Thursday, July 17, 2014

"Makers and Takers - Not What You Think"

"Behind every great fortune there is a crime." - Mario Puzo, The Godfather

Half the wealth in this country is concentrated in the New York/Washington DC/New England area. How did this happen?

Let's see...what is in that area? The federal government and the financial sector.

The political scientist Kevin Phillips has pointed out the empires go through three phrases: agricultural, industrial, financial, then they collapse.

The sector I just spoke of produces nothing. It is purely parasitical. And I'm half-amused, half-contemptuous, when people think corporations are free market and not creations of the State (the have the legal status of persons). Let's put it this way: the Revolutionary War was started because of the biggest corporation in the word at that time - the East India Company, which had gotten a tax rebate of millions of pounds from the Crown to drive out of business its smaller American competitors. It'd be the same today if a world war was started because of McDonalds or Wal-Mart.

Too bad the South didn't win. It couldn't be any worse than it is now.

The following article was written by Kevin Carson and is from the Center for a Stateless Society.

"The old '53% vs. 47%' meme that got so much attention in the 2012 election resurfaced this week when it came out that Colorado gubernatorial candidate Bob Beauprez apparently first coined it at a 2010 Rotary Club speech. The 47% who pay no income tax, he said back then, are 'dependent on the largesse of government' and 'perfectly happy that someone else is paying the bill.' The talking point got traction with the Tea Party and was soon picked up by politicians like Paul Ryan (who warned we were approaching 'a net majority of takers vs. makers') and Mitt Romney.

"Of course this is pure buncombe. It presupposes that high taxable incomes result primarily from being 'makers,' when the truth is just the opposite. The higher your income, in fact, the more likely you’re a taker who’s — all together now! — dependent on government.

"It’s possible to get moderately wealthy — say, an income that qualifies you for the 'top 1%,' which is somewhere under $400,000, or assets in the low millions — through genuine entrepreneurship. Even at this level, of course, it’s more likely you have an income heavily inflated by membership in a licensing cartel, or help manage a highly authoritarian, statist corporation where your 'productivity' — and bonuses — are defined by how effectively you shaft the people whose skills, relationships and other human capital are actually responsible for the organization’s productivity. But it’s at least possible to get this rich by being a maker of sorts, by being more adept than others at anticipating and meeting real human needs.

"But you don’t get to be super-rich — to the tune of hundreds of millions or billions of dollars — by making stuff. You get that filthy rich only through crime of one sort or another (even if it’s technically perfectly legal in this society). You get the really big-time money not by making stuff or doing stuff, but by controlling the conditions under which other people are allowed to make stuff and do stuff. You get super-rich by getting into a position where you can fence off opportunities to produce, enclosing those natural opportunities as a source of rent. You do it by collecting tolls and tribute from those who actually make stuff, as a condition of not preventing them from doing so. In other words you get super-rich by being a parasite and extorting protection money from productive members of society, with the help of government.

"So don’t be fooled by the fact that some of us aren’t paying any income taxes. We pay lots of taxes — to rich takers who live off our largesse. The portion of your rent or mortgage that results from the enormous tracts of vacant and unimproved land held out of use through artificial property rights is a tax to the landlord. The 95% of the price of drugs under patent, or Bill Gates’s software, is a tax you pay to the owners of 'intellectual property' monopolies. So is the portion of the price you pay for manufactured goods, over and above actual materials and labor, that results from embedded rents on patents and enormous brand-name markups on (for example) Nike sneakers over and above the few bucks a pair the sweatshops contract to make them for. So is the estimated 20% oligopoly price markup for industries where a few corporations control half or more of output. If by chance you do pay federal income tax, half of it goes to support the current military establishment or pay off debt from past wars — wars fought for the sake of giant corporations.

"The 'takers,' in short, are the people Romney spoke to at $1000/plate fundraisers, who pay Hillary Clinton several hundred grand for a speech reassuring them Wall Street’s not to blame. The entire Fortune 500, the entire billionaire plutocracy, depends on largesse from us makers — and they can only do it with government help."


Anonymous said...

There's room in my heart to reject the takers at all points on the income distribution chart.

JKB said...

The best explanation was given in the movie 'Goodfellas' showing a backyard bbq while the voice-over is describing Pauli's place in the organization.

I also remember a movie about Lucky Luciano where at the end he describes his organization, the Commission, as being like a corporation. But he was wrong, it was government for criminals. Each family controlled their territory, licensing who could operate there, taking in tribute (taxes), etc. The Commission was just a sort of united nations of criminal families formed to avoid unproductive conflicts among the separate sovereign territories.

Anonymous said...

"And I'm half-amused, half-contemptuous, when people think corporations are free market and not creations of the State (the have the legal status of persons)."

Before I read your blog, it never occured to me that corporations were a creation of the state and not a free market entity. How can people know that if no one tells them?

Unknown said...

Not only they creations of the State and have the legal status of persons, they have "free speech" rights, as if one person is really equal to a corporation which spends millions to elect obedient representatives to office.