Category: Economics Page 12 of 89

The Problem With Aristocrats Is That They Inflict What They Can Never Suffer

— (someone else, can’t find the original)

The democratic bargain, or really, the bargain of all civilization that is worthy of existing, is based on the idea of resolution of conflict by means other than violence. Band level hunter gatherers are much more egalitarian than we are, and are generally better off on most metrics than anyone except industrial age humans (who they are still better off than in terms of free time, equality, dental health and female hip width) but they usually have higher levels of violence than we do.

Early civilizations were also shockingly violent and extremely cruel, both to their own residents (not citizens, residents) and to those nearby. “An eye for an eye” wasn’t even the law: punishments for crimes were often excessive, feuds were common and often lead to far more death and suffering than the original crime being avenged.

In civilizations and especially in democracy, at least in theory, the idea is that we give up our private right to determine what is right and wrong and especially our private right to take justice into our own hands. In exchange we avoid the evils of vengeance and feuds and reduce the amount of internal violence. (Native Americans might not think that British democracy reduced violence, though, note, nor did Rome’s neighbours think Republican Rome reduced violence towards them.)

In Democracy we elect people to make and enforce our laws, and to implement policy. This is based on the idea that people we elect will act largely in the interests of society as a whole, and thus that more people will be better off. Because it is impossible to make policy or laws without harming at least a few people, those who run society are supposed to be disciplined not by violence but by legal means and thru the ballot box.

However, representative democracy (not direct democracy, which has other failure modes), especially when combined with capitalism, tends to fall into oligarchy. There are multiple forms of oligarchy, an oligarchy isn’t always rich, but under capitalism those with the most money tend to form the core of any oligarchy, even if it has some sort of base in the population. There would be no right wing in America of the current sort, or the world, without the massive financial support of the Koch brothers and other extremely rich individuals.

The end result of this is governments which act against the interests and desires of the majority. The Princeton oligarchy study found that, for all intents and purposes, the opinions of most of the American population have no effect on legislation.

Oligarchies are a form of aristocracy, and aristocracies have three fundamental principles:

1. Aristocrats are the best people and deserve their wealth, power and privileges.
2. Aristocrats as a class should never lose their power; and,
3. Individual aristocrats should never be held responsible for their actions unless they harm other aristocrats or their interests;

There are two issues here.

First, democracies which become aristocratic oligarchies stop acting in the interests of the majority.

Second, the members of an aristocratic oligarchy don’t suffer what they inflict.

For well over 40 years now productivity and wages have not risen together, for example, where before they did. This is a direct result of policy, both legislative (massive tax cuts and regulatory changes) and monetary, central banks acting to “control inflation” by suppressing wages on theory that “wage push inflation” is the only important type of inflation, while also acting to increase asset prices held by the rich, like stocks, bonds and real estate.

Likewise, starting in the 70s many types of drugs were made illegal, but the rich don’t tend to be arrested for doing them, either because their drugs are legal, or by simple lack of enforcement, as with the widespread use of cocaine amongst elites in the 80s and 90s.

I recently read someone claiming that Federal Reserve members had “skin in the game” because they had to live in America, which is a massive misuse of the idea, akin to saying that Jeff Bezos and workers in his warehouses both have interests in common. Well, sort of. Or that just because they are Americans Bill Gates and homeless person both have skin in the game.

Yeah, OK. And the Queen and Boris Johnson have skin in the British game, just like food bank users and people who die from NHS cuts.

In 2008 there was a huge financial crisis, starting in the US, but spreading thru much of the world.

It was caused by the actions of executives in the financial sector and as a result, essentially every brokerage and most banks were, had they taken their losses, bankrupt. If the normal course had been allowed, they would have lost all their money, and thus their power

Aristocrats, as a class, must never lose their money or power. (Money is power, in our societies.)

The Federal Reserve and the Treasury department stepped in, with some legislative help, and saved them. The cost for saving them was, at the time, for America alone, something like 20 trillion dollars.

Some ordinary people were bailed out, but the vast majority weren’t.

Later, when banks foreclosed homes because of the financial crisis’s fallout, they fraudulently signed legal documents, en-masse, stating that they had title to the properties they were foreclosing. They were allowed to foreclose anyway, and they were not prosecuted for this clear crime.

Democracies which become aristocratic oligarchies stop acting in the interests of the majority.

As for the crimes which lead up to the crisis, of which there were many, most of the bubble, especially in the last two years, they were not prosecuted, but instead they were fined for amounts less than they had made, thus immunizing them from criminal penalties.

Aristocrats should never be held responsible for their actions,  unless they hurt other aristocrats.

The one major prosecution was of Bernie Madoff. Madoff had victimized out members of the elite, not the general public.

So, the system operated to save the rich and powerful and when saving them was in opposition to saving regular people it not only didn’t save them, it allowed the rich and powerful to victimize them further.

