The old phrase “The rich get richer and the poor get poorer” is familiar to most people. It’s a mantra you can hear countless people say in everyday life. The problem with it is that it’s not true. At least, in America it’s certainly not true.
By the way, I don’t mean “it’s not true this year,” or even, “it’s not true this decade.” It hasn’t been true in my lifetime or yours.
Try to tell that to some people and they’ll actually get angry. But that doesn’t make it any less so. It’s got nothing to do with whichever politicians are in charge in Washington either. Pick your President of the last 50 years, and it never happened under him.
Wired magazine has more on it. And note the date on the piece: nothing’s really changed since then. (I noticed the link over as Sasha’s, by the way).
If you’d like an even more complete treatment on the subject, with the social and spiritual ramifications of same, may I suggest that you check out Gregg Easterbrook’s excellent The Progress Paradox? Fascinating book, I’ve been meaning for months to write a review of it. Maybe after election season’s over I’ll finally do it, but it’s a superb book, it really is.
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The “…and the poor get poorer” part is often left unstated. More commonly they’ll say, “The rich get richer…” and let the listener mentally complete the sentence.
So, the stated part is true, but the implied part is false.
Caveat emptor.
The poor, as a segment of society, are getting richer more slowly than are the rich. Since we are not caught in a zero sum gain, wealth creation is not intrinsically harmful to the poor, as the Marxist model insists it is.
The truth is that, under capitalism, a.k.a., free enterprise, the rich get richer and, consequently, the poor get richer, too. I’m not rich when you look at Bill Gates, but I am rich when you look at the vast majority of the population of this planet. And, that’s not because I’m “exploiting” them. It’s because they don’t have capitalism. As Ayn Rand pointed out: “What the ‘have-nots’ have not is freedom.” Truer words were never spoken.
Triticale: Actually the rate at which the poor get richer tends to fluctuate. Sometimes it’s a lot faster than others. At the moment most of the “poor” in the U.S. are of course fabulously wealthy by the standards of most of the world or even by the standards of any human being alive 200 or more years ago. But then you know that.
Still, the rate at which they’re becoming more wealthier is sometimes faster, sometimes slower, than what’s going on at the top end.
The irony of all this is inescapable though: as the trend continues, the “gap between rich and poor” tends to widen. Indeed, that’s the funny part, many who use that phrase (“gap between rich and poor”) don’t even seem to realize what they’re saying when they bring it up.
I have never understood why anyone would think it either immoral or unethical that the rich get richer. The essence of the capitalist system is that private wealth is invested, for purposes of fostering such commercial and industrial activities that will return a suitable profit to the investors, and in locations most favorable to the investors from the standpoint of protection of their investments and avoidance of governmental taxes and other impositions.
These investments, in turn, almost always have lead to the development of sources of employment for others, and of better protection for existing employment sources. Because, in the end, all employment is based on productivity combined with the existence of a market to which the production output in terms of goods and services can be sold at a profit.
All systems of state socialism, and all of which have failed badly and even spectacularly throughout history, reverse the above-stated equation and substitute state control in place of private control over the supply of investment capital, labor, production planning and every other economic consideration. Sometimes gradually, sometimes rapidly, economic inducements of the state acting as the new ownership class shifts from economic inducements to forced labor and ultimately to outright chattel slavery.
So I would much rather walk my life in the shadow of a class of super-rich plutocrats than to do the same under the big brother gaze of an all-encompassing bureaucracy. Especially one that tells me they are enslaving me for my own good or for a better world tomorrow.
After all, if I invest my money carefully, I have a chance to become one of those rich plutocrats by my own merit.
But in order to become a government slave-herder, I have to make some sort of pact with a unique committee of devils, who, as a rationalist non-believer, I am sure do not exist; but if I were compelled to live in a socialist society, I might not believe in any gods, but I sure as hell would know that satans not only were as real as sunlight and moonlight, but in fact ruled my country.
Arnold Harris
Mount Horeb WI
In my little apartment I am warmer, more comfortably dressed, cleaner, and better fed than the Emperor of France was 200 years ago.
Oh, yeah, I’m healthier and safer, too.
Critics of this can sod off.
You’re also safer from violence and crime, have more forms of entertainment at your fingertips, have more freedom of motion and speech, and access to a wider array of knowledge and communications.
Just to drive the point home.
And the best thing, Mike, is you’re not French!
I love progress :)
I guess that I’m the odd man out in this discussion. I think that there is a problem with an enormous gap between the top income quintile and the bottom four income quintiles. Life experience matters in forming one’s core beliefs.
My ideal society is closer to Jefferson’s yeoman farmers than it is to a small, largely hereditary aristocracy and a large group of peons even if the peons are happy and well-fed. And I’ll stand by the hereditary part, too: inheritance laws, intellectual property laws, legacy admissions policies in colleges, greater access to improved educational resources, etc.
Not that I have an acceptable solution to the problem.
Dave, I think you do not understand that under capitalism, there is no hereditary aristocracy of any kind. There is solely a continuously changing cast of characters that make up a completely new meritocracy in every generation or two.
What exactly was the aristrocracy that Bill Gates belonged to when he dropped out of college and began Microsoft, first in the privacy of his own mind, then in a small makeshift office, then created an empire than bestrides the earth?
What exactly was the aristocracy that Henry Ford belonged to when he was growing up dirt poor on a small farm in southeastern Michigan in the late 19th century, before he created an empire that changed the world in the early 20th century?
I could give you hundreds of other examples. But the most important lesson of all of this is that capitalism, that life force of freedom, brings to the world the changes that act as a lubricant that bring fresh ideas, fresh minds, fresh people with fresh and overwhelming power of will to the surface, each like a new and refreshing wave that leaves behind progress that advances the world?
Only under the enemies of capitalism
Several analyses I’ve seen done of the wealthy show that inherited wealth is pretty much the least common way to become wealthy, and wealth doesn’t stay in most families for too many generations–they either lose it or it gets widely dispersed.
Income mobility is huge in this country, and that’s another ongoing thing–a lot of the people we consider “the poor” or “low income” are really simply young people. Most people by the time they hit their 30s make it to the middle class. Poverty is rarely entrenched, at least not if you finish High School and avoid having kids before you’re about age 20 or so.
I again recommend reading Easterbrooke’s book, Dave. It’ll change how you see a lot of things–and Easterbrooke’s hardly a right-winger or even much of a libertarian. Although you can find confirmation for what he says in many other sources, and he’s hardly the first to note the things that he does.
First off, we don’t have a pure market economy. In a pure market economy there would be no such thing as intellectual property, the complete basis of Bill Gates’s fortune.
Second, let’s examine Arnold Harris’s examples. Bill Gates’s father was a well-to-do attorney. What about Gates’s children? Unless Gates has the good sense to leave nothing to his children they will inherit enormous wealth—without lifting a finger.
Henry Ford’s heirs continue to live off their inherited wealth.
For every single one of your hundred examples, I can give you two examples of descendants of successful entrepeneurs who haven’t lifted a finger (many who don’t remember anyone in the family ever having lifted a finger).
And the notion that we don’t have a hereditary aristocracy in this country is flatly wrong. Believe me, I know. I grew up living next door to some of them. Or went to grade school with them. They typically maintain a pretty low profile. To prove it to yourself check out the descendants of the 19th century “robber barons”.
But this is largely beside my point. What I’m talking about is the increasing distance between the wealthiest quintile and the remainder of the population. IMO it’s not a formula for a healthy society.
But I agree with you and I’m resigned to this fact. The cure would be worse than the disease.
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