Wednesday, October 14, 2009

The Real Ruling Class

Is there a ruling class in our world? Surely, there have been castes or classes in the past, with some ruling and extracting the product of the labor of others, while others must obey and be exploited.

Marxists say there is such a class and that it is the capitalists. Others think that insofar as the power of capital rests on voluntary market transactions, the ideas of "ruling" and "exploitation" do not really apply here. Others look for more mysterious, hard-to-see rulers. Who really rules us? Is it the Trilateral Commission? The Jews? The Bavarian Illuminati? Each theory is more arcane than the last.

I think the answer to the question is the one that is right under your nose. Consider the very words, "ruling class." Who literally rules you? Who has the power de facto to extract wealth from you without your consent and even against your wishes?

The answer of course is the state, the government and its employees (see also the above graph, click to enlarge). For most its history and prehistory, the human race has lived in stateless societies, in conditions that were very primitive but also very equal. With the birth of the state, extreme political and economic inequality comes about. Primitive states were often frankly wealth-extraction devices and had virtually no other declared function. Modern states have evolved considerably and, I admit, do some things that are for the common good.

The wonder of it is that, though this answer is screamingly obvious, it is almost never given. Looking to see who the real overlords and masters of the Earth are, people consider everything but the obvious.

My point here is not (yet) to judge or blame. Maybe these people deserve all this wealth and power. My point here is the irrefultably obvious one: that they do indeed have them, staggering amounts of them, and that they are gaining on the rest of us day by day.

Beyond that, my only point is that we probably should not give them any more than they already have. It is in this context that I view the health care reform bills now before congress. Any one of them would surely be one of the largest gains in government power in the history of the republic.

16 comments:

Anonymous said...

As a child I remember going to the dentist to have my teeth drilled and filled with silver. My dear 2nd generation American mother cooked all of those old world recipes in vegetable oil instead of olive oil. As a teen with a drivers license I learned to enjoy those Flame Broiled Whoppers and Big Macs. As a college student I smoked Marlboros and Winstons. Today of course I watch TV ads not for M&M's, Big Macs, Whoppers and Winstons but the man is telling me to "Ask my doctor" about Lipitor, Levitra, Flomax and Nicotene patches. I find it befuddling that you think the government has taken over our lives!

Todd said...

You too are a state/government subsidized employee.

Lester Hunt said...

Todd,

Yes, my industry was sucked into the state about a century ago, leaving thousands of it trapped in its arms. It all began with a harmless little public option. Be warned! This is your future if you don't watch out!

Matt Olver said...
This comment has been removed by the author.
Matt Olver said...

These numbers reflect only averages in the graph you have provided, but the private sector as a whole encompasses A LOT more territory so these numbers are a bit deceiving. For example, the upper fringes of the private sector blow away the upper fringes of the public state/government sector in annual salary. For example BHO's annual salary is 400K. Now if you look at the pay of all of the CEO's for the Fortune 500 companies http://www.forbes.com/lists/2006/12/Rank_20.html you will notice that most earn at least double or significantly more than double BHO. In fact, a lot of the C-Level management for the Fortune 500 earn double the annual salary of BHO. Heck, Bernanke's salary this year was a meager $191,300.

Steve said...

@Anonymous:
What is befuddling about being aware that 1/3 of the product of your labors is forcibly taken from you? What is befuddling in the realization that this percentage will only increase dramatically in the near future? What is befuddling about looking at the historical growth trend of the federal government (percentage of the GDP spent) and seeing that it has only gotten bigger, particularly during "emergencies", and has never shrunk back to pre-emergency levels once the emergency has passed?

@Todd
And this has what to do with anything? Does it make his point invalid? Are facts no longer facts because they are pointed out by someone you believe to be tainted in some way?

People need to read some history of the founding of this country. Read Common Sense. Read the Federalist Papers. Read the letters of John Adams and Thomas Jefferson. People have forgotten what this is all supposed to be about.

But I suspect most of the public are now too intellectually lazy to read and to try to grasp such a concept as "liberty". Ignorance and complacency will ultimately be our undoing.

Lester Hunt said...

Matt,

I think you are in effect pointing out a peculiarity about the way that democracies work that, while interesting, doesn't affect my point. I would say that the pay of government employees is subject to public scrutiny which places an upper limit to what they will get. In the market, there is no upper limit. CEOs are subject to public scrutiny and disapproval, but (at least until we got a CEO Pay Czar) this was not connected with any mechanism that imposed limits.

On the other hand, there seems to be no real limit to the amount that government workers get as a group, which is what I was addressing.

BTW, another huge advantage to government jobs, which I neglected to mention, is their extreme job security. Most people in the private sector can be terminated at any time and without cause. So not only does the average government worker have an income-and-benefit stream that is twice that of the person who has to work to support them, but they in effect have property rights over that stream, which the private sector serf does not.

