the like. Women and girls working in factories in New England were striking as early as 1834; Sarah Bagely and others formed the Lowell Female Labor Reform Association, an early union which fought for the ten-hour day. German socialists who emigrated from Europe in 1848 contributed to the growth of labor radicalism and organization as well. I am a member of one of the oldest turnverein organizations in Milwaukee, set up by August Willich, Union army general and a friend of Marx. Former slaves joining the ranks of the Union army might also be called organized labor.
Organized pressure from below hasn’t always resulted in the better behavior of elites, as Juice suggests was the case in America’s past. For example, Shay’s rebellion resulted in the Constitutional Convention, a radical pro-creditor and anti-democratic project.
Narrative control is one tool of power. The powerful fight tooth and nail to maintain control of the narrative. Losing control of the narrative is alarming to the powerful. See how much effort goes into maintaining the “correct” narrative. Remember the O admin crushing the Occupy Wall St movement and the “99% and the 1%” memes? / ;)
This conference is an explicit demonstration of that point. From Jimmy Dore. It’s so blatant it’s nearly Monty Python-level self-parody.
ionists ADMIT They Are Manipulating AI To Brainwash Entire World For Israel!
https://www.youtube.com/watch?v=pODWKev84oo
The accumulation and exercise of power always has been unequal, since long before the dawn of recorded human history. And it does not matter if those seeking power call themselves democrats, republicans, socialists, progressives, monarchs or whatever. Once in power, they amass wealth particularly if they had no wealth before gaining power. And eventually, the power they hold and exercise inevitably becomes corruption and repression.
Money is speech. So $ 10^11th pretty much drowns out $10^5th power by 6x on a logarithmic scale! Converting to decibels, 110 dB is a loud night club, 50 dB is the sound of a soft rainfall. You want to understand Western politics, the politicians are standing in front of the speakers in the nightclub, and outsiders are wondering why they aren’t aware of the millions of drops of rain (and tears) falling outside.
I suspect that if you asked the wealthy themselves they’d say their main concern is the money, not just the power. Indeed they spend most of their time seemingly scheming how to hold onto the money.
And I also suspect that if most of us had a billion dollars we’d act the way they do. All of which is to suggest or suspect that to suppress hierarchy you’d be trying to control human nature itself. It’s the rational versus the irrational which is why religion in its various guises may indeed be a key component of more just societies. In the past the wealthy and powerful took the prospect of divine punishment seriously whereas the tech bros like to believe they can conquer mortality itself.
We are living in a might makes right world at the moment but the might is fraying because “greed is good” is the philosophy of idiots. And it also conflicts with the social side of our natures. Time for the cycle to take another turn?
Beyond time. Fashionably late?
In short, power is all about having friends in high places. Friendships cannot be taxed, regulated, or redistributed.
One thing I always liked about Machiavelli was that he tended to argue that real power was always in short supply.
He tended to see power in largely relational terms–attempting to get others to conform to your will–but he seems not to have been seduced by the efficacy of force and coercion in attaining such goals because he believed that the more you use force and coercion the less credible they become.
Consequently, his model political animal was the fox rather than the lion. It was the fox who used sophisticated strategy as a substitute for the very visible brute force of the lion.
The wonderful Machiavellian paradox of power centers around showing how power defined solely as the use of force and coercion among nation states is present the more fully it is absent.
This insight might have some validity to contemporary foreign policy maneuvering in the Middle East!
Someone whose immense wealth is concentrated in Wall Street funds and real estate has a high degree of power. Someone whose immense wealth includes ownership of several broadcast and streaming news networks, a chain of radio stations, a major New York publishing house, a financial newspaper, and one or two very large social media properties has more power than the first person. Control over information is just as important a leg of the power tripod as control over what money is invested in and control over the apparatus of state coercive violence.
The even deeper problem with the structure of Western capitalist societies is that wealth and power are exchangeable. You can convert wealth into power and visa versa. This is one of the basics that, come the revolution, we will fix.
