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Homeless Man (Photo © Matthew Woitunski)

Nick Hanauer: You’re missing the point on inequality

Billionaire Nick Hanauer published an article recently on Politico warning his fellow “filthy rich Americans” that “the pitchforks are coming.” In his article, Hanauer discussed the inequality in America that’s getting worse every day:

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.

While I am certainly pleasantly surprised by Hanauer’s apparent courage to openly disagree with his fellow billionaires — who “think he’s bonkers” — on the problem of inequality, his motivations for wanting to change the way things are going right now could have been much better. As Hanauer himself states, “the problem isn’t inequality” but it’s that “it is at historically high levels.” So Hanauer doesn’t have a problem with inequality per se; it’s just that it’s getting a little too extreme now. And these high levels of inequality threaten his empire and his (way of) life. So Hanauer’s motivation is fear. He fears the pitchforks that are coming, and rightfully so.

Rick Hanauer on Politico

Nick Hanauer on Politico

I would have hoped that Hanauer’s motivations for wanting change would have been a little purer. Like being motivated by love instead of fear; love for his fellow human beings, and the realization that the way he and his fellow billionaires are exploiting the 99.99 percent of humankind is barbaric and cruel. On the contrary what I get from Hanauer’s article is that he would have been just as content as his “fellow filthy rich” with exploiting the 99.99 percent of the population if he could continue to get away with it. But he’s beginning to realize that the masses are waking up and are not going to tolerate being exploited like this much longer:

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 goes on to argue in his article — and I agree with him on this — that the “filthy rich” don’t create jobs, but that it’s rather the middle class that create jobs, and encourages his “fellow filthy rich” to stop exploiting their employees and to start paying them fairer wages:

If workers have more money, businesses have more customers. Which makes middle-class consumers, not rich businesspeople like us, the true job creators. Which means a thriving middle class is the source of American prosperity, not a consequence of it. The middle class creates us rich people, not the other way around.

He later adds that “the thing about us businesspeople is that we love our customers rich and our employees poor.” But poor employees make poor customers.

People like Hanauer and his “fellow filthy rich” should be deeply ashamed of themselves. They’re claiming more than their fair share of the resources we have available and are denying others a decent life. They’re unnecessarily hoarding too much of our resources as Hanauer himself admits:

I earn about 1,000 times the median American annually, but I don’t buy thousands of times more stuff. My family purchased three cars over the past few years, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men. I bought two pairs of the fancy wool pants I am wearing as I write, what my partner Mike calls my “manager pants.” I guess I could have bought 1,000 pairs. But why would I? Instead, I sock my extra money away in savings, where it doesn’t do the country much good.

Note that Hanauer admits that he doesn’t really need all the money he’s hoarding. Instead he socks his extra money away in savings where it does nothing — money that was denied to employees who get paid slave wages at businesses he owns and invests in. He’s hoarding resources and denying others what they need to survive, just like the rest of his fellow billionaires. It goes without saying that this kind of abhorrent behavior can never be healthy for any society.

If I were Hanauer, I would be deeply ashamed of myself and probably wouldn’t want to show myself in public. I’d probably have difficulty going outside and meeting people. Because every time when I would see homeless people, or people struggling to survive, I would feel very guilty knowing that I am a big part of the reason why they’re struggling with their lives.

I often mention to people that I never want to get rich. And I always get a reaction of surprise from them, followed by the question of why not. And if you’ve read the above, it should be clear why I never want to become rich. It’s because I understand that I can only become rich by denying others their fair share; I can only have more than I need, by denying others some (or a lot) of what they need to live a decent life. My conscience will never allow me to go down that road. Most of the societies we have on Earth right now are based on artificial scarcity; resources — especially money — are often deliberately rationed and kept finite. This means that we all have a finite amount of resources available to us to live our lives. Imagine having to divide a cake between a group of 10 individuals; certain individuals will only be able to get more than their fair share of cake if they deny others their fair share. This is why as soon as I’m beginning to sense that I have enough resources to live a normal life, and some savings to sustain my frugal way of living for up to a year or two, I start to give things away or work for less money and often even for free. I try to maintain a balance between giving and taking so as to not contribute to the problem of rising inequality by hoarding too much resources.

This is also why so far I’ve never accepted a job inside the government, even though I could have had one if I wanted to. I understand where the money the government will pay me comes from: from confiscating the income of the middle class and the poor via taxation. That’s one of the primary ways in which wealth is being forcefully transferred from the middle class and the poor to the rich, and thus one of the primary causes of inequality. Read my post on income taxation for the details. And it’s people like Hanauer and the rest of his “fellow filthy rich” who ultimately benefit from this barbaric system of enslavement via taxation. I know you’ve probably often heard that taxation doesn’t benefit the rich, but that’s bullshit. The money being confiscated by the government ultimately ends up in the pockets of the “filthy rich” and that of the bankers (Hanauer and “his friends also own a bank”). Read my post “Why the poor get poorer and the rich get richer” for the details.

The forceful confiscation of wealth from the masses via taxation is also what enables the government to continue to grow for various reasons which I also discuss in my income tax post. Hanauer mentions reducing the size of government, but completely misses the point:

First, I’d ask my Republican friends to get real about reducing the size of government. Yes, yes and yes, you guys are all correct: The federal government is too big in some ways. But no way can you cut government substantially, not the way things are now. Ronald Reagan and George W. Bush each had eight years to do it, and they failed miserably.

