Tag Archives: wealth

Inequality Series Part III: Think Globally, Resent Locally

A reduction in global inequality has meant an increase in national inequalities.

The Asian middle class has experienced a heartwarming increase in income and purchasing power since the mid 1980s, while the wealthier (in absolute terms) American middle class has seriously stagnated.  This article discusses the urge to draw causal influence.

Inequality Series Part II: Tolerance for Inequality

We all know that the Scandinavian countries are famous for their social welfare programs.

Recently, there was a psychological study that sought to compare and contrast Norwegian and American values around fairness and luck (link below).

Findings:

  • Americans are more tolerant of inequality, even when it is due to pure bad luck.
  • Both nationalities are more tolerant of inequality due to differences in merit.
  • Both groups were willing to accept some societal costs in order to redistribute inequality-by-luck, but this is less true for Americans.

It has been shown empirically that most Americans believe wealth is possible for them to achieve, which could explain the tolerance of having it–even if it is by unfair means; an attitude of, “Good for you on your wealth, however it happened.”

At the same time, “Americans don’t believe that rich people are happier than they are,” which is why many choose to be happy with what they have.

As for government policies that work toward redistribution while costing money and reducing total wealth,“costs don’t seem to be Americans’ big hang-up with redistribution. Rather, their opposition seems to go to an underlying acceptance of fate and the fortunes it brings.”

 

 

 

 

 

 

Inequality Series Part I: Income Inequality as a Product of Corporate Inequality

As this wonderful Harvard Business Review article explains, the stratification of corporate wealth is a prime driver of individuals’ income inequality.

While better performing companies can afford to hire better talent, it’s not just the hard skills that count in the competition for labor.  Employees value the soft skills, in both themselves and others, and seek out collaborative environments that compound their own labor value, which helps the firm’s performance, which helps the pay, which helps the recruitment…and the upward cycle continues.

Also, once a leading company reaches #1, they can often use their clout to “raise the drawbridge” to potential competitors via M & As, or by influencing political regulations.

This tension-balance of democracy and oligarchy within the US economy simultaneously both furthers and checks social inequality: things aren’t as good as they could be, but they aren’t as bad as they could be.

“Maybe competition creates corporate inequality. But maybe it’s lack of competition that preserves it.”

 

 

Capital and What To Do With It: Part II

This is a continuation of Part I.

How about influence and capital? Both in Pikkety’s book, and in a quick tally of the major contributors to political campaigns, data shows that in this country money tends to buy influence. But does that mean that you will have an impact on Humanity’s Direction? Not necessarily. Sure, you may be able to influence a senator, but what has Congress done for anyone lately?

Simply speaking, we feel that you shouldn’t envy those at the top. They’re probably shady and you’re probably going to be much happier if you get yourself into the Upper Middle Class like we are over here at ModCon. We care more about being happy and raising good kids than the amount of vacation homes we own.

However, all that wealth could be used for good. The likelihood that you will have a significant impact in making the world a better place is definitely easier if you have vast sums of money to support your efforts. That was one of few great things about the last Gilded Age: in the early 1900s we had horrible conditions for the common man, but access to vast resources gave men like Andrew Carnegie the ability to do things that would have been unlikely otherwise. Railroads were built. Libraries were constructed. The US became the Big Man on Campus. Was it worth it? No question: yes.

We see similar expensive efforts today in the news on a regular basis. Entrepreneurs are working feverishly behind the scenes to make space flight a tangible reality for all human beings. Bill and Melinda Gates are well on their way to curing polio for good. As many shrewd conservative thinkers are pointing out, investments in philanthropic research are becoming more impactful than many government investments. Publicly-traded companies are using their vast sums of Financial Capital to create free internet for all, clean energy for most, and better education for our youth. In a nutshell, these members of the super rich elite are making the world a better place. As a Conservative, we know that Government has it’s faults. Businesses and Social Institutions these days are picking up the slack where government is unable or unwilling to intervene. Many of us here at ModCon work for benevolent companies that try to deliver goods and services to citizens to make their lives markedly better. Being associated with that daily transfer of money into quality of life is pretty awesome to be a part of.

