All you readers who can’t resist going after Sam Harris—back off a tick. He has a nice new piece on HufPo: “A new year’s resolution for the rich,” which highlights the growing financial inequality between Americans. (That, of course, also means inequality of health care and many other benefits.) Harris calls for a fairer tax code, one in which the wealthy—as they did historically—pay a higher proportion of their incomes, and for wealthier Americans to sacrifice some of their fortunes on education and clean energy.
. . . throughout the 1950′s–a decade for which American conservatives pretend to feel a harrowing sense of nostalgia–the marginal tax rate for the wealthy was over 90 percent. In fact, prior to the 1980′s it never dipped below 70 percent. Since 1982, however, it has come down by half. In the meantime, the average net worth of the richest 1 percent of Americans has doubled (to $18.5 million), while that of the poorest 40 percent has fallen by 63 percent (to $2,200). Thirty years ago, top U.S. executives made about 50 times the salary of their average employees. In 2007, the average worker would have had to toil for 1,100 years to earn what his CEO brought home between Christmas in Aspen and Christmas on St. Barthes. . . . But I can’t imagine that anyone seriously believes that the current level of wealth inequality in the United States is good and worth maintaining, or that our government’s first priority should be to spare a privileged person like myself the slightest hardship as this once great nation falls into ruin. . .
. . . The combined wealth of the men and women on the Forbes 400 list is $1.37 trillion. By some estimates, there are at least another 1,500 billionaires in the United States. Something tells me that anyone with a billion dollars could safely part with 25 percent of his or her wealth–without being forced to sell any boats, planes, vacation homes, or art. As of 2009, there were 980,000 families with a net worth exceeding $5 million (not including their primary residence). Would a one-time donation of 5 percent really be too much to ask to rescue our society from the maw of history?
Lovely sentiments. Given the political climate of our country, none of this will happen, of course. The Republicans couldn’t even sacrifice their goal of tax cuts for the wealthiest Americans, a huge loss of money for the government whose retention by the wealthy will do nothing for the country. Screw health care for the poor, but let the rich get their tax breaks. This is government, as Francis Fukuyama says below, not only by the wealthy, but for them.
Face it: we’re becoming a plutocracy. Here are some graphs produced by Berkeley economist Emanuel Saez (courtesy of Foad Mardukhi), showing the huge rise in income inequality in America that has taken place since the late 1930s (download his article here). This one shows the proportion of total income shared by the wealthiest 10% of Americans (click to enlarge):
But it’s worse: you can decompose the top 10% into three groups: the share of total income garnered by those making the top 1% (about 21%!), the top 1%-5%, and the top 5%-10%. The topmost bracket has shown the greatest increase since 1980:
This is not, however, what this issue of The American Interest means by plutocracy. We mean not just rule by the rich, but rule by and for the rich. We mean, in other words, a state of affairs in which the rich influence government in such a way as to protect and expand their own wealth and influence, often at the expense of others. As the introductory essay to this issue shows, this influence may be exercised in four basic ways: lobbying to shift regulatory costs and other burdens away from corporations and onto the public at large; lobbying to affect the tax code so that the wealthy pay less; lobbying to allow the fullest possible use of corporate money in political campaigns; and, above all, lobbying to enable lobbying to go on with the fewest restrictions. Of these, the second has perhaps the deepest historical legacy.