New American Social Contract?
Posted by butalidnl on 12 October 2011
The OccupyWallStreet protesters actually have an issue, but they don’t fully realize it yet. “We are the 99%” is not merely a catchy slogan; it is also quite sharp as an issue. The thing is, people in America are reluctant to attack the wealthiest 1% because these people symbolize “the American Dream” – that ordinary Americans can work hard and become wealthy. The dream is just that – a dream. The truth is that the only people who started outside the 1%, and who are now in it, invariably come from the top 10% wealthiest to begin with. Probably the only exceptions to this are some showbizz and sports stars. But more and more of the top 1% were born into that class. Wealth in the US is now largely hereditary, but people still have the illusion that it is not.
Having a hereditary wealthy class is not an unstable situation per se, nor is it necessarily a bad thing. Hereditary wealth is a stable institution in most of Europe (though with the glaring exceptions of Greece and Russia). The secret to this stability lies in two things. First, the rich don’t constantly flaunt their riches (like riding around in stretch limousines, or having huge villas in plain sight). Second, the political system makes sure that the rest of the population operate in a more or less meritocratic, welfare system; meaning that most people who excel and work hard are rewarded well, and that the rest have a stable minimum standard of living. None of this exists in America, and that spells trouble for that society. People don’t mind that others are rich, even extremely rich, as long as they themselves know that if they work hard, they will be rewarded for it.
The wealthy in France recently petitioned the government to raise taxes on them. The Royals of England, the Netherlands and some other countries cut their budget when their countries go through hard times. The rich agree to pay an extra 1% wealth tax without whimpering. Cabinet officials in Spain took a pay cut before asking others to do so. Society accepts that they are rich, and the rich in turn understand that they should contribute their fair share.
Such an arrangement is stable.
The wealthiest 1% of America does not only NOT PAY their fair share; they have arranged (through political lobbyists etc) to pay MUCH LESS (proportionately, of course) than ordinary people. They own more and more of America’s wealth and pay less and less to society/government. Instead of the European principle of :”The strongest shoulders should bear the heaviest burden”, in America the strongest (wealthiest) have passed the heaviest burden to the rest of the people.
The idea that taxing the “1%” more will be bad because this will hurt business hiring falls flat on the basis of recent experience. Big businesses (which are owned mostly by the ultra-rich) are now sitting on trillions of dollars in cash, even while millions of people are unemployed. Taxing them a bit more will not hurt hiring. In America, the rich don’t utilize their enormous profits to create jobs – they just hoard the money. The ‘trickle down’ theory of economics is a myth that is propagated by the wealthiest people.
Change the Myth
The real problem of America lies with the myth of the American Dream. It should simply be discarded, and replaced by a new Social Contract between the (hereditary) rich and the rest of the people. As long as the Dream exists, the richest will continue to believe that their wealth and privileges are a reward for ‘hard work’.
The problem has so far been aggravated by the US dollar’s monopoly over world finances. Despite its present problems, America is still able to cobble along because it siphons away resources from other continents through its financial monopoly.
I believe that not only is the day of the “American Dream for the 1%” coming to an end, but that this would be paired with the end of the US dollar’s financial monopoly. OccupyWallStreet can start protesting now, but its ultimate demand – which would be the establishment of the new American Social Contract – will not arrive until the rich can no longer use the rest of the world’s money to keep things going.
The future belongs to the “Occupy” protesters, who DO represent the “99%” of America. I hope that that future comes sooner, rather than later.
This entry was posted on 12 October 2011 at 5:11 pm and is filed under politics, World Affairs. Tagged: 1%, 99%, American Dream, hereditary wealthy, occupy wall street, occupywallstreet, social contract, trickle down economics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.