Wednesday, January 18, 2017

Talking Inequality at Davos

Everyone at the Davos summit is talking about inequality and what to do about it. But according to Peter Goodman, the conversation skips over obvious remedies like stronger unions or higher taxes on the rich in favor of this sort of thing:
The answers from the corporate executives who comprised a panel could be crudely boiled down to this: The people who have not benefited from globalization need to try harder to emulate those who have succeeded.

Abidali Neemuchwala, the chief executive officer of Wipro, the global information technology and consulting company that hosted the event along with The Financial Times — and who last year earned some $1.8 million plus stock grants worth an additional $2 million or so — said working people would have to pursue training for the jobs of the future.

“People have to take more ownership of upgrading themselves on a continuous basis,” he said.

. . . . Ray Dalio, founder of the American investment firm Bridgewater Associates — who took home $1.4 billion in compensation in 2015 — suggested the key to reinvigorating the middle class was to “create a favorable environment for making money.” He touted in particular the “animal spirits” unleashed by stripping away regulations.
More animal spirits! Why didn't I think of that?

Better get back to work on my continuous upgrade. . . .


G. Verloren said...


The rich are divorced from reality. They have a flawed understanding on the nature of things. They tell themselves little myths, comforting assumptions that they draw in order to not suffer from cognitive dissonance.

First, there's the notion that "hard work is rewarded with success". It overwhelmingly isn't. Millions of people break their backs every day for their entire lives, and get nowhere.

If you point this out to the wealthy, showing them that many people toil much more heavily and with much greater dedication and tenacity than the rich themselves ever do, they will change course slightly and start admitting a bit more of the actual truth.

Well of course it takes more than -just- hard work. "You need to apply yourself properly and seize opportunities." They'll tell you all about how you need to get out there and "sell yourself", to take on extra work unasked and uncompensated, to work for "exposure", to be a corporate shark and do whatever it takes to climb that shiny gold ladder of success by proving your willingness to benefit your employers at your own expense and that of your fellows. Ultimately if please your masters enough, they're see fit to uplift you through nepotism!

Suddenly we've gone from "work hard and you will be rewarded" to "only the most worthy few are rewarded, compete ruthlessly to be one of the special chosen".

The simple fact is not everyone can be at the top, and in fact the people at the top rely on the vast majority of everyone else being beneath them in order to maintain their position. But they still tell themselves that this is "fair" somehow, and that they "deserve" to be at the top - because they worked hard and seized opportunities, damnit!

G. Verloren said...


Except often they didn't do much of either.

Wealth accumulates wealth. Money is a replacement for effort. If you have $200 in the bank, you have to spend all your time working to feed yourself and make ends meet. If you have $200,000,000 in the bank, you can just "put your money to work for you" and live off the annual interest. Even at the abysmal rate of 0.01% yearly interest in a basic savings account, you still "earn" $200,000 a year - absolutely more than enough to live not just comfortably, but even luxuriously, without having to work a day in your life.

That's the entire point of capitalism. If you can get a big enough pile of capital, you can forgo having to work, because you set it up to self perpetuate. It's like the money just appears out of thin air. (Of course, it doesn't come from nowhere - it actually gets squeezed out of the poor, extracted through rents and carefully constructed profit margins, but that's neither here nor there.)

So of course, if you start out in life with more wealth, it's easier for you to get even more wealth. As the wealthy themselves say, "Success breeds success". If you already have money, it becomes much easier to "earn" more money. The more privilege you enjoy, the easier it is to maintain your privilege and to "earn" even more privilege on top of it.

But obviously this is monstrously unfair. There are huge numbers of people literally toiling to death in poverty while the rich enjoy their wealth and lives of ease. There are 8 rich white men born in the lap of luxury who possess the same proportion of global resources as the roughly 3,750,000,000 poorest individuals in the world. That's the top 0.0000001% vs the bottom 50% of the human population. It not even remotely within anything vaguely resembling sane proportions.

And that uncomfortable reality, when brought to mind, quite naturally makes the wealthy squirm. Somewhere, deep down, they realize this is a crime against humanity. But no one wants to think that they are a bad person. We all want to believe that we are good and just people, and that we deserve our successes.

And so to quell the cognitive dissonance that comes from their position, they try to rationalize things. They tell themselves it's okay that they have everything while billions have nothing. They tell themselves that this is natural, just, and fair. They succeeded through hard work and seizing opportunities - not through random chance and odds stacked in their favor. If the poor truly want to succeed, they can just follow in their footsteps. And anyone who tries and still doesn't succeed... well we won't feel bad about that, because they deserved to fail.

So is it any surprise that the rich don't have the slightest clue about how to fix inequality? That they attribute their wealth and success to such absurd notions?

Ever notice how the rich always want to get rid of regulations? How will that help the poor?

Well obviously if something makes it easier for rich people to make money, then by extension it will also make it easier for poor people to make money, right? ...right?

These people just cannot even begin to conceive of the special bubble of reality they live in, and the differences between their own lives and those of everyone else. They literally don't understand why regulations exist. Why would anyone in the world ever want or need to government to step in to protect them from exploitation and abuse? Who has ever even heard of such a thing? Clearly regulations are nonsense - the work of meddling busybodies and bureaucrats who are jealous of the successful, and just want to put obstacles in their way and place senseless restrictions on them out of simple pettiness and spite.

G. Verloren said...


To sum up, people don't change. The rich have always, always been stunned to truly learn that the universe is unfair and that poor people suffer monstrously and undeservedly.

Siddhārtha Gautama stepped beyond the walls of his palace and was astonished to find suffering at every turn. It troubled him so much that he walked away from his rich life of bliss and comfort forever, and spent the rest of his years trying to make sense of the universe.

But we can't all be Buddhas, even if you want to argue that we all have the potential. It's never going to happen. The answer isn't to just wait until we all miraculously achieve enlightenment somehow.

The answer is to slowly change the way society operates - to work create a society in which significant economy inequality does not exist, because it is not allowed to exist. To create a society in which there is no such thing as rich or poor, because everyone has all of their needs met fairly and there is no value in having excess beyond what reasonably need. To have a culture where people are taught to be generous instead of selfish, and to prefer self improvement over the accumulation of material possessions.