America has the lowest social mobility amongst rich countries by a very long way. That’s the first way the economy’s rigged. How bad are your chances of moving up the social ladder? Go ahead and guess the odds of a middle class American entering the the top 20% of earners. What did you guess: maybe 50%? About even? Wrong. It’s between 10 and 20%. That is, your chances of moving upwards as a lower middle class American are about as good as literally rolling the dice. That might not sound dire — if you rationalize it, at least — but it is. What it means in practice is this. Born poor, stay poor. Born middle class — probably end up amongst the new poor.
That brings me to the second reason the economy’s rigged. Social mobility has been decimated because average incomes have stagnated for five decades now. The bottom 90%’s income gains from 1970ish to the 2010s? Efffectively zero. Think about that for a moment. For half a century, Americans haven’t earned a penny more. That’s astonishing, the stuff historic social collapses are made of.
Let me place that in context: what Americans have lived through for the entirety of their adult lives is a Depression by any other name. Not just any depression. If we named it, we’d have to call it The Greater Depression — because it’s longer and harder than the so-called Great Depression,which, truth be told, lasted less than a decade. So why don’t we hear about it that way? Why isn’t the Greater Depression a story that’s told every day?
Which brings me to the third reason the economy’s rigged: America’s Greater Depression is an invisible one, because fundamental economic statistics gave grown badly divorced from reality. Every day, you can glance at the headlines, and read weird, absurd takes from haughty pundits and elite intellectuals like: “the economy’s booming!” Wait, what? How can the economy be booming when 90% of people haven’t earned more for fifty years…when your chances of living a better life are like playing the lottery…when a lifetime of hard work has literally no payoff…when suicide, depression, and poverty are all soaring? What the? After all, real prosperity — what economists call “welfare,” or how well we fare — isn’t just stocks, bonds, and money, which is just bits and paper chits: it’s whether people are living better lives or not. Longer, saner, healthier, happier, wiser closer ones. And in America, all those dimensions of life are cratering, in stunning ways, at light speed.
And yet the story of the Greater Depression can’t be told because it can’t even really be seen — and that is since American economic statistics only measure the health of capital, things appear to be in rude health, not falling apart. How much more in profits are mega-corporations earning today? Awesome! The stock market rose! How many more hours did people put in this year? Fantastic! How much did GDP rise? These statistics are wonderful for telling you how well billionaires and boardrooms are doing. But they convey absolutely no information about how well the average person, the average family, society, or democracy are doing. In fact, they convey negative information: they mislead us, because one — the growth of the stock market, the growth of GDP — has become detached from the other. Wait — what does that mean?
That brings me to my fourth reason the economy’s rigged. The Greater Depression means growth has become extractive. Think about what it really means to say that “the stock market and GDP have become ‘decoupled’ from economic reality: each now heads in the precise opposite direction. That is, when the stock market soars, and GDP roars, things like income and savings and happiness and life expectancy all fall.
There’s really only one possible interpretation, at least if we rule out things like alien attacks (we’ll actually come back to that), natural calamities, and pandemics, and plagues of locusts. Growth is now coming at the expense of real prosperity. That is why when one heads up, the other heads down. The stock market and GDP rise — but living standards fall. The relationship is an inverse one.
What does extractive growth really mean — for so long it’s produced a Greater Depression? This is the fifth reason the economy’s rigged. Exploitation is the norm. A figure like Jeff Bezos or Zuck is growing unimaginably rich precisely by causing living standards to crater. And that’s precisely what America’s lived experience tells us. Exploitation has become an everyday reality. Jobs don’t come with “benefits” like pensions or decent healthcare or childcare — why would they, if you’re never paid more to begin with? Instead, you’re worked around the clock, and on the weekends, barely paid for a fraction of that time — and the result is that life ends up being pretty miserable. As a result of all that, things like incomes and life expectancy and happiness all fall. Exploitation is a little word with big consequences — it means that people are being preyed upon.
