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| THIS WEEK | |
Eighty years ago, in the depths of the Great Depression, America’s hungry jobless — in bands sometimes 30 to 40 strong — would rush into chain stores and demand food. The chain store owners wouldn’t report these raids to police. Local newspaper editors wouldn’t print stories about them either. Both the chain store owners and the editors, notes historian Robert McElvaine, “feared publicity might precipitate other such actions.” Today, of course, Blackberrys and iPhones made such news suppression seem archaically quaint. Photos of last week’s massive looting in London’s burning boroughs almost immediately flashed all around the world. So did the debate over what the looting signified. Mindless violence? A political statement of some sort? A glimpse into the ominous “feral” future that surely awaits us all? Amid the charred rubble, we’ve dug out some pearls of wisdom. We do our best to share them, this week, in our latest Too Much. | |
| GREED AT A GLANCE | |
 How much could an Italian-style patrimoniale raise in the United States? The latest financial industry global wealth tally, released by Merrill Lynch and Capgemini this past June, offers some tantalizing hints. The study puts the combined wealth of North American households worth over $1 million — not counting residences, yachts, luxury cars, jewels, and artwork — at $11.6 trillion in 2010, with the vast bulk of these “investible assets” sitting in U.S. pockets. A one-time 10 percent wealth tax on America’s millionaire households, applied to these assets, would raise over $1 trillion, or almost as much in one year as the $1.2 trillion in deficit savings the congressional “super-committee” the debt ceiling deal established must now identify for the next ten years . . .  Tech entrepreneur John Vaccaro probably gets a mite nervous when people start talking about taxing the rich. You’d be nervous, too, if your business depended on having people rich enough to plunk down $500 on a case for their iPads. What makes an iPad case worth $500? The materials! Vaccaro’s latest iPad wraps come from the auctioned-off wardrobe of investment scam artist Bernie Madoff. The idea for making iPad cases out of Bernie Madoff pants hit Vaccaro, the New York Post reports, when he saw Wall Street bankers at the Madoff estate auction last November “fighting over absurd Madoff items like velvet slippers.” Vaccaro quickly put in winning bids for every pair of Madoff slacks up for sale, and his company is now busily stamping out four iPad covers from each pair . . . John Vaccaro’s main competition in the luxury cover-your-iPad industry? That’s coming from the UK’s Stuart Hughes company, a firm that specializes in covering “iPads and other electronic devices in the precious metal of your choice.” But Stuart Hughes has now gone way beyond accessorizing gadgets, to hawking a customized gold-plated Rolls-Royce. The Rolls, without the gold, runs $540,000. The Stuart Hughes “accouterments” — among them a golden radiator grille “designed to resemble a bank” — up the cost to $8.15 million. Stuart Hughes and a Swiss partner have so far produced two gold-plated Rolls-mobiles and sold one. | |
| INEQUALITY BY THE NUMBERS | |
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| IN FOCUS | |
Look Out, Here Comes the ‘Feral Underclass’ What made last week's rioting in London all the more 'achingly sad'? The rioters weren't challenging greed. They were celebrating it. We really need to understand why. Oppressed people riot. Oppression and rioting have gone together for millennia. But the young rioters last week in London didn’t seem oppressed. They struck many appalled onlookers, the world over, as just plain greedy. That world would watch endlessly looped “images of giddy youths hauling flat-screen televisions out of plundered shops.” One young rioter had “looted so many sweaters from a high-end London store she tottered under their weight.” Another threw a champagne bottle at police. The morning after one night’s looting, a clerk at a plundered high-end boutique told reporters the looters obviously knew their way around. “They went straight upstairs where we keep the expensive stuff,” she explained, pointing to where the store kept its £300 — nearly $500 — jeans. What may have begun “as an outburst of anger against police violence,” most observers agreed, had “morphed into an orgy of nocturnal ‘shopping.'” The rioters — “self-centered, marauding thugs,” the National Post sneered — hadn’t “even bothered to come up with a slogan or a decent chant.” “At bottom,” Guardian political analyst Michael White sadly concluded, “these were not riots for social justice, but for Nike shoes.” Britain’s top politicians, the architects of an austerity that’s aggravating social injustice in the UK, cut short their vacations to pound home this image of the riots as “mindless violence” — and discourage any other interpretation. Prime minister David Cameron dismissed the turbulence as “criminality, pure and simple” — “as if any attempt to understand what’s at the root of all this rage,” theNation's Maria Margaronis astutely noted, “would imply condoning it.” Conservative London mayor Boris Johnson, for his part, | |
Any response to the riots that ignored broader realities, countered critics of the UK's ongoing austerity, would be the real immorality. These critics noted that almost a third of London’s boroughs have 20 people chasing every open job, that a tripling of tuition fees has left UK colleges unaffordable for wide swatches of British youth, that local rents for modest flats have far outpaced inflation.
This squeeze, the critics stressed, stands in ever-sharper contrast to the excess at the UK’s economic summit. Last year, amid an austerity that chopped away at every public good, the private wealth of Britain's 1,000 richest soared 30 percent.
These rich, as Daily Telegraph chief political commentator Peter Oborne put it, have been nurturing “an almost universal culture of selfishness and greed.”
“It is not just the feral youth of Tottenham who have forgotten they have duties as well as rights,” he noted. “So have the feral rich of Chelsea and Kensington.”
“Feral politicians cheat on their expenses, feral bankers plunder the public purse for all its worth, CEOs, hedge fund operators, and private equity geniuses loot the world of wealth,” added the eminent British geographer David Harvey.
