I see American society, and most societies around the world, as a hierarchy of three groups. At the top is the 10% of the population that owns all of the wealth and controls all of the institutions.
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Within this group is an even smaller elite that really owns everything, but for the moment let's set that aside and take a slightly more expansive view of who is included among the Haves. The second group is the 75% of the population that exists in the margin between comfort and total ruin. This includes (unless some of you are wealthier than I realize) all of us who essentially live paycheck-to-paycheck or close thereto, from menial service industry jobs to well-compensated professionals. Even those of us who are doing well aren't truly wealthy, though, since we're never more than a stone's throw from ruin. The people who have real power compensate us because we're in some way economically useful to them, allowing them to make more money and/or live more leisurely lives. They also ensure that we graduate college with enough debt to be servile in perpetuity, in addition to or instead of running up enough credit card debt to keep us in a state of constant readiness to accept whatever terms of employment and existence they dictate. Here, have another payday loan and pre-approved Platinum Card.
The third group is the bottom 10-15% of society. To the people in power, these people serve no purpose.
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They have no economically valuable skills to exploit. You just have to get rid of them somehow. And that's what the War on Drugs is all about.
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In a society that doesn't want to pay to educate its population well or pay for a social safety net or strive for full, well paid employment as an economic policy goal, there are only two options for dealing with the third group. In many countries around the world the leaders can just send out death squads and various uniformed skull-crackers to physically eliminate them. The second option preferred by societies like ours that fancy themselves above such tactics is mass incarceration. And the nice part about incarceration, aside from appearing more Civilized and Proper, is that the ownership class can profit handsomely from it and you can pay some of the would-be useless people to lock up and watch the others.
We are very slowly beginning to dismantle the War on Drugs as an act of national policy faith. We are doing this, and I sincerely believe that within a decade or two it will be complete, for all the wrong reasons. We're moving toward sentencing reform and marijuana legalization not because our previous policies make no sense but because states cannot afford the gargantuan systems of incarceration, punishment, and monitoring that they built beginning in the 1970s. With large states spending literal billions annually to maintain their leviathan departments of "corrections", it is finally dawning on some formerly gung ho drug crusaders that filling the prisons, jails, and parole systems with non-violent drug offenders is remarkably expensive. Add to that the fact that cash-strapped state and local governments realize what a tax cash cow marijuana is and it seems clear now that the first few dominoes have fallen that drug legalization is going to continue to spread in the near future.
I wonder, then, what will be the new national policy toward the third group in society – the underclass for which there is no practical economic use. We sure as hell aren't investing in education to increase the balance of useful skills. We aren't creating more jobs, and in fact there are not enough to go around even for people who do have the skills and willingness to work these days. My guess – and this is why I've been talking about "Brazilification" of the American economy for years now – is that we will take that final step toward Second World status as a nation by allowing First World wealth and opulence to exist immediately alongside massive levels of desperate Third World poverty. Of course poverty is already visible in the U.S., but there is another level of economic and physical segregation – think Rio or Mexico City – of inequality for us to achieve.
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We see it already in places like Chicago where rich, perfectly safe neighborhoods are cordoned off by law enforcement and local government to coexist alongside poor neighborhoods that are essentially free fire zones where city services barely operate, infrastructure is crumbling, and the policing policy is "Call us when there is a corpse to pick up."
If we're not going to incarcerate or employ everyone and we have no intention of creating a social welfare system that allows people to live like human beings even if they lack the Puritan sacrament of daily toil for a soulless corporation, then there really is no other option.
(PS: Don't worry, we'll still incarcerate tons of people even if the WoD is scaled back. I promise.)
Mike says:
After 6 years, why do I still read this blog?
Reading G&T is the literary equivalent of slowly rolling by a car wreck.
zombie rotten mcdonald says:
They could serve a purpose if we enacted a national guaranteed salary; they would be massive generators or economic demand.
mothra says:
Soylent Green!
Andrew says:
I'm pretty sure my wife and I are in the top 10% by income if not by wealth. We both have IT jobs in Silicon Valley and no kids. I inherited a sum in the low-mid six figures about nine years ago. But we're hardly society's elite. My wife comes from a proletarian background (five kids, high-school educated parents, only one of whom worked while the kids were small), and my mother was a college lecturer who dropped out of society to make macrame wall hangings and watch soap operas, then went back to work as an ESL teacher when I was in high school, but quit at age 60 and lived off a modest inheritance from her father (an OB/GYN) and her mother (who probably inherited it) until she died at age 70.
