Why the Rich Aren’t Job Creators
[A venture capitalist explains how consumers drive capitalism and that The Revolution is coming. *RON*]
By Yves Smith, Naked Capitalism, June 28, 2014
This is a short talk by venture capitalist Nick Hanauer, who among other things, was the first non-family investor in Amazon. Hanauer in very simple and effective terms debunks the “rich are job creators” myth. Even though the video is going viral (now at over 1 million views on YouTube, it is important enough that I wanted to make sure NC readers saw it and circulated it.
Hanauer’s remarks illustrates the degree to which propaganda has overcome commercial common sense. Any real entrepreneur will tell you that the thing you most need to start a new business is customers. But you here almost nothing about that in the media these days. The “job creator” meme has sucked almost all the air out of conversations on how to establish new ventures (and remember, for well over a decade, small businesses have been the driver of employment growth).
Hanauer is also the author of an important piece at Politico: The Pitchforks Are Coming… For Us Plutocrats. The money section:
What sets me apart, I think, is a tolerance for risk and an intuition about what will happen in the future. Seeing where things are headed is the essence of entrepreneurship. And what do I see in our future now?
I see pitchforks.
At the same time that people like you and me are thriving beyond the dreams of any plutocrats in history, the rest of the country—the 99.99 percent—is lagging far behind. The divide between the haves and have-nots is getting worse really, really fast. In 1980, the top 1 percent controlled about 8 percent of U.S. national income. The bottom 50 percent shared about 18 percent. Today the top 1 percent share about 20 percent; the bottom 50 percent, just 12 percent.
But the problem isn’t that we have inequality. Some inequality is intrinsic to any high-functioning capitalist economy. The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.
And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won’t last.
If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. 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 comparison to the period right before the French Revolution is instructive in another respect. Students of that period of history know that there was a period of intellectual ferment before the Revolution, as well as a good deal of interest among some aristocrats in more participative forms of government (remember, the Corsican constitution, which was the model for the US constitution, was signed in 1755) along with better treatment of the destitute. So the revolution didn’t spring out of a vacuum, but recognition of the need for changes fell well short of the will and ability to act.