The horizon is not so far as we can see, but as far as we can imagine

The Three Types of People Who Wind Up Rich and How They Destroy the Wealth of Others

Models of economics which don’t handle power are marginal at best. They serve only to describe what happens in situations where no one has enough power to set the rules or where there is a central authority which acts to keep any other actor from having enough power to set the rules.

The Standard Model of Power in Markets

Assume that people want two things: They want stuff and they want security. That is to say, they want to know they can keep what they have.

People who become rich usually fall into one of three categories:

1) People who lucked out by being in the right place at the right time (many people who became rich in the internet bubble, for instance, just happened to be working at the right place at the right time);

2)People who are obsessed with something that other people value highly. Like many musicians in the era of mass-produced music before the rise of the internet. Or like J.K. Rowling. These people are also lucky, in the sense that the products of their obsessions are highly marketable at the time of  output;

3) People who are obsessed with making money. They think of little else and have devoted their life to it.

In all three cases, once you’re rich, the needs that drove you there don’t go away. Wealth effects people, but it rarely changes either the obsessive need that drove them, nor the human need for security.

The second group is the least dangerous because their primary motivation was never money and their obsession drives them away from thinking too much about money.

The first group, those who got lucky, are the rank and file of the “I’ve got mine, screw you. Jack” brigade. This includes people far beyond those who became truly rich, like those who worked at startups by luck or those who won the genetic jackpot and inherited; it also includes those who won the generational jackpot: the GI Generation, for example, or older Boomers.

The GIs may have been born during the Great Depression, but they spent their prime working years during the greatest general wage increase of the last few centuries. They bought houses when they were cheap, then they benefited from the massive appreciation of housing values from a multi-generational period in which house prices increased faster than wages, capped by an actual housing bubble for those who lived long enough.

In generational terms, they were born on second (though not third). They had the GI Bill, great jobs, great job security, great pensions, great health care, and so on.

They lucked out. It’s not that they didn’t work hard for what they got, but the same amount of work in a different time or place wouldn’t have reaped the same rewards.

People like this become conservative. The GIs start off as the footsoldiers of post-war liberalism, but they wind up Reagan Democrats. They have theirs and they vote for politicians and policies which make sure that what they have is secure. The net result of those policies has been to pull the ladder up after them–to make their children and grandchildren less prosperous.

If you got lucky, then preservation of capital is the first rule. People who got lucky are against high taxes, because they can’t expect to make more money.  They are especially against high taxation of unearned income, because their advantage is unearned income–their houses, stock portfolios, bonds, and so on. Their money makes money.

These are their interests. Most people act on their interests as filtered through their beliefs.

Thus, we come to group #3. The people who made a ton of money and who did so because that was their goal; they were always obsessed with money. This group also includes those people who came into a lot of power because they were obsessed with power, though the dynamic is a bit different.

These people still have the need for security. The best security is the legal protection of no one else being able to join your business. Some businesses have this quality innately. For instance, suppose you are the cable or phone provider to an area. You have the phone lines, you have the cable; it’s unlikely anyone else can drive those lines.

But the government, in the 90s, forced phone providers to lease their phone lines to internet providers (dial up, for ancients). So even having a physical monopoly isn’t security if the government acts against you.

High speed internet, over phone or cable, is not something those companies in the US (or Canada) are forced to allow other companies to sell.

The first concern for someone who is wealthy is getting protection from whoever is politically powerful. Government, if you wish, though it can be warlords or Kings or the local tribe, depending on the culture. They need sanction to keep what they have.

This is especially true of businesses which aren’t natural monopolies: selling weapons to the government, for obvious reasons, or; selling music, which could be copied by anyone (say hello to copyright laws); being a lawyer and not wanting too many other people to act as lawyers (say hello to bar exams and law schools); selling genetically modified food of which people are scared (make GMO labeling illegal). Creating money out of thin air, which is what banks, brokers and so on do, might be considered the ultimate monopoly. They sure don’t want Joe Blow to be able to say “I have one hundred thousand dollars, and if Goldman Sachs (in the 00’s) can create money through leverage at 41/1, I can too.”