Money is the quantitative expression of social relations between human beings. So wealth a.k.a. money is of cause the problem, not because of itself, but of what it represents. So money is only a measure/number of how many social/political/societal power you can exert on other human beings and their organized social structure a.k.a society. One does not become a billionaire because of hard wage labour, but because the ability to extract value out of social relations, usually nowadays via the means of production, but not exclusively, between human beings that you have either born into (inheritance, network, education, social status, …), or by chance.
Not wanting to go ad hominem, but one can clearly see Murphy’s thinking structured around his profession in accounting. Numbers are only the expression of a material relation, not the relation itself.
In David Graeber/David Wengrew’s Dawn of Everything, a notable feature of premodern power generally is how limited and contextual is often was. An absolute ruler might kill someone on a whim, but once he and his retinue left town, life went back to normal and everyone ignored him.
There is a lot that I imagine the current state might do, with very robust anti-monopoly class fighters in the Executive and Congress: Legislate away corporate citizenship rights vis a vis Citizens United and make all Federal campaigns for office two months long and publicly funded (pace Graham Platner); legislatively undo all illegal mergers during this administration (pace Warren, I believe); put huge fangs including criminal penalties into the Justice Department’s Antitrust division–I’d go so far as to set it up as a private unit accountable directly to the A.G., like Elliot Ness, with only the best and least compromised); actively pressure “bad”‘ judges within the party to resign or their “legacies” be opposed vigorously. Add vigorous anti-corruption, especially within your own party, for anything money- or influence-related.
Presumably the wealth recaptured goes towards an economically and socially just, predistributive, generally prosperous state for all. To remove some of the invidiousness that inevitable great wealth that still exists (I’m not proposing a revolution), the state then needs to robustly enforce regulations against a lot of the wasteful externalities that great wealth generates: make yachts so prohibitively expensive to own and operate, through fuel, emissions, wastewater, and other taxes and penalties (same for jets!), and so over crawling with inconvenience around crewing them or whatever, that it kills the pleasure. Do that with land ownership, multiple homeownership and house size penalties, and make it suck to be that rich.
Public transit should be better :)
Wealth is an euphemism, an indirect way of referring to a range of social and economic relations that produce expectations of future income streams. In some cases, the nature of those relations, viewed plainly, are too harsh or offensive, so we use the euphemism, so that we don’t have to refer to the social pathology or crime involved plainly.
In some modes of economic thinking, wealth is associated with the gifts of nature or the more synthetic capabilities associated with sunk cost investments in knowledge, infrastructure and productive machinery. But, there’s no isolating potential wealth from the exercise of power to organize the realization of income from resources, natural or synthetic.
People are not born equal;
geographically or economically.
But we have a rating system.
Of use or not.
Consider Elon Musk, who clawed his way from bounteous entitlement, through institutional abuse, fraudulent immigration and serial poor delivery
He is a hard worker, to push assets beyond production.
Why not use the mugs’ money to move the next excavation from the mugs.
The greatest president of all time will sort things out.
I do wonder why the 3 arms of government, constitutionally dedicated to the pursuit of happiness are so malevolent to others that mean it.
I do not have to wonder that far from class aggression, sublimated first into; talk of war, interests in war, we are being manipulated against our commonwealth.
Maybe I’m funny that way.
Not that funny, and not alone. I think Elon’s assets should be in quotes?
There is plenty to agree with here. I would add it’s crucial that society avoid dynasties.
One look at the Trump family, sons Don, Eric, Baron, and Kushner and Ivanka, misfits who should not themselves inherit billions, and neither should anyone else. You expect the children of wealth will be comfortable but the tax code must be adjusted to avoid passing on massive wealth.
Massive wealth begets inequalities of power and one should expect those who have it will pursue their own desires rather than those of a community. The government should protect the community.
Just as Fascism is always descending on the United States, but always landing in Europe, Dynasties are always descending on the United States, but always landing in Europe.
Americans are terrible at passing on money to their descendants. The rule is still ‘shirtsleeves to shirtsleeves in three generations.’ Europeans are much better at passing money along, despite taxing everyone more than in the United States. This begins with the fact that they are thriftier than Americans, but they’re also more willing to engage in suspect tax avoidance schemes. The Panama Papers didn’t snare many Americans. It may be apocryphal, but the story is that when Italy instituted a yacht tax, not a single person paid it, despite there being yachts docked throughout the country.
