Resources us few wealth

 

Shadows of Gothomgrad

 

In the bustling city of Gothomgrad, there lived two sisters as different as night and day. Catheryne, the elder, was a sharp-witted gal with a nose for opportunity and a heart set on triumph, no matter the price. Her motto, you see, was "Success at any cost." Emmelyne, the younger, was a dreamer through and through. She believed in following her passions and living life true to her spirit. Her motto was "Follow your heart."

Catheryne, with her keen eye for finance, climbed the corporate ladder faster than a squirrel up a tree. She amassed wealth and power, becoming a prominent figure among Gothomgrad's elite. Emmelyne, on the other hand, dedicated herself to her art. She painted, wrote poetry, and taught at the local community center. Her life was rich in creativity and fulfillment, but not in material wealth.

As the years rolled by, Catheryne's wealth and influence grew like a well-watered weed. Greed for gold and a lust for power drove Catheryne's every choice. Slowly, step by step, she amassed wealth and influence, tightening her grip over the struggling masses of Gothomgrad. Her empire grew like a shadow, casting a pall over the city. The more she gained, the more she craved, and the divide between the wealthy elite and the destitute widened into a chasm. The streets buzzed with whispers of discontent, and the air grew thick with the tension of a city on the brink. Emmelyne and her friends, once beacons of hope and creativity, found themselves at the heart of the growing unrest, their dreams suffocated by Catheryne's relentless ambition.

The tipping point came when Catheryne's company announced plans to demolish the community center to build luxury apartments. Emmelyne, devastated and desperate, became a leader in the burgeoning resistance movement. The protests grew larger and more intense, fueled by the anger and frustration of those who had been marginalized.

One fateful night, the protests turned violent. Emmelyne, driven by a mix of righteous fury and personal betrayal, led the charge against her sister's empire. The revolutionaries stormed Catheryne's mansion, and in the chaos, Catheryne was brutally murdered.

The aftermath was nothing short of tragic. Gothomgrad lay in ruins, a city once vibrant now scarred by the fires of revolution. Emmelyne, who had once been a beacon of hope and creativity, found herself consumed by guilt and sorrow. She had achieved her goal, but at a terrible cost. The revolution had brought change, but it had also left deep wounds on the city and on Emmelyne's soul.

In the end, Emmelyne lived in a shadow of shame and misery, haunted by the memory of her sister and the violence she had unleashed.  Catheryne, however, was but dust.

The U.S. is a Socialist State!

 Several people have told me over the past year of their belief that the United States is becoming a socialist country. 

Many believe Obama is a socialist

Pundits on radio and television proclaim that we are redistributing wealth through taxes from rich to poor.  Claiming liberty is under threat, it is said we are losing our capitalism and becoming a socialistic country.  

Sean Hannity and Sarah Palin seem to take this for granted.  Rush Limbaugh preaches that a socialist trend will bring the country down.  On the political right, the national move toward socialism is taken as a goal of the political left.

There are two basic themes being espoused.  One is that the United States is socialist already.  The other is that the United States is becoming socialist.

Let us examine some data to see if these claims are warranted.

What is Socialism?

Socialist countries try to achieve and maintain an even balance between the poorest and richest citizens.  One of the major aims of socialism is to ensure that people are economically equal.   Non-socialist countries will have very rich and very poor segments, where wealth and income are distributed unevenly.

A common thought

Socialism in its purest form is an economic system where a collective of people or government owns the means of production and distribution.  

In pure socialism there is no private property.  In pure socialism everyone shares the benefits of property equally.  

Pure socialism has never been achieved by a modern nation state.  Some level capitalism has always been allowed.

There are degrees of socialism. 

Some real-life socialist-like states have their government planning their economies, allowing businesses to operate for profit under close supervision.  Countries like Cuba, North Korea and Burma practice this form of socialism. 

Other real-life socialist like states allow workers to share control of businesses with owners.  India and Germany have variations of this form of socialism.  Where implemented carefully and thoughtfully these kinds of economies thrive.

Lastly are those countries with market socialism.  Nationalized businesses compete within a market, returning the profits to the state.  China’s recent economic boom has occurred using this form of socialism.

Distribution of Income

If we divide citizens into five groups (quin-tiles) and look at their annual income the difference between the richest fifth and the poorest fifth in socialistic nation would be small.

Current income distribution in the United States

With a little reflection, most people realize this is not the case for the United States.  When asked to estimate the balance of incomes, most citizens predicted that there was a significant imbalance between rich and poor.

When asked what their ideal balance was, citizens thought in general terms that the rich should stay rich, but not so rich.  They also thought poor people needed to earn more of the income pie.