Creating and lending money is a valuable perogative, one worth defending.

And what if everything goes wrong? What if, despite all your money, and all the defenses you’ve bought, you lose everything anyway?

Be clear: This is what happened in 2007 and 2008. If you take into account counterparty risk and you mark assets to market (value them at what they could be sold for), every bank and major brokerage in the United States, and probably all of those in Europe, was bankrupt.

Bankrupt. Even the ones who made the right bets, like Goldman Sachs: because if all their counterparties go under, so do they.

This sort of risk, the kind that is backed up by the full credit of the United States, requires owning government. It requires knowing the central bank is yours and will act to save you.

The first thing a capitalist does when he or she gets rich enough, is buy the system.

They do this for three reasons: 1) to secure their current privileges; 2) to provide a backstop in case of disaster; 3) to create new opportunities.

The consequence of these actions is to drive up prices and keep out competition. It is explicitly to reduce competition, because competition is a danger. The fewer entities controlling more of a market, or controlling politicians, the more money is made and the more secure the current (and future) fortune is.

What this does is destroy the future.  To those who are currently in power, the future cannot be allowed to happen until they control it: until they are the ones who will make a profit from it.This doesn’t mean all distruptive change is impossible. There are, even today, many factions amongst the rich: Wall Street, Oil, Silicon Valley, etc.. They have interests in common, and cooperate around those interests, but they are competing to see who will control the future.

This doesn’t mean all disruptive change is impossible. There are, even today, many factions amongst the rich: Wall Street, Oil, Silicon Valley, etc.. They have interests in common, and cooperate around those interests, but they are competing to see who will control the future. Largely, they agree on the basics–things like continually extending copyrights, for example, or free movement of capital, or making regulations so that government can’t enact laws which would make their business go away. They agree about low taxes on capital and low wages (Apple and other Silicon Valley companies conspired to keep engineer wages low by not bidding against each other). They agree about unions not being too powerful.

Anywhere Capital has consensus, if they have been able to buy the system, it is virtually impossible to do anything against their consensus.

Gays have rights because it’s not important to most rich and powerful people that they don’t; and it is important to some of them (say, Tim Cook) that they do.

Effective wages have stagnated or dropped for over 40 years now because it is important to most rich and powerful people that they do; your wages are their costs.

Unions have lost massive power because rich and powerful people find that in their interest–even those in industries without unions want them kept weak so they will never have unions.

Concentrated wealth quickly turns into concentrated power and concentrated wealth will always be inimical to widespread prosperity. Wealth is power when it is concentrated. Wealth that is not disproportionate is not power. If it is not power, it cannot protect wealth.

If you allow any group, especially any small group, to obtain disproportionate wealth, they will always use it to protect their wealth.

Part II will discuss how the drive for further wealth leads to the vast impoverishment of everyone outside the wealthy and a small retainer class. Part III will discuss how moderate concentration of wealth can lead to general progress for everyone.


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36 Comments

  1. Joe

    Hi Ian, I started reading your blog when I was 17 (~4 years ago) and I’ve learned so much. This is one of my favorite posts so far. I know you’ve written extensively about solutions to these sorts of issues but do you believe they will ever be implemented and if so, effectively? Thank you for doing what you do.

  2. Tom

    http://rt.com/news/251853-sanctions-iran-russia-interests/

    Putin is going after Obama hard economically now. He has finally realized Obama is insane and Europe feckless and thus will go after the dollar with China and keep the war in the Middle East burning hot by defunding Assad to let IS take swaths of territory full of weapons to keep the fight burning in Iraq and possibly expand into Jordan and elsewhere to keep the US bleeding financially while building Iran up to be an Ally who then clamps the lid shut or at least burns out IS.

    Putin is taking a big risk with that, but he probably figures rightly, that IS will not turn North till its destroys Iran and Israel and that will take years and he can strengthen Turkey as a new Ally. in case IS gets too strong.

    If the US bankrupts itself fighting Vietnam redux and crashes, Putin will be in the dominant position and unlike Washington he won’t go squandering his might on pointless nonsense and instead invest it back into the country.