Much of this was illegal by the law at the time, but a lot of it was legal. Aristocracies make laws that favor those in power. They create policies which favor the already powerful and rich.

And, as the Princeton study showed, they ignore majority opinion if it contradicts elite preference.

Let us now move to abortion, the issue of the day. A majority of the population wanted to keep Roe vs. Wade, by about a 2:1 margin.

Some years ago I asked my father, a very conservative guy, his position on abortion. He said he didn’t like it but believed it should be legal. I asked why. “Because I saw what happened when it was illegal. Rich women got abortions, and poor women didn’t.”

Let us say that abortion becomes effectively illegal. Do you think that the wives, sisters and daughters of the rich and powerful will still have access to them?

We all know the answer.

Aristocrats inflict what they never must suffer.

An example given by, I think, Nassim Taleb, used the Roman Republic. When Hannibal wiped out a huge Roman army at Cannae, one-third of the Roman Senate’s members were killed. They fought in battles.

What important politician or rich person of the last two generations died in any of America’s wars? Most didn’t even fight, including Bush Jr., Trump and Clinton all of whom weaseled out of the Vietnam war using dubious means.

Now let’s bring this back. One of the benefits of civilization is the reduction of violence which comes from prohibiting people from taking vengeance or justice (not the law) into their own hands. The benefit of Democracy is supposed to be that the government acts in the interests of the majority of the population, and liberal democracy it is supposed to also protect the rights of minorites against the majority.

This is what the legitimacy of civilization and democracy rest on. In exchange for these benefits, people don’t make life unpleasant for people with power, they don’t get vengeance themselves and so on.

I’ve seen the argument that protesting outside the houses of Supreme Court justices is illegal. It is. Hiding slaves was illegal. Blacks riding at the front buses was illegal. Strikes were illegal. Almost nothing that the Nazis did was illegal when they did it, because they were in power and made the laws.

What the French aristocracy did before the revolution was legal, and so was what the Russian aristocracy did.

Legality isn’t justice, even in good societies, though sometimes it approximates it.

But when legitimacy is broken: when civilization or democracy or liberalism doesn’t provide what it’s supposed to do, people stop caring so much about what is legal.

Nobody on the supreme court is going to be affected negatively by the loss of Roe. They and their friends and families, all of whom are rich, powerful or both, will still be able to get abortion when needed or when they want them. They, their daughters, wives and sisters will not die of untreated ectopic pregnancies or bleed out from back alley abortions.

And, as a commenter pointed out, the supreme court did rule that protests outside the houses of abortion doctors were constitutionally protected free speech, but protests outside their houses aren’t.

The evil of aristocracy is that aristocrats inflict what they never suffer.

If you are a member of the American elite life has never been better. You are the richest rich the world has ever known, even richer than in the Gilded Age. For over 40 years salaries, stock options, stocks and other assets like real-estate have just gone up and up and up, and when they haven’t the government, often in the form of the Fed, has stepped into to make sure they do.

Meanwhile ordinary people increasingly can’t afford houses, rent or medical care and where one salary could support a 4 person family, now 2 often can’t. (Ignore the official inflation and wage adjusted stats, and focus on reality, the stats don’t tell the picture and everyone knows it.)

Life gets better and better for the elite; the aristocrats and some of their retainer class, and shittier for almost everyone else.

There isn’t really a social contract, but there is legitimacy, and our elites have broken it. Since they have broken it, I will gently suggest that expecting those will die or suffer in large numbers due to their decisions to respect them or their laws is unreasonable.

When Jared Diamond tried to figure out why societies collapse, he dug into many civilization collapses and found out they almost all had one thing in common: the decision makers were cut off from the consequences of their decisions. Things were getting worse for almost everyone else, but everything was good for them, and often even improving, so they did nothing.

Eventually that broke. Sometimes due to environmental collapse; sometimes economic collapse; sometimes invasion; sometimes rebellion; and sometimes a combination or all of them at once.

Our aristocratic oligarchy is inflicting on others what they won’t suffer, even as they enrich themselves and pat themselves on the back about how they deserve everything they have.

That is leading where it always does, and it starts with the loss of legitimacy.

Those who protest rudely when those who will never suffer what they inflict hurt them or kill them, are minor in this context, but they are a sign of what is to come.

And that will be far worse than some judges being made uncomfortable or scared. It will be an age of war and revolution, throughout the world, and it will also be an age where some of their victims decide that if they are to suffer, their victimizers will suffer too.

This means either full on dystopian police states or an age of assassination and rebellion, and probably both.

This is what our aristocrats have sowed, and they will reap it. Alas, so will the rest of us. In the meantime, those who try and intrude on their bubbles and make their displeasure known are actually doing them a favor, offering them one last (and it is very close to last) chance to course correct.

History suggest they won’t, but occasionally it does happen, and we must hope for that occasionally.

DONATE OR SUBSCRIBE