Damning Corporate Capitalism With Faint Praise

Economist Tyler Cowen, in a piece at The American Interest, arguesd that — despite growing differences in nominal income — inequality in “personal well-being” has declined drastically over the past century (“The Inequality That Matters,” Jan.-Feb. 2011).

“Bill Gates is much, much richer than I am, yet it is not obvious that he is much happier if, indeed, he is happier at all. I have access to penicillin, air travel, good cheap food, the Internet and virtually all of the technical innovations that Gates does. Like the vast majority of Americans, I have access to some important new pharmaceuticals, such as statins to protect against heart disease ….

“Compare these circumstances to those of 1911, a century ago. Even in the wealthier countries, the average person had little formal education, worked six days a week or more, often at hard physical labor, never took vacations, and could not access most of the world’s culture. The living standards of Carnegie and Rockefeller towered above those of typical Americans, not just in terms of money but also in terms of comfort.”

I suppose I would say Cowen’s is a valid argument, in a very backhanded kind of way — or perhaps that it simply proves too much.

We’ve seen a stagnation in nominal, dollar-denominated, inflation-adjusted purchasing power, and the shift of virtually every penny increased GDP from productivity increases upward to the plutocracy and corporate management, as the result of all kinds of subsidies, protections, and monopolies.

What Cowen is really pointing out, when you get right down to it, is that all these monopolies were still unable to prevent the average worker’s standard of living because — despite all the larceny in the plutocrats’ and bosses’ piggy little hearts — the technologies of abundance have developed so fast that they’ve increasingly broken the link between nominal purchasing power and resource distribution on the one hand, and quality of life on the other. In other words, it’s becoming more and more feasible to live comfortably on what you’ve got left after you’ve been robbed by the plutocracy, despite their best efforts.

I’m surprised the WSJ hasn’t run a “Lucky Duckies” editorial on this.

Nevertheless, the fact remains that this trend undermines the basic logic the system was set up to serve, and the robber barons at the commanding heights of state capitalism are fighting tooth and nail to prevent it. Just what do you think the Digital Millennium Copyright Act was about, for example? Or the assorted recurring examples of “safety” legislation to impose overhead costs on small garage manufacturers and truck farmers and make them less competitive against mass-production industry and factory farming?

These people have been doing their dead level best to maximize the amount of rent they’re able to extract from each unit of comfort, to maximize the number of hours we work to produce profit from them in addition to supporting ourselves, by imposing all sorts of inefficiency burdens on production with efficient new technologies. It’s the moral equivalent of those laws the funeral industry used to have in a lot of states mandating the purchase of a casket even by people who wanted to cremate a body.

These people want to “enclose” the technologies of abundance and extract rents from them, in order to force us to work to support them in addition to ourselves. The fact that the productivity of abundance technologies is growing faster than their ability to raise the rents on artificial scarcity is — despite Cowen’s rosy picture of the world — a bug for them rather than a feature.

The propertied classes, the robber barons, have since the beginning tried to extract tribute by closing off and regulating access to the means of subsistence and production — much like a medieval lord forcing the peasant to work two days on the lord’s demesne in return for the right to support his family on his own plot the rest of the week. And throughout history, the ruling classes have responded to increased productivity of the peasantry’s labor by increasing the size of their own demesne so they could appropriate the surplus for themselves. What’s been happening technologically over the past decades is that the peasant’s labor is growing in productivity faster than the lords can enclose land to compensate for it. It’s more feasible than ever before, in the words of the Wobbly song, to “throw the bosses off our backs.”

And they hate it.

Citations to this article: