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I wish I had gotten around to reading this book sooner. It is a great read and takes a great deal of piss out of the arguments (made by our beloved conservative/libertarian friends) for lower taxes and more love for the wealthy. I highly recommend reading it. Check out other reviews here and here. I found a brief summary of what McQuaig talks about in the book:
“In the last few decades, the concentration of income in the United States, Britain and Canada has reached levels not seen since the late 1920s. Such extreme income concentration created a dynamic that led to the disastrous Wall Street crash in 2008 – just as it did in 1929. The financial collapse is simply the most striking example of the problems caused by the rise of a new class of billionaires. Their massive fortunes – widely considered benign or even beneficial to society — are actually detrimental to everyone else. The glittering lives of the new super-rich may seem like harmless sources of entertainment. But such concentrated economic power reverberates throughout society, threatening the quality of life and the very functioning of democracy. It’s no accident that the United States claims the most billionaires—but suffers from among the highest rates of infant mortality and crime, the shortest life expectancy, as well as the lowest rates of social mobility and electoral political participation in the developed world. Our society sees itself as a meritocracy. So we tend to regard large fortunes as evidence of great talent or accomplishment. Yet the vast new wealth isn’t due to an increase in talent or effort at the top, but rather to changing social attitudes legitimizing greed and to policy changes made by governments under pressure from the new elite.”
Oh and a quick excerpt from the book taking down the notion of the “self-made” billionaire (p.25 – 28).
“The notion that it should be possible to become a billionaire is rooted in the idea that there are some uniquely talented individuals whose contribution is so great that they deserve to be hugely, fabulously rewarded.
Some billionaires, such as Leo J. Hindery Jr., have made this point themselves. Hindery, whose contribution was to found a cable television sports network, put it this way: “I think there are people, including myself at certain times in my career, who because of their uniqueness warrant whatever the market will bear.” Similarly, Sanford Weill, long a towering figure on Wall Street, is impressed with the contributions of billionaires like himself: “People can look at the last 25 years and say that this is an incredibly unique period of time. We didn’t rely on somebody else to build what we built…”
What is striking in such statements, in addition to the absence of modesty, is the lack of any acknowledgement of the role of society in their good fortune. These men seem unaware of the pervasive role played by society in general (as well as by specific other people) in every aspect of their lives — in nurturing them, shaping them, teaching them what they know, performing innumerable functions that contribute to the running of their businesses and indeed every aspect of constructing and operating the market that has enabled them to get rich. Weill’s statement that “We didn’t rely on somebody else to build what we built” can be quickly tested. Would Weill, having built everything from scratch, be able to reproduce his fortune if stranded on a desert island?
If so, then he should be able to keep every bit of it for himself, having been solely responsible for its creation. If not, then it is reasonable to ask what portion of it was created by him, and what by others?
The Desert Island Test is a useful one to keep in mind. The primacy and ubiquity of society — so casually erased by billionaires and others justifying their fortunes — must be restored if we are to have any meaningful discussion of income and wealth, and where an individual’s claim ends and society’s begins.
One of the crucial ways that society assists individuals in generating wealth lies in the inheritance from previous generations.
This inheritance from the past is so vast it is almost beyond calculation. It encompasses every aspect of what we know as a civilization and every bit of scientific and technological advance we make use of today, going all the way back to the beginning of human language and the invention of the wheel. Measured against this vast human cultural and technological inheritance, any additional marginal advance in today’s world — even the creation of a cable television sports network — pales in significance.
The question then becomes: who is the proper beneficiary of the wealth generated by innovations based on the massive inheritance from the past — the individual innovator who adapts some tiny aspect of this past inheritance to create a slightly new product, or society as a whole (that is, all of us)?
Under our current system, the innovator captures an enormously large share of the benefits. Clearly, the innovator should be compensated for his contribution. But should he or she also be compensated for the contributions made by all the other innovators who, over the centuries, have built up a body of knowledge that made his marginal advance possible today? What share of the newly-generated wealth correctly belongs to the society that has not only nurtured him but also provided him with this rich past inheritance — without which, stranded on a desert island, he wouldn’t have the means to even keep himself warm.”
The youtube summary as well.
From a great interview on Alter.net –
“LP: Some say that if we redistribute income in a more equitable way, people won’t want to work as hard. Is that true? What happens to our motivation to work when things are so inequitable?
JS: One of the myths that I try to destroy is the myth that if we do anything about inequality it will weaken our economy. And that’s why the title of my book is The Price of Inequality. What I argue is that if we did attack these sources of inequality, we would actually have a stronger economy. We’re paying a high price for this inequality. Now, one of the mischaracterizations of those of us who want a more equal or fairer society, is that we’re in favor of total equality, and that would mean that there would be no incentives. That’s not the issue. The question is whether we could ameliorate some of the inequality — reduce some of the inequality by, for instance, curtailing monopoly power, curtailing predatory lending, curtailing abusive credit card practices, curtailing the abuses of CEO pay. All of those kinds of things, what I generically call “rent seeking,” are things that distort and destroy our economy.