Now, not everyone is being so beneficent. However, the point we here at ModCon are trying to make is that the world is different now. To compare the Gilded Age to the Internet Age is folly. We are not turning a profit on child laborers for gain anymore, for example. Companies and individuals accumulate wealth and resources while also providing purpose and financial independence to those of us lucky enough to work for a decent wage. Living in this era allows the superrich to create Impact for Everyone. We now live in the Information Age. We can study problems with better Data, track progress easier, and measure Impact better. We can do more good with less, if you know the new system. Continue reading Capital and What To Do With It: Part II

Capital and What To Do With It: Part I

Recently, French economist Thomas Pikkety published a landmark book entitled Capital in the Twenty First Century. Regardless of what you think about its conclusions, it’s groundbreaking stuff. We here at the ModernConservative are big fans of economics, specifically macroeconomics. In our opinion, the moving around of dollars and cents in this world is as close as we can come to tapping into humanity’s heartbeat and planning it’s direction for the future. Money takes into account the best and the worst of society and boils it down into the one thing that we love after God and Family here at ModCon: Data. Track the  Data right, and Truth opens itself up for you like a perfect, holy blossom. The search for Truth has defined humanity throughout the centuries, and Pikkety does his best to simplify his accountings of tax records over decades to come up with his idea of Truth in our modern age.

Spolier alert: As always, the Truth is a bitter pill to swallow.

We won’t get into the technical jargon of his book, but in a nutshell Pikkety believes that wealth in our modern society is becoming increasingly concentrated. The rich, specifically the super rich, are able to hold on to vast sums of money much easier than the upwardly mobile are able to acquire it. He believes that the superrich not only are able to buy yachts and supercars with this Financial Capital, but are also able to influence the power structure of our society. In essence, Financial Capital is far outpacing the Human Capital in regards to power in our society. You could be a smart twentysomething from an upper middle class family, but your contribution to humanity’s direction will most likely be outpaced by a another twentysomething from a wealthy family. Or at least your earning potential will be.

Now, we’ve heard this in the news before. The rich are getting richer, the poor are getting poorer. That we are entering into a New Gilded Age. In Pikkety’s terms, the “drift towards oligarchy” begins with the rapid accumulation of wealth by the superrich and the passing on of that wealth to their heirs. It is alarming, but unfortunately it is the Truth. Many old-guard conservatives deny this fact, but they are fools. To deny this basic concept in a time where everyone feels it in the air is to doom Conservative Thought into the realm of the obsolete. Wake up, people. This is happening.

So what should we do as Modern Conservatives? Should we fill the airwaves with misinformation and political spin in the attempts to discredit this theory? Should we continue to promote the false idea that this wealth is inherently tied to performance–and therefore deserved? We here at ModCon don’t think so.

Instead, let’s focus on what’s really important: Impact.

Impact is a more difficult concept to figure out. Sure, it’s very easy to detail that wealth is being concentrated, but what does one buy with that wealth? Can it buy you happiness? Sadly, no. Study after study has shown that after the threshold of $75,000 – 100,000, Happiness takes a precipitous plunge. If your income is below this threshold, as you rise up in the ranks you become increasingly more happy in your newfound security and access to resources. Anything higher than this, and the trappings of modern wealth begin to take hold: Selfishness, Laziness, and a disconnect from the Common Man.

Can this type of wealth guarantee your children’s success? Again, the Data proves otherwise. Sure, your children will be cultured by taking ski trips to the Alps or having tuition paid for at the college of their choice. However, income tends to stay the same or drop from one generation to the next if you’re too rich.

More importantly, if you were to base success on the pride of your son or daughter’s profession, the Data shows us that most doctors, pHDs and “job creators” of our society tend to begin from humble beginnings. The more likely scenario of wealth is that your children will associate with other affluent snobs and end up perpetuating their own wealth, rather than furthering your name or the success that you created by being a job creator…

Part II: Stay tuned for the doctor’s prescription!