by Jonathan Power
Adam Smith who in 1776 wrote “The Wealth of Nations”, the Bible of capitalism, which has become the standard economics text for over two centuries, was quick to single out monopolistic tendencies as the most important tool in undermining the virtues of capitalism. It kept the poor poor. The laws that give these capitalists their freedom to exploit the marketplace, so-called rent-seeking, “may be said to be all written in blood”.
At the moment Amazon is in the firing line for practicing such practices. Indeed, a majority of Silicon Valley companies rent-seek. Big pharma companies, like Pfizer, which is expecting this year 25% profits on its coronavirus vaccine are another.
Rent-seeking is a major cause of wage stagnation among working-class Americans and has much to do with the “deaths of despair”, argue Anne Case and Angus Deaton in their recent, well-reviewed, book, “Deaths of Despair and the Future of Capitalism”.
Poverty in the US is worsening, they write. Suicide rates among middle-aged, white, Americans is on the up- in particular among those without a bachelor’s degree. (However, suicide rates among blacks are lower than among whites in this group; black mortality rates have declined.) Drug overdoses from too freely available opioids have risen extraordinarily fast among working-class whites. Alcoholism, always a problem with this group, has increased rapidly. This group has also been hit by pandemic-caused unemployment- the relief mandated by the Trump Administration was too on and off to do what should have been done.
We know that President Donald Trump practiced the wizardry of co-opting poor whites. Trump in effect told poor whites that although they might not have much at least they were white. As Martin Luther King observed, the poorer white men “ate Jim Crow, a psychological bird that told him no matter how badly off he was, at least he was a white man, better than a black man”.
White working-class men have seen their purchasing power fall. Between 1979 and 2017 they lost 13% of their purchasing power while national income per head grew by 85%. The coronavirus pandemic has accelerated this decline in wages. Moreover, wage decline has been joined with job decline- from better jobs to worse jobs.
Other rich countries- in Europe, neighboring Canada, Australia, and elsewhere- have not seen an epidemic of deaths of despair nor a long-term stagnation of wages, although they were badly hit for a few years by the Great Recession of 2008, triggered by US bank failure- for which the bankers suffered personally hardly at all while lower-income mortgage holders lost everything.
Globalization and technological change often named the culprits by pundits and academics, do not seem to have had such a bad impact. This suggests that in the US other factors are at work.
The main trigger of poverty and despair is the health care system. Second is the move, more than anywhere else in the Western world, of market and political power away from labor towards capital- the Amazon workers’ ongoing fight to unionize and Uber’s attempt to refuse contracts (recently declared illegal by the UK Supreme Court) to its drivers are two indications of this. Other rent-seekers are doctors, pharmaceutical companies, banks, real estate businesses, car dealers and hedge fund managers. All these have pushed legislatures to give them tax breaks and special deals and regulations. None of these operate in a true free market as described by Adam Smith and most of his economist successors. Reducing rent-seeking would probably do more good than increasing taxes on the rich.
he problems with the health industry go far beyond the opioid scandal. The US spends huge sums of money for some of the worst health outcomes in the Western world. “A cancer at the heart of the economy”, Case and Deaton call it. Robin Hood robbed the rich to aid the poor. In the US it is the other way round.
One bit of good news is the reported improvements among black people. Black lives do matter and since the onset of Martin Luther King’s civil rights protests time has been increasingly kind to black people. Black mortality rates have fallen rapidly. The percentage of blacks with a bachelor’s degree has risen. Black incomes among its working-class have not improved as much as they should but non-material advances are plain to see. Discrimination has diminished. Voting power has increased- indeed the black vote in South Carolina assured Joe Biden that he would be the Democrats’ presidential candidate. The gate to becoming middle class has opened. Health has improved. Intermarriage has become acceptable. (Gallup refers to this as “one of the largest shifts of public opinion in Gallup history”.) The number of black politicians has risen very fast. Black people have held important positions, often enough the top positions, in the White House, the cabinet, the government agencies, the military, the police, the civil service, multinational companies, schools, universities, broadcasters and newspapers. (Yesterday the Los Angeles Times appointed a black journalist as its editor in chief.) When Barack Obama became president it looked like a big divide had been crossed.
This, presumably, is why the suicide rate among poor blacks is much less than among poor whites and why the resentment of poor whites that Trump drew on increased. As poor whites see it, they live on a downhill slope. For blacks, there is the benign feeling of progress. Of course, the pandemic has shaken things up for everybody but doubtless, once it has ended the US will return to where it was two years ago.
Enter Joe Biden, stage left. He has promised to correct these grave malfunctions in American society. Indeed his multitude of planned reforms are already underway- from tax rises for the rich to universal kindergarten provision for all.
Nevertheless, for him to change norms that are deeply embedded in American society will be extraordinarily difficult. There is an inbuilt wall of resistance, from banks to hospital insurance companies. Free market capitalism was high jacked by special interests a long time ago and those interests are entrenched in the body politic. It is imperative that they be dug out.
