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Last post Author Topic: What Killed the Middle Class?  (Read 3983 times)

IainB

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What Killed the Middle Class?
« on: March 28, 2016, 12:43:49 AM »
Gary North's newsletter (refer https://www.garynorth.com) had a link to this post on the Of Two Minds blog: What Killed the Middle Class?

I think that blog is usually focused on US affairs, which I am kinda ignorant of, and I didn't know that the middle class had been or were being killed off, but after reading the article posted I consider myself better-educated.
I had wondered why IT salaries had tended to tank since the '80s in the Western economies, and there, amongst the charts was a probable explanation of what had happened:
  • from 1947 to 1979, the earned income for labour had tended to be linked to and closely trailed the growth in productivity, but from 1980 onwards, the link seems to have been dramatically broken.

Not only that, but also earned income measured as a percentage share of GDP (a standard economic measure) seems to have been on a steadily declining trend since at least the 1960s (approx. 50%) becoming approx. 43% today, with earned income hitting a short-term peak (approx. 47%) around 2000 - during the Internet boom.

I hadn't realised or known any of this, having been busy doing other things.

The indication seems to be that as productivity and GDP continue to grow, the demand for labour continues to reduce, hence it's price is falling, thus it seems that labour is becoming progressively redundant (surplus to requirements or no longer needed).
There is too much labour available, competing for work where there is a diminishing demand for labour. International corporations will seek arbitrage over labour-rates to access the lowest per capita labour costs of the labour pool - these typically can be had by means of outsourcing production to countries offering traditionally good production facilities with the most attractively low labour rates (e.g., outsourcing, offshoring).
So it's presumably only going to get worse. It's like a race to the bottom for labour rates.

This is ironic, because, to be able to consume goods and services, people must have the wherewithal (personal disposable income) to pay for them - they need to have the propensity to consume. However, with declining real incomes (QED), fewer potential consumers will be able to afford such consumption.

So who is receiving the income/profit from the sale of the GDP? Well, it seems it must be corporations, and their shareholders and corporate executives - typically high net-worth members of society. That is, people not tied to earned income from their own direct production.
But are there enough of the 1% to consume all that is produced? No, and they probably don't need/want most of it. So what is likely to be happening is that increasingly corporations will focus on the production of luxury goods and services aimed at the growing market targeting the demands of those high net worth individuals - stuff that they want. Boats, planes, cars, houses, toys, etc.

There was an interesting post at Brookings Institution: Make elites compete: Why the 1% earn so much and what to do about it | Brookings Institution
That post points out that the top 1 percent of U.S. residents now earn 21 percent of total national income, up from 10 percent in 1979.
The article discusses the myths that have grown up around wealth and education, and that the key thing about the top 1% is that they don't so much earn their income as get themselves into cartels, closed syndicates, trade associations in restraint of trade, etc. - so that they don't have to compete for getting a large proportion of high-value unearned income.

Interestingly, the author advocates fixing this by opening up the 1% to more free-market enterprise and competition of the classic capitalist religio-political ideology - and he may be right, I don't know. However, I presume that it would have to be done by legislative force, as they could be expected to strenuously resist such a change - and their number may even include those (lawmakers) who would be required to legislate that change.
However, as someone who knows that economic history shows that that ideology has categorically largely been responsible for enabling millions to drag themselves out of poverty, I can't help but think that the current situation is out of control and is reversing the situation, effectively having slowly driven those masses back towards poverty (QED) at the growing enrichment of the 1%, since the '60s. This possibility had never occurred to me before.

If the system is broken now (and that would arguably seem to be the case), then we have been presumably unable to stop this rot since at least the '60s, thus, advocating more of the selfsame capitalist religio-political ideology as a solution doesn't really seem entirely rational to me - I mean, it surely seems to be a non sequitur ("it does not follow") at least.

