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democracy: government by and for the people
economics: the systematic distribution of resources
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Imagine a big, gymnasium-size room with 100 people in it.
Imagine there is $1000 the 100 people can divide up among themselves
in any way that at least 51 of the people agree upon.
For instance, they might decide to give all 100 people $10 each,
or to give 50 people 15 and 50 people 5,
or any distribution at all that at least 51 of them approve.
– – – – – – – – – – – – – – – – – – – – – – – – – –
Suppose someone suggests the 100 people divide up the $1000
in the same proportions as wealth is distributed in the United States
(based on figures in the Federal Reserve Bank’s 2001 Survey of Consumer Finances).
That distribution would work approximately like this:
Get 10 of the 100 people and have them sit together in one part of the room.
These 10 people will get 700 of the $1000.
Before moving to the next group, get 1 of the first 10 people to stand apart of the other 9 –
out of their total of $700, this 1 person will get $330.
Now get another group of 10.
They will share $130.
Now, form a group of 20 – they’ll share $110.
Another group of 20 will share $40.
And finally, the remaining 40 people will get to share $3.
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So here’s how it ends up:
# of people $ each gets
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1 $ 330.00
9 $ 41.10
10 $ 13.00
20 $ 5.50
20 $ 2.00
40 $ 0.075 (seven and a half cents)
100 $1000.00
– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
THE KEY QUESTION:
Would 51 of the people in the room agree to this distribution?
It doesn’t seem likely, does it? (Would even 25?)
HYPOTHESIS
for discussion and debate:
This distribution of wealth could not exist in a democracy.
Corollary:
The United States, where this distribution of wealth does in fact exist, is not a democracy.
The United States is at best some form of virtual democracy
(virtual meaning “existing in the abstract but not in fact”).
My unfortunate conclusion:
There is a name for our form of government, but it’s not democracy.
It’s PLUTOCRACY
government by and for the wealthy.
Is this the society we want?
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notes and caveats:
* Figures are approximations based on Table 2 in Edward N. Wolff, Changes in Household Wealth in the 1980s and 1990s in the U.S. (Levy Economics Institute Working Paper No. 407 (May 2004))
located at: http://www.levy.org/default.asp?view=publications_view&pubID=fca3a440ee
- Use of the figure 51% to make an agreement in the experiment does not reflect my belief that key social decisions should be determined by simple majority. When consensus is not possible, I like the idea of 67%.
- Of course, I don’t pretend to have answers to the questions implied by this information. Answers will necessarily be the products of social, rather than individual, understanding and action. But a preliminary question should probably be: do we seek to reform the current system, or maybe form a whole new system, perhaps without even confronting the current regime, but rather under its radar?
- Comments, criticisms, contentions, concerns requested.
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Great illustration.
GREAT illustration!!
I always thought of our government as a corporate aristocracy, but plutocracy also works.
We can’t be a democracy when the people we choose to represent us continually and routinely vote for measures that go against the interests of their constituancy. The economic divide in this country is getting wider every year and is not resulting in increased production of jobs and individual wealth. There is a real limit to the concept of wealth creating wealth and we reached that limit years ago.
One of the key reasons that you can end up with your distribution of wealth:
1 $ 330.00
9 $ 41.10
10 $ 13.00
20 $ 5.50
20 $ 2.00
40 $ 0.075 (seven and a half cents)
Is that the only people who know the rules of the game and the total amount of wealth are the following; there are an additional number of people who suspect something isn’t right, but can’t quite put their finger on it; I’ve indicated those in parentheses. Then there are the uneducated and naturally clueless, who I’ve indicated in square brackets:
1 $ 330.00
8[1] $ 41.10
5(3)[2] $ 13.00
2(8)[10] $ 5.50
1(5)[14] $ 2.00
1(9)[30] $ 0.075
The people in square brackets gravitate towards the bottom because if you’re uneducated, or if you’re naturally stupid, you’re going to have a hard time moving into and staying in an upper income bracket.
The only hope of avoiding a plutocracy is keeping the numbers of people in () or [] as small as possible. This has been well known throughout history, as indicated by an ancient Chinese saying:
If you’re planning one year ahead, plant rice.
If you’re planning 10 years ahead, plant [fruit] trees.
If you’re planning 100 years ahead, educate the people.
And by Jefferson’s self-penned epitaph:
“Here was buried Thomas Jefferson, author of the Declaration of American Independence, of the Statute of Virginia for Religious Freedom, and Father of the University of Virginia.”
The plutocracy is most able to have its way when, by denigrating the value of education and eroding the education system it can get as many people as possible into the () or [] conditions, where they are easily swayed by fiery rhetoric and empty promises.
The history of the world is a sad litany of revolutions started in hope of freedom and justice, and ending with neither. The key is not in the redistribution of wealth; that alone will soon result in a new set of plutocrats on top. The key to a fair society is to educate the people so that they can recognize the threats to their collective well-being and set up rules of the game so that they are fairer and kinder than crude Social Darwinism alone would create. And this means not just schools, but all forms of “the media” as well.
The decline of America into plutocracy since WWII is a failure to educate the public that both parties bear some blame for, although the party of kleptocracy and destructive mythologies now in power bears the lion’s share of the blame. Many would say organized religions that denigrate questioning and reward trust of leaders bear blame as well.
Correcting this mess is a multigenerational task at this point, and the outcome is by no means certain, even if Republicans are swept from office in 2006 and 2008. It is an interesting question as to whether the best thing for the planet and its people is to let the US fall like Rome (or, more realistically, like the USSR), or to try and mold it into something smaller and more humble, like the UK after empire (although it took two world wars to bring England to that place).
Some might argue that there isn’t a pile of wealth (that fell from the sky?) and is sitting there waiting to be divided up. People who think that they deserve to keep at least some of what they earn, or what is given to them — that is, almost everyone — are likely to object to a way of thinking that seems to say that everything is up for grabs through a political process. This is a good reason to avoid relying on this thought experiment. It suggests what a majority would consider wrong.
That said, there is something very wrong about a process that channels so much more wealth to the wealthy, simply because they are wealthy. It may be better to focus on fixing that process.
but at last part of the point is that resources — wealth — are social products, products of the way we organize ourselves as a society — they do not magically appear from individuals disengaged from social processes. And there appears to be no good reason to exclude key decisions as to how we should organize our production and distribution of resources from democratic control. In my mind, that doesnt equate to everyone getting the same amount of resources (I agree most Americans including me would not vote for that), but in my mind it does equate to a significantly less stratified and less plutocratic form of organization in which the wealthy do not get to determine how wealth is distributed (and as your comment suggests it’s no surprise that they use their wealth-based control to channel most of the wealth to themselves or people who help them maintain power — that’s the problem for which democracy could be a solution).
Of course, as Progressive in KY notes, defeating the plutocratic orgnaization of our society probably requires a longterm educational process that would hopefully eventually wrest some control from the ruling Establishment class (top 10% or so). I think an early step in the process of fixing things is to make people aware of the current situation, which I believe a large percentage of Americans would agree is not close to fair. That’s the spirit in which I propose this thought experiment — not to suggest solutions, but to identify a problem that needs to be addressed.
This is an interesting way to present the data.
I agree that the numbers don’t make sense if the political organization is a democracy. If one considers a representative government structure, then it is possible to consider who is really represented.
It is also possible to consider the cultural/religious beliefs that explain and support such a distribution of wealth.
Thanks.