  3. American dollars have always paid for slow genocide, even in New York City.

  4. http://www.bbc.com/news/world-us-canada-32420600

    now think about what this is really worth to the small people who are getting pennies on the dollar.

  5. Ian Welsh

    Joe,

    we’re going to go through a very bad period: lots of war and hunger and so on. That will concentrate the mind, and there is a decent chance (not a surety) that many of the right things will be done.

  6. Spinoza

    Just want to second what Joe said, Mr. Welsh I’ve learned more here than most of the books I’ve read. Keep it up, sir. I’ll donate when my money is a bit better. You deserve all the support for this priceless work.

  7. Tom

    The scary thing about the growing wars in the Middle East is just how much more entrenched and effective IS Government is becoming. Like the NVA, they are building roads, infrastructure, and food aid, and taxing businesses’ wealth not income. IS has a 2 billion dollar budget, and only 1% is spent on weapons and mostly ammunition and pickups at that. Their upper Euphrates Heartland is untouchable with the Manbij Plain under their total control and the Raqqah Farm Lands, and lower Khabour which feeds the four million citizens IS has on its books in Syria. Even with USAF support, the Kurds havve again been repulsed from Sarrin and ISA retook ground and with YPG and FSA cleared from the West Bank of the Euphrates and Lake Assad, they can’t hit IS on enough fronts to break their morale and cause a mass retreat.

    https://upload.wikimedia.org/wikipedia/commons/archive/8/88/20140128024523!Syrian_civil_war.png

    That was before IS came out of the woodwork and said follow us and die. YPG was at its height.

    https://upload.wikimedia.org/wikipedia/commons/archive/8/88/20140329180012!Syrian_civil_war.png

    IS takeover

    https://upload.wikimedia.org/wikipedia/commons/archive/8/88/20140427172627!Syrian_civil_war.png

    After FSA Offensive against IS

    https://upload.wikimedia.org/wikipedia/commons/archive/8/88/20140613044329!Syrian_civil_war.png

    Day Mosul Offensive started

    https://upload.wikimedia.org/wikipedia/commons/archive/8/88/20140812172157!Syrian_civil_war.png

    Sinjar Offensive

    https://upload.wikimedia.org/wikipedia/commons/archive/8/88/20140923033317!Syrian_civil_war.png

    Start of the ISA Upper Euphrates Campaign to clear Tishrin Dam and Kobane Canton

    https://upload.wikimedia.org/wikipedia/commons/8/88/Syrian_civil_war.png

    Roughly where we are today. ISA may not have destroyed Kobane yet due to Airstrikes, but it did secure Tishrin Dam and secured the West Bank of the Euphrates.

    It was essentially their version of the NVA Easter Offensive. Superficially a US/YYPG victory, but in reality a serious defeat for the US which should have focused on helping FSA take and hold Tishrin Dam but failed because they fell for the Kurdish heartstrings.

    In the end, YPG breathes for a little longer in Kobane, but IS can replace its losses, YPG can’t because they train them longer and more expensively, most of the Canton fled giving them a irtual attrition of 400,000+ and ISA training methods is cheaper, faster, and puts more men in the field faster where they live or die and can be replaced faster than air strikes can kill them while elite units composed of survivors get held in reserve for shock operations.

    Even going by the ridiculous kill claims of YPG, in which they killed 7,000% of IS by CIA estimates, they are losing one member for every four IS members. Going by verifiable kill counts, YPG and IS are actually maintaining an even kill count with YPG only able to advance when SAA or US provides heavy support. Otherwise IS heavy fire power just rolls over YPG.

    Even with US and SAA Support, YPG is still steadily suffering a net loss of ground, they are simply not viable as a fighting force as they can’t muster economic, military, and social networking in a viable way to form a sustainable State. IS has and it is protecting the core of its domains and building for a renewed summer push, spending this Spring testing and finding weaknesses, and letting the Shia Militias do the recruiting for them.

    This summer will be big even as we speak Rebels in Syria are going on a massive offensive and Assad is arresting family members on suspicions of coup plotting and Putin is cutting the tap.

  8. Monster from the Id

    If ISIS gets a state up and running, would that not make them more vulnerable, as they would then be concentrated in a few places, with valuable infrastructure to be destroyed–which is the kind of war Western and Western-trained military forces can do well?

