Tags
Barbara Ehrenreich, Capitalism, Corporate State, Corporatocracy, Dennis Kucinich, Economic Hardship Reporting Project, Financial Elite, Gross Inequality, Inverted Totalitarianism, Joseph E. Stiglitz, Oligarchy, Poverty, Rent-Seeking, Rocky Anderson, Social Unrest, The Elite 1%
Since most of us will eventually be relegated to the ranks of the poor or ‘working poor’, I thought it fitting to feature an expert on poverty, Barbara Ehrenreich, author of Nickel and Dimed. She is now heading the Economic Hardship Reporting Project whose goal is to “force this country’s crisis of poverty and economic insecurity to the center of the national conversation.” I have added their blog to my list of RSS feeds. For anyone who thinks that Mrs. Ehrenreich is unaware of the larger apocalyptic picture unfolding in the world, please listen to what she says about the demise of industrial civilization. And since our last post by Darbikrash centered around the rent-seeking financialization of the economy, in particular its effects on small businesses and individual liberties, it behooves us to look at how corporations and government entities prey on the poor and use them as a vast resource pool from which to extract dollars.
In what ways do the poor get used as a source for rent-seeking financialization? Here are a few:
…as Business Week helpfully pointed out in 2007, the poor in aggregate provide a juicy target for anyone depraved enough to make a business of stealing from them.
The trick is to rob them in ways that are systematic, impersonal, and almost impossible to trace to individual perpetrators. Employers, for example, can simply program their computers to shave a few dollars off each paycheck, or they can require workers to show up 30 minutes or more before the time clock starts ticking.
Lenders, including major credit companies as well as payday lenders, have taken over the traditional role of the street-corner loan shark, charging the poor insanely high rates of interest. When supplemented with late fees (themselves subject to interest), the resulting effective interest rate can be as high as 600% a year, which is perfectly legal in many states.
It’s not just the private sector that’s preying on the poor. Local governments are discovering that they can partially make up for declining tax revenues through fines, fees, and other costs imposed on indigent defendants, often for crimes no more dastardly than driving with a suspended license. And if that seems like an inefficient way to make money, given the high cost of locking people up, a growing number of jurisdictions have taken to charging defendants for their court costs and even the price of occupying a jail cell….
You might think that policymakers would take a keen interest in the amounts that are stolen, coerced, or extorted from the poor, but there are no official efforts to track such figures. Instead, we have to turn to independent investigators, like Kim Bobo, author of Wage Theft in America, who estimates that wage theft nets employers at least $100 billion a year and possibly twice that. As for the profits extracted by the lending industry, Gary Rivlin, who wrote Broke USA: From Pawnshops to Poverty, Inc. — How the Working Poor Became Big Business, says the poor pay an effective surcharge of about $30 billion a year for the financial products they consume and more than twice that if you include subprime credit cards, subprime auto loans, and subprime mortgages.
These are not, of course, trivial amounts. They are on the same order of magnitude as major public programs for the poor….
From for-profit prisons subsidized by taxes to government-mandated premiums for the private health insurance industry, I bet if the amount of rent-seeking as a proportion of the GDP in America was able to be quantified, we’d find that this country and its captive denizens are treated as just one big plantation from which to harvest greenbacks. According to economist Joseph E. Stiglitz, an inordinate proportion of those at the top of the free market heap have made rent-seeking the primary method by which they have accumulated their riches:
…The magnitude of “rent seeking” in our economy, while hard to quantify, is clearly enormous. Individuals and corporations that excel at rent seeking are handsomely rewarded. The financial industry, which now largely functions as a market in speculation rather than a tool for promoting true economic productivity, is the rent-seeking sector par excellence. Rent seeking goes beyond speculation. The financial sector also gets rents out of its domination of the means of payment—the exorbitant credit- and debit-card fees and also the less well-known fees charged to merchants and passed on, eventually, to consumers. The money it siphons from poor and middle-class Americans through predatory lending practices can be thought of as rents. In recent years, the financial sector has accounted for some 40 percent of all corporate profits. This does not mean that its social contribution sneaks into the plus column, or comes even close. The crisis showed how it could wreak havoc on the economy. In a rent-seeking economy such as ours has become, private returns and social returns are badly out of whack.
