The Driving Dream of MORE

Too often we assume that Homo Economicus is truly just motivated by the money, or more ridiculously the financial interests of the shareholders of the companies they run.  The truth is Our Galtian Overlords are frequently just assholes because they are assholes, not because being assholes will actually make them any richer.

                                                --Atrios

                                    

That right there.  What Atrios said.  

Digby wrote something the other day quoting Joseph Stiglitz’s assertion that the ultimate fate of the 1% “is bound up with how the other 99% live.”  Digby then added that “a stable society with a thriving middle class is more necessary to [the 1%’s] survival than a quick buck to add to their already depraved level of wealth . . . .”

With which Steve M. quibbled:

Maybe [these statements] are true in the very, very long run, but I can’t live on a planet in which North Korea’s regime has endured for decades, thriving as its population starves, and believe that the overdogs in our society can’t keep bleeding us relatively slowly for as long as we’re willing to put up with it.  They don’t need for us to thrive – they’ll sell to a Chinese or Indian or Brazilian middle class if ours isn’t thriving.  Or they’ll sell to one another.  They don’t need for us to thrive any more than they’ve ever needed a thriving middle class in any of the third world countries where they’ve long put their factories.

But I think Steve M. gets it wrong here, because I think Steve misapprehends the issue.

Digby and Stiglitz might have been discussing the division between the 99% and the 1% that obtains here in the United States, but that division is being replicated around the world and so their argument applies on a global scale.

It is fine to blithely suggest that Our Galtian Overlords will sell to a Chinese or an Indian middle class if the US middle class isn’t flourishing, but neither the Chinese nor the Indian middle class are flourishing either.  Sure, you can point to the high growth rate of the middle class in either country, but that is only because when one’s starting point is essentially zero any uptick at all implies, mathematically speaking, a growth rate of infinity.  (I exaggerate, obviously, but I think you take my point.)

The reason we have a “global savings glut” (Bernanke, Krugman, Roubini), or - stated another way - a “dearth of economic investment opportunity” (Stiglitz), or - stated another way - an “overaccumulation of capital” (Marx) is because Our Galtian Overlords in pretty much every country are appropriating for themselves alone almost all the profit from their growing economies and not recycling that profit back into the system in the form of higher wages for everybody else.

By doing so, they are at once accumulating capital for themselves and destroying any market in which they might later deploy that capital.  It’s not that they are eating their seed corn so much as they are storing that seed corn away until it rots from disuse.

This is also why Steve M.’s point about the 1% never having needed a thriving middle class in “any of the third world countries where they’ve long put their factories” is misplaced.  The cruel genius behind the idea of employing third-world workers at slave wages to manufacture goods for export is that those goods, by definition, are intended to be sold elsewhere; by keeping their labor markets and their consumer markets absolutely separate, manufacturers could impoverish the former without shrinking the latter.  But the genius of this little stratagem evaporates once one attempts to replicate it on a global scale.  When the entire world’s labor supply is impoverished, the entire world’s consumer market is as well.

And as for the idea that the world’s 1% might simply sell to one another if they can no longer sell to the 99%?  Well, they certainly intend to try doing that; in fact, that seems to be the fundamental idea underlying CitiGroup’s infamous “plutonomy memo” from 2005.   But to again quote Kunkel: “this substitution was never likely, for as Keynes observed, ‘when our income increases our consumption increases also, but not by so much.’”  Simply stated, not even the greedy gobs of the Galtian Overlords can swallow an entire world’s production, over and over and over again.

Which leaves us, finally, with the suggestion that perhaps Our Galtian Overlords will learn to be content with living the way Kim Jung-il does in North Korea:  luxuriously, wanting for nothing, content to pile up riches while the rest of the world beggars itself for their comfort.  To which I respond . . . maybe.  Maybe they could learn to live this way, but I doubt it.

It is one thing to beggar a nation, it is quite another to beggar the world.  Kim Jung-il might not be vexed by the idle wealth he is amassing at the expense of North Korea but remember . . . at the end of the day it’s still only North Korea.  How much wealth can he possibly be amassing over there?  After Kim shoots a few new action-adventure Godzilla blockbuster movies and springs for another giant waterslide, how much can he really have left over with which to play the role of Scrooge McDuck?

 (h/t Anderson Cooper)

But The World is . . . The World. 

Grab up all of The World’s resources and you can’t just let that stuff sit around doing nothing.  You’ve got to find some use for it . . . exactly the same way campus police at UC-Davis or the cops in New York just needed to find a use for all that cool new military equipment that until recently had been just lying around.  “Money – excess capital – needs to be put to work; it needs to earn profit, or else it is just useless.”  As useless as an unopened can of military grade pepper spray.

Besides, at the end of the day anyone who has climbed to or spent their life in the coveted position of a Galtian Overlord, anyone as sociopathic as the Koch Brothers who – not content to possess a combined wealth of $50 Billion -- still feel the need to purchase governors, destroy workers’ rights, eliminate all business regulation, and disenfranchise voters merely to suck up even more money. . . anyone like that is never going to be content just to kick back and enjoy their unimaginable wealth.