So in fact, part of the problem of low taxes at the top is that since so much of the income at the very top is a result of rent seeking, when we lower the taxes, we’re effectively lowering the taxes on rent seeking, and we’re encouraging rent-seeking activities. When we have special provisions for capital gains that allow speculations to be taxed at a lower rate than people who work for a living, we encourage speculation. So that if you look at the design bit of our tax structure, it does create incentives for doing the wrong thing.”
The burgeoning inequality in the US is rotting civil society away, the sooner the US decides to address the issue the better.
From Alter.net Richard D. Wolffe writes:
“In May 2012, I had occasion to visit the city of Arrasate-Mondragon, in the Basque region of Spain. It is the headquarters of the Mondragon Corporation (MC), a stunningly successful alternative to the capitalist organization of production.
MC is composed of many co-operative enterprises grouped into four areas: industry, finance, retail and knowledge. In each enterprise, the co-op members (averaging 80-85% of all workers per enterprise) collectively own and direct the enterprise. Through an annual general assembly the workers choose and employ a managing director and retain the power to make all the basic decisions of the enterprise (what, how and where to produce and what to do with the profits).
As each enterprise is a constituent of the MC as a whole, its members must confer and decide with all other enterprise members what general rules will govern MC and all its constituent enterprises. In short, MC worker-members collectively choose, hire and fire the directors, whereas in capitalist enterprises the reverse occurs. One of the co-operatively and democratically adopted rules governing the MC limits top-paid worker/members to earning 6.5 times the lowest-paid workers. Nothing more dramatically demonstrates the differences distinguishing this from the capitalist alternative organization of enterprises. (In US corporations, CEOs can expect to be paid 400 times an average worker’s salary – a rate that has increased 20-fold since 1965.)”
The ideas of egalitarianism and equality can work and work well within society, Mondragon is but one example of how we could be organizing our society in a more just mode of production.
“Given that MC has 85,000 members (from its 2010 annual report), its pay equity rules can and do contribute to a larger society with far greater income and wealth equality than is typical in societies that have chosen capitalist organizations of enterprises. Over 43% of MC members are women, whose equal powers with male members likewise influence gender relations in society different from capitalist enterprises.
MC displays a commitment to job security I have rarely encountered in capitalist enterprises: it operates across, as well as within, particular cooperative enterprises. MC members created a system to move workers from enterprises needing fewer to those needing more workers – in a remarkably open, transparent, rule-governed way and with associated travel and other subsidies to minimize hardship. This security-focused system has transformed the lives of workers, their families, and communities, also in unique ways.
The MC rule that all enterprises are to source their inputs from the best and least-costly producers – whether or not those are also MC enterprises – has kept MC at the cutting edge of new technologies. Likewise, the decision to use of a portion of each member enterprise’s net revenue as a fund for research and development has funded impressive new product development. R&D within MC now employs 800 people with a budget over $75m. In 2010, 21.4% of sales of MC industries were new products and services that did not exist five years earlier. In addition, MC established and has expanded Mondragon University; it enrolled over 3,400 students in its 2009-2010 academic year, and its degree programs conform to the requirements of the European framework of higher education. Total student enrollment in all its educational centers in 2010 was 9,282.
The largest corporation in the Basque region, MC is also one of Spain’s top ten biggest corporations (in terms of sales or employment). Far better than merely surviving since its founding in 1956, MC has grown dramatically. Along the way, it added a co-operative bank, Caja Laboral (holding almost $25bn in deposits in 2010). And MC has expanded internationally, now operating over 77 businesses outside Spain. MC has proven itself able to grow and prosper as an alternative to – and competitor of – capitalist organizations of enterprise.”
We need to see more of this in our business news.
The United States is regressing quickly under the burden of its plutocratic elites. Public health and the rights of women are under onslaught by ignorant religious ideologues who espouse intensely anti-woman rhetoric that undermines the ideals of civilized society. You would think that idiocy on this scale would quickly be quashed and laughed out of the public sphere. Wrong – its becoming the common parlance…
“The nationwide assault on reproductive and abortion rights that effects everyone with sexual health needs (so, that’s everyone, pretty much!) and has come to be known as “The War on Women” may claim its first state as a victim soon. In Mississippi, the final abortion clinic left is fighting for its survival. Bloomberg reports:
Beginning July 1, all abortion-clinic physicians must have admitting privileges at a local hospital under a law passed by the Republican-led Legislature and signed by Republican Governor Phil Bryant in April. At the Jackson Women’s Health Organization, the state’s sole remaining clinic providing elective abortions, none of the three physicians who perform the procedure has been granted those privileges.
“Mississippi may become the first U.S. state without a dedicated abortion clinic if the Jackson facility fails to come into compliance. That would mark the most visible victory for the anti-abortion movement, which has fought to abolish the procedure in the face of the U.S. Supreme Court’s 1973 Roe v. Wade decision guaranteeing a woman’s right to have one.”
