Monday, August 22, 2011
Plutocracy to Plutonomy: From Bad to Worse!
Yes, It Does Get Worse! As if a plutocracy supported by a government that is controlled by a political duopoly isn't bad, enough, the story gets even worse. Now we have to deal with a couple of other dirty words -- plutonomy and plutonomics..
How Plutocracy Works.. Our plutocracy is based upon the rich (the wealthiest 5%) and the super rich (the wealthiest 1%) in our country who finance the political duopoly that comprises our government. This government then passes legislation that is favorable to the wealthy. The wealthy then contribute more to the politicians, and the cycle repeats. It's an insidiously symbiotic relationship that benefits nobody but the super wealthy and the politicians, some of whom are members of this financial elite themselves. And this is all done at the expense of the remaining 95% of the population. Obviously, this is not exactly a textbook case of democracy in action. Rather, it is a textbook example of how democracy can be bought and has been lost in this country. All we have now is a plutocracy cloaked in a facade of democracy.
Plutonomy Rears Its Ugly Head. The word plutonomy is a contraction of the Greek word plutus (meaning wealth) and the suffix -onomy (meaning management). It is in effect the management of wealth. However, in actuality, it can be somewhat more than that. The web site Investopedia defines plutonomy as "Economic growth that is powered by the wealthiest upper class of society." .
Plutonomy vs. Plutocracy. To make a distinction, plutocracy pertains to the extremely wealth as a major controlling interest in government. Plutonomy pertains to the extremely wealthy as a major controlling interest in our economy. The two are different, even though they may be inextricably intertwined in this country. The end result is essentially the same: a country in which 95% of its non-rich people are subservient to the richest 5% and who involuntarily contribute to that minority’s increased wealth and further control.
Plutonomics. You may also encounter the word plutonomics. In his book, "Plutonomics:A Unified Theory of Wealth," S. E. Harrison's book defines plutonomics as:
"The science or study of wealth, wealth measurement, and wealth management." [It can be thought of as a methodology for accumulating massive wealth, retaining it, and making it grow -- even at the expense of an overwhelmingly huge majority.]
Great! Not only do we have a tremendous imbalance in the distribution of wealth in this country, but now we even have a methodology for making the imbalance worse.
Bill Moyers on Plutonomy. (May 1, 2010). "Plutocracy is not an American word but it's become an American phenomenon. Back in the fall of 2005, the Wall Street giant Citigroup even coined a variation on it, plutonomy, an economic system where the privileged few make sure the rich get richer with government on their side." [Emphasis added.]
The Citicorp Reports. In 2005 and 2006, Citigroup issued two major reports catering to and for the exclusive use of its richest clients. These were supposed to be confidential reports for the eyes of their wealthy elite. However, someone leaked these reports, and when they hit the public, they caused quite a stir for some -- and a stink for others.. As a result, one of the world's largest financial conglomerates was unmasked for espousing the concept of plutonomy and selling it to their richest investors..Here are some of the comments extracted from these documents that give the reader a flavor as to what Citigroup was pitching
"Our thesis is that the rich are the dominant drivers of demand in many economies around the world (the US, UK, Canada and Australia). These economies have seen the rich take an increasing share of income and wealth over the last 20 years, to the extent that the rich now dominate income, wealth and spending in these countries. Asset booms, a rising profit share and favorable treatment by market-friendly governments have allowed the rich to prosper and become a greater share of the economy in the plutonomy countries." [Emphasis added.]
“The world is dividing into two blocs - the plutonomy and the rest. The U.S., UK, and Canada are the key Plutonomies - economies powered by the wealthy.”
“There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take. There are the rest, the “non-rich”, the multitudinous many, but only accounting for surprisingly small bites of the national pie.” [Emphasis added.]
“At the heart of plutonomy, is income inequality. Societies that are willing to tolerate/endorse income inequality, are willing to tolerate/endorse plutonomy." [Are we willing to tolerate the tremendous income inequality we have in this country?]
"Perhaps one reason that societies allow plutonomy, is because enough of the electorate believe they have a chance of becoming a Pluto-participant. Why kill it off, if you can join it? In a sense this is the embodiment of the “American dream”. But if voters feel they cannot participate, they are more likely to divide up the wealth pie, rather than aspire to being truly rich." [A very good reason for all of us to vote.]
"We project that the plutonomies (the U.S., UK, and Canada) will likely see even more income inequality, disproportionately feeding off a further rise in the profit share in their economies, capitalist-friendly governments, more technology-driven productivity, and globalization." [Emphasis added.]
"Society and governments need to be amenable to disproportionately allow/encourage the few to retain that fatter profit share. The Managerial Aristocracy, like in the Gilded Age, the Roaring Twenties, and the thriving nineties, needs to commandeer a vast chunk of that rising profit share, either through capital income, or simply paying itself a lot." [Emphasis added. Especially take note of the term "Managerial Aristocracy.]
"The wave of globalization that the world is currently surfing, is clearly to the benefit of global capitalists, as we have highlighted. But it is also to the disadvantage of developed market labor, especially at the lower end of the food-chain." [What an insult to be referred to as the lower end of the food-chain.]
Conclusion. "Our overall conclusion is that a backlash against plutonomy is probable at some point. However, that point is not now. So long as economies continue to grow, and enough of the electorates feel that they are benefiting and getting rich in absolute terms, even if they are less well off in relative terms, there is little threat to Plutonomy in the U.S., UK, etc."
Where Things Now Stand. The economic elite now control our government,our economy, and our pocketbooks. And they have brainwashed a great percentage of our population into believing that we still live in a democratic society with free enterprise and an open market.
In reality, a minuscule minority is controlling a humongous majority from the top down. We are no longer participants in the system, controlling our own futures. Rather, we are slaves to the system and controlled by our masters, doing the bidding of the “Managerial Aristocracy” -- in the workplace, in our homes, and even at the ballot box...
In medieval times, the population was divided into nobility and commoners. Our founding fathers wanted something better for the people of this country. However, we have undone much the good they accomplished, all to our own detriment. We are once again a country of nobility and commoners, lords and subjects, aristocrats and peasants. Is that what our founding fathers wanted for us? And is that what we want for ourselves and those who follow us?