Lester Hunt said...

Matt,

It occurs to me that I might have missed your point. Maybe it was that people who say that the capitalists are the real ruling class are thinking of those CEOs with stratospheric salaries. So my graph can't be used to show that the state is a better candidate for being the ruling class than those CEOs are.

I think this would be a good rebuttal to that argument. But that isn't the argument I meant to make. In order to knock out the capitalists as the real ruling class, I would use the argument I only hint at in the post: ie., the relevant concepts don't apply to genuine market phenomena.

Anonymous said...

In a somewhat different vein than the above comments, and related to the genesis of government, what say you, Lester, of the idea that government is none other than a reification of culture? Then the genesis to be discussed would not be that of government but of reification (and the degree of which engenders actual, institutionalized government). And, if inequality, or a hierarchy of any sort, is to be discussed, then the discussion must needs be of, and within the bounds of, culture.

Matt Olver said...

Lester,

I wasn't really disagreeing with your original post, but like you say I was merely pointing out a peculiarity of the system and the graph data presented. The graph data is surely accurate for average figures, and illustrates your point. The disparities of wealth in the private sector immediately stood out to me, and I don't think this disparity exists in the public sector. In the private sector not only do you have the CEO's of the world like Walmart's Michael Duke, but you have all of the people that make Walmart function at the ground level making barely over the minimum wage. A person can avoid Walmart like the plague and choose not to shop or work there. A person can't avoid taxes as easily. So as you said "ruling" and "exploitation" don't apply in the same sense in market phenomena as they do with state/government acting over the populace.

Lester Hunt said...

I get it now. Yes, I suppose government salaries are much less disparate than private sector ones. I had not noticed that before. Maybe that's one reason so many egalitarians seem to like government and dislike the private sector.

Todd said...

Steve,

I wasn't indicating Lester was tainted, but he is now clearly in a growth industry. By the way if I recall correctly it was in fact one our own founding father who wrote:

"Education is here placed among the articles of public care, not that it would be proposed to take its ordinary branches out of the hands of private enterprise, which manages so much better all the concerns to which it is equal; but a public institution can alone supply those sciences which, though rarely called for, are yet necessary to complete the circle, all the parts of which contribute to the improvement of the country, and some of them to its preservation." --Thomas Jefferson: 6th Annual Message, 1806.

John Adams was also a big believer in public schools.

Lester Hunt said...

Note that Jefferson is not calling for public schooling in general, but government provision of the sort of schools that discover new knowledge -- ie., universities. America's disastrous decision to give the brains of its young children to the state was still about 30-40 years in the future.

Also, I think TJ is wrong even about universities. His apparent claim that only the government can create an institution that provides the needed knowledge is weirdly wrong. I have taught at private (both religious and secular) universities as well as public ones. Believe me, the private ones do it better. Unfortunately, the "public option" pretty much took over the industry, in the same way that it will take over medicine if statists have their way.

Maybe I should post about this!

Todd said...

Mabey this would clarify things. Almost everything I read about John Adams and TJ have socialist bents towards education:

"I... [proposed] three distinct grades of education, reaching all classes. 1. Elementary schools for all children generally, rich and poor. 2. Colleges for a middle degree of instruction, calculated for the common purposes of life and such as should be desirable for all who were in easy circumstances. And 3d. an ultimate grade for teaching the sciences generally and in their highest degree... The expenses of [the elementary] schools should be borne by the inhabitants of the county, every one in proportion to his general tax-rate. This would throw on wealth the education of the poor." --Thomas Jefferson: Autobiography, 1821. ME 1:70

Mike said...

Lester,

Thanks for an interesting post and discussion. I'm a bit late to this, but I'm curious about your statement that private universities provide education better than public universities. I attended UW, including several of your classes, and was quite satisfied with the overall quality of education there. The obvious caveat is that I don't have a private-university education to compare it to, but from the perspective of the student (or the professor), why are private universities better? And if they are better, why did you choose to leave a private university for a public one?

-Mike Gendall

Lester Hunt said...

Todd,

Wow, I had not seen that quote. So TJ's views on government education went much further than I had thought!

Mike,

This is a big subject and maybe I should post about it. Of course there are great profs and great courses at both kinds of schools, and a lot of mediocre ones as well. I was thinking of the difference in institutional environment between the two: 1) Funding for private schools comes from people who care enough about education to give it their money voluntarily, that of public ones does not. In the latter case, this results in distractions and frustrations of various sorts. 2) Private schools all represent some religious or philosophical position or style, while public ones don't and can't. 3) Contrary to what you might think, public schools are more directed toward practical, capitalistic trades and skills than public ones are. Insofar as old-timey "liberal education" still exists, it lives in private colleges. This of course is the kind of education I prefer and try to practice myself.