The actual distribution of incomes is much different than expected in the survey.  

The wealthiest have significantly more annual income than the average citizen expected.  

The very poorest are much worse off than citizens thought, estimated or considered ideal.

The current distribution of income among citizens of the United States is very clearly not showing signs of socialism today.  To the contrary, in terms of income distribution the United States is not a socialist nation.

Distribution of wealth and assets
in the United States

Control of Wealth

In socialism the government or collectives of citizens control the wealth of the land.  If this is true we would see an even distribution of wealth between citizens.  The facts indicate otherwise.

One percent of the population controls 43% of the total wealth of the nation.

The bottom 80% of the population controls only 7% of the nation’s wealth.

Clearly property and money are not being redistributed to the poor in any large scale.  Rather, we see a very few people owning most of the riches.

The current distribution of wealth among citizens of the United States is very clearly not showing signs of socialism today.  To the contrary, in terms of wealth ownership the United States is not socialist today.

Income Trends

If the United States is trending toward socialism, then we would see data that showed the poorest citizens having gains in income while the richest citizens lost it.

If we examine data from 1963, before the liberal Lyndon Johnson became president and started the Great Society program, and compare it with income distribution in 2009, when the results of George W. Bush’s economic policies were in full effect, what shall we see?

During this time frame, there has been a surge in the number of citizens who are making less income and plunge in the number of citizens who are making more.  

Fewer and fewer people are earning good incomes.  More and more people are earning poor incomes.

  

If we examine the over all trend in incomes during this period, we discover that we are moving farther and father away from a socialist economy.  

In 1963, the United States was much closer to a socialist balance of incomes than it was in 2009. 

During this forty year period, the economic balance has shifted drastically away from the poor to the rich.

While the number of people who are earning good incomes is dropping, the amount of income being earned by the rich is steadily rising.

The current trend for wealth and incomes among citizens of the United States is very clearly not showing signs of trending toward socialism.  To the contrary, the United States has been becoming less socialist as time passes.

Unions and Government

If the United States was becoming socialistic, then unions of labor would be gaining power.  

Data from 1948 until 2008 shows a different trend.  Labor unions, including government and private sector unions, have dropped to less than half of their peak rate during Harry Truman’s liberal administration.

If the United States was trying to redistribute wealth, we would not see a dramatic fall in federal taxation on the rich.  In socialism, the rich are taxed heavily to support the poor.

When looking at tax revenues by source, we see a dramatic rise in taxes on payroll income.  This represents and increase in the taxation of labor.

Meanwhile, taxes on corporate revenue fallen significantly.  Businesses are given greater access to capital by reduced tax rates.

The individual tax rate is applied on money not earned by labor.   The individual tax rate includes things like inheritance taxes, stocks profits, dividends, and interest income.  The individual tax rate has remained fairly consistent.  Taxes on wealth not earned by labor have remained flat.

The current trend for government and labor in the United States is very clearly not showing signs of trending toward socialism.  To the contrary, the United States has been becoming less socialist over time.

  

Ignorance or Lies?

Clearly the facts show that the United States is NOT BECOMING SOCIALIST.  It is in fact becoming less socialist.

So why are people saying we are becoming socialist?  I will not venture to guess at their motives here, perhaps in another post.  I will suggest a course of action for we the listeners.

Those who ARE saying that the United States is becoming socialist are either ignorant of the facts or intentionally lying.

When a pundit does not know the facts, they should not be speaking about the issue.  Ignorance is not a qualification for expertise.  Listening to ignorance will only breed ignorance.   Continuing to listen to the opinions’ of ignorant speakers is a foolish thing to do.

When a pundit does know the facts and deliberately lies about them, they have broken trust and should not be listened to.  Audiences should ignore them until they leave or change their ways.  Listening to someone who lies to you is a foolish thing to do.

Limbaugh, Palin, Hannity, and others who spout that the United States is currently socialist or becoming socialist are either uninformed or telling falsehoods.  Either way, wisdom suggests, we should stop listening to them.

Equal Elite?

In every society, there is a group of people who lead it. There may be a king, a parliament or a even a democracy. The reality is that only a few people have the power to make things happen. Let's call these people 'the elite'.  They are not a conspiracy, rather a group of people, often men, who have the reigns.

The Kennedy brothers had special advantages.

The great political theorists of history, Plato, Hobbes, Locke, Nietzsche, and even Lenin, acknowledged that society has elites of one kind or another. The United States is no different from any other human society that has existed.