  9. It’s amazing how many of the machinations of society look downright absurd in the face of devastating wealth inequality. I attend all kinds of talks on public health interventions as a part of my job, and every single time the same thought comes to me: instead of the complicated intervention can’t the poor just have more power (not exactly money)? I believe that the debate around humanitarian work in foreign countries hinges on this problem.

    I listened to a particularly ridiculous talk about a complicated initiative to help the urban poor sleep more! Millions spent on a complicated (and temporary) initiative to tell people that they need to sleep more. They don’t get enough sleep because their lives are stressful – not just because they are poor – but precisely because of the burden of being way down at the bottom of the totem pole. It’s incredibly frustrating to hear these experts with so many letters after their name be blind to the obviousness of our current social conditions. But these types are purposely trained not to notice such large-scale problems, and they only allow themselves to think about tiny technical problems. Some are aware of this issue, and claim that this is all they can do in such circumstances. Other are completely clueless. These observations have really driven my hatred for neurotic, data-driven, New York Times-reading professionals. I hate them all the more so because I was in training to become one.

  10. Tom

    @ Monster from the Id

    IS is a state, it has a Government, taxes, and has a military since 2014. What we think of it is another matter.

    No it wouldn’t make them more vulnerable, it makes them stronger as they have an industry to support the war effort. The IS war machine is mom and pop deals with maybe 20 employees max and doubly redundant. Airstrikes are not simply not cutting their gas off as they are haphazard, not focused, and IS has enough excess capability to weather the storm. Which in turn means their Army grows and they can support more troops further into their enemies’ core areas. This means IS can not only replace losses, but grow their army larger while YPG and SAA can only merely replace losses, but not grow their forces larger as they lack key ingredients such as oil, large populations, booming economy, and effective recruitment system.

    The summer offensive grabbed enough gear to allow them to pour money into their core area to build a new road to Mosul to bypass Highway 47 which is cut in a few spots, and connected Syrian Hwy 715 to Mosul cutting right across secondary roads spurring off of 47 giving a parallel road network to supply its various forces and built an additional connection by Buarra linking Mayadin Syria to Mosul.

    The dams such as Tishrin are declared untouchable by the coalition due to collateral damage meaning IS has a secure road from Manbij to Raqqah which they improved by destroying a portion of the Raqqah City Wall that was still standing to expand the road network. Bomb attacks on the road are not effective and swiftly repaired by IS road crews.

    IS is also trying to conquer Deir Ezzor which if successful will allow them to barge supplies into Iraq straight from Raqqah and put back in action a railway to al-Qaim from Raqqah which would also greatly aid logistics.

    Like the NVA IS is letting logistics win the fight for them rather than meet force on force. This means they can pick their fights without worrying about being cut off. Its why they abandoned Kobane after fighting so long, they had Tishrin and could give ground to turn the fight fluid again to atritt YPG on more favorable terms without stacking so many men into a concentrated mass in a confined space for airstrikes and why they left only 400 men in Tikrit to go back to mobile tactics. So long as Mosul holds out on the Tigris their main base is secured and Baiji was still in the game. Letting ISF and the Militias waste energy on Tikrit to enable them to take two bases in Anbar’s Thar Thar region was worth it an recovered them large amounts of gear to replenish their stocks of Humvees and heavy weaponry.

    IS is not going to waste assets on non-economical ground if it means destroying their army. They want their opponents to do that while leaving their core areas untouched, plus it leaves a ruined area their opponents have to waste resources on cleaning up and securing from stay behinds who wage guerrilla actions.

    The only way to stop them is to invade their heartland, but Obama doesn’t want to commit the troops, airstrikes are not sufficient and even with can not produce an operational or strategic effect if infantry can’t immediately exploit the shock effect of the blasts to take ground. YPG is unable to break IS and needs massive Air Support to stay alive. The FSA/JAN are far more effective having taken Idlib and much more ground than YPG without air support or crying to Obama and Assad to save them from IS like a whore as YPG did.

