One of the Masters of the Universe — he bankrolled the startup of Amazon.com, for example — has peered through the bubble of wealth that surrounds him and has glimpsed a terrifying future. Now, the opinions of the rich and powerful have no enhanced value because of their status and deserve no special attention; to the contrary, they are highly suspect given their destructive record. But given the almost universal tendency to defer to people who accumulate money, it’s worth quoting them on the rare occasions when, like a stopped clock, they are in fact correct.
So when Seattle entrepreneur (from the French, meaning “between jobs”) Nick Hanauer publishes an open letter in Politico to his fellow .01-percenters, warning them that unless they change their ways they will come to a bad end, well, it’s worth a listen. He’s been pretty good at seeing the future and making money from it, Hanauer allows, and now when people ask him what he sees up ahead, he tells them he sees pitchforks. “You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.”
Hanauer’s apocalyptic vision is based on just one of the things that are terribly wrong with our economies today — his hair is on fire about inequality. If you drive too many people out of your mansion to starve and freeze in the dark, pretty soon they are going to burn your mansion down around your ears. Not in America, you say? You might want to ask the British about that.
Criticisms of inequality almost never come from the more equal, so Hanauer’s insights are surprising, not so much for their quality or novelty but because he had them. Among them:
- Poor people can’t buy stuff. Rich people get and stay rich by selling stuff. So if too many people are too poor, pretty soon no more rich people.
- “The middle class creates us rich people, not the other way around.” The notion that the rich are the job creators, he says, is bogus. Ordinary people with a little money to spend are the job creators.
- “The thing about us businesspeople is that we love our customers rich and our employees poor,” forgetting that employees could also be customers.
- The way to shrink government is to pay people a living wage so they don’t need food stamps and other forms of welfare.
Hanauer argues forcefully for a higher minimum wage as a way to lessen inequality and avert a harsh outcome. But really, is there any chance that from today’s paralyzed politics there will emerge a living wage for all? Of course not.
For all his insight, and refreshing candor, Hanauer misses most of the picture. Whatever wages people are paid, if they cannot buy food, water, air conditioning, lights or shelter at any price they will be in the streets. With pitchforks. So while Hanauer’s bleak view of the future is surprising given its source, it is a considerable understatement;
“Revolutions, like bankruptcies, come gradually, and then suddenly. One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning. And then there’s no time for us to get to the airport and jump on our Gulfstream Vs and fly to New Zealand. That’s the way it always happens. If inequality keeps rising as it has been, eventually it will happen. We will not be able to predict when, and it will be terrible—for everybody. But especially for us [one percenters].”