Launching Point

Before World War II, Ivy league schools (Yale, Harvard, Dartmouth, MIT, Columbia, etc.) publicly admitted that their students were largely from the New England elites. Names of graduates from these schools fill positions of power through out our society, (Kennedy, Bush, Rockefeller, Roosevelt, Murdoch, Clinton, Adams, Proctor, Gates, Merck, Dole, Heinz, du Pont, Sachs) reading like a who's who of power and wealth in the country.

Poison "Ivy League"?
Probably not.

Before the world war, chiefly the old family elite were permitted entrance to the training that would give them positions of power. After the war, this started to change and a new kind of merit admittance started. The path has remained the same, but the pool of eligibility has gradually widened.  It is still highly limited, not many gain access to the pathways to power.

We all know the story, go to a top school secure a job in one of a few companies and rise up to the crest of society. Rarely do we see the people who take positions of power not come from the Ivy League.  These schools are the 'elite manufacturing centers' of our nation. Tuition is high and access to the education provided is controlled. Opportunities abound for only a few.

Web of Power

Some of these people are truly the best and brightest. Many others are there by family or fortune. Building networks amongst people with power is more important than excelling at a field through brilliance of mind, action, or will.

Belonging to the same fraternities and societies within these schools like the Skull and Bones, the Scroll and Key, or Wolf's Head, gives one access to families and people already in power.

Kerry and Bush both belonged to the
Skull and Bones society.

The elites fill the ranks of both political parties, Republican and Democrat, liberal and conservative alike. The top non-elected positions in government, from the Cabinet level on down, are populated with these elites.  The Federal Reserve, the top military brass, the Supreme Court and more come from these same institutions.

Sitting on the boards of long established corporations or even leading them is another path taken by the elites. Many hold multiple seats as directors on Fortune 500 companies. They are a web of familiar faces that make decisions across industries and borders. The median is that single person will be a director for 7 different Fortune 500 firms.  A small number of elites control the wealth of the nation.

Conspiracies are fun to imagine,
but too complex to pull off.

Not a Conspiracy

Having similar educations, these members of the elites tend to think alike. There is a homogeneity to what they are exposed to and therefore who they can become.

Human nature is to seek out people like ourselves. Those who think like us and act like us, attract us.

There need be no secret conspiracy of power for an elite to form. It is just the way humans are.

Leveraging family, contacts and existing wealth by individuals tend to build a cadre of elites.  If you could, wouldn't you give your children this opportunity by tilting the scales of opportunity in their favor?

Ethical Entitlement

Rockefeller boys with their father.
All inherited great wealth.

The Untied States envisions itself as a place where you can rise to the top though hard work. This Protestant Work Ethic tells us that frugality and effort will lead us to prosperity. Some even think it is a sign of God's blessing when we achieve success in this way.

This ethic also tells us that once you have 'made it' you deserve to be there. Your wealth and power are an indication of your personal superiority. The people who did not make it, failed due to their own personal limitations.

Any head start you may have been given is taken as inconsequential. There are very, very few who make it own their own, yet they are held up as the examples of all of those in power. There many more who came from a few families in these groups of power than those who made it on their own. Yet we take people like Abe Lincoln or Steve Jobs as the standard by which all climb to powerful positions.

Surrounding themselves with people like themselves, they live in an echo chamber that reflects back their own merit and entitlement to their power. The elite tend to not understand the issues, struggles or inequalities suffered by 'the little people'. These failed little people are thought simply not good enough to make the 'big time'.

Reality

Look around at the people you know. We each could name a dozen or more people that have worked hard, been frugal, and have done their best. We can also name several who did not work hard, were lazy and failed.

Hard worker with
little opportunity.

The non-elites are the ones who design the software, work in the factory, administer the medicine, and coach the little league team. They are good people who do the best they can with what they have.

The difference between the elite and those we know who worked hard is not one of effort. The difference is the resource of opportunity. Most of the elite do not start off poor. Most of the elite do not come from broken homes. Most of the elite do not have to work two jobs to support an ailing family member or face unemployment when the local factory shuts down.

The non-elite do not attend private schools with great educations. They pay off student loans over 20 years. The non-elite do not get inside knowledge on the next big economic opportunity, they are at the whim of the big company's plans. The non-elite can not martial the capital, resources, lawyers, or political power to realize their potential and accomplish their goals.

The difference between the 'little guy' who works hard and the 'little guy' who is lazy pales in comparison to the lazy and hard-working elite. The elite have huge advantages in money, education, and resources. These advantages are the true source of their power, generation after generation.

The people who call themselves the 'job creators' are actually often the elite in a new mask. Believing they 'know better' they demand a greater share of the common resources, pay less taxes, and make decisions that effect all our lives with out our input.