    So in effect they got enough impetus and the US is fought out enough that IS can only grow stronger as its logistics network improves and its tax base expands from improving infrastructure and order (albeit harsh).

    IS is NVA level, we can’t beat it unless we draft 4,000,000 men and occupy the whole of Syria and Iraq and root it out village by village or just leave and let this affair burn itself out along the Tigris River.

  11. Stephen Douglas

    For the culturally challenged in your audience, could you explain what your Rowling comment referred to? Before Rowling things were different for musicians? What did that author do that changed everything? The internet changed everything. Harry Potter? Not so much.

  12. Ian Welsh

    Just written unclearly, see if it makes sense now, with a punctuation change.

  13. Purple Library Guy

    While technically, people who inherited wealth are a subset of the “right time, right place” group, they’re generally worse than the other ones and a big enough group that they maybe should be considered their own set. Thing is, on top of their basic interests, they’re insulated. They’ve never known what it’s like not to be rich and may never have met a non-rich person socially; they have no real personal stake in society at large continuing to operate because they aren’t members of it.

  14. Montanamaven

    @ purple library guy
    Glad you brought this up. Was going to myself. A sizable inheritance and wealth tax is needed to start the process of ridding this place of these parasites. Yes they need their own category.

  15. Stephen Douglas

    Thanks for the correction. Yes, it makes sense now. Your description of the GI Generation and being born (or sent to) 2nd base is something I have been saying to my own GI Generation parents for……almost a generation now. They don’t want to hear that it wasn’t all that working my fingers to the bone nonsense. They also don’t want to hear that every generation since has done worse. Progressively. Meaning my Gen doesn’t want to hear it either.
    It bears saying. Thanks for saying it.

  16. Tom

    The only way to break inheritable wealth and attitudes associated with it is to draft everyone at 18, no exceptions and start everyone off as a private and set the raft period for two years in which they don’t deploy but train in arms, do an equivalent of a two year college program learning trades, then off they go to either re-up two years or go onto civilian life and reserves.

    The Rich Kids have to put up with Poor Kids during this time and work together.

  17. Stephen Douglas

    Tom, that would also break the War Party. That’s why there is no draft.

  18. Monster from the Id

    In cheerfully confessed ignorance, I want to ask more questions.

    I have read that we had satellites back in the Cold War that could read the license plates on the limousines of Soviet bigwigs.

    I would assume we have the same, or better, surveillance capabilities now.

    Why can’t ISIS’s industries be located, and destroyed?

    For that matter, ISIS, unlike North Vietnam, does not have another superpower backing it.

    If Global Capital (note I did not say the USA, which is merely a giant anime-type piloted robotic warsuit, painted to look like Uncle Sam, with Global Capital as the pilot) just decided “Morality and public relations be damned!”, and unleashed the very worst genocidal hell-weapons in its arsenal–how long could ISIS last, since it would not have a superpower patron to threaten retaliation in kind?

  19. JustPlainDave

    The ability to read license plates thing is a bit of an over statement for space-based systems. Resolution varies from system to system and with atmospheric effects, but one should generally be able to get something around 20ish cm resolution reliably (not everything collected with be that, but there’ll usually be a selection of take that good in the system). Reading license plates is more like something that one would get with airborne systems, but you’d have to get a good angle on it, which is a lot harder (and less generally useful) than it sounds. Airborne video systems, I don’t know whether they can collect that or not – adding video opens up a lot of interesting post-processing possibilities, even with comparatively low res systems, but I suspect it’s still beyond current resolution capabilities.

    Collecting imagery is the easy part. Understanding what it means is a good deal harder. Deciding what one should do based on the analysis is harder still. In this specific case it’s pretty straightforwardly much less an issue of can’t than won’t – there’s not a lot of infrastructure worth the expenditure to hit and above all this is an economy of force operation. They don’t want the area to become a transnational launch pad, but really they’re not super disposed to bailing the Iraqi government out and they certainly don’t want to do Assad any favours – they’d frankly love it if somebody inside got fed up with the expenditure and put him down. One could bounce rubble with 5,000 aim points in 15 days, but it’s pretty unclear what it would achieve over the long term and they’d lose leverage as soon as everyone felt the threatcon decrease. My sense is that in the absence of something big breaking free, look for this to grind slowly on.