Now I have no idea what the solution might be - assuming that there is one - and I'm not posting this as a polemic for any given economic religio-political ideology, but merely as something probably worth thinking about and discussing.
I for one don't have any desire to see humanity driven backwards economically into the Middle Ages where serfdom was the norm and the unelected 1%, or something, ruled over people as despotic barons doing the State/King's bidding - much as they seem to have done as economic historians have described in, for example, the Philippines today.
« Last Edit: March 31, 2016, 04:31:22 PM by IainB, Reason: Minor edits to improve clarity. »

40hz

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Re: What Killed the Middle Class?
« Reply #1 on: March 30, 2016, 06:04:00 PM »
Wow IainB! There's an awful lot to unpack and think about in that post of yours before I could hope to offer anything intelligent or considered in response.

One inherent danger in losing the middle class in the United States is that it has always been a safety valve for domestic unrest. I'm not sure who said it, but they pointed out that Americans have traditionally been willing to accept a fairly large amount of unfairness in their economic system and government institutions as long as it was felt that their own relative position in the pecking order was not permanently fixed.

Now that it's become increasingly difficult for many Americans to escape from poverty through no fault of their own or from lack of trying, the way things are being done is now coming under increasing fire. And the 'haves' appear to be gearing up to deal with that threat. (Nobody seriously believed that the militarization of US police forces - and the increasingly broad and effectively unregulated surveillance state that's emerging along with it - is being created solely to deal with international terrorist threats do you? Does anybody remember how abruptly and totally the economically motivated "occupy" actions across the nation were cleared out during an obviously well-coordinated sweep in several US cities besides New York? According to official statements, the fact it all happened on the same day - and with minimal news coverage - was "purely coincidental.")

But anyway - Thx! I needed a little intellectual stimulation today.  :Thmbsup:

IainB

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Re: What Killed the Middle Class?
« Reply #2 on: March 31, 2016, 03:52:37 PM »
@40hz:
...There's an awful lot to unpack and think about in that post of yours before I could hope to offer anything intelligent or considered in response. ...
__________________________
Sorry, I  didn't mean to do a "core dump" on it, it's just that my mind can't abide some kinds of puzzles without seemingly being compelled to try and solve them, and reading what I did helped to make bits of a jigsaw fall into place, in my mind - things that "didn't make sense" before now had a workable theory to describe under what conditions they could make sense.
That was what led to my making the post in this thread, anyway, as I thought that others might find the theory and ideas generated interesting and worth exploring.


IainB

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Re: What Killed the Middle Class?
« Reply #4 on: April 01, 2016, 05:05:25 AM »
^^ Yes. That's what it is.

eleman

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Re: What Killed the Middle Class?
« Reply #5 on: April 01, 2016, 03:05:56 PM »
Bernie, the 70+ years old fella loved by the youth, apparently thinks about these problems as well. It is interesting to hear about the pressure on and bleak future of the middle class from someone who has a real shot at the presidency.

wraith808

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Re: What Killed the Middle Class?
« Reply #6 on: April 01, 2016, 06:29:48 PM »
Bernie, the 70+ years old fella loved by the youth, apparently thinks about these problems as well. It is interesting to hear about the pressure on and bleak future of the middle class from someone who has a real shot at the presidency.

Unfortunately, unless something dramatic and drastic happens, I don't think that last part is true.

rgdot

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Re: What Killed the Middle Class?
« Reply #7 on: April 01, 2016, 07:37:36 PM »
Someone who openly mentions/mentioned 'socialism' winning the US presidency? Pigs will fly before that. Enthusiasm (and let's face it, it is that) during the primaries has zero chance of translating to general election votes for someone who has 'wealth Inequality' as the first issue on his site, and others like 'living wage' too. If the republicans had any sane candidates Sanders' and Clinton's chances would be less than zero. As it stands Sanders' is just zero.