Conclusion

We will always have an elite in our society. It's just the way things are.

The elite should not forget their advantage and spread the knowledge and resources so that more have opportunity.  

More people of merit should be allowed to become elites, especially by non-traditional means.

The non-elite need to setup infrastructure and institutions that will enable more of the little people to rise to positions of power.

If both the elite and non-elite fail at these tasks, in a few generations we will all become weaker.

Mapping Wealth, Education, and Politics

Is there a relationship between wealth, education, and politics?  

Let us examine the raw geographic data and see what we can learn.

Household Income 

Poverty Level

High School Diplomas

 College Degrees

Election 2008

Election 2012

What do you see?

When I look for data to support an opinion, I am being close minded.

When I look at data, then form an opinion, I learn.

Clicking on the title will open the source data. 

Clicking on the map will open the map in a larger format.  

Links have been provided so you can verify the data and its source for yourself.  

Census data is interactive, so you can explore further on your own.  

Data is presented on the county level across the 48 lower states.

Myth of the Makers (Part 3)

In this series we are examining the libertarian economic myth that a small number of people are makers and that the rest of the society are takers. It attempts to show that this world view is false and works against society, not for it.

In Part 3 we continue examining the list of assumptions about the superiority of the Makers showing in counter arguments how theses assumptions lead us to false ideas about how society works.

Without Makers Society Collapses

Backyard inventor.

It is true that not everyone can invent the next great thing. Not everyone is able to write new music. Most people are unable to design their own cars. But to suggest that only a select few can do these things is easily disprovable. We have an over abundance of makers.

There are many people who can and do invent. Most inventions are never monetized, made in a factory and reproduced for all. Inventions that never leave the garage, the kitchen table, the hobby room are purely for the local benefit of those who invent and there close associates. Human beings are in fact very creative in finding new ways to solve old problems. Steven Wozniak was not the only computer hobbyist who invented a personal computer.

Land of tinkering.

The number of talented garage and bar bands in my country alone is astounding. Every neighborhood has an aspiring string quartet, guitar hero, or closet rapper. So many more songs are written and performed than go public as to make us literally awash in musical talent. Madonna is not the only creative musical artist to write a catchy tune.

In garages and small commercial buildings all around the land are individuals and small groups who design their own vehicles. From three wheeled custom motorcycles to flying cars, our nations ability to develop new means of moving ourselves around boggles the imagination. To suggest that only Mr Ford, Mr. Oldsmobile, and Mr. Harley are capable of designing vehicles is obviously not so.

Robber barons showing self interest.

It is the access to resources that divides Steve Wozniak, Madonna, and Mr. Ford from the general masses. Many have tried and failed at achieving the level of success enjoyed by people like these. Some fail because of personal inabilities. Most fail for lack of access to resources.

As the Small Business Administration has documented, most business fail because of lack of experience, insufficient money, and poor location. They do not fail because of the people are incapable. Rather, they fail because they have not been given the room to gain experience, have access to resources, and being given access to the right location. Those who control the resources shut out those who do not, unfairly limiting their own competition.

Labor farmed by greed.

Makers know best how to use resources.

Makers make decisions about how to use resources for their own personal interest. Few makers choose to allocate their resources for the greater good. This self interest often leads to a depletion of a shared resources by individuals, acting independently and rationally according to each one's self-interest, despite their understanding that depleting the common resource is contrary to the group's long-term best interests. Makers must be monitored and restrained by society in order to ensure that the Makers self interest does not damage the whole of society. Selfish makers can hurt us all.

The idea that selfishness and greed are a societal good is clearly false.  It is an argument that tries to justify immorality as a virtue.

Those who would tell us that they should get all the results of 'their labors' are actually trying to confuse us.  Ayn Rand's philosophical views has been perverted by a new generation of robber barons.

The division of society in to Makers and Takers is mythic attempt by a few to take even more from the labor of us all.

First - Part 1 – Part 2 – Part 3

Myth of the Makers (Part 2)

In this series we are examining the libertarian economic myth that a small number of people are makers and that the rest of the society are takers. It attempts to show that this world view is false and works against society, not for it.

In Part 2 we examine the first few assumptions and counter arguments in more detail.

U.S. Wealth distribution.

Makers Create Wealth

There are three definitions of wealth: Things that make people better off, the value of things, and the total assets of individuals.

Not all wealth is about money. Wealth is also about life, liberty and happiness. Those who focus only on money as a definition of wealth are limiting the value that human beings have to an arbitrary counting system for their own benefit.

Billion dollar mansion
under construction.