So how did American work and life become so exploitative? This leads us to the sixth reason (and now we’re getting into the big ones). America’s so exploitative because the then merely rich spent small fortunes to make it that way — so they could become ultra rich. Crackpot mega millionaires established bizarro world “research institutes” at universities, with huge endowments, chaired professors, set up “thinktanks,” which began writing op-eds, and therefore altering society’s entire understanding of what an economy is, and why it exists. But the role of all this wasn’t really to understand anything about the economy — it was to wage a kind of ideological warfare. The point of human life is profit. The point of all existence on the planet is profit. And if all that profit ends up in the hands of a tiny few — well, that’s only fair: they’re the superpeople among us. But was any of that remotely true — or sane?
That brings me to the seventh reason: capitalism became a totalitarian ideology in America in the same way communism did in Russia. What do I mean by that? Well, I don’t mean that small business you own. I own a couple myself. That’s not really capitalism — capitalism is Goldman Sachs and McKinsey and Facebook and Walmart whatnot. The rest is enterprise, commerce, endeavour. Now, this ideological war that began to be fought in America in the 1980s or so posited capitalism as a genuinely extremist ideology: it was the sole and single answer to everything. Everything. From school lunches to retirement to college to healthcare — the answer was always only one thing: capitalism will do it best. Just as in Soviet Russia, it was forbidden to open even a humble dry-cleaning shop, so in America, even kids didn’t deserve healthcare and a literal free lunch.
As a result, American thinking came to be permeated by truly weird and childish ideas, like the primacy of “economic freedom” — how many flavors of toothpaste you can choose at Walmart mattered more than, say, your right to have a union, a raise, decent working conditions. Or the notion that “consumer choice” was the most important thing. What good does it do me having a dozen doctors to choose from…if my insurance demands a “deductible” higher than my monthly salary?
You see my point, perhaps. That brings to my eighth reason — and now we’re getting into ones, perhaps, that many Americans will struggle with: capitalism is incapable of solving many — perhaps most — of society’s deepest and most basic problems. It was going to do what capital does: profit, usually by exploiting. Think about a figure like Jeff Bezos: denying his workers bathroom breaks…making smartphones monitor them by the microsecond…and literally fire them if they don’t perform. Think about Zuck — paying “content moderators” a pittance, who are scarred for life by having to experience things like child pornography and snuff films from wars…for a living. That’s exploitation all over again. You might pay your workers a fair and decent wage, and treat them like human beings, but you are the one that is the exception.
You see, you might be one of a handful of gentle and wise and beautiful people who, if they ran a mega corporation or a hedge fund, wouldn’t abuse their power — and maybe even give kids free lunches and educations and so on. Sadly, that isn’t the case on average. When institutions wield that much power, they tend to use it in abusive and harmful ways. When we give a figure like Zuck or Bezos the license to abuse their power — they do. Why? For a pretty simple reason: it makes them mega rich.
That brings me to the ninth reason the economy’s rigged: pathological greed (and I mean truly pathological). Starting from the 1980s — or maybe long before that, and picking up steam in the 1980s — greed came to be lionized as America’s uber-value. What was the point of life? Getting rich. What was the point of an education, a society, science, art, literature, math, books? Getting rich, getting rich, getting rich.
But nobody asked a crucial question: why would anybody ever need or want to be as rich as a Zuck or a Bezos? Think about it. You can’t spend a hundred billion dollars in one lifetime. You can barely spend it in a dozen or a hundred. So the point can’t be the money — it must be something else. Power, perhaps, or insecurity, maybe, or a sense of unworthiness. But money can’t solve those problems. You can pile up a hundred trillion dollars — but if a hundred billion didn’t make you feel worthy, secure, happy, valued, good…why would a hundred trillion? You see my point. This moral logic is pathology — not sanity. This logic is even more viciously pathological and malicious when you consider that billionaires could each end Covid worldwide easily, multiple times over.
Yet greed — extreme, absolutist, hubristic greed — became a swaggering cultural value in America, and still is, having been spread by the now ultra-rich’s army of crackpots masquerading as wise men. But greed wasn’t something to value. Levels of greed at that of a Bezos of a Zuck speak to something like mental illness, or disorder, or imbalance. That kind of greed is the very definition pathological — as in insatiable, but pointless, yet self-destructive: a vicious cycle. Money being used — in vain — to fix problems of the soul. Now, you might not think that’s a big deal — but I assure you, it is. Why? Well, think about this.