The Republicans in Mississippi are busy legislating themselves back into the stone-age. I sincerely hope that Canada will not follow their foolish example.
Let us sent out a big thanks to the Ontario Swing Voters that brought us this monstrosity known as the Harper Majority Government. The Omnibus bill is the latest poke at the mouldering corpse that is Canadian Politics.
Debate? Defence of ideas? Compromise? Not happening in our House of Commons. The light at the end of the tunnel is coming though and the French NDP contingent is gnawing at the bit waiting to lead the charge to expel the current plutocrats from power.
“The French chant “2015” started in the upper reaches of the NDP backbench and soon cascaded into a common, desk-thumping chorus just before midnight Thursday in the House of Commons.
The tone from the official Opposition was oddly celebratory, given that they’d just faced 22-plus hours of consecutive spankings by a Conservative majority government voting to protect its omnibus budget bill from hundreds of amendments.
Bill C-38, the sprawling Jobs, Growth and Long-Term Prosperity Act, survived the ordeal untouched and now goes to third and final reading in the Commons on Monday.
The bill — and the literally dozens of significant statutes it comprises on everything from environmental assessments to old age security, employment insurance rules, government contracting and cross-border policing — should clear the Conservative-dominated Senate by the end of next week.”
Of course Bill C-38 was going to pass, like a javelin through the heart of Canadian Democracy. But we can save hope that things will change as the NDP back bench clearly intoned in the House of Commons.
“Finance Minister Jim Flaherty said as he emerged from the chamber with his budget bill intact.
“We have our view and our view is supported by the mandate we got from the people of Canada last year, so we’re carrying out the mandate that we have — which is about jobs and growth and economic prosperity.”
The majority of Canadians did not vote for you or your mandate Mr.Flaherty, it would be good of you to remember that. You can feel the scorn from Conservative benches, actually having to show up and vote on legislation, having to deal with this nasty messy idea that people should have input into how their country is run. The nerve of Canadians who clearly do not know their place.”
“Green party leader Elizabeth May was the author of hundreds of the substantive amendments shot down Thursday and one of about a half dozen MPs who didn’t miss a single vote. She said it was far more than “theatrics or … a waste of time.”
“This was democracy,” said May, still feisty and coherent after 22 hours of voting.
“This was parliamentarians stepping up to our obligation and our duty to Canada, to parliament, to the people who sent us here from our constituencies, to behave like parliamentarians.”
“It was a sign that democracy in Canada has a spark of life,” said May. “We found the pulse.”
This was democracy indeed. The electorate will remember how the Harper Government slapped the democratic process in the face. Prepare for more jaw dropping, commonsense defying attacks on our environment, labour and the social fabric of our society though because Harper needs to get all the damage done quickly so he can begin sucking up to the Canadian public in time for the 2015 election.
“It is music’s capacity to take over your mind and invade your inner experience that makes it so terrifying as a potential weapon.“
– Thomas Keenan, the director of the Human Right’s Project at Bard College
Hey, surprise we’re not the good guys. Ever. This is all from Al-Jazeera and I guarantee it will not brighten your day.
“In 2003, it transpired that US intelligence services had tortured detainees at Guantanamo Bay and Abu Ghraib with music from Sesame Street.
Human rights researcher Thomas Keenan explains: “Prisoners were forced to put on headphones. They were attached to chairs, headphones were attached to their heads, and they were left alone just with the music for very long periods of time. Sometimes hours, even days on end, listening to repeated loud music.”
“The music was so loud,” says Moazzam Begg, a former detainee at Guantanamo Bay and Bagram. “And it was probably some of the worst torture that they faced.”
Stunned by this abuse of his work, Cerf was motivated to find out more about how it could happen.
“In Guantanamo they actually used music to break prisoners. So the idea that my music had a role in that is kind of outrageous,” he says. “This is fascinating to me both because of the horror of music being perverted to serve evil purposes if you like, but I’m also interested in how that’s done. What is it about music that would make it work for that purpose?”
We’re missing yet another capitalist experiment go bad. Chile self-destructed earlier under the watchful eye of the IMF and its neo-liberal reforms. Mexico, geographically, is much closer to us and you would think that its slide into anarchy would garner a little more attention in our news media.
Nah.
The breakdown of Mexican civilized society continues unabashedly while the important powers that be continue to make their money. The unravelling of the social fabric of Mexican society is chilling reminder of lawlessness actually is.
The North American Free Investor Agreement (NAFTA) was the harbinger of the demise of Mexican society. Austerity and cost-cutting denied the government the funds necessary to do what governments are supposed to do, serve and protect their people. Not industry, not finance, not capital – the people of Mexico. The inequality and insecurity are so entrenched, the people so desperate, people will do anything to survive. Morality, ethics all go down the shitter when you struggling just to survive the day. Consider the police situation:
Watch closely and you can see our future written in the blood of the poor of Mexico. We mourn for them, yet fail to see the precursors (neo-liberal reforms, etc.) that are shredding the social fabric of our societies.
bleatmop
Mystro
The Arbourist
Dead Wild Roses 
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