(I'm on vacation, and this is a repeat from November 23, 2017)
Before partaking of today's holidazed extravaganza, wherein engorged American agribusiness output and brain-damaging sportsball games divert our collective attention span, let's consider a very important distinction.
It's the difference between oligarchy and plutocracy.
What is Oligarchy?
As mentioned above, an Oligarchy is a type of political system or government. It is defined as a form of government controlled or ruled by a small and elite group of people. Thus, this small group of people has control of the government and, of course, the entire state. A nation that has this form of government or political system is also called an Oligarchy. The sovereign power of the state is vested in this small group of people comprising of landowners, wealthy people, royalty, noblemen, high-ranking military officers, renowned academics, or philosophers.
What is Plutocracy?
The term Plutocracy derives from the Greek word ‘Ploutokratia.’ ‘Ploutos’ means “wealth” while ‘kratia’ means “rule or power.” Thus, the full translation of this word is the rule or command by the wealthy. Plutocracy is, therefore, defined as a state, society or government controlled and ruled by the wealthy or a wealthy class.
People that exercise control:
• In Oligarchy, the group that controls the system is not limited to wealthy people alone but includes other privileged individuals or groups of people such as royalty, noblemen, landowners, academics or philosophers, and military officers.
• In Plutocracy, the group exercising control derives their authority or power from their wealth.
Oligarchy and plutocracy are not interchangeable, and yet there might come a point when every last oligarch is wealthy. Then what?
As it stands, while wealth is the chief culprit, there may be a handful of fundamentalist preachers who actually aren't rich, and as such, oligarchy remains the best choice to describe our United States of Capital Accumulation.
Study: US is an oligarchy, not a democracy
The US is dominated by a rich and powerful elite. So concludes a recent study by Princeton University Prof Martin Gilens and Northwestern University Prof Benjamin I Page.
This is not news, you say.
Perhaps, but the two professors have conducted exhaustive research to try to present data-driven support for this conclusion. Here's how they explain it:
Multivariate analysis indicates that economic elites and organised groups representing business interests have substantial independent impacts on US government policy, while average citizens and mass-based interest groups have little or no independent influence.
In English: the wealthy few move policy, while the average American has little power.
Although "Pitchforks for Plutocrats" has an engaging tone to my ears.
If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.
Moving ahead (or in this instance, to a post earlier this year): "Reaganomics killed America's middle class."
Despite what you might read in the Wall Street Journal or see on Fox News, capitalism is not an economic system that produces a middle class. In fact, if left to its own devices, capitalism tends towards vast levels of inequality and monopoly. The natural and most stable state of capitalism actually looks a lot like the Victorian England depicted in Charles Dickens’ novels.
Save this one for your leftover turkey sandwiches. How's that upward mobility working for you?
Myths of the 1 Percent: What Puts People at the Top, by Jonathan Rothwell (New York Times)
Dispelling misconceptions about what’s driving income inequality in the U.S.
... The groups that have contributed the most people to the 1 percent since 1980 are: physicians; executives, managers, sales supervisors, and analysts working in the financial sectors; and professional and legal service industry executives, managers, lawyers, consultants and sales representatives.
Without changes in these largely domestic services industries — finance, health care, the law — the United States would look like Canada or Germany in terms of its top income shares.
The United States also stands out in terms of how much money its elite professionals earn relative to the median worker. Workers at the 90th percentile of the income distribution for professionals make 3.5 times the earnings of the typical (median) worker in all occupations in the United States. Only Mexico and Israel, which have very high inequality, compensate professionals so disproportionately. In Switzerland, the Netherlands, Finland and Denmark, the ratio is about 2 to 1.
This ratio, the elite professions premium, is very highly correlated with income inequality across countries.
Finally, for my younger readers.
Wealth check: The rich get richer, and millennials miss out (The Economist)
More than half of global wealth is owned by the top 1%
The report underlines the sharp divide between the wealthy and the rest. If the world’s wealth were divided equally, each household would have $56,540. Instead, the top 1% own more than half of all global wealth. The median wealth per household is just $3,582; if you own more than that, you are in the richest 50% of the world’s population.
Feeling better? I hope so.
Enjoy your pumpkin pie, folks.
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