“Does anyone believe,” Harvey continued, “it is possible to find an honest capitalist, an honest banker, an honest politician, an honest shopkeeper or an honest police commissioner any more? Yes, they do exist. But only as a minority that everyone else regards as stupid.”
But last week's riots, progressive analysts lamented, represented more a tribute to dishonest “feral rich” values than a challenge. Those squeezed the hardest, posited commentator Tom Fox “should be uniting against the greed and recklessness of austerity, not replicating it.” Yet the rioters, a leading British left think tank observed, seemed to have no greater ambition than “to own.”
Why this absence of political ambition? What explains the rioters’ genuflection at the altar of “crude materialist, market-driven hedonism”? To zone in on the answer, we need to step back and remind ourselves how strikingly unequal distributions of income and wealth impact how we interact with “things.”
In relatively equal nations, societies where minor differences in income and wealth separate social classes, people typically do not obsess over “things,” the baubles of modern life. The reason? If nearly everyone can afford much the same things, things overall tend to lose their significance. People in more equal societies will be more likely to judge you by who you are than what you own.
The reverse, obviously, also holds true.
“As inequality worsens,” as Boston College economist Juliet Schor has explained, “the status game tends to intensify.”
The wider that gaps in income and wealth go, the greater the differences in the things that different classes can afford. In markedly unequal societies, things take on ever greater significance. They signal who has succeeded and who has not.
In London, the developed world’s most unequal city, these signals may dominate daily life as ferociously as anywhere else on Earth. Their incessant repetition drowns out the socially cohesive signals that people see and hear and feel in more equal societies, the sense that “we're all in this together.”
“Let this week be a wake up call,” London's Compass think tank observed right after the heaviest rioting. “There is more to clean up than broken shop windows.”
Understanding Our National Empathy Deficit
Michael Kraus, Paul Piff, and Dacher Keltner, Social Class as Culture: The Convergence of Resources and Rank in the Social Realm. Current Directions in Psychological Science, August 2011.
Patriotism, as Samuel Johnson suggested long ago, may be the last refuge of scoundrels. Philanthropy, on the other hand, has always been the first refuge of the rich and powerful.
The more wealth the wealthy accumulate, rationalizers for the rich love to contend, the more they will shower down on those in need.
In fact, little of the philanthropy wealthy people do on a regular basis flows to people in actual need. Far more goes to bankrolling new wings of fine-arts museums — plastered with the names of the donors, of course — or subsidizingmahogany-windowed new dormitories at elite alma maters.
University of California social scientists Michael Kraus, Paul Piff, and Dacher Keltner have just published new research that takes a deeper look at this phenomenon. They’ve mined the experimental literature — and conducted experiments of their own — to better fathom how class impacts our humanity.
The three researchers have run people of means — and people without them — through an assortment of exercises and tests that track for compassion and caring. They’ve had their subjects play games, for instance, that involve giving away real money. The various experiments all show a consistent pattern.
“Lower class people just show more empathy,” co-author Dacher Keltner noted in an interview last week, “no matter how you look at it.”
The empathy here, Keltner and his colleagues stress, comes from real-life experience, not anything innate.
People of modest means, the scholars point out, don’t have the resources to control their own environments. They have to depend on others. They learn, in the process, how to read other’s emotions. They become more empathetic.
People from wealthy households, by contrast, don’t have to depend nearly as much on others. Their wealth and “higher station in life” give them the luxury of focusing much more single-mindedly on self. They have less need to understand what other people are feeling. Over time, they feel and show less empathy.
This dynamic, observes Keltner, has clear implications for trickle-down public policy approaches that expect the rich to demonstrate a hefty dose of nobless oblige. That expectation, he notes bluntly, rates as “improbable, psychologically.”
“Our data,” Keltner sums up, “say you cannot rely on the wealthy to give back.”
Our society’s scoundrels will no doubt disagree.
Quote of the Week
“We need not draw a straight line from the decision to bail out the banks to what's going on now in London. But we must not lose sight of what both events tell us about our current condition. Those who want to see law and order restored must turn their attention to a menace that no amount of riot police will disperse: a social and political order that rewards vandalism and the looting of public property, so long as the perpetrators are sufficiently rich and powerful.”
Dan Hind, author, The Threat to Reason, inNothing 'mindless' about rioters, a commentary on last week's UK rioting, August 9, 2011
Stat of the Week
Americans, by a two-to-one margin, want to see the rich paying higher taxes. Says who? Says a national Gallup poll released last week. The “increasing income taxes for upper-income Americans” policy option enjoys overwhelming support among Democrats and independents — and even backing from 47 percent of Republicans.
on Wealth
Cynthia Moothart, 2012 election poses choice of democracy or plutocracy,Capital Times, August 9, 2011. The League of Rural Voters policy director reminds us that America's 400 wealthiest hold as much wealth as “nearly half the U.S. population.”
Yves Smith, Income inequality is bad for rich people, too, Salon, August 11, 2011. A look at what we now know about health and happiness.
Ethan Bronner, Protests Force Israel to Confront Wealth Gap, New York Times, August 11, 2011. The Israeli economy, says the director of a "pro-market research group, rests on “rapacious elites fleecing consumers.”
Paul Solman and Elizabeth Shell, Wealth Quiz: How Does the U.S. Slice the Pie? PBS NewsHour, August 12, 2011. Public TV is recreating, interactively, the landmark experiment on American attitudes toward wealth conducted by Duke's Dan Ariely and Harvard's Michael Norton.
Daniel Morrissey, Courts should curb executive pay, National Law Journal, August 15, 2011. A Delaware court finds that CEO windfalls may well represent “unconscionable” wastes of shareholder assets.
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