Wednesday, April 04, 2018

the economists and the plutocrats

Economists have really missed some chances in the last decade. For instance, where is the model that shows the way that the wealthy will, quite rationally, spend money on other than productive ventures to remain wealthy?  And since the wealth we are talking about was accumulated under the paradox of its not really being useful per se to the wealthy - once you have five hundred million dollars, it is unlikely your lifestyle is going to get better with another 100 million dollars - the amounts involved can be seen as pure instruments of prestige. 

This is an area that the economists never venture into, because, of course, it is at the intersection of economics and politics. In fact, it is the proper subject of the political economy, which until the twentieth century was where the study of economcs was located. As it ejected itself from this category, economics became technocratic - and pretended to become non-political. But of course that is nonsense. 

What the plutocrats do is not something unusual - they operate as aristocrats have operated for the last six thousand years or so of human civilization. Non-productive expenditure involves such things as raising the barriers to entry to wealth - that is, slowing down social mobility by freezing or pushing back wages - and buying off threats to prestige wealth - that is, producing a political system in which the politicians operate as bribed factotums of the plutocrats - and creating a universe of plutocratic spinners - as per the endowment of, say, libertarian think tanks, which exist in gross disproportion to the number of libertarians that live in this country, where libertarianism has never been politically popular.

When an economy reaches the point where a certain large percentage of the wealth lying in private hands is about maintaining the system in which the wealthy maintain their positions and prestige, you have a massive problem.  We have that massive problem at the moment, and it is getting worse. 

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