The Pitchforks Are Coming Socioeconomic Inequality Argument Essay In “The 1 percent’s Problem” and “The Pitchforks are Coming” various arguments are presen
The Pitchforks Are Coming Socioeconomic Inequality Argument Essay In “The 1 percent’s Problem” and “The Pitchforks are Coming” various arguments are presented which situate socioeconomic inequality as a social problem. Focus on 1-2 of the arguments from the readings that you personally find most compelling (for example, “the fairness problem”). Briefly outline these arguments and evaluate them. Are these valid reasons for why inequality matters? Why or why not?Your written responses must be between 500-600 words. Submit finished responses to our Canvas site before 5pm, Wednesday, May 1st. 1/28/2019
The Pitchforks Are Coming… For Us Plutocrats – POLITICO Magazine
Roie McClaran
PCIAL RPORT
The Pitchfork Are Coming… For U Plutocrat
NICK HANAUR | Jul/Augut 2014
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Memo:
From Nick Hanauer
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To: My Fellow Zillionaires
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You probably don’t know me, but like you I am one of those
.01%ers, a proud and unapologetic capitalist. I have founded, cofounded and funded more than 30 companies across a range of
industries—from itsy-bitsy ones like the night club I started in my
20s to giant ones like Amazon.com, for which I was the first
nonfamily investor. Then I founded aQuantive, an Internet
advertising company that was sold to Microsoft in 2007 for $6.4 billion. In cash. My friends
and I own a bank. I tell you all this to demonstrate that in many ways I’m no different from
you. Like you, I have a broad perspective on business and capitalism. And also like you, I
have been rewarded obscenely for my success, with a life that the other 99.99 percent of
Americans can’t even imagine. Multiple homes, my own plane, etc., etc. You know what I’m
talking about. In 1992, I was selling pillows made by my family’s business, Pacific Coast
Feather Co., to retail stores across the country, and the Internet was a clunky novelty to
which one hooked up with a loud squawk at 300 baud. But I saw pretty quickly, even back
then, that many of my customers, the big department store chains, were already doomed. I
knew that as soon as the Internet became fast and trustworthy enough—and that time
wasn’t far off—people were going to shop online like crazy. Goodbye, Caldor. And Filene’s.
And Borders. And on and on.
Realizing that, seeing over the horizon a little faster than the next guy, was the strategic
part of my success. The lucky part was that I had two friends, both immensely talented,
who also saw a lot of potential in the web. One was a guy you’ve probably never heard of
named Jeff Tauber, and the other was a fellow named Jeff Bezos. I was so excited by the
potential of the web that I told both Jeffs that I wanted to invest in whatever they launched,
big time. It just happened that the second Jeff—Bezos—called me back first to take up my
investment offer. So I helped underwrite his tiny start-up bookseller. The other Jeff started
a web department store called Cybershop, but at a time when trust in Internet sales was
still low, it was too early for his high-end online idea; people just weren’t yet ready to buy
expensive goods without personally checking them out (unlike a basic commodity like
books, which don’t vary in quality—Bezos’ great insight). Cybershop didn’t make it, just
another dot-com bust. Amazon did somewhat better. Now I own a very large yacht.
But let’s speak frankly to each other. I’m not the smartest guy you’ve ever met, or the
hardest-working. I was a mediocre student. I’m not technical at all—I can’t write a word of
code. What sets me apart, I think, is a tolerance for risk and an intuition about what will
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happen
in the future. Seeing where things are headed is the essence of entrepreneurship.
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And what do I see in our future now?
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The Pitchforks Are Coming… For Us Plutocrats – POLITICO Magazine
I see pitchforks.
At the same time that people like you and me are thriving beyond the dreams of any
plutocrats in history, the rest of the country—the 99.99 percent—is lagging far behind. The
divide between the haves and have-nots is getting worse really, really fast. In 1980, the top
1 percent controlled about 8 percent of U.S. national income. The bottom 50 percent shared
about 18 percent. Today the top 1 percent share about 20 percent; the bottom 50 percent,
just 12 percent.
But the problem isn’t that we have inequality. Some inequality is intrinsic to any highfunctioning capitalist economy. The problem is that inequality is at historically high levels
and getting worse every day. Our country is rapidly becoming less a capitalist society and
more a feudal society. Unless our policies change dramatically, the middle class will
disappear, and we will be back to late 18th-century France. Before the revolution.
And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble
worlds: Wake up, people. It won’t last.
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.
Many of us think we’re special because “this is America.” We think we’re immune to the
same forces that started the Arab Spring—or the French and Russian revolutions, for that
matter. I know you fellow .01%ers tend to dismiss this kind of argument; I’ve had many of
you tell me to my face I’m completely bonkers. And yes, I know there are many of you who
are convinced that because you saw a poor kid with an iPhone that one time, inequality is a
fiction.
