If Words Were Money
Been Robbed Lately?
Posted Jun 14, 2014
The word “hogging” gets at the idea of justice or fairness that’s submerged in the polite abstraction “inequality.” The current hog-wild economy in the US is sinister when people don’t receive a fair share of income for their work. If Walmart gives its CEO over $23 million, and it pays you less than you need to stay alive, it feels wrong—whether or not you’re equal. It’s a “starvation wage,” and it comes with fear, stress, and intimidation. And if the company pays you a starvation wage and then lobbies to kill the government food stamp program that keeps you fed, why call it “politics”? It’s more like cheating or enslaving you, whispering “work or die.”
This is one reason why so many people are reading about the economist Thomas Piketty’s new book “Capital in the Twenty-first Century,” which shows that the return from capital tends to grow faster than the payoff from labor. If you own real estate, say, or patents, stocks, bonds, or Scrooge McDuck’s money bin, your money can work for you while you stay home and think up more ways to get rich. Capital is bringing you more capital, and also more time: more freedom. In a rentier economy, the more you have, the more you get.
There’s something uncanny about capital. Money behaves as if it’s alive. If you charge rent or interest, then money creates more money. This is the ancient, spooky fascination of usury. Your capital enables you to collect and borrow yet more capital—rinse and repeat—until you have an empire. Such financial “leverage” (think of a pry bar) creates the force-multiplier effect, magnifying your command and enlarging your money-bin. If you systematize the effect through clever derivatives, bundling, and rehypothecation, as Wall Street does, you can be TBTF (too big to fail) and “politics” will make you whole again if something goes wrong as it did in 2008. Then “banking” reveals features of a Ponzi scheme, and people suffer real bankruptcies, unemployment, and eviction.
Today, the top 1% or even half-percent have essentially grabbed all the economic gains of the last few decades. In the US, “the share of income going to wages and other forms of labor compensation, dropped from 68% percent in 1970 to 62% in 2010—a decline of close to a trillion dollars.” In turn, incomes in the middle and below have stagnated or diminished. In terms of income generated by work, says Piketty, the level of inequality in the US is “probably higher than in any other society at any time in the past, anywhere in the world.”
Piketty proves his point with data. But psychology and evolution are at work too. Appetite has no natural limit. If you’re afraid there won’t be enough—for whatever reason: competition, stealing, unemployment, climate change—you may get ravenous. You can hog food and capital until other people are broke or crippled, or so indebted that they’re effectively your slave. After all, economic health isn’t a hoard or an empire. It’s productivity: the circulation of money and energy. Just as the self isn’t a thing but a social interaction, so wealth isn’t a pile of loot: it’s social transactions, money in motion, buying and selling, trading and investing.
Hogging capital is hogging power. The debtor is potentially your slave or the mistress that rubs your feet. You command debtors’ political as well as physical strength. You can command special low tax rates, so that you get to use the public’s roads, water, and the like for free. You can even use the public’s collected taxes, taking subsidies and TBTF “bailouts” that feed your inner hog.
Whether they praise his findings or look for flaws, reviews of Piketty’s book are usually polite. Like economists, they try to use objective terminology. But money is not simply neutral numbers anymore than a bullet’s trajectory is merely ballistics. Money’s charged with feeling; it “burns a hole in your pocket.” Think of the denial in a euphemism such as “breadwinner,” which makes a lifetime of loyal toil a lucky lottery ticket. Like money, “politics” is also always power. Sleazy bankers get golden parachutes; the predator Marc Rich buys a presidential pardon; beggars go to jail.***
Beyond economic data, there’s actual history: the rhythm of hogging, servitude, and protest. Which brings to mind a good companion to Piketty’s book: George Huppert’s After the Black Death. Never mind the title. The book is really an overview of economic life in early modern Europe (14th-18th centuries), and full of eye-opening details. Huppert describes subsistence life on the farm, then looks at the typical village, town, and finally the city, where finance and privilege ran the show as they do today.
What’s breath-taking is that the basic dynamics haven’t changed. The city dominated the landscape. Farm folks lived from hand to mouth. As serfs, they gained control of their land, became free peasants, then ultimately lost control again to absentee landlords, the financial overlords in the city. The city’s seigneurial 1% captured political power, too, minimizing their own taxes and shucking regulations. They knew how to lobby and to manage the law.
Here’s a twist: when the lowly protested, says Huppert, the evidence shows them not forming a vengeful mob, as 19thC historians liked to think, but teaming up with literate representatives, sometimes lawyers, and petitioning for relief. Huppert’s account demands to be read if only to see the myth of the crazed mob—and today’s prejudices—dispelled.
Like wealth today, which invests in paramilitary security and gated precincts, 19thC historians assumed that inequality generated rage. But the truth is more complex. Like you and me, working people usually tried to contend rationally with hairy euphemisms and toxic denial. They wanted the monarch to listen to them. They wanted traditional laws restored. They wanted justice.
*** As NPR has reported, some financially strapped states are reviving debtors’ prison these days, charging legal costs to those jailed.How about “a homeless man sentenced to a year in jail over $2,600 in penalties incurred by shoplifting a $2 can of beer; a recovering drug user sent to jail three times for being unable to make payments on nearly $10,000 in court costs. . . . At the federal level, jailing someone for unpaid debt has been illegal since the 1830s. A Supreme Court decision 30 years ago reaffirmed that judges must determine that an offender is able to pay overdue fines before jailing her, but some states appear to be breaking with that requirement.” <<http://thinkprogress.org/justice/2013/04/05/1829601/ohio-debtors-prison/...
Resources used in this essay:
John Cassidy, "Forces of Divergence," New Yorker, March 31, 2014
George Huppert, After the Black Death (1977)
George Piketty, Capital in the Twenty-first Century (2014)
Alan Pyke, “Impoverished Mother Dies in Jail Over Unpaid Fines for Her Kids Missing School” (Think Progress).