  20. Tom

    @Monster from the Id

    Even with surveillance, you have to specifically look at an area and zoom in, otherwise you just see a big mass. Even then there is limits to what you can actually see. Finally even if you find a factory, they are incredibly hard to take out permanently unless you take the ground they occupy or kill the workers.

    The City Bombing was the latter approach used by the British, it failed miserably. Enough survived to train new workers and the factories went back into action with renewed purpose.

    Precision bombing has similar failure. You can disrupt production but not stop it.

    That means you have to overrun the factory.

    Factories can also be built anywhere and take many shapes. So factory bombing is pointless. Transport Infrastructure bombing only works if the enemy doesn’t have a dedicated Civil Engineering group to quickly repair and replace damaged or destroyed transport infrastructure which IS does have and even releases videos showing these crews at work repairing bomb damage and putting unemployed youth to work who aren’t too enthusiastic on getting shot.

    IS is well organized and able to shoe string a state with $2 billion in the bank and with no corruption. Try that with the US where it takes weeks to repair a road section that IS fixes in just two days max.

  21. JustPlainDave

    I find this overweening focus on the rich fascinating (though I understand precisely how rhetorically handy it is ). The processes of self-propagation that I have the most concern with are solidly middle- and upper-middle-class. An example: http://www.theglobeandmail.com/life/parenting/growing-generational-divisions-are-a-worrying-millennial-shift/article24083323/

    If one dislikes the concept of a hereditary elite, one should be substantially more concerned about the establishment of a hereditary middle class. Particularly doing so by cutting the legs out from under the below-median.

  22. JustPlainDave

    The comparisons that can be drawn between a strategic bombing campaign against an industrial state and tactical bombing against a post-industrial non-state actor are minimal. Aircraft, operated by mammals, drop explosives. Hell, even that comparison is stretched a bit.

    Focusing on all the ways that strategic bombing won’t work sounds truthy as fuck to the lay audience, but analytically it’s entirely pointless.

  23. Ycb

    Focusing on all the ways that strategic bombing won’t work sounds truthy as fuck to the lay audience,

    Because it is. Nice weasel-phrasing there BTW. And it’s neat to know that IS can build infrastructure in real time faster than the coalition can bomb it. Even the Borg couldn’t quite manage that trick.

  24. VietnamVet

    I admit that I was lucky to be born on second base, to survive Vietnam and to be hired by the Federal Government because I was a veteran. This all happened due to the tax rate of 74.6% on the rich in 1970 and the money was mostly spent to help society. It all collapsed with the Reagan/Thatcher counter-revolt. The last Republican presidential candidate called me a leech.

    The USA has been at war with Iraq for almost a quarter of a century. The current choice of the war party is more bombing and continued defense spending on the forever war. A less costly alternative is containment of the Islamic State. To end the war with a victory over ISIS and to bring peace to the Middle East requires resumption of the draft and taxing the rich and a regional war. A regional Middle East war and the current Ukraine Civil War both risk a nuclear holocaust. Today we are at the greatest risk of human extinction since the Cuban Missile Crisis in 1963.

  25. Ycb

    Focusing on all the ways that strategic bombing won’t work sounds truthy as fuck to the lay audience,

    Because it is. Nice weasel-phrasing there BTW.

    And it’s neat to know, Tom, that ISIS can build infrastructure in real time faster than the coalition can bomb it. Even the Borg couldn’t quite manage that trick. ISIS must have better nanoprobes.

  26. Ycb

    A less costly alternative is containment of the Islamic State.

    An even less costly alternative is to not fund and arm them in the first place

  27. Ycb

    A less costly alternative is containment of the Islamic State.

    An even less costly alternative is to not fund and arm them in the first place.

  28. JustPlainDave

    Yeb, write this on the back of your hand: “The current conflict is not like WWII.” The nice thing about this is that if the ink is indelible, the relevance of the reminder can last for a good long while.

    If one is ambidextrously American, “The current conflict is not like Vietnam.” on the back of the other can also be useful.