The land a farmer hands on to his children is his wealth, not just the crops he takes from the land. The care a mother gives her children is her wealth, not just the money she spends on them. The labor we give to those challenged by natural disaster is often more about just showing up and lending a hand. Wealth is more than money.

The majority of the wealth in a society is not created by the individuals who control it.  Rather it is inherited.  Huge fortunes made in one generation are handed down from father to son creating an oligarchy of power.  The descendants of wealth benefit from the labor of others without providing in return.  Wealth is concentrated by family more than effort.

Obligation to give back.

Makers Act Alone

No maker became a maker without society. Without their parents Makers would not have been given the basic food, shelter, and clothing necessary to grow up. Without schools provided by the local society they would not have had the chance to be educated enough to become Makers. Without national society Makers would not be safe from enemies. Makers could not exist without the society they come from. Makers have an obligation to that society to return what has been given them.

Making is a team effort.

Most things that are made require many hands of effort in order for the thing to be made. No one Maker designs and builds the radio in your car. No one Maker plants, grows, transports, and sells his food unless they are in a small limited, local market. No one Maker builds their own factory by hand and runs it by themselves. Makers live in an interconnected society. To separate themselves from the society is to act against the society which created them.

Garage inventions

Few People Are Makers

Actually most people are makers to one degree or another. My mom was a maker of meals and households. My Dad made torpedo targets. My wife makes documents so people can learn to use tools made by others. My friend makes clean bathrooms and floors so we remain healthy and feel good about our environment. Each of these people make more than these things. All responsible people make things through effort of labor. Sometimes they are rewarded by money. Sometimes they are rewarded by love, or happiness, or life, or liberty. Almost everyone is a maker of some kind.

Makers Always Benefit Society.

Destruction of the commons.

Many people make things for bad ends, even on purpose. The strip club owner employees girls who may not make money otherwise, but drags down the potential of all the other daughters. The Heroin dealer makes money distributing a product that does evil. Cigarette makers do far more damage than good for society. It is difficult to find an argument why Swastika makers help people. Some makers can hinder society.

Lungs after cigarettes.

Most makers do have a positive good result in what they make. The products and services of many makers have negative side effects that can sometimes over weigh the good that they do. Even those without bad intent can do damage though. When the focus of the maker is on making money and not making good, makers can do great evil.

Next - Part 1 – Part 2 – Part 3

Myth of the Makers (Part 1)

At the heart of the conservative economic argument is the idea that a small number of people make things, while everyone else lives off their ability. These special few who are the designers, inventors and creators that provide the masses with goods and services. The libertarian view expounds that the general public should cater to the needs of these special few so that everyone else can benefit from the their genius.

The selfish man carries the
world on his shoulders?

The basic philosophy of the conservatives is based on the idea of the 'Virtue of Selfishness'.  It argues that  businessmen, innovators and builders are 'Makers'. 

Makers provide things everyone needs. Makers are superior humans due to their skill, talent, and force of will. Makers act in their own self interest using their genius,talent, and creativity to provide things for many other people. Makers add value to their community and are rewarded in return by money and power. When the society diverts resources from the makers, it is essentially an evil that will ruin all.

This view of selfishness as a 'moral good' has as one of its basic ideas that most people are not Makers, rather, most people are 'Takers'. Takers use the things and services given them by the Makers. Takers are inferior humans because they lack skill, talent and/or will. Takers act in their own self interest taking away from the makers, giving nothing in return; essentially stealing from the Makers. Takers drag down society and will ruin it all because they divert the resources of the Makers.

What selfishness means.

There are several assumptions to the Makers argument. They are:

1. Makers create wealth.
2. Makers act alone.
3. Few people are Makers.
4. Makers always benefit society.
5. Without Makers society collapses.
6. Makers know best how to use resources.

Every one of the assumptions about Makers can be challenged using reason. The concept of Makers and Takers can be dis-proven as rationalized myth. These stories about Makers serve only the purpose of allowing a few people with power to maintain that power. The myth of the maker is therefore propaganda.

Unselfish acts of labor.

Here is a brief list of the reasons the assumptions of the makers are false:

1. Wealth is more than money.
2. Makers have an obligation to society
3. Makers are in an interconnected society
4. Everyone is a maker.
5. Makers can hinder society.
6. Makers can do great evil.
7. We have an over abundance of makers.
8. Those who control the resources shut out those who do not.
9. Selfish makers can hurt us all.

Over the next two posts, I'll be examining each one of the assumptions about Makers demonstrating how the logic used in these arguments does not hold up to the facts of the reality we live in.

Next - Part 1 – Part 2 – Part 3