40hz

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Re: What Killed the Middle Class?
« Reply #8 on: April 01, 2016, 08:10:48 PM »
@40hz:
...There's an awful lot to unpack and think about in that post of yours before I could hope to offer anything intelligent or considered in response. ...
__________________________
Sorry, I  didn't mean to do a "core dump" on it, it's just that my mind can't abide some kinds of puzzles without seemingly being compelled to try and solve them, and reading what I did helped to make bits of a jigsaw fall into place, in my mind - things that "didn't make sense" before now had a workable theory to describe under what conditions they could make sense.
That was what led to my making the post in this thread, anyway, as I thought that others might find the theory and ideas generated interesting and worth exploring.

No apologies needed. It's good to get something big and solid to chew on for a change.  :)

eleman

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Re: What Killed the Middle Class?
« Reply #9 on: April 02, 2016, 12:15:04 AM »
Someone who openly mentions/mentioned 'socialism' winning the US presidency? Pigs will fly before that.

I wonder how many pigs flew before someone black won US presidency? Or will fly before 2017 when someone without a penis will be elected if people don't get over their 'socialism' obsession? Times change.

Stoic Joker

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Re: What Killed the Middle Class?
« Reply #10 on: April 02, 2016, 08:07:37 AM »
Someone who openly mentions/mentioned 'socialism' winning the US presidency? Pigs will fly before that.

I wonder how many pigs flew before someone black won US presidency? Or will fly before 2017 when someone without a penis will be elected if people don't get over their 'socialism' obsession? Times change.

I think the American people were primed -by dissatisfaction - for a grand social experiment back then...and the other options just really sucked.

But when BO took office, he got sat down for the official (one way) Facts-of-Life discussion and told that he was to smile for the cameras, stick his hands in his pockets, and don't touch nothing...because these "nice" folk behind the curtain over there were actually going to be running things.

And somehow, I can't help but think that people know that. Maybe not consciously...maybe not even well enough to articulate ... It's just not looking like a good time for yet another "grand" social experiment.

I've always thought of Trump as the poster child for the opulent level of corporate greed - and distain for the common men - in this country. But if he got into office he is just arrogant and crazy enough to blow the lid off of whatever shadow organization that tries to stifle him.


---------------------------------------------------------

Getting closer to the actual topic, I thing the middle class has been systematically destroyed under the insane guise of the "Global Economy". Which has been siphoning off the skilled labor jobs and turning the American people into nothing more that lazy, fat, stupid, cash generating eyeballs groomed for consumption.

Made in America used to really mean (Quality!) something back in the early 20th century. Now...it's damn near flat out irrelevant. Because now we're all to busy sitting in front of Japanese televisions masturbating our sense of adventure because it's too scary to actually have one ... That would require going outside...which is dangerous. At least that's what the nice guy on TV keeps telling us..

eleman

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Re: What Killed the Middle Class?
« Reply #11 on: April 02, 2016, 10:39:03 AM »
I think the American people were primed -by dissatisfaction - for a grand social experiment back then...and the other options just really sucked.

Don't call a black president "a grand social experiment". You may be mistaken for a bigot. Or a racist. Or both.

40hz

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Re: What Killed the Middle Class?
« Reply #12 on: April 02, 2016, 11:27:32 AM »
Why do I hear the sound of the door to The Basement slowly starting to creak open and Mouser coming down the hall with broom in hand?  ;)

Stoic Joker

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Re: What Killed the Middle Class?
« Reply #13 on: April 02, 2016, 11:33:03 AM »
I think the American people were primed -by dissatisfaction - for a grand social experiment back then...and the other options just really sucked.

Don't call a black president "a grand social experiment". You may be mistaken for a bigot. Or a racist. Or both.

That's just hypersensitivity driven fear trying to quell honest and open dialog. Because the first time anyone does anything it is in part, or is completely - by its own nature - experimental. Due to the fact that nobody really knows how it is going to turn out. If the thing in question involves people, it becomes a social experiment ... And if the thing being tried by those people for the first time is a really bid deal, well... Ain't that grand.

