Nick Hanauer, a hereditary millionaire who increased the family fortune with some shrewd early dotcom inventions has written an open letter to his fellow “zillionaires” warning that their corruption of the US political system has given rise to an unstable situation of wealth inequality that has turned their potential customers into impoverished pitchfork-wielding revolutionaries who are coming for their heads.
Hanauer wants to salvage capitalism, but he’s keenly aware that the reforms that Reagan began and his successors have built upon have created a system that benefits people like him at the expense of the people he sells things to. He fears that a delusional belief in American exceptionalism has made America’s plutocrats unrealistically comfortable with this situation, convinced that neither the French Revolution nor the Arab Spring could ever take hold among Americans.
America certainly spends enough of “guard labor” — from private prisons to militarized police forces — to suggest that there’s at least a subconscious belief that Hanauer might be right. To investors who believe that they can get a better return from gulag wealth investments than they can through a prosperous consumer class on their own shores, Hanauer argues that this is a dangerous bet without precedent: “There are no counterexamples. None. It’s not if, it’s when.”
Hanauer doesn’t believe that he’s a “job creator.” Jobs, he says, come from consumer demand for products and services, and that demand (as arch-conservative Henry Ford believed) can only be fueled by worker affluence. Capitalists want “rich customers and poor employees” but this doesn’t work on a national scale: your worker is someone else’s customer.
There’s nothing special about being a zillionaire: “If any of us had been born in Somalia or the Congo, all we’d be is some guy standing barefoot next to a dirt road selling fruit. It’s not that Somalia and Congo don’t have good entrepreneurs. It’s just that the best ones are selling their wares off crates by the side of the road because that’s all their customers can afford.”
During the Cold War, the debate over social spending and worker rights always had a thread about the necessity for capitalism to discredit the Soviet project by showing that markets produced a good deal for workers, but no more. Without an external enemy, capitalists have adopted a rhetoric that elevates owning stuff and investing the rents from that stuff to the most important part of the economic story, while the people who make and do stuff are demoted to commodities that can be trivially substituted with someone willing to work at lower wages and under worse conditions.
Like Piketty, Hanauer wants to rescue capitalism, and both men see a coming period of rupture and dislocation if a hereditary, permanent ruling class of monied dynasties is installed by the lack of social spending, progressive taxation, and other policies that treat property rights as subservient to human rights.
You think that Occupy Wall Street and all the other capitalism-is-the-problem protesters disappeared without a trace. But that’s not true. Of course, it’s hard to get people to sleep in a park in the cause of social justice. But the protests we had in the wake of the 2008 financial crisis really did help to change the debate in this country from death panels and debt ceilings to inequality.
It’s just that so many of you plutocrats didn’t get the message.
Dear 1%ers, many of our fellow citizens are starting to believe that capitalism itself is the problem. I disagree, and I’m sure you do too. Capitalism, when well managed, is the greatest social technology ever invented to create prosperity in human societies. But capitalism left unchecked tends toward concentration and collapse. It can be managed either to benefit the few in the near term or the many in the long term. The work of democracies is to bend it to the latter. That is why investments in the middle class work. And tax breaks for rich people like us don’t. Balancing the power of workers and billionaires by raising the minimum wage isn’t bad for capitalism. It’s an indispensable tool smart capitalists use to make capitalism stable and sustainable. And no one has a bigger stake in that than zillionaires like us.
The oldest and most important conflict in human societies is the battle over the concentration of wealth and power. The folks like us at the top have always told those at the bottom that our respective positions are righteous and good for all. Historically, we called that divine right. Today we have trickle-down economics.
The Pitchforks Are Coming… For Us Plutocrats [Nick Hanauer/Politico]
(Image: Marie Antoinette Execution, Isidore Stanislas Helman/Wikimedia Commons, Public Domain)
(Image: Exécution de Louis XVI, Georg Heinrich Sieveking/Wikimedia Commons, Public Domain)