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Special Report
The Myth of America’s Golden Age
By JOSEPH E. STIGLITZ
Here’s what I say to you: You’re living in a dream world. 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 most ironic thing about rising inequality is how completely unnecessary and selfdefeating it is. If we do something about it, if we adjust our policies in the way that, say,
Franklin D. Roosevelt did during the Great Depression—so that we help the 99 percent and
preempt the revolutionaries and crazies, the ones with the pitchforks—that will be the best
thing possible for us rich folks, too. It’s not just that we’ll escape with our lives; it’s that
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we’ll most certainly get even richer.
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The model for us rich guys here should be Henry Ford, who realized that all his
autoworkers in Michigan weren’t only cheap labor to be exploited; they were consumers,
too. Ford figured that if he raised their wages, to a then-exorbitant $5 a day, they’d be able
to afford his Model Ts.
What a great idea. My suggestion to you is: Let’s do it all over again. We’ve got to try
something. These idiotic trickle-down policies are destroying my customer base. And yours
too.
It’s when I realized this that I decided I had to leave my insulated world of the super-rich
and get involved in politics. Not directly, by running for office or becoming one of the bigmoney billionaires who back candidates in an election. Instead, I wanted to try to change
the conversation with ideas—by advancing what my co-author, Eric Liu, and I call “middleout” economics. It’s the long-overdue rebuttal to the trickle-down economics worldview
that has become economic orthodoxy across party lines—and has so screwed the American
middle class and our economy generally. Middle-out economics rejects the old
misconception that an economy is a perfectly efficient, mechanistic system and embraces
the much more accurate idea of an economy as a complex ecosystem made up of real people
who are dependent on one another.
Which is why the fundamental law of capitalism must be: If workers have more money,
businesses have more customers. Which makes middle-class consumers, not rich
businesspeople like us, the true job creators. Which means a thriving middle class is the
source of American prosperity, not a consequence of it. The middle class creates us rich
people, not the other way around.
On June 19, 2013, Bloomberg published an article I wrote called “The Capitalist’s Case for a
$15 Minimum Wage.” Forbes labeled it “Nick Hanauer’s near insane” proposal. And yet,
just weeks after it was published, my friend David Rolf, a Service Employees International
Union organizer, roused fast-food workers to go on strike around the country for a $15
living wage. Nearly a year later, the city of Seattle passed a $15 minimum wage. And just
350 days after my article was published, Seattle Mayor Ed Murray signed that ordinance
into law. How could this happen, you ask?
It happened because we reminded the masses that they are the source of growth and
prosperity, not us rich guys. We reminded them that when workers have more money,
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businesses
have more customers—and need more employees. We reminded them that if
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businesses paid workers a living wage rather than poverty wages, taxpayers wouldn’t have
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The Pitchforks Are Coming… For Us Plutocrats – POLITICO Magazine
to make up the difference. And when we got done, 74 percent of likely Seattle voters in a
recent poll agreed that a $15 minimum wage was a swell idea.
The standard response in the minimum-wage debate, made by Republicans and their
business backers and plenty of Democrats as well, is that raising the minimum wage costs
jobs. Businesses will have to lay off workers. This argument reflects the orthodox
economics that most people had in college. If you took Econ 101, then you literally were
taught that if wages go up, employment must go down. The law of supply and demand and
all that. That’s why you’ve got John Boehner and other Republicans in Congress insisting
that if you price employment higher, you get less of it. Really?
“
The thing aout u uinepeople i that we love our
cutomer rich and our emploee poor.
Because here’s an odd thing. During the past three decades, compensation for CEOs grew
127 times faster than it did for workers. Since 1950, the CEO-to-worker pay ratio has
increased 1,000 percent, and that is not a typo. CEOs used to earn 30 times the median
wage; now they rake in 500 times. Yet no company I know of has eliminated its senior
managers, or outsourced them to China or automated their jobs. Instead, we now have
more CEOs and senior executives than ever before. So, too, for financial services workers
and technology workers. These folks earn multiples of the median wage, yet we somehow
have more and more of them.
The thing about us businesspeople is that we love our customers rich and our employees
poor. So for as long as there has been capitalism, capitalists have said the same thing about
any effort to raise wages. We’ve had 75 years of complaints from big business—when the
minimum wage was instituted, when women had to be paid equitable amounts, when child
labor laws were created. Every time the capitalists said exactly the same thing in the same
way: We’re all going to go bankrupt. I’ll have to close. I’ll have to lay everyone off. It hasn’t
happened. In fact, the data show that when workers are better treated, business gets better.