It simply is what it is. and if one equivocates on admitting the risks involved in a venture...they are also subsequently eroding away at the level of success it can therefore claim to have attained ... And frankly, I think that's rather sad.

eleman

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Re: What Killed the Middle Class?
« Reply #14 on: April 02, 2016, 11:44:19 AM »
I think the American people were primed -by dissatisfaction - for a grand social experiment back then...and the other options just really sucked.

Don't call a black president "a grand social experiment". You may be mistaken for a bigot. Or a racist. Or both.

That's just hypersensitivity driven fear trying to quell honest and open dialog. Because the first time anyone does anything it is in part, or is completely - by its own nature - experimental. Due to the fact that nobody really knows how it is going to turn out. If the thing in question involves people, it becomes a social experiment ... And if the thing being tried by those people for the first time is a really bid deal, well... Ain't that grand.

It simply is what it is. and if one equivocates on admitting the risks involved in a venture...they are also subsequently eroding away at the level of success it can therefore claim to have attained ... And frankly, I think that's rather sad.

Venture? Electing someone with a different skin color is a venture? How is that even a variable involved in the analysis? How is that a new thing? BO is the 44th president of the US. Not the first one.

If Donald Trump gets elected, will he also be an experiment, on the grounds that he is the first one named "Donald"? How about Hillary? Will she be an experiment on the grounds that she will be the first one with ovaries? What about Ted Cruz? The first president to be born in Calgary? Grandiose experiment... really.

These are irrelevant. You can't call the ordeal an experiment on these grounds. An experiment is a process aiming to assess the impact of an independent variable on a dependent variable, with reference to an existing hypothesis. I really would like to assume you did not hypothesize a black president would behave different than FDR or Ronald the Cowboy just because of his skin color.

The true way to overcome the evil of class distinctions is not to denounce them as revolutionists denounce them, but to ignore them as children ignore them. [Charles Dickens]

Stoic Joker

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Re: What Killed the Middle Class?
« Reply #15 on: April 02, 2016, 01:19:57 PM »
I think the American people were primed -by dissatisfaction - for a grand social experiment back then...and the other options just really sucked.

Don't call a black president "a grand social experiment". You may be mistaken for a bigot. Or a racist. Or both.

That's just hypersensitivity driven fear trying to quell honest and open dialog. Because the first time anyone does anything it is in part, or is completely - by its own nature - experimental. Due to the fact that nobody really knows how it is going to turn out. If the thing in question involves people, it becomes a social experiment ... And if the thing being tried by those people for the first time is a really bid deal, well... Ain't that grand.

It simply is what it is. and if one equivocates on admitting the risks involved in a venture...they are also subsequently eroding away at the level of success it can therefore claim to have attained ... And frankly, I think that's rather sad.

Venture? Electing someone with a different skin color is a venture? How is that even a variable involved in the analysis? How is that a new thing? BO is the 44th president of the US. Not the first one.

Right, he's just the first black POTUS. And it's not like I did or am making a bid deal about it ... The 6 O'clock news did when he was elected. For months heralding the grand accomplishment that we as a society had achieved.

But you seem to feel that we should take that away from him...because it was really no big deal.

If Donald Trump gets elected, will he also be an experiment, on the grounds that he is the first one named "Donald"?

No, it will be an experiment because he would be the first- non politician -  political outsider to be elected in like forever.


How about Hillary? Will she be an experiment on the grounds that she will be the first one with ovaries?

Yes, because anything that hasn't been tried...hasn't been proven. And anytime anyone is the first someone to do something...it tends to draw a lot of attention. It has nothing to do with good or bad, it's simply human nature.

Why is Christa McAuliffe a household name??? Can you name another person from that flight without using google first - I bet most people can't - Because...


-----------------------

Since this is going quite badly off topic, I'm going to bow out of the thread. Hopefully before it goes completely off the rails.

