I’ve been sick and so I’ve been re-watching some movies. Last night, I put on Terry Pratchett’s Going Postal. At one point, Mr. Pump says that Moist Von Lipwig has killed many people. Lipwig counters that he never even drew a sword. Pump responds, “You have stolen, embezzled, and swindled. You have ruined businesses and destroyed lives. When banks fail, it’s not bankers who starve. In a thousand small ways, you have hastened the deaths of many. You did not know them. You did not see them bleed. But you snatched bread from their mouths.”
There is a conservative reading of this, of course. It’s the old “get tough on the criminals” line. But that isn’t what Terry Pratchett is saying. The whole of Going Postal is a radical critique of free market idolatry. The point is this: economic crime kills. But in our system, we don’t talk about that. We pretend that physical and economic harm are different. If a criminal tied a victim to a chair and let him starve to death, that would be considered murder. If the same criminal merely prevented a victim from having a job so he could buy food, that would not be considered murder. (See my article Property Rights for a discussion of the myth of freedom in a modern economy.)
We know that poor people have much lower life expectancies than rich people. In the upper half of the income distribution, people live about 5 years longer than people in the lower half. This means that our economic system hastens the deaths of many. When a venture capitalist fires hundreds of manufacturing workers, he lowers the life expectancies of those workers. Let’s suppose he does that to 1,200 workers and takes an average of one month of life away from each. That’s a hundred years of life. That’s a lot more life than your average murder takes away from his victim. Yet we don’t even see what the venture capitalist does as a crime, much less punish him for it.
I realize it is more complicated than this. And I am not calling for a communist revolution. In fact, I am actually a big proponent of a market system. My problem is not with the venture capitalist. He is just doing what society tells him to. The problem is the society itself. We live in a rich nation. If we wanted to, we could provide everyone with a base level of support. There is no reason why Americans need to feel insecure about their futures. But it’s a choice. And the choice that we’ve made is to allow some to become insanely rich while others live under the eaves of the downtown library.
And where might that money come from? I’ve written about this a lot because I think the most important issue we face as a country is economic inequality. The explosion of inequality is the direct and indirect result of government policy. According to the Economic Policy Institute, in the years from 1917-1981, the bottom 90% of income earners received 69% of the gains from productivity increases. In the years 1981-2012, the bottom 90% of income earners received 4% of the gains from productivity increases.
An indication of this can be seen in CEO compensation data from Bloomberg. In 1950, CEOs of Fortune 500 companies made 20 times what the average employee at their firm made. (Average, not minimum.) By 1980, the number had risen to 42. Today, it is 204. This is not all about taxes. There are plenty of other ways that the government over the last 60 years has made owners rich at the expense of the poor. One of the most important is the way that Reagan basically abolished all labor law and allowed unions to be all but destroyed in the private economy. (And Democrats have done nothing but help that along since then.)
Economic crime kills. Legal economic activity kills. The government should do something about that. But as income inequality has skyrocketed, the government has only become more beholden to the rich. It is far more interested in seeing to it that the rich can transfer their wealth to their kids without paying taxes than that the poor can live with a modicum of dignity.
Data were taken from The Young Turks May Day video.