For this Biden needs to win over poorer whites, many of whom voted against their own economic interest and went for Trump. Biden has to persuade poor whites that he is on the side of all the poor and that he stands for their economic progress. If successful that will ensure him a Congress that gives him a future majority and ensures a Democratic victory at the next presidential election.
As for the blacks, he needs to hold on to their support, keeping their upward trend going, not least in non-material things- improved education, health care, unemployment, and social benefits, the housing of the homeless, and encouragement to rebuild trade unions.
Biden must lift all boats among the working class. It is an immense challenge. But it is possible.
Finally though I must say that by the abundance of the rats who came out of the sinking ship to respond to my initial comments, I truly must have hit some nerves. Predictable idiots!!
As I am not sure what idiocy this latest rightwing nutjob is implying, I can only rest with the knowledge that he, like all of his deluded and truly character challenged idiots, will one day find the truth. Sadly, their religious self-righteousness may very well condemn them to lives of ignorance and blind devotion to a belief in white supremacy. Especially sad as they are very quickly and steadily being thrust into the realm of the minority. Death throes is what it is called. So sinbad....breathe deeply. I don't waste time with hate, as one of the lemmings has implied. Instead I trust in truth and reality. You all would do well to try that too one day.
So Adj is a front hole, birthing person? Go figure.
You right wing nutjobs are amusing, deluded, but oh so sadly dangerous. You say that black people are playing the victim card!! Open your eyes and minds if at all possible. Blacks have always been victims. But you idiots listened to the supreme yellow idiot who convinced you that white people are the victims. The people who have been the beneficiary of all the institutional racism that is the hallmark of america. You all cry foul with your self-righteous indignation when your priviledged position is questioned. You are offended when your ignorance of the plight of the black man is lost on your limited comprehension skills that allow you only to see that your life is great and that anyone else whose life is not so great means that it is their own fault. America has institutionalized the subjugation of the black race through red-lining and so much else. But you offended and threatened white people cannot see past the fact that your lives were pre-ordained to be better because of the system started hundreds of years ago. But despite this fact statistics show that you all are killing yourselves at an astonishing rate and losing your minds over an orange idiot whose only goal was to prove how many deranged and disaffected white people he could bamboozle. Clearly all of you trumpers on nrp are 45 devotees who embrace stupidity and, yes, racism, wholeheartedly. It would do you all well to just accept who you are....faux-religious zealots who rival jim jones devotees. All you are missing is the kool-aid. Finally, save your religious entreaties for yourselves and others like you. They will be ineffective but atleast you can believe something else you cannot see. Meanwhile I will continue to trust in reality and truth.
While we all grew up using masculine pronouns for heneral descriptions I doubt Adj is a man. The writing have all the hallmarks of a bitter leftist woman who projects her failures in life onto white male oppression bla bla bla. I have used the past year of violence as a teaching tool to my kids and my nieces. While not all blacks hate whites, enough have been indoctrinated and are violent that they should all be avoided. This is not racism it's self preservation. I have video taped the scene of whites being made to to bow down and worship Black lives matters leaders. Whites made to wash their feet. This has made a lasting impression on the children which range in ages from 9-14. They will not fall victim to any critical race theory indoctrination, their eyes have been opened. I suggest others do the same with their children.
The liberal left have always been racist and always deflect their racism on others, for example white men. Remember that the liberal left started Planned Paraenthood and put them into black neighborhoods to commit genocide against a whole generation of black babies. The Democrat employees of Planned Parenthood are on tape accepting money designated explicitly for the death of a black fetus and promise the money will only go for black deaths. These are nasty little facts that lefties like ADJ don't want you to know. Remember that blacks are trapped, enslaved and controlled in Democrat cities. Their condition has not improved in the last 50 years. The white liberals like Adj who run these cities need a straw man, a boogey man to blame and a rural white farmer in Iowa is the perfect scapegoat. Sadly because of the terrible schools and indoctrination the blacks think their oppresser is a white corn farmer 1000 miles away when the white self loathing liberal oppressor is right in their own city. Adj is pure evil for what he has done and continues to do, I doubt prayers can save him.
So now veraquas joins the psuedo-christian white supremacy crusade. Do you even understand the true meaning of racism?? To be racist you must be in a position of power, a position from which you can exercise control and bias over others....as whites have done since they stepped foot on the new world. I will let you fools who demonstrate a glaring lack of self-awareness daily in on a little secret. I have seen what the white man has done in the name of their religion, the atrocities that people like veraguas pray about once a week to try and assuage their guilt, guilt they do not even realize they have. So they scream blindly when the truth is finally thrust in their pious faces. Veraguas please don't pray for me in your house of hypocrisy, I know right from wrong, truth from falsehood and I definitely know much more about your religion that you try and convince yourself daily will release you from the evil in your heart. You will need much more than a building with a cross on it. Your problems are genetically infused in your dna to the point that truth, real identification of your failings only elicits weak and flacid pronouncements from you couched in fake religious indignation. Save your prayers for yourself and all the others just like you. There are many.