In their simplest form, rents are nothing more than re-distributions from one part of society to the rent seekers. Much of the inequality in our economy has been the result of rent seeking, because, to a significant degree, rent seeking re-distributes money from those at the bottom to those at the top.
But there is a broader economic consequence: the fight to acquire rents is at best a zero-sum activity. Rent seeking makes nothing grow. Efforts are directed toward getting a larger share of the pie rather than increasing the size of the pie. But it’s worse than that: rent seeking distorts resource allocations and makes the economy weaker. It is a centripetal force: the rewards of rent seeking become so outsize that more and more energy is directed toward it, at the expense of everything else. Countries rich in natural resources are infamous for rent-seeking activities. It’s far easier to get rich in these places by getting access to resources at favorable terms than by producing goods or services that benefit people and increase productivity. That’s why these economies have done so badly, in spite of their seeming wealth. It’s easy to scoff and say: We’re not Nigeria, we’re not Congo. But the rent-seeking dynamic is the same….
Below is a good discussion from a couple days ago of the expanding poverty problem in America featuring Barbara Ehrenreich. Don’t mind the free market lackey from the ultra-conservative think tank American Enterprise Institute. He thinks that the access to information the internet created has made people less poverty-stricken than in the past. For those who can afford a computer and internet subscription, the information age has only made them more aware of how fucked they are in a world of depleting resources run by a ruthless transnational oligarchic elite.
What we have in America is a twisted form of socialism for the elite wherein the few are supported by the collective wealth extraction from the many, as precisely described by Dennis Kucinich:
The rancorous debate over the debt belies a fundamental truth of our economy — that it is run for the few at the expense of the many, that our entire government has been turned into a machine which takes the wealth of a mass of Americans and accelerates it into the hands of the few. Let me give you some examples…
Chad from Alaska said:
Chad,
Your logic assumes it would be possible for the entire population of America to exodus the cities and take over land, becoming subsistence farmers. It’s just a matter of a feckless population pulling themselves up by their bootstraps and strapping on an ox harness?
Your argument leaves in place a system that will, without radical change, lumber along until your self-reliant homestead becomes a drought-ridden dust bowl ill-suited to sustain even a grasshopper.
Your argument leaves in place a corrupt system that continues to suck out the productive wealth of its citizens who can only thrive in one that operates for the good of society as a whole and not for a few well-connected oligarchs.
Your argument assumes that you still have a scrap of freedom left besides the antiquated, frontier-days mentality of the Second Amendment and its cultish belief of arming to the teeth every man, woman, and child.
So much for doomsteading. There’s really no place to hide.
Thanks for your reply, but I wish you would not have deleted my writing. It is very disrespectful to delete the work and effort of others merely because you disagree, while disallowing others to form fair opinions based upon anything I said or you said. My writing was certainly not an “incoherent ranting”, as you stated. It is the result of over 50 years of life at most all levels of society around the world, and study in law, history, engineering, and sciences beyond, most likely, every person you will ever meet.
Now, as to your reply: You are twisting my words to make light of what I stated (which nobody can see, because it was deleted). In no way did I call for a mass “exodus” of the population to become subsistence farmers utilizing “ox harnessess”. This only demonstrates that you did not understand what I wrote, nor did you care to understand what I wrote. You care more about being “right” and enforcing your view than engaging in intelligent discourse and allowing alternate opinion.
I am not an artist, and I do not write or think about serious issues artistically. I do not view the world as a socialist canvas upon which to create my designs. That is the job of the elite, on behalf of satisfying their serfs. In fact, it is this type of thought/attitude/behavior that has created all that you dislike. You want to solve problems using the same thinking that created them in the first place, the only difference is that you think that your “serf elite” designs (control and re-distribution of elite wealth) are better, yet they are ludicrous because a) you have no control (and never will) of the “elite” or their wealth, and because b) in a functional untainted democracy (which will never exist within human nature, society, reality), the best you can hope for is a 100IQ platform of ideas/solutions. If that is satisfactory to you, then so be it. But it is completely unsatisfactory to 1/2 of the population that has an IQ over 100.
