August 23, 2006

NEEDED: A WIDER DISTRIBUTION OF WEALTH



Caption: For purposes of illustration, Seamus McGoogle models a (very) wide distribution.

For a visual image of what a just and stable distribution of wealth in a democracy might look like, El Cabrero thinks of a diamond shape: big in the middle, smaller at the top and bottom.

A perfectly even distribution of wealth is probably both impossible and undesirable and is in any case incompatible with an open society. But then again, the concentration of wealth and power into a small number of hands also creates serious social problems for a democratic society.

This isn't a very new or radical insight. It goes back to the ancient Greeks and was best articulated by Aristotle, Goat Rope's official philosopher in residence. (We really should pay him a retainer.) Far from being a flaming radical, he was fairly conservative even by the standards of 4th century BC Athens.

Pardon me if I trot him out again:

it Is manifest that the best political community is formed by citizens of the middle class, and that those states are likely to be well-administered, in which the middle class is large, and stronger if possible than both the other classes, or at any rate than either singly; for the addition of the middle class turns the scale, and prevents either of the extremes from being dominant. Great then is the good fortune of a state in which the citizens have a moderate and sufficient property; for where some possess much, and the others nothing, there may arise an extreme democracy, or a pure oligarchy; or a tyranny may grow out of either extreme...


(Source: Politics, Book 4, Chapter 11)

Not too poetic and hard to dance to, but otherwise right on.

Meanwhile, back in the 21st century, we're heading in the wrong direction. In a sneak preview of the forthcoming 10th edition of The State of Working America 2006/2007, the Economic Policy Institute reports that inequality is on the rise by just about any measure and is higher here than in most industrialized countries.

The graphic below may be easier to read on the link but the upward trend of inequality should be clear enough. In 1962, the ratio of the wealth owned by the richest 1 percent to the median household wealth was 125 to 1. By 2001, it was 173, and by 2004 it was 190. In 2004, EPI found that the wealthiest 1 percent owned an average of $14.8 million compared to only $82,000 for households in the middle fifth.

If we want a healthy democracy in the 21st century AD, we should take a little advice from the 4th century BC and work to build and strengthen the middle class.














GOAT ROPE ADVISORY LEVEL: GALACTIC

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