  29. de castro

    Inspirational read…..comments also !
    Write on….pen is certainly mightier than sword.
    Can’t wait to get to “heaven” with those 100 virgins…..que Sera sera

  30. Monster from the Id

    Apparently, according to the consensus on this blog, guerrillas are invincible.

    How can that be, since they are human beings, too?

  31. JustPlainDave

    I deviate from that consensus. Guerrillas are far from invincible. However, they can have a lot more comparative advantage when dealing with a first world force waging expeditionary warfare than comparing combat power alone would suggest.

    The issue isn’t whether campaigns against guerrillas are winnable, full stop. The issue is whether they are winnable at the price points and over the durations western powers are willing to accept—particularly when those powers are not going to end up owning the terrain at the end of the day.

  32. Ian Welsh

    Nor do I, the blogger, believe that guerrillas are invincible.

    Though, at this point, I’ll note, ISIS aren’t really guerrillas.

    Guerrillas aren’t that hard to beat, if you’re willing to go all out and have the necessary force and administrative capacity.

  33. Purple Library Guy

    Well, guerrillas may not be that hard to beat, but it’s been rare over the past several decades for a guerrilla movement with local public support to in fact be beaten, so I’m thinking it can’t be all that easy.
    Local support is the key. Guerrillas without public support–you find their hideouts and do some mop-up, the end. Nobody cares. Easy enough.
    Guerrillas with public support . . . as Mao put it, they “move among the people as a fish swims in the sea.” And that man, if you say nothing else positive about him, knew his guerrilla warfare. When the guerrillas are supported by and intermingled with and effectively are the people, then you have to commit genocide to get rid of them. Up to that point, the more you kill the more civilians you also kill, even the militants you kill enrage the public that they spring from, and the rest of the people will just get madder and make more guerrillas. This is fairly common when the counterinsurgent is an invader, like when the US is involved.

    ISIS is an in-between case (although agreed, they are actually a small state at this point, not guerrillas). That is, the people are kind of divided about them; some like ’em, some hate ’em. A certain amount of disillusion is setting in with the brutality of their governing style. Unfortunately, on the Iraqi side at least, the people generally fear the folks attacking ISIS, such as Shiite militias who see the whole Sunni population as the enemy, even more than ISIS itself, so they end up supporting them the way US leftists vote for Democrats–lesser of two evils, for their purposes.

  34. philadelphialawyer

    Meh, I think most rich people simply inherited their wealth, one way or another. Sure, there are the musicians, athletes, writers and so on, and there are some people who really did start at or near the bottom, and obsessed about money to the exclusion of everything else, but wound up rich. But most folks who are rich, including even many of the above, came from money. Or, they came from status, which is akin to money.

    Warren Buffet, who famously posed with a change belt when he was asked to have his picture taken with his favorite Xmas gift, and who was obsessed with money his whole life, was the son of a Congressman. So, yeah, he worked hard, he was obsessed, blah, blah, blah, but he got chances and opportunities that the son of butcher, never mind the son of a bum, would not have gotten, obsession or not and hard work or not.

    Writers, musicians, actors and athletes do come from all backgrounds, but it certainly does not hurt to come from a middle class or better background, in terms, again, of chances and opportunities to develop and showcase your talent, in terms of not winding up incarcerated or in the military or in a dead end job because you didn’t get those chances and opportunities or were judged far more harshly for various bogus and real crimes than are kids with mores status, and in terms of having the luxury of something to “fall back on” if it didn’t work out.

    And, of course, the most basic and obvious way, besides direct inheritance or gift, of the power of coming from money is that it means growing up in a nice home, in a nice town or neighborhood, going to good schools, having tutors or special classes if needed, and having an entire system set up to get you into a good college, and from there a good grad school. More or less making your way into the professional class by default, and by means that poor and even middle class kids simply don’t have available to them. It always cracks me up to hear kids who grew up in Manhasset pose as Horatio Algers because they were able to become doctors, lawyers, stockbrokers or dentists!