It is IMPOSSIBLE for serfs to take control of all/most of society and forge it into whatever they dream it to be – they are serfs after all, for a reason; and anger/movements/serf-dreams won’t change that. Any socialist movement of the “masses” will ALWAYS be controlled by the “elite”, because a) they have the money/power/tools, and b) they have 160+IQ, and the masses have only have 100IQ and their hopeless dependency. It simply is not reasonable to assume poor & stupid & dependent can trump powerful & genius. If you want to believe otherwise, so be it.
Your logic defies all of history. Never once in history has any urban (eg, socialist) civilization lasted. They last so long as they can plunder to provide for those living on cement. Steel & glass buildings don’t create wealth, and cubicles & brick boxes don’t create freedom. You cannot change the world, you can only change yourself. What example are you for others to live well? I do not care to save all people, nor provide all things for all people – because that is IMPOSSIBLE. As to your statement on freedom: you only have the freedom you are willing to fight for and protect, because human nature within a society will always consist of those that want others to do their work for them. This is why law and self-sufficiency is important for anyone that takes serious responsibility for their prosperity & freedom. To think otherwise is delusional. You should read Bastiat’s “The Law” sometime.
I wish you would have used more than artistic ridicule in your reply. I agree with the premise of your blog, and only care about sharing knowledge and thoughts with integrity, but it is difficult and arduous to refute “exodus”, “subsistence farmer”, “feckless population”, “pulling themselves up by their bootstraps”, “ox harness”, “homestead becomes … dust bowl”, “productive wealth”, “antiquated, frontier-days mentality”, “cultish belief”, “arming to the teeth”, “doomsteading”, etc. Those kind of words do not represent anything I said, nor do they convey any factual information. It is just a liberal-sounding attack that is trying to appeal to emotion instead of intellect, and though it might move lesser minds, it alienates others. PS. I am not interested in hiding, I am interested in relating the importance of personal responsibility, as stated in my writings which you deleted. I wish you would put them back for context.
You quoted me as saying your thoughts were an “incoherent ranting”. I’m having trouble finding where I said that.
Also, your writings have not been deleted. They are all right here and replicated above my response in the first comment of this thread. I merely moved your comments from an old post you made these comments on: Invitations sent to Potential Contributors.
Now that you have been approved, you can say whatever you like, whenever you like.
People need to learn how to work WITHIN HUMAN NATURE, and stop trying to change human nature (IMPOSSIBLE). And the way this is done is to grow up, and take responsibility for your own life (#1), and take responsibility for providing for any life you create (#2). In a nation of self-sustaining landowners, “industrial civilization” becomes a VOLUNTARY affair, and that is the only way humans can engage in civilization without strife & self-destruction/annihilation. The only peaceful & lasting form of civilization is agrarian. Only urban slaves cry to their masters to have their bird-feeder filled by “elites”, necessitating and supporting them and their plunder in servitude. You haven’t “woken up” until you realize that the finger is pointing the wrong way, unless it’s pointing at yourself (and/or your parents). It makes absolutely NO SENSE to expect others to provide for you, when you cannot even accept that responsibility for yourself. It is just CRAZY THINKING!
Urbanization = 100% Failure, ALWAYS, throughout history. As Thomas Jefferson said “When people become piled upon one another in cities as in Europe, America will become as corrupt as Europe (paraphrasing).” There is nothing to win for a serf in the game of Serfs vs Elites. USA was never intended to be a democracy, the Founders despised democracies (mob rule). How can a mob rule with an average of 100IQ or less? What person with an IQ over 100 would even want to live in such a society? Urbanization is created by Serfs (too stupid to provide for themselves) & Elites (in need of slaves for their industrial schemes for profit). The serfs live lives of desperation, never knowing if they will be able to feed themselves tomorrow. They live on their knees at the mercy of their masters. Therefore, they become greedy, and selfish, and lose all morality in sacrifice to their desire for bread tomorrow. Until you realize these things, you have not “woken up”.
Democracy/groups/mob-rule has destroyed society & humanity & the unalienable rights of rugged individualism (freedom), it is purely a result of the cry of serfs for their bread & water, and an allowance of elites who know they can skillfully guide & control any outcome of 100IQ mob cries, while giving the serfs a feeling of hope and fruitful destiny. Unfortunately, all wealth (and freedom) comes from the land (agriculture/mining), and those who own it, have it. Nothing changes this fact within the realms of human nature. If you want real change, grab & maintain a piece of the wealth (land) yourself. Then you are free, then you are outside of the serf vs elite paradigm. Now you have humanity, dignity, honor, and are accordingly deserving of respect. Now you will be a generous & giving & caring human being that lives without fear of destitution. Now you can give, because nature provides more each year, and you will know the gifts of the Creator and forget the Urban Psychosis.
