Jason OMahony - Irish political blogger, Irish politics, EU politics
 

Do we need the ultra-rich to be Socialism’s workhorses?

Posted by Jason O on Aug 27, 2013 in Politics |

I am, as will be no surprise to regular readers, a believer in free enterprise. It is flawed, of course, but as a means of generating wealth and allocating finite resources to infinite human demand, it’s a effective system.

However.

I can’t help thinking that we’re approaching one of those key moments in human history when an entire system takes a radical turn. See, globalisation has created wider wealth and more choice than at any time in human development.

But, coupled with technology, there is the serious danger that as it opens up almost unlimited opportunity for the very talented, it has the opposite effect for the people at the other end of the talent spectrum. As the very skilled travel the world as globalised citizens, becoming very wealthy, what happens to the less skilled?

Train and educate them is the usual mantra, and there is an element of truth in it, but what if it is not enough? What do we do with the growing number of working and now middle class who just can’t compete? Who just aren’t talented enough? Even if you do manage to retrain them, aren’t they just doomed to a lesser quality of life?

That’s life, some say. Except it’s not, because we’re making more and more of one particular resource. Wealth.

But it is not their wealth, goes the argument, and of course, it’s true, but only up to a point.

That wealth is created by two forces. One, the hardwork and creative skill necessary for wealth to be created, and two, a society to provide a marketplace for products and services to be sold.

And that is the key, because whereas the less skilled may not be part of the first group, he or she is most certainly part of the second.

That is where a new Capitalist Compact is needed, which agrees to the rich becoming rich, but in return supporting wealth redistribution, through taxation, to fund the bottom part of society which cannot compete.

It means freeing capitalists to create the wealth to fund a de facto socialist society, effectively the rich working in a luxurious, gilded engine room, powering the ship of social stability along.

Not as much a class war as a new class compact between the ultra-rich and the rest, and most importantly, a much under-discussed weapon in the fight against tax flight, because after all, there will always be some nation willing to hide the wealth of the rich. But how will they generate that wealth if we refuse to let them sell in the first place?

After all, do we not control the marketplace?

2 Comments

Michael
Aug 27, 2013 at 6:28 am

Here is a 114 year old essay by Andrew Carnegie which essentially says the same thing :) http://www.swarthmore.edu/SocSci/rbannis1/AIH19th/Carnegie.html


 
eamonn moran
Aug 27, 2013 at 9:49 am

What you are describing is what happened in America after the last depression and was a result of the increase in income inequality that proceeded that depression. FDR and other social democrats saved capitalism from itself in the new deal.
Globalisation isnt the reason for the increase in income inequality in America and Europe (although it helps).
Unchecked freemarkets tend toward Monopoly and eventually destroy themselves.
That’s why we inserted lots of checks in the 40′s and 50′s in order to keep some sort of balance. Social welfare, higher business taxes and glass stiegal to name a few.
Since the 70′s the corporate lobby has been tearing down these checks especially in the US.
In US average wages have remained stagnant since then so any increases in demand are as a result in increasing levels of debt.
In his book “The price of inequality” Joe Stiglitz advises business owners to harden their hearts and pay their employees more.
In other words, it makes sense for them to pay more because it increases demand and will result in larger profits in the future.

“After all do we not control the marketplace?”
No they do.


 

Reply

Copyright © 2017 Jason O Mahony All rights reserved. Email: Jason@JasonOMahony.ie.