Sunday, June 29, 2014

A comment on Nick Hanauer's "The Pitchforks are coming for us Plutocrats."

Today I read an impassioned, yet reasonable article in Politico Magazine by Seattle billionaire Nick Hanauer entitled The Pitchforks are coming for us Plutocrats. Hanauer calls it "a memo to my fellow zillionaires." Hanauer argues that American income inequality will be the cause of the coming revolution, in much the same way as it is in every uprising, thus the pitchforks. The rich get richer, the poor get poorer, the middle class shrinks, the statistics are all there. We, having now grown accustomed to the phenomenon, continue to eek out our existence, cursing the government and corporations under our breath. Then one day, someone sets something on fire and we have a revolution on our hands. 
Surprisingly, Hanauer has a reasonable solution, simply pay everybody more. Leave the government out of it, they will win by being able to reduce social assistance because everyone will be able to fend for themselves. With the American workforce requiring less help, government can shrink. When Walmart employees make twice what they do now, (Hanauer's minimum wage is $15, which is being instituted in Seattle,) they will have more disposable income, thus spend more money, thus sell more crap, thus help the corporations make more money, so they can hire more employees and on it goes. People who barely get by don't go out for dinner, or buy new clothes, or flowers for their mom. 
Corporations can afford to pay their employees more. Simply look at the profits reported by the companies. Walmart profited 25 billion last year. What do you do with 25 billion dollars a year? You trickle it down, but it doesn't trickle very far with nearly 500 billionaires in America. Hanauer's "Middle-Out" economics take some of that wasted money and flush it back into the system through the working class. It's worked in the past, Henry Ford did it, Eisenhower did it. The problem, argues Hanauer, is that corporations like to "keep their customers rich and their employees poor." This is backwards thinking, yet Hanauer is mocked in his own community for admitting it. Corporations, really the folks at the top of them, aren't interested in making less money. Historically, they've balked at the idea every time, "We'll go bankrupt." Of course, they don't, quite the opposite really...

Hanauer's piece is not without its faults, for instance, it is short on detail and makes use of some fuzzy math. However, its philosophy isn't wrong: Everyone wins in a system that shares the wealth. It's a real shame that I think someone is going to have to burn something down in order to build it back up. Capitalism can work, if it's made to be just. Capitalism has been highjacked by the greedy elite and governments have been made complicit. It's not a distinctly American phenomenon. There could be a distinctly American solution, but it will require either a changing of minds or a changing of hidden hands.

To read relevant essays of mine.


  1. Hi, I find your blog through your article about Cleverbot and it sounds very interesting.
    I premise we are on the same wavelength here, or at least very similar :).
    The converse of expecting such enterprises to pay the employers more (which I of course share as principle) is the resistance strategy of a network of planned general price lowering, hence make the little money circulating among the relatively (on average, but certainly increasingly) poor majority of people worth much more among them. That is a path which I think as more feasible than hoping the richest niche of people wise up and stops being so much shortsightedly greedy.
    This takes into account an equation, of course, what one accepts not to earn is something which is not going to spend as well, because a network of people can make agreement about it. This is also more useful because it helps us in the exercise of relativize the value of money, breaking it down as a simple convention, an instrument and not an end. One of the most cleverly used form of social engineering :).


Thanks for commenting.