Bye!

rgdot

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Re: What Killed the Middle Class?
« Reply #16 on: April 02, 2016, 01:48:26 PM »
Someone who openly mentions/mentioned 'socialism' winning the US presidency? Pigs will fly before that.

I wonder how many pigs flew before someone black won US presidency? Or will fly before 2017 when someone without a penis will be elected if people don't get over their 'socialism' obsession? Times change.


Obama was/is a minority person, socialism is an idea.
Any way my point was a republican ad campaign portraying Sanders as one who will increase taxes (and for once they won't be outright lying) will work and you will be surprised how fast it works. If things like Kerry/swiftboat worked this will too, no matter the times. If anything it has an even better chance to work than years ago.

Shades

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Re: What Killed the Middle Class?
« Reply #17 on: April 02, 2016, 05:26:48 PM »
[To the basement, here we go...]
If you want a government to attain (and maintain!) a standard of living for every citizen it serves...you'll need to get your head around the fact that constant taxing of all the population is necessary. And there are things that are better run by government than commercial market parties. Ideally, government should only have to check what it's citizens and companies/cooperations are doing day to day to keep the society it serves running as smoothly as it can for as long as it can.

In the real world however, commercial parties try to game the system set up by the government on a much grander scale than the citizens of that government deserve or bargained for. And on the other end corruption and plain stupidity is strife in government, upsetting citizens and companies/coorperations alike.

If you really want lower taxes, government should be lean. But government should also be able to get their allotted taxes without citizens and companies/cooperations "screwing the pooch". This is called a "live and let live" mentality.

From what I gather through news-outlets, US republicans (& companies/cooperations) only accept the lower taxes part, but for all intends and purposes this cuts the sustainability of the society short. US democrats lean too much on taxes for everything and the kitchen sink. Which also cuts the longevity of that society short.

As always, the way forward is through the middle: everybody (citizens/companies/cooperations) actually paying what one owns on taxes, will reduce government practically automatically. If that makes me a socialist in your eyes, so be it.

Now I grew up in a country with such a "live and let live"-mentality and government made sure that tax-revenue went to their intended destination. While no-one is/was really happy about paying taxes, in the end it was clear to anyone that the living standard from everyone (including the middle-class and the rich) went up.

Of course, I am aware that both societies with a cut-throat mentality and a live-and-let-live mentality have their positives and drawbacks, I just happen to think that the society with the live-and-let-live mentality is the most sustainable one over a longer period.

In the 2016 US election Clinton is not my favorite candidate, Sanders doesn't inspire me either. But compared against the republican candidates...either democratic candidate is a shining beacon of light and reason. And I truly believe that Donald Trump in office will bring the US to its knees economically. Just because his stances on any given subject bend and twist as a leaf of grass in the wind. Whatever you think of him, it is not a sign of vision or leadership...and it wont make America great again, no matter how much times Trump says this. Actually, the US was never as small/meager as Trump continuously states.
[/To the basement, here we go...]

rgdot

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Re: What Killed the Middle Class?
« Reply #18 on: April 02, 2016, 06:03:59 PM »
Yes, basement   :P

@Shades and everybody
The problem is not being pro government action or not. It's the atmosphere and there is no doubt in my mind that the right wing is more guilty in creating the toxic atmosphere.
I was just reading this for example, and had to double check to make sure it is not an April Fools thing:

Quote
Congressman Don Young (R-AK):
Bernie Sanders and Hillary Clinton will seek to have the government “control everything you do.”
Everything? Yes, everything. Young goes on to earnestly explain that Sanders or Clinton would mandate “when to get up, what to eat, what you are thinking, what school you are going to go to and what you are going to believe.”

Not only this guy exists but he is an elected official.


