• sandyt commented on the blog post Us Versus the Volcano

    2013-01-21 13:00:23View | Delete

    Thanks to marym for the Oxfam link! And to hotflashcarol for pointing out the necessary strategic objective. And to robspierre for his analysis.

    I agree with the spirit of Glenn W. Smith’s point. But I would like to expand it a bit. He describes the one percenters as termites. Actually, there is a much more venerable and accurate term. They are rentiers, people whose income arises from owning things rather than producing them. In modern terms, money for nothing. Adam Smith argued in 1776 that their wealth should be taxed away, since it does not create wealth (see this from the estimable Michael Hudson contrasting Adam Smith’s ideas with those of Simpson-Bowles). In Smith’s day, the rentiers were mainly landowning feudal aristocrats and bankers monopolizing credit. In succeeding decades, the British government followed his advice. It destroyed monopolies, taxed land, and built the world’s most advanced economy. For more, see Ch. 7 of the excellent recent book, “Why Nations Fail” by Daron Acemoglu and James Robinson.

    If we want to stop our slide into misery, we will have to do something similar. The recent compromise on the Bush tax cuts, as Stiglitz pointed out, accomplishes nothing.

    The solution, of course, is at hand. As Acemoglu and Robinson point out, Britain’s progress depended upon accomplishing the Glorious Revolution of 1688, which overthrew the reigning Stuart dynasty, brought in William and Mary on condition that they let Parliament run the country, and extended the franchise in a series of steps unbroken until today. It took street action, it took people going to jail, it took dedicated pressure and agitation over decades, but the result was the burst of progress we now call the Industrial Revolution. With the rentiers in place, it would not have happened.

    Today we need a new industrial revolution; we have to do nothing less than replace our entire energy infrastructure to prevent runaway climate disruption and the threat of social collapse. This is also very desirable short-term economics, as Stiglitz pointed out a couple of weeks ago in the Guardian; it creates demand and puts people to work.

    But it’s not going to be possible with our current crop of rentiers in power. While we need to build a future worthy of human beings, they spend their time conniving to extract even more money from the rest of us, whom they regard as a kind of two-legged cattle (see the appalling attitudes expressed in Chrystia Freeland’s “Plutocrats” for examples). They have gained control of the organs of government and media, not just here but in Europe, Russia, China, everywhere. Only Latin America shows some signs of breaking away and pursuing a model of real development.

    So I’m with hotflashcarol – over the side with them! Keynes called for the ‘euthanasia’ of the rentier (as a class, not as individuals!), which is still good policy today. They got our money from us; it doesn’t belong to them. Let’s redeploy their ill-gained (and well-hidden) trillions for the common good!