The evolution of mankind has been to organize, developing social complexity and its attendant problem-solving. Whether or not we can solve our current dilemmas and avoid collapse (it doesn’t look good) is another matter. Nevertheless, I don’t see any major shift away from this historic trend toward a society that completely disperses into the wilderness to farm a plot of land; people are social creatures.
I disagree 🙂 . I know that is the “system’s propaganda” for conformity, but looking into nature and primitive societies, humans traditionally organized into small tribes or bands, and as they became “too large” for whatever reason, parts would split off and form new tribes or bands. Likely, many people lived solitary lives as well, although this can’t be archaeologically documented effectively, though there are many examples of ancient people apparently wandering alone on long journeys. Also, people in tribes/bands obeyed no authority, and did not exist as “subjects of a system”, always retaining their free-will. Also, what do you think the promise of America was originally? To be social? NO! It was to GET AWAY from all of the social systems, to live alone or in small community with others of like mind, to be INDEPENDENT of “society” and “civilization”.
All that exists today is completely contrary to all of human history, it is artificial life, and like any other animal completely removed from its natural environment, somewhat weak, disturbed, and dysfunctional. If you look into history, although there have been many attempts at human civilization, they all failed, without exception, but nobody seems to care about that, and everybody thinks this time will be different, though there is no reason to think this time is any different. All civilization previous created great technologies to solve problems and grow and expand as well, nothing new there.
I do not see that anyone cares for a sustainable civilization that can survive the human spectrum and the spectrum of changes in nature, we only care about economic/population growth and the required plunder, and to do that, we must turn humans into more and more conforming units of functionality. I only see a herd that keeps grazing for greener grass as they approach a cliff that nobody cares to discuss, with no green pastures to turn back to. “Leaders” seem to be those that best know how to appease the herd, while profiting themselves, and the herd in general doesn’t have the intellect to understand the foundations upon which they sustain themselves, let alone decide how to steer the Titanic into the future, nor do the leaders.
All measurements in nature occur across a spectrum that forms a Bell Curve, so it cannot be stated as fact that humans are “social creatures”. As the saying goes: small minds discuss people, average minds discuss events, and great minds discuss ideas. Most highly intelligent people I know are not especially social, even anti-social, and why shouldn’t they be? It is not engaging for them to talk to the average person, they would rather pursue their intellectual passions and interests. Hunting/gathering societies are not especially social as those activities are usually solitary, or done with one other, and much of the work within their camp is done alone. Thinking of people as social animals is mostly a recent technologically based presumption, and may even be a description of the dysfunction of humanity. Too much chatter, and not enough pure unadulterated perception and quiet reflection.
It seems that you are happy with the general “evolution” of things, and are happy to see it continue along the same path, but you wish for better human nature, so that the current path is more pleasant & prosperous for most people. But what is your plan to change human nature and eliminate it’s defects? What is your plan to keep population within the bounty of resources? Not even the greatest men that ever lived could do these things. The earth became populated globally because people have always found it necessary to leave one tribe/band or civilization behind, and find new territory – but this time, there is no new territory.
The formatting on your comment was incorrect, so I fixed it.
Of course I’m not happy with the general evolution of things. I’m only an observer of how things are, but like anyone who has their own opinions, my personal beliefs affect how I view the current system. The system progresses along like a cumbersome beast, and its future path will unfold in ways not completely foreseen. All anyone can do is either be passive or act in various ways to alter the way of the world. For you that would be living out in the wild away from civilization. I won’t knock that approach, but I will say that industrial civilization will make that option nonviable in the future due to climate chaos caused by the ever-growing use of coal.
The odds are that industrial civilization will come to an end within this century due to a variety of environmental crises, depletion of resources, technological advances in the lethality of weaponry, and world wars over the earth’s last remaining natural capital. On our current trajectory, I cannot predict otherwise. In the Hobbesian world that remains, a few bands of surviving humans may make it through the bottleneck of modern man.