When tax rates are raised, much more energy is focused on avoiding taxes. Ventures become less viable. It becomes more profitable to be a tax scheme entrepreneur than to create new products and services. In the long run, this is bad for economies.
Ethical middle class intellectual elites desire a more just society, but they are outvoted. Vast swathes of the U.S. public admire Trump and his gangster ethos, and the rest are easily persuaded that crumbs from the table are change they can believe in. The predatory rich have ample means to use the democratic machinery to get the voting public to back the uniparty, which consistently favors corporate interests and the War Power at the expense of the common good. Unfortunately, ethical middle class intellectuals seldom accumulate vast wealth and thus their efforts are limited to earnest appeals to reason. The good and just society that the ethical intellectual elites desire will remain a dream as long as politics is controlled by the wealthy through the weak-minded voters that they efficiently manipulate.
Wow, what a conversation! Of note is that in the past, wealth (and power) was associated with industrial capitalism, and economics was more or less grounded in reality. Nowadays, finance capitalism is the dominant mode of wealth and rent-seeking is the highest good, while neoliberal, neoclassical economics turns the world on its head.
According to Michael Hudson, the industrialists in America saw that their production depended on good workers and able infrastructure. Thus, libraries, public education, public healthcare, housing, roads, bridges, and canals made production more efficient, more profitable. There was a claim that free American labor could outcompete pauperized European labor!
One point on this:
Sure, but I think the main idea behind such egregious sounding rates (not unlike the Minneapolis of Chicago plans for bank size and equity requirements) is precisely to incentivize, nay force, these people/institutions to downsize. (Also, I’m sure a finance ministry would accept Musk’s equity shares and paper wealth for tax purposes)
More generally, allowing any amount of wealth to become that large is a policy choice. And of course our politics are so corrupted now that of course they enable it. Celebrating that amount of wealth is a social choice. So i find the whole, “not all wealth is bad wealth” hedge pretty annoying. Just because mackenzie bezos is distributing her billions doesn’t mean the institutions that enabled, perpetuated and celebrated those billions are good for society. It reminds of Obama’s unctuous speech hedging against the MIC and security state powers, “i’m against dumb wars” .
The squillionaires (h/t Yves!) simply don’t fear the pitchfork as they did a generation ago. They’re beginning to fear the bullet, a la Luigi, but not enough to change morals and course correct. If anything they’re even more emboldened to lash out, hunker down on a luxurious bunker island, hire more security, buy some ASM, and grab even more (see Ken Griffin and having has feelings hurt).
Yet another opportunity to point out how easy a wealth tax would be to implement via adjusting tax basis annually lower, and could even become negative. Just don’t expect annual payments in cash.
‘Wealth, I reiterate, can be benign, even if it appears that so much of it has the propensity to turn toxic. But it is that toxicity that represents its real threat.’
An absolute monarch’s power can be benign, if the monarch is nice. It’s just that it sometimes turns ‘toxic’, because the monarch isn’t always nice.
A slαveowner’s power over his slαves can be benign, if the slαveowner is nice. It’s just that it sometimes turns ‘toxic’, because the slαveowner isn’t always nice.
That’s why we got rid of monarchs and slαveowners, so things wouldn’t depend on whether they were personally nice or not.
Wealth is power.
The notion that the rich elite of Dickensian Britain or rοbber baron / Gilded Age America was, as a whole, nicer and more ‘benign’ than that of today, thanks to its devoutness, strikes me as unrealistic, given what we know about the prevalent conditions during these periods as well as about the ruthless class warfare conducted by the representatives of that same elite. Examples of charity and the like are not a serious argument – there is a lot of charity today, too, and giving to charity does not prevent billionaires from fighting tooth and nail against taxation and the welfare state, because they want to keep the power to use their money as they see fit. All in all, this seems like reactionary idealisation of the past to me.
(I’ve used some Greek letters in possibly ‘sensitive’ words, because this comment seems to be automatically rejected for unclear reasons and I suppose that some algorithm might be triggered by something.)