A cause of the Bastille storming I mentioned yesterday is that the population was faced with "the ones who took without limit." The New York Times's labor and economics journalist Louis Uchitelle has a piece in today's Times on the personal satisfactions felt by today's very very rich.
The framing fact about American society is that "Only twice before over the last century has 5 percent of the national income gone to families in the upper one-one-hundredth of a percent of the income distribution — currently, the almost 15,000 families with incomes of $9.5 million or more a year." The first time was 1915-16, just before the U.S. entered World War I, and around 1929, right before the stock market crash.
How do people explain the return to a level of inequality as intense as that of the last Gilded Age 100 years ago, if not of some feudal past? Some would trace the inequality boom to new forms of exploitation of labor, new financial rules written by self-interested financial brokers to insure a huge personal slice of any financial action, and new economic institutions too complex for the untrained majority to understand.
Then there's the explanations offered by the rich themselves: Uchitelle cites self-satisfied tycoons like Sanford Weill, former CEO of Citibank, explaining that the wealth they own reflects the wealth they single-handedly made. A few examples:
- "very wealthy men in the new Gilded Age talk of themselves as having a flair for business not unlike Derek Jeter’s “unique talent” for baseball, as Leo J. Hindery Jr. put it. “I think there are people, including myself at certain times in my career,” Mr. Hindery said, “who because of their uniqueness warrant whatever the market will bear.”
- Weill is paraphrased as follows: "Harnessing entrepreneurial energy, deftness as a deal maker and an appetite for risk, with a rising stock market pulling him along, he built a financial empire that, in his view, successfully broke through the stultifying constraints that flowed from the New Deal. They were constraints not just on what business could or could not do, but on every high earner’s take-home pay."
This, it pains me to point out, is Sun King Philosophy.
Weill et al. are pure American ancien regime. They sound as righteous and invulnerable as Louis XIV the original roi-soleil or as Louis XVI, his less invulnerable and ultimately executed successor. The sense of unlimited entitlement is similar in both cases. It was divine right of rule for Louis XIV and the Bourbons. It is absolute market right for Hindrey and Weill.
I will leave aside two questions - that the "market" is not a natural system of object laws and of the uncertain social - and ultimately economic - value of what these folks create and focus on two others.
First, why not compare Weill to Gilded Age American tycoons rather than Louis XIV? Because Weill's social philosophy is much closer to the Sun King's than to a tycoon like Carnegie's.
“Carnegie made it abundantly clear that the centerpiece of his gospel of wealth philosophy was that individuals do not create wealth by themselves,” said David Nasaw, a historian at City University of New York and the author of “Andrew Carnegie” (Penguin Press). “The creator of wealth in his view was the community, and individuals like himself were trustees of that wealth.”The big Progressive thinker in this piece is Andrew Carnegie. The U.S. did get rid of its Bourbons - Carnegie was careful not to become one. Now we have them back.
The second Bastille issue is the disorganized state of the voice of the Third Estate. The only criticism of our economic royalists comes in effect from the First Estate, the clergy, which in our case is a "professional-managerial class" some of which may have become quite wealthy while still worrying about the condition of the flock. For example, the democratic moment in the piece comes from the founder and CEO of Costco:
James D. Sinegal, chief executive of Costco, the discount retailer, echoes that sentiment. “Obscene salaries send the wrong message through a company,” he said. “The message is that all brilliance emanates from the top; that the worker on the floor of the store or the factory is insignificant.”So far in the U.S. economic royalism is being opposed by liberal minorities of the First and Second Estates, whose sensibilities are offended by the social Darwinism of Weill-style Sun King Philosophy. Nothing will change unless the Third Estate decides it should do something. That it can so decide is a central lesson of the Bastille.