What happens when more and more money is piling up in the hands of those who crave it most as a kind of symbolic substitute for the happiness and worth and value they can’t seem to win in any other way? What happens is two catastrophically toxic things. One, that money fails to give them the good feelings they want, so they pile up more of it. Two, that means that society itself develops a profound shortage of…money…which has now piled up in the hands of those afflicted with a kind of pathological greed, who are using it for symbolic purposes, to try and heal problems of the soul, which it can’t do.
Does that sound like America to you — and increasingly, the world? It should. That brings me to the tenth and final reason the economy’s rigged. It’s the simplest to understand, but also the one that provokes the most denial and anger and misunderstanding.
All the money’s locked up in the hands of the ultra rich. There isn’t enough to around for anyone or anything else, like having a functioning society, rising living standards, upwards mobility, democracy, or a civilized way of life where people don’t have to crowdfund basic medicine. That’s because, like we discussed, the ultra rich use money as a kind of trophy, a status symbol, to try and have feelings they need, but can’t seem to ever find. Yet money doesn’t give them those feelings, and so they go on chasing more and more of it, to absurd degrees — bang! Vicious cycle. Bezos and Zuck are worth more than entire countries at this point — and they still want more, while more or less everyone else can barely make ends meet, mass poverty’s the norm, and an entire generation can’t afford to start adult lives.
Let me say it again. Because the ultra rich have all the money, everyone and everything else, which needs it most, doesn’t. The ultra rich have all the money, and so average incomes have stagnated for fifty years. How can incomes ever rise, when the pathological greed of the ultra rich is literally insatiable? The ultra rich have all the money, and so society doesn’t have enough left over to pay for things like decent healthcare, education, media, childcare, elderly care, retirement. The ultra rich have all the money — and so entire generations are now effectively in hock to them, living and dying in debt. And so on.
What do the ultra rich tend to do, as money doesn’t give them the worth and happiness and value that comes only, really, from relationships, meaning, purpose, nobility, truth, beauty, discovery, revelation? Well, they tend to turn mean and cruel and nasty. They seem to grow embittered — and take their frustration, that money isn’t making them feel better — out on everyone else. They exploit their workers. They corrode democracy. They flout the law. They become hostile and aggressive and violent people — but ones with immense power. They become a new class that’s a prime move of all the elements of social collapse: corruption, indifference, rage, and abusiveness.
So more and more money has piled up in precisely the wrong hands: people whom it benefits least, not most. Instead of average families, households, people, who need it for basics, it goes to the super rich, and makes them ultra rich. But because it doesn’t give them what they’re really after, which is feeling better about themselves, they turn abusive. That’s what I mean by the wrong hands: money, given to the pathologically greedy…which only fuels their pathology, frustration, emptiness, lack of self-worth…so they chase more and more of it in vain …until we end with people like the Sacklers and Waltons and Zucks and so on in control of a society…who are quite happy to abuse and demean everyone else in genuinely horrific and grotesque ways, because they seem to have become dehumanized themselves.
Do you see that subtle and strange link? On the one side, a shortage of money for 99% of people — a Greater Depression, in which life is so dire, people have to crowdfund basic medicine like insulin, and pay off debts their whole lives long. And on the other, a tiny class of ultra rich with more money than kings of old — who always want more — because they are looking for missing worth and value in money, but that only made them more abusive, since money could not buy them what they were looking for through pathological greed in the first place.
See that poor guy in the pic above? My heart breaks for him. Yes, really. I grew up with families and people like that. Maligned as rednecks, mocked as hillbillies — just hard-working people, by and large. Their society has failed them, and failed badly. And yet the story of that failure still isn’t told. Who will tell it? Who will speak the words for all those shattered lives — which could and should have amounted to so much more?
That is a recipe for a slowly collapsing society. And all that, my friends, is the strange and grim story of how America’s economy grew rigged. Can it become a lever of prosperity and a handmaiden of democracy again? That part, I suppose, is up to you.
Umair
June 2021