IainB

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Re: What Killed the Middle Class?
« Reply #19 on: April 03, 2016, 03:33:40 AM »
Ah well, the OP was (I thought) an interesting perspective from economic history, and thus worthy of discussion (a good way to learn and develop one's thinking), but regrettably it seems to have so far ended up doing little more than stimulate a hailstorm of often off-topic and somewhat characteristically polarised US-political views and bias.
I had simply thought it was an interesting and complex puzzle.

rgdot

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Re: What Killed the Middle Class?
« Reply #20 on: April 03, 2016, 10:41:34 AM »
:huh:

The middle class discussion and how it is being decimated is exactly due to problems created by those mentioned in the so called biased posts. If people choose to ignore one of the main reasons for the problems brought up by OP then it is little surprise we are at this point.

IainB

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Re: What Killed the Middle Class?
« Reply #21 on: April 03, 2016, 05:02:15 PM »
@rgdot:
:huh:
The middle class discussion and how it is being decimated is exactly due to problems created by those mentioned in the so called biased posts. If people choose to ignore one of the main reasons for the problems brought up by OP then it is little surprise we are at this point.
_______________
That does not seem to follow. The OP represents a perspective from economic history (refer to the links for the details thereof), with no reference to the responsibility or significance of, or polarisation with any present-day actors of any specific political party (or not that I am aware of, at any rate).
That history shows long-term trends at work. For example, there has essentially been a move from State A income distribution as a percentage of GDP, to State B. This had occurred over several decades.

So, it would seem unlikely that one could associate the names of recent/current/prospective future POTUSes or senators with this decades-long trend, but yet you say these things  are "...exactly due to problems created by those mentioned in the so called biased posts".
I do not understand this reasoning, because those POTUSes or senators cannot reach back in time and claim to have altered events decades in the past.

IainB

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Re: What Killed the Middle Class?
« Reply #22 on: April 04, 2016, 06:17:51 AM »
Quote
Capitalism is not the system of the past; it is the system of the future—if mankind is to have a future. Those who wish to fight for it, must discard the title of “conservatives.” “Conservatism” has always been a misleading name, inappropriate to America. Today, there is nothing left to “conserve”: the established political philosophy, the intellectual orthodoxy, and the status quo are collectivism. Those who reject all the basic premises of collectivism are radicals in the proper sense of the word: “radical” means “fundamental.” Today, the fighters for capitalism have to be, not bankrupt “conservatives,” but new radicals, new intellectuals and, above all, new, dedicated moralists.

— Ayn Rand

xtabber

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Re: What Killed the Middle Class?
« Reply #23 on: April 04, 2016, 08:54:26 AM »
Quote
Capitalism is not the system of the past; it is the system of the future—if mankind is to have a future. Those who wish to fight for it, must discard the title of “conservatives.” “Conservatism” has always been a misleading name, inappropriate to America. Today, there is nothing left to “conserve”: the established political philosophy, the intellectual orthodoxy, and the status quo are collectivism. Those who reject all the basic premises of collectivism are radicals in the proper sense of the word: “radical” means “fundamental.” Today, the fighters for capitalism have to be, not bankrupt “conservatives,” but new radicals, new intellectuals and, above all, new, dedicated moralists.

— Ayn Rand

“Equality may demand the restraint of the liberty of those who wish to dominate; liberty — without some modicum of which there is no choice and therefore no possibility of remaining human as we understand the word — may have to be curtailed to make way for social welfare, to feed the hungry, to clothe the naked, to shelter the homeless, to leave room for the liberty of others, to allow justice or fairness to be exercised.”

-- Isaiah Berlin

If you really want to see where Ayn Rand's philosophy leads, try moving to Honduras, or read The Space Merchants by Pohl and Kornbluth.

MOUSER!!! Please move this thread to the basement before we all need to don our tin hats!

