RTS: The Gated Way
The institution of serfdom has arisen, or at least perpetuated itself in a variety of societies, though not, as far as I can recall, through quite the mechanisms suggested by Hayek. More generally, the partial or total enslavement of much of the population has occurred in many societies that had more egalitarian origins.
The American founding fathers were quite aware that republican governments had historically proven rather fragile, and John Adams wrote about his analytic study of the mechanisms of failure in the Roman, Florentine, and Greek Republics. One of the key factors he found was the rise of an oligarchy that concentrated wealth and power and became increasingly isolated from and distinct from the rest of the citizenry. He and others in our government considered that possibility a major threat to our own republic, and consequently passed laws intended to prevent that eventuality from occurring here.
Nonetheless, an American aristocracy of wealth and birth did arise, and by end of the Nineteenth Century had accumulated most of the trappings of nobility - private communities, mansions with hordes of servants and largely endgamous mating patterns. The income tax was initiated partly in response to this phenomenon, and that, combined with more fundamental economic factors, produced a rich and relatively egalitarian society in the middle of the Twentieth Century.
That egalitarian society has suffered major damage since the 1970's. Globalization, technology, and especially the changes in taxation patterns initiated by Saint Reagan (big tax cuts for the rich, big tax increases for the middle class and working poor) have produced huge changes in the wealth distribution in the US.
Brad Delong excerpted Paul Krugman's NYT column:
In 1968 a 99.9 percentile income was about forty times that of a 25 percentile income. By 1990 it was four hundred times as large. There is every reason to believe the disparity continues to increase. The Bush administration, oddly enough, has not been very forthcoming about changes since 2001, but the impact of their tax policies is clear. Taxes for the richest decreased far more than those for anyone else.
The gated community is the modern manifestation of membership in the oligarchy. If you have a few million dollars to spare you might qualify to join
The Yellowstone Club. It and it's founder, Tim Blixeth are lovingly portrayed in this week's New York Times Magazine by Susan Dominus. Tired of rubbing elbows with the upper middle class hoi polloi at Aspen? Embarrassed by the humiliation of having to call for a tee time at your allegedly exclusive country club? Join the Yellowstone Club and golf and ski in a private gated ski resort and golf course. Warm up by hopping on your private jet to the branch campus on the Mexican Gulf coast. You can bet you won't find any surly lift attendants at the Yellowstone club Montana, and the bar boys will jump when you lift your finger in Mexico.
There are other advantages. Your security, and your children's are being watched over by a crack security team headed by a former Secret Service biggie.
You can't blame the rich and famous for joining up. Bill Gates has to know that there are quite possibly criminals or even terrorists who might like to snatch his kids. And if your kid has to learn to snowboard from some local snow punk, at least he will be wearing the servants livery.
The American founding fathers were quite aware that republican governments had historically proven rather fragile, and John Adams wrote about his analytic study of the mechanisms of failure in the Roman, Florentine, and Greek Republics. One of the key factors he found was the rise of an oligarchy that concentrated wealth and power and became increasingly isolated from and distinct from the rest of the citizenry. He and others in our government considered that possibility a major threat to our own republic, and consequently passed laws intended to prevent that eventuality from occurring here.
Nonetheless, an American aristocracy of wealth and birth did arise, and by end of the Nineteenth Century had accumulated most of the trappings of nobility - private communities, mansions with hordes of servants and largely endgamous mating patterns. The income tax was initiated partly in response to this phenomenon, and that, combined with more fundamental economic factors, produced a rich and relatively egalitarian society in the middle of the Twentieth Century.
That egalitarian society has suffered major damage since the 1970's. Globalization, technology, and especially the changes in taxation patterns initiated by Saint Reagan (big tax cuts for the rich, big tax increases for the middle class and working poor) have produced huge changes in the wealth distribution in the US.
Brad Delong excerpted Paul Krugman's NYT column:
What we’re seeing isn’t the rise of a fairly broad class of knowledge workers. Instead, we’re seeing the rise of a narrow oligarchy: income and wealth are becoming increasingly concentrated in the hands of a small, privileged elite.
[…]
So who are the winners from rising inequality? It’s not the top 20 percent, or even the top 10 percent. The big gains have gone to a much smaller, much richer group than that. A new research paper by Ian Dew-Becker and Robert Gordon of Northwestern University, “Where Did the Productivity Growth Go?,” gives the details. Between 1972 and 2001 the wage and salary income of Americans at the 90th percentile of the income distribution rose only 34 percent, or about 1 percent per year. So being in the top 10 percent of the income distribution, like being a college graduate, wasn’t a ticket to big income gains. But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent. No, that’s not a misprint.
Just to give you a sense of who we’re talking about: the nonpartisan Tax Policy Center estimates that this year the 99th percentile will correspond to an income of $402,306, and the 99.9th percentile to an income of $1,672,726. The center doesn’t give a number for the 99.99th percentile, but it’s probably well over $6 million a year.
In 1968 a 99.9 percentile income was about forty times that of a 25 percentile income. By 1990 it was four hundred times as large. There is every reason to believe the disparity continues to increase. The Bush administration, oddly enough, has not been very forthcoming about changes since 2001, but the impact of their tax policies is clear. Taxes for the richest decreased far more than those for anyone else.
The gated community is the modern manifestation of membership in the oligarchy. If you have a few million dollars to spare you might qualify to join
The Yellowstone Club. It and it's founder, Tim Blixeth are lovingly portrayed in this week's New York Times Magazine by Susan Dominus. Tired of rubbing elbows with the upper middle class hoi polloi at Aspen? Embarrassed by the humiliation of having to call for a tee time at your allegedly exclusive country club? Join the Yellowstone Club and golf and ski in a private gated ski resort and golf course. Warm up by hopping on your private jet to the branch campus on the Mexican Gulf coast. You can bet you won't find any surly lift attendants at the Yellowstone club Montana, and the bar boys will jump when you lift your finger in Mexico.
There are other advantages. Your security, and your children's are being watched over by a crack security team headed by a former Secret Service biggie.
You can't blame the rich and famous for joining up. Bill Gates has to know that there are quite possibly criminals or even terrorists who might like to snatch his kids. And if your kid has to learn to snowboard from some local snow punk, at least he will be wearing the servants livery.
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