
The Pitchforks Are Coming For Us Plutocrats (2014) - yotamoron
https://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014
======
jkingsbery
This article is certainly an interesting read, but it seems like the only idea
proposed is a higher minimum wage, the results of which seem to be mixed
([https://grow.acorns.com/how-seattles-minimum-wage-has-
change...](https://grow.acorns.com/how-seattles-minimum-wage-has-changed-the-
city/), [https://www.vox.com/the-
highlight/2019/7/13/20690266/seattle...](https://www.vox.com/the-
highlight/2019/7/13/20690266/seattle-minimum-wage-15-dollars),
[https://publicpolicy.wharton.upenn.edu/live/news/2303-effect...](https://publicpolicy.wharton.upenn.edu/live/news/2303-effects-
of-the-15-minimum-wage-in-seattle)). From what I've read, the academic study
that paints the best possible picture says that for a 10% increase in the
minimum wage, Seattle saw a 1% increase in wages (one would presumably expect
a 10% increase in total wages, unless there was a decrease in total hours
worked). There are partisan arguments for and against raising the minimum wage
(which the author does a good job of summarizing), but from reading those
studies it seems not obvious what raising the minimum wage will do at the
macro level.

~~~
vonmoltke
> Seattle saw a 1% increase in wages (one would presumably expect a 10%
> increase in total wages, unless there was a decrease in total hours worked).

How's that? Why would a minimum wage increase raise the wages of everyone
already making more than the new minimum wage by the same amount?

~~~
atomi
I've read our production has more than doubled since the 90's; wages have not.

~~~
HenryBemis
Just in case you were wondering how Bezos is a billionaire.. he now has MORE
people making MORE profit, and that accelerates as the operations become more
effective (until they plateau and then on the next technological leap they
will jump again).

I am not targeting Bezos, I am merely using him as an example. Let's call it
"scale", and "effectiveness".

------
notbezos
from an AMZN early investor. the company that pays the lowest wages and
creates the greatest wage disparities ever seen.

great example of why the pitchforks are overdue. Even the rich who can see the
writing on the wall are too greedy to do anything other than virtue signaling.

~~~
fastball
Amazon certainly does not pay the lowest wages.

And wage disparities are only bad where they don't make sense. But at AMZN,
they do. AMZN has both some of the least skilled workers in the world, and
also some of the most skilled workers in the world, which unsurprisingly
demand vastly different rates.

The requirements to be a warehouse worker at AMZN are basically:

1\. Know how to read

2\. Be physically fit.

...which is a pretty low bar. You don't even need to be clever with your hands
or anything, so sweatshops in Bangladesh require more skill. Meanwhile, the
people building infra at AMZN are some of the most intelligent, highest
skilled people on earth. And I'm sorry, but until we live in a post-scarcity
economy, the former group is always going to get paid very little, and the
latter group is going to get paid a lot. Nothing else is tenable. You can
ignore supply/demand with Communism, but Communism clearly doesn't work in
practice as long as there is scarcity.

Personally, I think UBI is a great solution to this problem. But the idea that
AMZN is perpetrating an injustice by not paying unskilled, easily replaceable
workers at anywhere close to the rate they pay highly-skilled, hard-to-replace
workers is just silly.

~~~
jboog
The low skilled workers are going to get paid very little because we choose to
pay them very little.

We as a society have decided that rather than increase the wealth of the very
poor at the bottom of society, instead we want to increase the wealth of the
ultra wealthy.

Why does a person need tens of billions of dollars? Because they worked very
hard or had a great idea? Why isn't $500 million enough instead of $50 billion
when we have kids in this country and around the world who don't know where
their next meal is coming from?

Much of Western Europe decided on a much different route than the US took and
they have much more egalitarian societies.

The problem is that in the US we decided that the ultra wealthy are our
betters and deserve as much capital as they can accumulate and the parasites
at the bottom are inferior and deserve to toil for Bezos' pocket lint.

~~~
jp555
Bezos has $100B because Amazon generated $900B of wealth for other people.

“Of all human emotions, none is trickier or more elusive than envy...as soon
as we feel the pangs, we disguise it to ourselves—it is not envy we feel but
unfairness of the distribution of goods or attention, resentment at this
unfairness, even anger”

The Laws of Human Nature – Robert Greene

~~~
claudiawerner
It's a little saddening to see a quote about envy below a post which mentioned
the children who don't know when their next meal will be coming.

