The article in my last entry was written in 1932
74 years ago, and as accurate a portrayal of modern life today as it was then.
Only the USSR he speaks of has fallen, adopting our system of “free market”.
In the US production increases every year – an increase in per capita GDP of over 7 times, or almost 10% per year; yet work hours have been constant ever since – slightly increasing for most, decreasing for some, balancing out to an average of… exactly the same: slightly more than the 40 hour week which was made standard not long before the essay was written.
Since productivity has increased 7 fold, while hours have remained constant, presumably median real income (after accounting for inflation) would have also increased 7 fold.
In actuality, median pay has increased around 2.1 times from 1948 to 2004 (earliest data I can find).
The one thing this otherwise excellent essay misses is that, while the land holding privileged class of royalty has been eliminated, they have been replaced indirectly by the societal acceptance of virtually unrestricted investment returns and inheritance.
Through them the primary owners and controllers of major corporations have taken the place of a class which does not have to do any real work but can instead charge ordinary people for the privilege of living and working on their land or in their companies.
It is at much more their choice than the workers themselves that, for example, when the pin making machine is invented and production per person doubles, the work force is halved instead of individual hours.
It is to the advantage of the company – or, more specifically the owners and investors, who do no actual work but keep a percentage of the earnings, to have fewer people with more hours, as there is always a per person cost in taxes and benefits above the cost of wages.
With the introduction of the labor saving device, the employing company could choose to have all employees work half as often with the same total pay. The employees are only given the choice of cut hours at reduced pay or 50% lay offs. Given that, they prefer to retain the 8 hour day.
Were the company to continue to pay the same weekly rate for less hours (or double the hourly rate and halve the hours) it would not lose any money. It would be exactly where it had been all along. If it had been sustainably profitable before, i t would continue to be.
However, the assumption in our society is that the company gets to reap the full benefit of the new invention.
Thus the increase in GDP over the years is primarily concentrated in the hands of those who need it least.
It is not actually true in most years that “the poor get poorer while the rich get richer”
A more accurate statement would be “the poor get very slightly richer while the rich get much much richer”, which is really just as bad.
There are over 400 Americans with more than 1 billion dollars.
Few enough to fit in a large banquet hall or conference room.
Between the 400 richest individuals is personal ownership of 1.25 trillion dollars.
(worldwide there are 793 billionaires, with a total of 2.6 trillion – more than half are Americans)
The total GDP for the US is around 12.5 Trillion.
In other words, 400 people control 10% of all the wealth in the country.
Divided equally among the population, 12.5 trillion would mean $41,600 per person (including children and other non-workers)
These people, on average, have $3,125,000,000; or… 75,120 times the share they would have with equal distribution of wealth.
It may well be that some of these people, now or in the past, worked harder than the average person.
But 75,120 times harder? Were they working a 3 million hour work week? Do they contribute 75 thousand times more to society than average?
Are the following people contributing more (or in fact anything) productive or useful to society?
Draw your own conclusions:
(From Forbes Magazine)
“Developer John P. Manning used political savvy to build a $1.1 billion fortune in part by brokering low-income housing projects. Chesapeake Energy founders Aubrey McClendon and Tom L. Ward are two of the oil fortunes added to the list.
Pouring 40 million caffeinated drinks a week landed Starbucks honcho Howard Schultz on our list of America’s 400 richest.
Manny Mashouf placed his skimpy women’s wear on TV shows like Party of Five and Ally McBeal; today he has a $1.5 billion fortune in Bebe clothing stores.
Also gracing our list for the first time are Lehman Brothers Chief Richard Fuld ($1 billion), hedge fund manager David E. Shaw ($1 billion), mutual fund guru Jonathan Lovelace Jr. ($1.1 billion), Houston Rockets owner Leslie Alexander ($1.2 billion), leveraged buyout tycoon Leon Black ($2 billion), Google veteran Omid Kordestani ($1.9 billion), Colony Capital’s Thomas Barrack ($1 billion), New York City real estate moguls Stephen Ross ($2.5 billion) and Tamir Sapir ($2 billion), and the husband-and-wife computer chip team of Weili Dai ($1 billion) and Sehat Sutardja ($1 billion).
Black Entertainment Television founder Robert Johnson, who rebuilt his fortune with investments in real estate and restaurants, is among the 14 returnees to this year’s list. Netscape pioneer James Clark is another retread; he reinvested his tech proceeds into Miami condos and construction outfit Hyperion Development Group following the burst of the tech bubble six years ago.
Also returning is Little Caesar’s founder Michael Ilitch ($1.5 billion), car dealership owner Robert Friedkin ($1.2 billion), investors J. Christopher Flowers ($1.2 billion) and Alfred P. West ($1.2 billion), and banking and real estate maven Paul M. Milstein ($3.5 billion).
Once again the biggest gainer is casino mogul Sheldon Adelson, with a net worth up $9 billion. Adelson’s Las Vegas Sands stock is up 125% since its public offering in December 2004. He has made almost $1 million an hour since the 2004 Forbes 400 list was published.”
$1 million an hour.