Re: Income distribution [and growth]

["John M. Legge" <jlegge@xxxxxxxxxxxxxx>]

Harry,

the nature of any system incorporating positive feedback is to concentrate
wealth and power, whether you are studying elephant seals or human
societies.  In a market economy the accrual of wealth is particularly
obvious, and since at least the time of Adam Smith "reform" has come to mean
removing barriers to the unlimited accrual of individual wealth.

Ultimately the process becomes unsustainable; some time before the Gini
index hits 100 per cent the many losers will overwhelm the few winners.  The
Glorious Revolution of 1688 cleared the way for the growth of bourgeois
capitalism relatively bloodlessly, because King James "recalled that he had
a joint in his neck".  The concentration of power under James had reached
the point that even the chief of his army, the ambitious John Churchill
(later Duke of Marlborough), saw brighter prospects in rebellion than in
continued loyalty.

Western history at least since Solon and the end of debt bondage in Athens,
up to and including President Johnson's Great Society is a continued pattern
of concentration followed by forced redistribution.  In 1789 the aristocrats
lost their heads.  In 1914-1918 Lloyd George's aggressive use of death
duties to fund Lord Haig's obsession with stacking bodies in front of German
machine guns, combined with an aristocratic belief that noblesse oblige
included leading daylight charges at these guns stripped the English
aristocracy of their inherited wealth and power.

Reasonable and morally sensitive people try to achieve redistribution
without resort to either the guillotine or trench warfare and so may form
unions and support progressive political parties, while the current
neoliberal ascendancy in the US and some other countries calls for
dismantling of such redistributive measures such as estate duties and income
taxes.  The triumph of the Right in the 1920s led to the Great Depression
and Roosevelt winning 60 per cent of the popular vote.

History doesn't repeat itself exactly, but the aggressive pursuit of
inequality creates its own backlash.  Americans who don't like G. W. Bush's
policies might like to study the fate of the conservative parties in
Britain and New Zealand.  In Australia the conservatives only survived the
last election by a substantial repudiation of neoliberal policy combined
with aggressive racism: Nixonism got to Australia after a thirty year time
delay.

The major parties of the Left have been bought by the monied interest to the
point that when they do some good they feel obliged to apologise for it (as
Brown in Britain restoring the National Health system to health).  If they
don't return to their progressive base, however, they will be outflanked on
the left by the greens and other radical, and less corrupted, parties.

JML


> -----Original Message-----
> From: pkt-owner@xxxxxxxxxxxxxxxx [mailto:pkt-owner@xxxxxxxxxxxxxxxx]On
> Behalf Of Harry L. Cook
>
>
> John,
> The common sense of income distribution is  that it is about 90% the
> consequence of concentrated political and economic power.
>
> Teachers, labor unions and big business all contribute to
> political parties
> and candidates who they think will be good for the country
> and for them.  It
> seems possible that the contributors with the most money will
> have the most
> influence in shaping the institutional structure to their advantage.
>                             Harry
>