Nick Hanauer, the only rich VC who was ever censored by Ted talks, just posted an essay on Politico, entitled The Pitchforks are Coming…for us Plutocrats. He raises the spector of a revolution in America unless the issue of income inequality is addressed.
What everyone wants to believe is that when things reach a tipping point and go from being merely crappy for the masses to dangerous and socially destabilizing, that we’re somehow going to know about that shift ahead of time. Any student of history knows that’s not the way it happens. Revolutions, like bankruptcies, come gradually, and then suddenly. One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning. And then there’s no time for us to get to the airport and jump on our Gulfstream Vs and fly to New Zealand. That’s the way it always happens. If inequality keeps rising as it has been, eventually it will happen. We will not be able to predict when, and it will be terrible—for everybody. But especially for us.
The image of a combination of Occupy veterans and Tea Party populists marching on the headquarters of JP Morgan Chase with pitchforks is evocative, but for me it remains in the realm of speculative fiction. If you look at the history of inequality in both the U.S. and Europe you come to some pretty clear conclusions. The first is that which political party is in power doesn’t seem to make much difference.
Looking at the U.S., from 1810-1910, the rise of the plutocrats was very steady, no matter which party was in power. Then in 1913 the Sixteenth Amendment to the Constitution was passed, allowing an income tax and the share of the top 10% began a slow decline. This movement towards equality was reversed in the the mid 1970′s with the Tax cut revolution that started at the state level (eg.Prop 13 in California) and continued with Reagan’s cuts to federal income tax rates. From a historical perspective the fact that 90% of the people have never owned more that 38% of the wealth in this country is a bit shocking, but now we have reached a point where the richest 1% of the country owns as much as the poorest 90% of the country.
All of this would seem to be fertile grounds for a populist uprising, and yet it has never happened in America. The reason?
Too much cheap entertainment. Marx never figured on TMZ or the Kardashians. Of course Aldous Huxley in “Brave New World” did understand the power of drugs and entertainment to render a polity so passive that the plutocrats would never have to worry about the pitchfork brigade. 52 million Americans use prescription drugs “non-medically”. Then you have social networking which eats up 3 hours a day for the average user. Then we spend 5 hours a day in front of the TV. 8 hours of sleep and two hours eating, who has time for work, much less marching in the streets?
Much as I would like to think that Nick Hanauer could scare his fellow plutocrats into supporting a major raise in the minimum wage, I am highly skepitcal. I don’t think the Millennial generation, which has the most to lose in continuing the status quo, has any gumption to take to the streets. They are deep in college debt, desperate for work and not interested in rocking the boat.