We're fortunate to have good jobs that enable us to spend less than we earn, but we're in our late 40s and early 50s and might not easily find new well-paid jobs were we to lose ours (which in her case is looking moderately likely). So things could turn around for us fairly quickly.
We also have zero debt except for a mortgage of about 45-50% of what we could sell our house for, so that helps, though it was not ever thus.
That having been said, I think your analysis of the permanent underclass is spot on. That's what really needs to change if our society is to move forward or at least not move backward. And I'm not holding my breath.
cat says:
@Andrew
90%, made up number but sounds truthy, are lucky to inherit their parents house. There is no such thing as a modest inheritance that allows a person to live without working. Your story is inaccessible to 99% of Americans.
The failure of the 10% to recognize they are not normal and their lifestyle is inaccessible to the rest of the US is why the "True Owners" can continue to screw everyone else. You/We are aiding them by voting their economic interests and not ours.
@Gin&Taco
You are vastly over estimating the number of peons the "True Owners" care about. They don't see the purpose of 80% of us I'm sure.
vegymper says:
Look at this formula: Maybe the 10% can find a way to use the 15% as food for the 75% and therefore pay them a little less for their services. Bingo! Efficiency! Reducing overpopulation!
Andrew says:
I never said I inherited enough to live without working, just that with my modest inheritance, good salary, modest expenses, and wife with the same good salary and low expenses, I earn more than I spend and can set aside some money for a time when I might be without work for a few months. I don't think that's all that unusual. Our income would have to triple, and our wealth would have to multiply 10-fold, before we would be one-percenters.
Believe me, my wife and I work plenty hard. And we vote Democrat or Green. But we believe in capitalism because no other system creates such vast wealth. We also believe in spreading that wealth around more than the current system does, starting with doing away with the low taxes on capital gains and/or the fiction that hedge fund managers' income is actually capital gains.
Robert Reich is one of my personal heroes.
jestbill says:
You're giving everyone too much credit.
This economic/social system has not been "designed" or "planned."
The owners were lucky to get their money and depend on luck to keep it.
They are at least as incompetent as you and I.
LK says:
There is one critical use of the bottom 15% you completely failed to acknowledge: they are the whip over the 75% backs, making sure they keep doing what the boss tells them. If there are too few of them, you can marginalize them and say "this can never happen to me". If there are too many, you risk the middle class actually understanding there is such a small difference between the two states of existence (plus, you don't have as many people working and making money for the 1%, so it's less efficient overall). Somewhere between 10% and 30% is the Goldilocks Number. And it probably depends on the local culture (maybe even in the state or city level).
cat says:
@Andrew
You clearly state your mother inherited a modest amount from her parents that enabled her to not have to work after 60. Maybe she had other income, your story leaves some room for interpretation.
"Your story [about your mother]" maybe would be less ambiguous and less confrontational, but you aren't getting my point.
You don't have modest expenses. Your yearly housing expenses are most likely 60k, taxes,mortgage, etc, which is median income in CA. Those aren't modest. They are only modest in the distorted view compared to the 1%.
You need to look down a quintile to the median income. Imagine what your life would be like if your household earned 60k but still wanted to work within a 30 minute commute to work.
Carter says:
The Universal Basic Income is a humane solution to this. Which is why it probably won't happen. But it's worth fighting for.
skyskier says:
"what will be the new national policy toward the third group in society – the underclass for which there is no practical economic use"
Duh, easiest question you've ever asked, Ed.
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Chautauqua says:
You've overlooked the military and the economic draft. Or is it just coin once that we've been fighting wars for the last ten years with a military that absorbs lots of kids from the wrong side of the tracks?
Chautauqua says:
Coin + once = coincidence. Damn spelling big brother.
sookabilly says:
You write, "The second option preferred by societies like ours that fancy themselves above such tactics is mass incarceration." Which "societies" do you refer to? Besides the US, which other First World societies lock up so many citizens, for any reason? I admit that Harper's Canada looks lovingly at all those jails south of the border, but we're not there yet.