IainB

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Re: What Killed the Middle Class?
« Reply #24 on: April 07, 2016, 08:06:21 AM »
    @xtabber: I think you might have misunderstood or misinterpreted some of the points I had made earlier. If so, then it may be that I caused confusion by not being clear enough.
    To better understand a puzzle, one needs to look at it from all angles.
    I was not quoting Ayn Rand as a polemical statement, but merely to encourage discussion by putting a valid and interesting point of view - not actually my own POV (I don't really have one and am apolitical, as I have learned from De Bono how to avoid the pitfalls there).

    Though I have read some of Ayn Rand's books, I personally have never fully understood the rationale of her particular religio-political ideology, nor of some of her statements, but I do consider that one could make make some kind of sense of them if one explained her likely paradigm as having been formed by and during her experiences of communist Russia and her intellectual rejection of and rebellion against the prevailing religio-political ideology there. I mean, at a guess, that could explain things, though one could never know for sure.

    However, I don't see that the statement that I quoted from Ayn Rand - though it might sound great - necessarily stands up, given what we know now. For example, here I would repeat what I wrote above:
    If the system is broken now (and that would arguably seem to be the case), then we have been presumably unable to stop this rot since at least the '60s, thus, advocating more of the selfsame capitalist religio-political ideology as a solution doesn't really seem entirely rational to me - I mean, it surely seems to be a non sequitur ("it does not follow") at least.
    _______________________________
    Not trying to labour the point, but, if the system is broken (and it seems to be), and if we desire the objective of an egalitarian society (which I would strongly support, if only for ethical reasons), then we evidently do not currently have a vector moving us towards such an objective (QED) - in fact, the vector would seem to be diverging from that objective (QED). That is always assuming that we are using the correct/appropriate economic statistics - I can't see any fault in them, anyway, but maybe someone else can show them to be wrong.

    In the UK and in the USA, The Establishment and The 1% would seem to be inextricably intertwined/interdependent. How did it get that way?
    • (a) In the UK: it arguably got that way due to the country's peculiar historical development over some hundreds of years - in fact, I consider the British history and its class system to have formed a monstrous millstone around the nation's neck, inhibiting its socio-economic development towards an egalitarian society.
      As Tony Wedgewood Benn so succinctly put it:

      Tony Benn on The Establishment.jpgWhat Killed the Middle Class?

    • (b) In the USA: it arguably got that way over a much shorter span of time (since the '60s), due to the country's peculiar constitution.
      A good example of what seems to have been happening to the country to cause this is arguably shown by this Venn diagram:

      MPAA + Fed Government revolving door.jpgWhat Killed the Middle Class?
    I mentioned the Philippines above. That nation was previously under the dominion of Spain (which its why it was still about 98% Roman Catholic in the early '90s), and the Spanish authority administered to it by appointing the chiefs of the 5 or 6 largest tribes as "barons" and to collect taxes, etc.. These ruling families became extremely powerful as a result. When the USA bought the Philippines off the Spanish, it became the US's 1st and only colony - it was a form of economic colonialism. Presumably because it worked, the Americans continued the Spanish administration via the ruling families, which by the 80s had become huge corporations owned by the families, and they effectively run the country in the background today, with the political structure apparently more or less under their control - this is a bit of a potted summary from reading an economic history (a doctoral thesis) of the country from a few years ago. Apparently, the Philippines is one of the few remaining places in the world where a feudal system is still in operation. The result is that a relatively large proportion of Filipino families continue to exist in a state of grinding poverty today, with no end in sight, and it is apparently much less than 1% that take to themselves and control the bulk of the country's wealth.

    I worked in the Philippines for about a year as an independent IT and management consultant managing projects for the two major telcos, and my roles required me to take delegated authority for financial budgets and hiring personnel (mostly degree-qualified programmers and analysts). The thing that appalled me was how little these people were paid in IT, when they could earn 10 times as much in IT if they went to (say) Australia or the USA on a work permit (and that's what a lot of them do now, and send their savings back home to their families).[/list]
    « Last Edit: April 10, 2016, 05:38:41 PM by IainB, Reason: Minor edit to improve clarity. »