~~~
jp555
Why? The wealth was not taken from those children.

~~~
claudiawerner
It is, however, extracted from their parents. To post a quote about envy when
the discussion is not based in envy but in concern for the welfare of the most
vulnerable in society is the upsetting part.

~~~
jp555
extracted? As in not through voluntary agreement?

I think you're talking about taxes, and missing the point entirely.

~~~
xnyan
>extracted? As in not through voluntary agreement?

This argument is so facile that I can't believe you are arguing in good faith.
The power dynamic between an a low-wage employee (any almost any kind of
employee) and an employer is incredibly biased in favor of the employer.

------
andrewl
He and his team at Civic Ventures have a podcast called Pitchfork Economics
which is worth listening to:

[https://pitchforkeconomics.com/episodes/](https://pitchforkeconomics.com/episodes/)

------
mschuster91
> One day, somebody sets himself on fire, then thousands of people are in the
> streets, and before you know it, the country is burning.

Almost prophetic to today's events. It's gonna be a real rough ride once the
masses that are currently focused on the murder of George Floyd and countless
other PoC expand their view and take aim on the systemic issues that plague
many Western societies.

> These idiotic trickle-down policies are destroying my customer base. And
> yours too.

Yup. I'm German, our car manufacturers have had the problem for years now that
the only place they can grow and sell cars is China or some other export
target. But well, that's the result of having:

\- about the biggest low-wage sector in whole Europe

\- 2/3rds of the population with either no meaningful savings at all or in
debts ([https://www.boeckler.de/de/boeckler-impuls-vermoegen-nur-
jed...](https://www.boeckler.de/de/boeckler-impuls-vermoegen-nur-jeder-dritte-
hat-reserven-6400.htm))

\- and cars that cost tens of thousands of dollars in new

How is the German economy supposed to "pull itself out of the recession on the
bootstraps" when the majority of the population does not have bootstraps?

~~~
jahaja
The usual stopgap is a vast expansion of consumer credit. But I guess that
phase has already passed in Germany as well.

~~~
mschuster91
That doesn't work too much here for two reasons:

1\. German consumers are _notoriously_ averse to debt ("Schwäbische
Hausfrau"). Most transactions pre-covid were in hard cash or using debit
cards, credit cards are rare and American-style revolving credit cards even
rarer (the debt incurred on a standard German CC will be fully deducted on the
third workday of the month, no partial payments or payment targets). Consumer
debt is mostly real estate, cars and financing for big-ticket purchases such
as furniture or expensive computers).

1a. Additionally, German consumers and companies are even more averse to
_risk_. Going bankrupt with a company (or personally) is seen as deeply
shameful and something that is only reserved for the lower classes of society
(which also explains, next to a lack of venture capital, the lack of
successful global scale start-ups from Europe), and many shy away from stock
markets and capital investment... it wasn't widespread even before the dot-com
burst, but that essentially killed everything involving stocks as an
investment methods to this day, so rather than to invest in ETFs people prefer
to "safely lose money" in zero-interest "saving plans". And as 2/3rds of
Germans don't have anything left over to save after making rent and food _and_
Germany being a "renter market" instead of an "owner market" in real estate,
they also cannot build up equity over the decades and generations.

2\. Credit requirements: the European "Basel 2" requirements on credit are
enormously restrictive. It's extremely hard to get approved for loans and to
make it worse, it doesn't make any difference if you have done business with
the bank as a known customer even for decades, the decision to grant a loan or
not must be purely statistic/math based. This royally screwed e.g. farmers who
suddenly had to put up their farm / equipment as collateral for loans for
seeds, but also prevents lower classes from using (consumer) credit to invest
in either outright consumption or into furthering their position in society
(e.g. by starting their own company).

~~~
jahaja
Thanks for very informative reply.

1\. I hope that this stays this way, a needy public may be very susceptible to
credit marketing.

2\. I find it a bit odd that this doesn't seem to apply here in Sweden.
Predatory loans are a plague on society atm. At the level where commercial
breaks are almost exclusively gambling and payday loans.

~~~
mschuster91
Gambling regulation is individual for each country, it's a loophole used by
e.g. Maltese web casinos advertising to German consumers.

~~~
jahaja
Yeah, I know. Just added the gambling bit to emphasize how cynical it is.

------
Priem19
It's too bad that articles as good as these don't say on the front page for
more than a day.

------
thanatos519
When my dad read this, he bought a pitchfork and mounted it on the front of
the house.

------
blickentwapft
There’s no problem with capitalism.