    And then there are folks who are perhaps not “rich” in the sense of having a lot of money at their disposal right this minute, are nevertheless rightfully classed with the rich. The kid whose parents are rich. The not kids but young adults whose parents are rich, and who, effectively, are backstopping them while they fool around in BS jobs. The persons who majored in art history and got a job, mostly through connections and social skills that are attributable to family and family background, that doesn’t really pay, but has good perks and is high status, and meanwhile, their family quietly bankrolls them, one way or another, in the background. People whose family business allow them to be phantom employees, and so they can get good health care insurance. People who were able to get good, post graduated degrees, because their parents paid the freight, and are now not only ensconced in good, professional jobs, but who also stand to inherit quite a bit of money not long from now as well. People without means themselves, but who simply live with their rich parents or siblings well into their adulthood.

    There are a lot of ways to keep and maintain wealth and status, once it is obtained. There is no tax on wealth, particularly intangible, non real estate wealth, in the USA. And the only transfer tax is the inheritance tax, and that is easily avoided with proper legal and accounting planning, and is set with a very high threshold to begin with. And then there is the stepped up basis charade in income tax. And the income tax is not very high in any event. Generation skipping trusts, and so on.

    And, of course, there is no real way at all to even make equality of opportunity an approximate thing, in a system in which wealth has been built up over generations. This is one of the reasons why African Americans start so far behind. The average built up wealth of a Black family, which really couldn’t even get started building up anything until very recently, is many, many times below that of the average White family. And social mobility in the USA, for all the hype, is actually quite low. Indeed, a study came out not long ago suggesting that in the Western world in general, over centuries, the rich and “well born” have managed to mostly hold on to their money and status, and that folks from most “common” families remain what they have always been.

    Having wealth also allows you to be in the right place at the right time. Wealthy people, because they have so much money that they don’t really need, can afford to invest in cutting edge technology, like the internet in the Nineties. If it succeeds, all to the good. If it fails, it is not as if their retirement depended on it succeeding. And, of course, wealthy people also can and do get the investment advice that feeds into that. I think that fits the bill a lot more than simply being in the GI or Greatest or Boomer or any other fake “generation.” Of course living in boom times is better than living in lean times, but real wealth is maintained through both.

    And all of that accounts for most of the concentration of wealth in society. Not rare and highly valued talent. Notice too that folks with rare and highly valued talent generally have short careers, and those when they are young. Since they have only a few years of high income, they are hit harder by the income tax. And they have less skill in managing their money. They also have family and friends and hangers on whom they feel they are morally obligagted to support, and a lifestyle that they feel they have to maintain. And, having grown up in poverty, understandably, they are more likely to simply squander their money on hedonistic, high priced extravagances than folks who have had trust funds and brokers since when they were children. Theirs is precisely the kind of money that does not last.

    Them what got it, have more added to it; them what don’t get nothing.

  35. philadelphialawyer

    George:

    “It’s amazing how many of the machinations of society look downright absurd in the face of devastating wealth inequality. I attend all kinds of talks on public health interventions as a part of my job, and every single time the same thought comes to me: instead of the complicated intervention can’t the poor just have more power (not exactly money)? I believe that the debate around humanitarian work in foreign countries hinges on this problem. I listened to a particularly ridiculous talk about a complicated initiative to help the urban poor sleep more! Millions spent on a complicated (and temporary) initiative to tell people that they need to sleep more. They don’t get enough sleep because their lives are stressful – not just because they are poor – but precisely because of the burden of being way down at the bottom of the totem pole. ”

    I don’t know, I hear you, but it seems to me that money is what matters most in a capitalist society, at least if you are poor! Poor people could sleep better if they had economic security. That’s what they need, not as you say, a PhD telling them to sleep better! Of course being low status is no great joy, but, all in all, it is still better to have money and low status than no money and low status. Also, it seems to me, that while certain inequalities of status are inevitable, the level of flat out, “devastating” (as you rightly call it), economic inequality we have now is anything but.

    Being a janitor or a housecleaner should not mean not having enough money to lead a decent life. But with the money to lead a decent life comes less stress, even if not more status or power. A janitor in a proper apartment, not having to choose between paying his rent and going to the doctor when he gets sick, is a less stressed out person, even though he is still a janitor and not a brain surgeon. And even though he doesn’t have any more real “power.”

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