Ajd is racist as Gerald so smartly pointed out. The worst kind of racist is the do gooder liberal racist. I will put Ajd on our prayer list at my church and hope he changes his ways. I encourage others to also pray for his soul so that the wickedness that has made hin hate the USA and caucasion men just based upon the color of their skin. Gerald you are quite wise to point out that preconditioning to shout racism is now rampant among the liberal drones. Pray for Ajd and hope he will denounce his wicked racist ways.
Well chimbre, ask gerald what he was envisioning when he made his comment. I guarantee he was not seeing lily white people when referencing Mogadishu or Detroit. Like a typical racist you refuse to see the obvious answer, especially when you are an integral part of the problem. The reality, not just the perception, is that america's entire existence is predicated upon and continues to thrive entirely on the legacy of slavery and the oppression of "others" by white people. People like chimbre have been the beneficiaries of that oppression to this day, despite the successes experienced by a few people of colour. I listened to that other idiot Rick Santorum spout his ignorance recently about the origins of america....christians seeking religious freedom!! Something I am sure chimbre embraces too. The reality though is that the pilgrims came out of fear. They were being persecuted in europe. They found here indigenous people who, for the most part welcomed "those strange beings". Remember the first Thankgiving. But what happened? Fear made the "christians" slaughter the natives and enslave an entire race of people for their own lie of a religion. So I mention race because you, chimbre, like so many like you, carry deep sub-conscious guilt and yes, fear, because, as I have said before on this forum, if blacks had done to you what you did to them, you would be seeking revenge, while everyday all blacks seek is equality. So understand your own fake defensiveness when race is mentioned. I do. If you did too you might find a way out of your ignorance that is taken advantage of so often by opportunists and fast talkers like the orange dotard who you love.
Wow Chimbre very nicely put!
Living off welfare in a Democrat city is the is the definition of not only poverty but also modern economic slavery. Gerald did not mention race he gave examples of well known poor areas. Of course a leftist like Adj jumps straight to race as he has been conditioned to do. Bigots like Adj bring race into a discussion about poor people because his own sense of superiority makes him think that minorities can't speak up for themselves. His is the worst kind of racism where he will think for and defend the poor ignorant blacks. Just disgusting Adj but leftist think their racism is ok if it makes them seem like they are a champion of the so called oppressed.
"Banjaxed", I appreciate the support. I live in hope daily that something I write will resonate with an otherwise ignorant and deluded soul.
Ajd, you are a voice of sanity in this wilderness of ignorance and bigotry that is the comments section of this website. Thank you for putting in the effort of trying to open the eyes of the brainwashed and those deficient in the skills of critical thinking. I fear that you have wasted your time but thank you anyway.
And Gerald, you racism is evident. You cite Mogadishu and Detroit as examples of poor people. But what about Appalachia, Alabama and Mississippi...all full of poor and uneducated "white" people. According to your reasoning, the only poor people must be of colour. Statistics show that the majority of poor people in america are white. Your racism is so obvious but you can't even realize it because it is the essence of you. Sad idiot!!
The two preceding writers truly must be the exact examples of the poor white people that JP talks so eloquently about in his article. What he missed though is the undisputable fact that the inherent bias and racism of poor white men automatically places them in the additional category of low information voters. Why else would they glorify and vote for someone as deficient as trump? They live in a world of depthless grievances against any and everything that they, in their aggrieved state, can only hate. As JP so rightly states, statistics prove that poor whites always vote against their own interests when they vote republican, but their inherent racism and self-pity does not allow otherwise. When have the repubs ever done anything for poor people? And yes, every country has poor people, but every country that adopts a sound social safety net( which the US has never done) has better life expectancy, better life satisfaction, better education and generally better conditions for its people. The fact that all of the above have marginally improved for black people in america is more a testament to their inherent strength of race and resilience. Even after centuries of slavery and jim crow, they still thrive. Conversely, even after centuries of dominance, poor whites are now killing themselves at tremendous rates as stated in the article. What does that confirm about the white race?? But poor white people i.e. low information voters, will always act against their own interests because they will always listen to opportunistic idiots like the orange dotard who will appeal to their ignorance. Remember when he clearly told you all at one of his many idiotic rallies. "I LOVE THE UNEDUCATED!!"He told you what you are and confirmed to your face why he could count on your vote....you are ignorant and know no better. A few may smarten up as Biden travels the country trying to explain his recovery plans, but most will remain low information voters like snake pliskin, mentally hobbled by their prejudices and hatred of anybody who does not look like him. Be thankful though snake that you will likely be long dead by the time that people like you are finally in the minority. White birth rates are ever diminishing while people of colour are proliferating. So only a matter of time until your grandchildren or their children look more like Obama than like the orange idiot you worship. Once again JP is on point. Read the article again. You might now learn something and perhaps emerge from the "low information" group of idiots you currently inhabit. Doubt it though.
This article is pure tripe! There will always be poverty because some people make poor choices and must live with the impact of those choices. Lazy people and people who can't live below their means will also remain poor. Poor people are a drain on any society. Remember that the only thing poor people produce is more poor people. Detroit and Mogadishu are good examples.
Jonathon Power is such a lying piece of trash.