The problem is rich people aren’t willing to share the wealth with less
fortunate.

Socialism is a dirty word in the USA but it’s really just about taking care of
everyone. Rich people - to generalize - aren’t ok with people getting free or
minimal cost health care education housing and a financial safety net. But in
general terms the rich fight against this.

People get mad when you .... the rich... can have houses and cars and holidays
and all the good things, but no one fights to ensure the less fortunate can
own houses, that they aren’t bankrupted when they get sick, that they don’t
have to work till they’re 78 even assuming they can get work.

That’s why the pitchforks will one day come. Because the rich want all for us,
none for you.

------
baybal2
503 anyone?

------
pydry
The ford story is a myth. A fairy tale told by investors to their children
whom they want to grow up to become successful venture capitalists. He raised
wages to:

* Deal with worker turnover (Jeff Bezos did this too)

* Gain more social control over his workers (he had a thing for good/clean/christian/nuclear family living and he wanted a remuneration policy that would let him enforce that).

* To poke some of his shareholders in the eye (whom he'd had fallings out with).

* Pour cold water over incipient unionization (Jeff Bezos also did this one recently).

The oft repeated idea that our media likes to promulgate that it was a grand,
magnanimous gesture done for selfless reasons (by a virulent antisemite no
less) is not only untrue, it's the exact opposite of true - there had to be
four _really_ solid reasons to jack up wages before Henry Ford had his arm
twisted into doing it.

~~~
cpcallen
> Pour cold water over incipient unionization

I'm generally pro-union, but I have _absolutely_ _no_ _problem_ with an
employer deterring its employees from unionising by paying them well and
treating them right.

~~~
pydry
So... you don't disagree with the correction I made... but you'd just like to
emphasize how much you agree with Henry Ford?

Ok.

------
roenxi
> But the problem isn’t that we have inequality. Some inequality is intrinsic
> to any high-functioning capitalist economy. The problem is that inequality
> is at historically high levels and getting worse every day.

As long as people keep getting this so badly wrong the problem, whatever it
is, is never going to be fixed. Really I just call on people to stop using the
wrong language and try to articulate detectable problems.

If you look out the window of your car (or house) and see homeless people (or
mobs) - that isn't inequality. If all the homeless people had houses or all
the mobers a comfortable life, the amount of inequality would be about the
same as it is now. Inequality as measured is all but undetectable in the real
world. I have no idea how unequal I am to the people who I see every day - and
none of my readers on HN do either unless they've spent a few hours poring
over some very dry statistical compendiums.

The problem is much more likely that the link between productive work and
reward has been completely severed for more than 40 years [0]. If being
productive reliably led to being rewarded there would be many less problems.
The people being rewarded aren't the people who are producing results. Go look
at the late 60s and early 70s to figure out what changed.

[0] [https://www.epi.org/productivity-pay-
gap/](https://www.epi.org/productivity-pay-gap/)

~~~
onion2k
_I have no idea how unequal I am to the people who I see every day_

When someone drives past me in a car that I know costs the equivalent of 30
years of my salary I do have _some_ idea of how unequal we are. It's a pretty
big clue.

~~~
roenxi
Fair enough. So what if I gave you the same car and he doubled his wealth.

Now inequality has increased much more significantly. And you can't tell.

You haven't found a measure of inequality, you have identified that you can't
afford an expensive car. Insofar as they are problems, the solutions to
inequality and material lack are different from each other.

 _EDIT_ And furthermore, if inequality is the major problem, you're arguing
you'd rather be in Scenario Now (no car) rather than Scenario Hypothetical
(very expensive car). I don't like telling people their opinion, but I'd be
shocked if inequality is going to be a factor in your decision making with
that one.

~~~
bottled_poe
That’s not how markets work. If you gave everyone a Lamborghini, the value of
a Lamborghini would plummet, so the wealth measure doesn’t move. Also,
resources have to come from somewhere, and that has a cost. The theoretical
you’ve proposed doesn’t hold up to much scrutiny and doesn’t seem like a
useful model.

~~~
roenxi
> ... If you gave everyone a Lamborghini, the value of a Lamborghini would
> plummet ...

If your argument is that the person with a Lamborghini isn't materially better
off in a real sense and that wealth inequality is therefore a social
construction then I am _profoundly confused_ if you are also aligned with the
article's thesis that pitchforks are going to be involved due to wealth
inequality.

The logical conclusion of that line of thought is to destroy the Lamborghini
to promote wealth equality, which is stupid.