Because the truth is that people so batshit, Koch brothers-level insane are just a little more imaginative than you or I could ever even think of being.  And what they tend to imagine is what it would be like to have more.  And not even more money, not necessarily.  Just . . . more.  More power, more control, more authority, more stuff, more, more, more and always, always, More Than Anybody Else.

More is what drives them.  Because, in the end, it really isn’t the money.  In the end it simply is that such people are – to borrow Atrios’s term – assholes.

* * *

So, yeah . . . Stiglitz gets it right when he says that the well-being of the 1% depends on them not destroying the very markets they need in order to keep realizing their ever-present dream of More.  

Nevertheless, the 1% persists in destroying those markets anyway because these people are perfect singularities of covetousness, reflexively grubbing up anything that crosses their greed field's event horizon.  It remains true that their very well-being depends to a large extent on the well-being of all the rest of us but, as Digby says, “they are too thick” to realize that simple fact.

Digby wins the round on points.

Of Lubricants and Epiphytes

Over at Digby’s, in a post titled Killing Credibility, David Atkins writes:

In the absence of any sort of political and economic reporting that actually makes sense, voters are left to trust pre-defined political narratives. . .  [T]he biggest problem with the narratives on both sides is that economics is treated as a religion in which hidden priests serving as economic doctors must be placated by appropriate policies to “gain confidence” and “heal the economy.”  There is a massive air of mystery and clandestine actors at whose mercy sovereign nations tremble.

Reality is far simpler:  the economy is like an engine.  Demand fuels it.  A strong middle class is the best way to ensure that the fuel level stays high.  Credit via lending is a lubricant, sort of like motor oil.  In exchange for providing the lubricant, financiers are allowed to skim off the top and make out like bandits even in times of relative equality.  Lately, however, the financiers have been playing radical games to suck economy-killing amounts out of the tank, while the economy sputters to a stop due to lack of demand.  In this situation, it would seem that government would be best suited to shunt the vampire financiers off to the side, provide a fuel injection of demand and oil up the engine itself on behalf of the people.  The only problem is that the vampire financiers have too tight a control on government policy through corruption, and aren’t about to be pushed aside. (emphasis added)

I’ve long described the relationship of the financial industry to the actual economy using the same metaphor:  the financial industry helps the engine of the economy run smoothly (by allocating surplus capital to where it is needed) but it isn’t the engine itself.  It is more like what Atkins describes – motor oil.

The Sociopathy of Banksters and Slaveowners

About six years ago Digby penned a piece entitled The Resentment Tribe. She was following up on a prior post in which she had asked the question: "Why are [Conservatives] so angry?" Digby proposed that what we see from the increasingly batty right-wing is something we have seen demonstrated throughout our history -- namely, a worldview that not only cannot brook dissent, but that so resents any expression of disagreement by others that it demands their complete and utter extirpation. Digby argued that this worldview "ha[d] its genesis in the original sin of slavery and . . . . the best way to understand this is to go right to the heart of the beast and quote . . . Abraham Lincoln at the Cooper Union in New York in 1860."

In that speech, Lincoln spoke to "the Southern people's" threat to break up the union unless their legal right to practice slavery was "at once admitted to as a conclusive and final rule of political action[.]" (emphasis added). Pointing out that the South's right to own slaves already had been legally adjudicated in its favor by the Supreme Court, Lincoln demanded:

[W]hat will satisfy them? Simply this: We must not only let them alone, but we must, somehow, convince them that we do let them alone. This, we know by experience, is no easy task. We have been trying to convince them from the very beginning of our organization, but with no success. In all our platforms and speeches we have constantly protested our purpose to let them alone; but this has had no tendency to convince them. Alike unavailing to convince them, is the fact that they have never detected a man of us in any attempt to disturb them.

These natural, and apparently adequate means all failing, what will convince them? This, and this only: cease to call slavery wrong, and join them in calling it right. And this must be done thoroughly -- done in acts as well as in words. Silence will not be tolerated -- we must pledge ourselves avowedly with them. Senator Douglas' new sedition law must be enacted and enforced, suppressing all declarations that slavery is wrong, whether made in politics, in presses, in pulpits, or in private. We must arrest and return their fugitive slaves with greedy pleasure. We must pull down our Free State constitutions. The whole atmosphere must be disinfected from all taint of opposition to slavery, before they will cease to believe that all their troubles proceed from us. (emphasis added).

In short, it was insufficient that the Southern States be left alone to continue the barbaric institution of slavery; what they demanded from their neighbors to the North was not mere tolerance of this institution, but active approval. Because they were unable to convince their Free State cousins that they should be lauded for buying, selling, and mercilessly exploiting other human beings for personal profit, they felt they had no choice but to go to war.

That excerpt from Lincoln's speech has stayed with me ever since I read it for the first time over at Digby's. I think of it every time I'm confronted by people with whom I disagree and who seem to take it as a personal insult that I might disagree with them. And I think about it when I see political actors -- like the banksters on Wall Street -- who would seem to have more than even the most self-regarding, greedy bastard imaginable might ever want, but who also seem to be perpetually whining that people aren't being nice enough to them.