Republicans and Democrats in Congress can’t shrink government with wishful thinking. The only way to slash government for real is to go back to basic economic principles: You have to reduce the demand for government.

No, Mr. Hanauer, you have to reduce the spending capacity of government if you want to reduce government. This means stopping the forceful confiscation of wealth from the middle class and the poor via taxation. When the government doesn’t have the money to spend on more employees, they’re not going to be able to hire more people and will be forced to shrink in size. You should start listening to your former congressman Ron Paul when it comes to this. In addition, when the government can’t confiscate and transfer wealth from the middle class and the poor to the rich anymore, it will help to put a stop to rising inequality. This will allow the poor and the middle class to keep their wealth resulting in them having more money to spend.

Hanauer again misses the point completely when he mentions the following:

Dear 1%ers, many of our fellow citizens are starting to believe that capitalism itself is the problem. I disagree, and I’m sure you do too. Capitalism, when well managed, is the greatest social technology ever invented to create prosperity in human societies. But capitalism left unchecked tends toward concentration and collapse. It can be managed either to benefit the few in the near term or the many in the long term. The work of democracies is to bend it to the latter.

Capitalism is the problem! As Hanauer himself mentions in his article, “some inequality is intrinsic to any high-functioning capitalist economy.” And that’s true, because a society founded on capitalism is fundamentally flawed with the problem of inequality; inequality is built into the system of capitalism. Capitalism promotes unhealthy competition and causes people to develop predatory behavior as the brilliant social engineer and futurist Jacque Fresco often mentions.

People cannot be decent and fair in a competitive world that encourages them to take advantage of each other. In order for people to thrive (or win) in a society based on capitalism, others must necessarily suffer (or lose). And that’s the basis for inequality, which continues to grow over time until a very small group of people control most of the wealth, and the entire society comes to the brink of collapse. Hanauer himself mentions historical examples of such situations, such as 18th-century France right before the revolution. As long as we’re going to continue to use these same systems in our societies, such as capitalism with its inherent flaws, we will always get the same outcome. Like Albert Einstein said, we have to be insane to expect different results while we continue to do the same thing over and over again!! I’m sorry to tell you Mr. Hanauer that your “middle-out” economics is not going to work and a minimum wage also won’t solve the problem of inequality. Getting the government involved to force businesses to pay people more is completely wrong in a free society, and business owners that are fueled by greed in a capitalistic society will only find other ways to make more profits, like replacing employees with robots and artificial intelligence instead in order to avoid paying higher minimum wages (and if you’re following the trends, you know that this is coming faster than most people realize).

The only real solution is that we have to completely get rid of the flawed systems like capitalism in our societies around the world. And I’ve got bad news for Hanauer: it’s not just that citizens are starting to believe that capitalism itself is the problem; the problem Hanauer and his “fellow filthy rich” are going to have to deal with in the near future is much worse than that. Citizens everywhere around the world are starting to realize exactly how they’re being enslaved by a small group of bankers who have set up a system of control and enslavement via the monetary system, of which their enslavement via income taxation is only a small part. Again, read my post on income taxation for the details, and also watch the below video titled “The Biggest Scam In The History Of Mankind” which explains in details how this system of enslavement works. I can also highly recommend a book by Michael Tellinger titled “UBUNTU Contributionism – A Blueprint For Human Prosperity” which not only exposes the bankers, but also offers possible solutions.

It’s understandable that Hanauer wants to keep his empire and continue his extravagant way of life, and thus tries to build an argument in favor of capitalism. But no matter what you do Mr. Hanauer, no matter what policies you try to push through to limit the negative effects of capitalism, there won’t be any lasting and significant improvements unless this inherently flawed system is completely eradicated from the face of this planet. As Hanauer himself points out at the end of his article:

The folks like us at the top have always told those at the bottom that our respective positions are righteous and good for all. Historically, we called that divine right. Today we have trickle-down economics.

What nonsense this is. Am I really such a superior person? Do I belong at the center of the moral as well as economic universe? Do you?

If Hanauer really believes that he’s not a superior person, he shouldn’t be for a capitalistic system which inherently causes inequality as he himself admits. Instead he should be looking at alternatives that inherently promote equality, such as the Venus Project designed by Jacque Fresco. Watch the video below for an introduction.

If there’s one thing Hanauer is certainly right about, it’s the fact that a revolution is coming. And it’s going to be the mother of all revolutions taking place on an unprecedented global scale. The 99.99 percent of the global population are not going to accept their enslavement to a small group of bankers any longer. Thanks to the Global Brain, more and more people are waking up to the reality of their enslavement every day. People are getting smarter and are beginning to understand the mechanisms that are behind their exploitation and enslavement. And the tipping point is getting closer every day.

In the mean time I hope that Hanauer and his “fellow filthy rich” start to change their motivations from those based on fear, to those based on love. What you are doing to your fellow human beings is barbaric and cruel. Instead of fearing the pitchforks, I hope that you come to the realization that your way of life has severe negative consequences for most of humanity and that you develop the necessary compassion to change your behavior and improve life for all of us.


  1. Karel Donk's Blog » Why poor people make bad decisions (01/01/2015)


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