12/13/24

The Lock Nut of Concentrated Wealth in Capitalism

 Capitalism is a way that includes most people in America. A cash economy that has a price on everything. Poverty is the most grave social sin. Even the middle class and illegal immigrants may be derisive of poor Americans. It is inefficient in many ways, and wealth is assuredly over-concentrated in the U.S.A. to such an extent that Americans are on parity with Mexico now. People have written about the inability of the Earth to sustain so many people at the present levels of consumption for more than a half century, yet there is little ability politically for people to change the way things are. Ecological economics for sustainability would require smarter politicians than the U.S.A. elects. Capitalism is a self-tightening lock nut concentrating wealth because capital grows faster than wages.

Creating some kind of basic income so no one is mired for decades in poverty would be helpful in a compassionate conservatism sort of way yet ideologues are against that seeing it as communism or socialism. When wealth is overly concentrated stagnation sets in to an economy as fewer than 1% own the majority of everything in the corporate world. People are promoted as they are of value keeping the 1% wealth structure intact. Individuals like Jobs, Gates, Buffet and Musk were/are symbols of capitalism with good P.R. value. 

Entertainment people in the 1% of 1% comprise 5% of that group. They usually support the system with good P.R. value keeping the public from being politically restive or increasing taxes on the rich. Capital increases faster than wage labor so concentrated wealth is a self-tightening lock nut; one gets some sort of plutocracy running things.The media becomes controlled by the 1% and the public become bound to paying off public debt owned by the 1% and global elites who pay fewer taxes. Yet that situation reflects human nature, the bad side, where public commons go neglected and social insecurity compels greed in micro-economics lest one starve or freeze in the winter. Humans presently can’t really do much better.

It is possible that in the future some kind of technical progress will assure that everyone has a fairly comfortable experience of being alive on Earth and that resources from the other planets of the solar system will provide enough for people on Earth after having achieved a stable and sustainable population level globally. Maybe the planet will have some kind of basic income for all and capitalism will be limited at the high end in order to prevent overly concentrated wealth as a percent of national income and social capital.

The Biden-Harris administration and others never use the word poverty these days except as it applies to foreign countries. Spending a half trillion on the Ukraine war instead of developing water resources and sustainable agriculture in Africa was unthinkable yet that happened. Such changes over-all are decisive in the long run. One need invest wisely in peace, education and ecological sustainability instead of conflict yet even that simple prioritization is nearly impossible to achieve in U.S. politics.

A practical step to make earnings opportunities more egalitarian and to accelerate the pace of economic invention and progress would be to reform the patent system to limit the period of exclusive patent ownership to three years with 5% of sales royalties going to the patent holder from users of an invention after it goes public domain (in three years). Because the pharmaceutical industry requires so much time and capital investment to develop new drugs they might be treated somewhat differently and given exclusivity for 7 years after which 5% sales royalties would go to the patent holder as the drug reaches the public domain. There are a lot of inventors that cannot afford to participate in the patent process unable to gamble several thousand dollars on an idea. Thus ideas tend to trickle upward to concentrated wealth and that is bad for society especially in an era where ecosystem and species decline in quality and quantity are facts of life.

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