The naysayers are just wrong.
Most of you probably think that the $15 minimum wage in Seattle is an insane departure
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from
rational policy that puts our economy at great risk. But in Seattle, our current
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minimum wage of $9.32 is already nearly 30 percent higher than the federal minimum
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wage. And has it ruined our economy yet? Well, trickle-downers, look at the data here: The
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two cities in the nation with the highest rate of job growth by small businesses are San
Francisco and Seattle. Guess which cities have the highest minimum wage? San Francisco
and Seattle. The fastest-growing big city in America? Seattle. Fifteen dollars isn’t a risky
untried policy for us. It’s doubling down on the strategy that’s already allowing our city to
kick your city’s ass.
It makes perfect sense if you think about it: If a worker earns $7.25 an hour, which is now
the national minimum wage, what proportion of that person’s income do you think ends up
in the cash registers of local small businesses? Hardly any. That person is paying rent,
ideally going out to get subsistence groceries at Safeway, and, if really lucky, has a bus pass.
But she’s not going out to eat at restaurants. Not browsing for new clothes. Not buying
flowers on Mother’s Day.
Is this issue more complicated than I’m making out? Of course. Are there many factors at
play determining the dynamics of employment? Yup. But please, please stop insisting that
if we pay low-wage workers more, unemployment will skyrocket and it will destroy the
economy. It’s utter nonsense. The most insidious thing about trickle-down economics isn’t
believing that if the rich get richer, it’s good for the economy. It’s believing that if the poor
get richer, it’s bad for the economy.
I know that virtually all of you feel that compelling our businesses to pay workers more is
somehow unfair, or is too much government interference. Most of you think that we should
just let good examples like Costco or Gap lead the way. Or let the market set the price. But
here’s the thing. When those who set bad examples, like the owners of Wal-Mart or
McDonald’s, pay their workers close to the minimum wage, what they’re really saying is
that they’d pay even less if it weren’t illegal. (Thankfully both companies have recently said
they would not oppose a hike in the minimum wage.) In any large group, some people
absolutely will not do the right thing. That’s why our economy can only be safe and effective
if it is governed by the same kinds of rules as, say, the transportation system, with its speed
limits and stop signs.
Wal-Mart is our nation’s largest employer with some 1.4 million employees in the United
States and more than $25 billion in pre-tax profit. So why are Wal-Mart employees the
largest group of Medicaid recipients in many states? Wal-Mart could, say, pay each of its 1
million lowest-paid workers an extra $10,000 per year, raise them all out of poverty and
enable them to, of all things, afford to shop at Wal-Mart. Not only would this also save us
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allrowing,
the expense
of the food stamps, Medicaid and rent assistance that they currently
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require,
but
Wal-Mart
would
still
earn
more
than
$15
billion
pre-tax
per
year.
Wal-Mart
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won’t (and shouldn’t) volunteer to pay its workers more than their competitors. In order for
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us to have an economy that works for everyone, we should compel all retailers to pay living
wages—not just ask politely.
We rich people have been falsely persuaded by our schooling and the affirmation of society,
and have convinced ourselves, that we are the main job creators. It’s simply not true. There
can never be enough super-rich Americans to power a great economy. I earn about 1,000
times the median American annually, but I don’t buy thousands of times more stuff. My
family purchased three cars over the past few years, not 3,000. I buy a few pairs of pants
and a few shirts a year, just like most American men. I bought two pairs of the fancy wool
pants I am wearing as I write, what my partner Mike calls my “manager pants.” I guess I
could have bought 1,000 pairs. But why would I? Instead, I sock my extra money away in
savings, where it doesn’t do the country much good.
So forget all that rhetoric about how America is great because of people like you and me
and Steve Jobs. You know the truth even if you won’t admit it: If any of us had been born in
Somalia or the Congo, all we’d be is some guy standing barefoot next to a dirt road selling
fruit. It’s not that Somalia and Congo don’t have good entrepreneurs. It’s just that the best
ones are selling their wares off crates by the side of the road because that’s all their
customers can afford.
So why not talk about a different kind of New Deal for the American people, one that could
appeal to the right as well as left—to libertarians as well as liberals? First, I’d ask my
Republican friends to get real about reducing the size of government. Yes, yes and yes, you
guys are all correct: The federal government is too big in some ways. But no way can you
cut government substantially, not the way things are now. Ronald Reagan and George W.
Bush each had eight years to do it, and they failed miserably.
Republicans and Democrats in Congress can’t shrink government with wishful thinking.
The only way to slash government for real is to go back to basic economic principles: You
have to red…
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