Graham says:
Given that the jail population is mostly black and given statistics like these:
According to the Left Business Observer, the federal prison industry produces 100% of all military helmets, ammunition belts, bullet-proof vests, ID tags, shirts, pants, tents, bags, and canteens. Along with war supplies, prison workers supply 98% of the entire market for equipment assembly services; 93% of paints and paintbrushes; 92% of stove assembly; 46% of body armor; 36% of home appliances; 30% of headphones/microphones/speakers; and 21% of office furniture. Airplane parts, medical supplies, and much more: prisoners are even raising seeing-eye dogs for blind people.
(globalresearch.ca)
what you really have is a return to slavery of sorts.
c u n d gulag says:
Massive "Hunger Games" competitions!
Anonymouse says:
@gulag; The Hunger Games books were so compelling to me because they weren't such a huge stretch of imagination.
lfv says:
@cat, is it really so i feasible that a woman who worked most of her life would receive a modest inheritance that, along with some savings and social security, would allow her to retire? No? Everyone everywhere works until they drop dead?
cromartie says:
Never mistake for conspiracy that which instead can be more easily explained as incompetence, neglect, self delusion or blind luck.
There is no conspiracy. Just a loose affiliation of people who occasionally have the same interest and are better at rigging a system than everyone else. And are inherently greedy.
VALIS says:
I was at the taco truck just now ordering dinner – cuz, you know, I'm rich, and a person came up and asked them if they had any food they were going to throw away. The taco truck people said no, and the person said, ok, I'll be back.
So, in a way, we're already there. Yay! Go us!
Anonymouse says:
@ifv; it's a generational and social class thing. For the average Gen Xers and below, they're unlikely to inherit enough money to quit working. Enough to maybe take a nice vacation or pay down some medical bills, but retire? Oh, heck no. Anecdotes are not necessarily data, but I'll share this anyway; when my last remaining grandparent died two years ago, the grandkids had been subsidizing her round-the-clock nursing care for years. When all the dust settled, my inheritance was a small cocktail ring, estimated to be worth around $200. I certainly can't retire on that. If something happens to my own parents (leading-edge Baby Boomers), their estate will go to pay off their underwater mortgage. If something happens to me, my college-aged kids will be homeless. Welcome to the American middle class!
moderateindy says:
Because of the miracles of medicine, there will be less and less money being inherited. In fact it will only increase debt. More people will live for months and years with ailments that will need round the clock care forcing people into long term care facilities, which are insanely expensive. A fairly crappy one in the Chicago area is around 75K a year. Your parents nest egg is going to go poof pretty quickly, and unless you want to put them in a really crappy place that accepts Medicaid once they've gone bust, you'll have to pick up that slack.
Just one more way for the top to suck cash from the middle. What's worse is that these nursing homes are extremely profitable while paying the bulk of their employees well below a reasonable wage.
I know plenty of one percenters, and even a couple one tenth of one percenters, and yes some are sociopaths with no regard for anyone but themselves, but you would be surprised how many actually believe that the current paradigm isn't just messed up, but is untenable, and will simply lead to disastrous economics outcomes for everyone. Lots of them believe that there is a great risk of killing the goose that lays the golden egg. Some even see a pendulum swing that could be so drastic that even wealth confiscation could result.
The Pale Scot says:
"believe in capitalism because no other system creates such vast wealth."
What capitalism actually does is redirect the largest possible amount of GP to exploiting the largest amount of raw materials as quickly as possible. On a infinite planet, It is a great idea. On a finite one, maybe not.
john steppling says:
First off…the new disposible population is something Ive written about a good deal. Henry Giroux as well. Two million in prison in the US is a staggering figure. But ANDREW. no capitalism does not create wealth, it creates poverty you dolt. Most of the world is capitalist and most of the world is poor. Your lack of grasp of your own privilege is stunning. Oh you work plenty hard? No…..you have a very very privileged elite position in this system. You work, true, but you dont have to really. You can save. Most people cant. most cant own homes, and increasingly they cant own cars. There are millions of food insecure people in the US. Just the US. SOmeone rightly mentioned the military…another use for the disposible. And what graham above said is correct, too. We are there already, but its time people like andrew grasped their own elite status\ and for everyone to questions the myths of capital.
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