Those who still believe in the trickle down theory best notice the yellow tint of what is trickling down.

I would add to the list the hefty tax breaks given to a developer in my town who built an apartment building downtown for "working families" and then turned around and rented it exclusively to students from the nearby college.

Guess what? Apparently allot of our citizens still buy this myth,of the hard working self made man. Which is why they stand mute in the face of the outrageous maldistribution of wealth, and even raise no protest to the tax policy inequalities. Want to know why? Because they believe they too might one day make it onto the list, or at least be a contender. How's that for the effects of a massive and effective propaganda machine in action?

The points in this article are very well-taken of course.

But, the the idea that someone even needs to argue something so self-evident as the importance of the public sphere - infrastructrue, laws and regualtions is a testament to the succes of the capitalist, Friedmanite, so-called "libertarian" propaganda system.

I await "mtn goats" comments on this article.

It would also help if children were taught in school that the concept of property rights is a recent concept in human development and the property rights concept has been accepted to the extent it has been useful and beneficial for those with the power to make the rules. So either the concepts of US democracy (with the assumption that the people make the rules) and equal rights (with the assumption the rules apply equally to everyone) are outmoded, or property rights should only extend as far as such property rights are useful or beneficial to the entire population.

The propaganda works very well, as evidenced by all the Americans who so willingly audition and pimp themselves to be a part of pop culture. And I'm not just talking about the reality show contestants. I see Americans all over the country playing "Good Germans" all the time. They seem to especially love to perform in the security lines at the airports. We got to be the best dressed sheep in the world. Our media is full of examples of brain dead Americans who become the talk of the town. Someone needs to make a movie based on Jack London's "IRON HEEL".
Hoa binh

Thank you, thank you, thank you!!! I've been meaning to write this very article myself for years. This should be required reading.

Excellent article! Put another way, we're lead to believe we live in a Me society, when in fact it's a We society.

Forbes is nothing more than a jerk-off mag for the wealthy and their wannabies.

Representative democracy--the money-power rules

Direct democracy--We the People rule

Very good article, but I'd narrow down the list for proving that you're not self-made to just one criterion: Have you ever hired someone to work for you on anything? Because if you have, then you're not self-made. Let's see how many of those 270 have never hired a single person.

Warren Buffett (likely not one of the 270) was right when he said, "I personally think that society is responsible for a very significant percentage of what I've earned."

I don't knock the so-called self-made types unless they get up on a pedestal and start preaching that EVERYONE else can also achieve the same things they did, as in "I bootstrapped mine, now you bootstrap yours."
Because in any society, there is a finite number who can be "above average."

I also don't buy the notion that wealth is created in a vaccuum. It COMES FROM somewhere. That's why it needs to be taxed when it concentrates in a few hands, as Pareto's law says is inevitable. Not to "punish" the rich for being wealthy. Not just to give it to lazy bums in redistribution. But to keep it from getting stuck in questionable piles. My favorite example is the "Girls Gone Wild" enterprise that has made a lot (lot) of money. Where did that wealth come from? Why should it stay in a pile and pass exclusively to the heirs of a guy who dreamed up the idea of filming drunk young people abandoning their clothes?

As regards taxation, consider Adam Smith:
"The subject of every State ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the State."
The concept of "protection of the State" is most relevant here because all production is bound by the laws of thermodynamics, which were not known until 75 years after Wealth of Nations was published. The second law prohibits the consideration of "surplus labor" arising from a transaction, hence there can be no "surplus value," as Adam Smith surmises in his premise, no profits. Still profits are obtained by custom of law through the victimization of those not protected under it: the environment, the public, the customers, and the worker.
For more on this subject see:
www.eco.uni-heidelberg.de/ng-oeoe/research/papers/Faber%20et%20al%20AEE%201998.pdf
and
http://dieoff.org/

Mr. Schwalbe:
You don't go far enough. Forbes is emblematic of a culture that celebrates thieves. Thieves are our heroes.

In my high school "American History" text book, I learned that the Dutch bought Manhattan Island, for $26 worth of beads and blankets. Stupid Indians they don't deserve the land if they can't appreciate the true value.

Butch Cassiday and the Sundance Kid, Jesse James, Al Capone. The list goes on of thieves that have been glorified and had movies produced and books written, about their shining example.

Carnegie, Rockefeller, and the rest of the robber barons who made their money off child labor, and the abuse of immigrants. Our great philanthropists (sp).

When I was young, and did time in Oklahoma, we celebrated the "Sooners". People who jumped the gun and took off early, to grab the land, that had been stolen from the Indians.

Our current crop of CEO clebrities, who write books, and are idolized by our middle class as examples to follow. While the same people are having their jobs shipped overseas by the CEO's they so admire.

The American Dream (myth) was that anyone, no matter their race, ethnicity, class, through hard work and determination could acheive wealth.

The American Reality is, that in most cases, you have to steal to become wealthy.

But that's okay - because we celebrate thieves.

Ramsay

Those who gain wealth by underpaying their employees are recipients of other people's work. Owners of large businesses and CEOs of corporations make inordinate incomes, own multiple homes and material possessions - all of which they can't possibly really use or enjoy, and assist in maintaining legislation that allows them to keep increasing percentages of their "earnings."

I recently had a discussion with a friend who works for Woodcraft - a company originated in West Virginia. He was defending the owner's right to accumulate wealth while paying subsistance wages to Woodcraft employees. He said that business owners wager their own money to get started or to increase their businesses and that their risk is a justification for reaping the benefits. When I said that it's immoral to own several multi-million dollar homes when people who work for you don't earn enough working full time to cover a small mortgage, his answer was that it's "just a game." He seemed surprised when I said that makes it even worse.

But, of course, my friend was partly correct. Much of it does become a game after a certain level of wealth. When money becomes a token of success, the accumulation of more money makes one a "player." In order to be a player, it is absolutely necessary to suspend one's belief in the real value of money as currency with which to purchase the necessities of life. It's obscene, and it certainly is not indicative of being "entirely self made."

The fact that our government subsidizes businesses makes these people even less "self made." Take away the government contracts, the government tax breaks, the government "corporate welfare" and see how easy it is for these people to claw their way to the top.

I had a bumper sticker on my last car that said "Labor creates all wealth." (I traded it in - gotta get a new sticker.) If we ever have a society that values work over capital maybe the real generators of wealth will be recognized and reimbursed for their efforts.

All true, above, but the tendency to undervalue great management must be avoided. Some of these folks are actually talented managers, often turning failing companies into successful ones.
The question(s) is/are:

How should excellent management be rewarded in the private sector? What is "too much" reward? Successful management works in part because of excellent workers. What is a fair way to divide up the pie?

How can excellent management be fostered in our method of governance? For example, in the private sector, inefficiencies, pork, and embezzling will quickly destroy the success of a company, in a competitive market...

thoughts?

LeeAnnG 3:26 pm

When I said that it's immoral to own several multi-million dollar homes when people who work for you don't earn enough working full time to cover a small mortgage, his answer was that it's "just a game."

I've had similar conversations. And not just in regard to subsistence salaries, but also running companies that though inherently risky do not cover the costs of the employees health and welfare if they are hurt, maimed, or die on the job.

The reply was, "it's all about supply and demand." In one swoop relegating their employees to the status of things. Also, contributing to keeping the poor forever in their lot with no hope of improving it.

Take another look at that list of public services. It's also a hit list of things the right wing wants privatized or has already done so.

Among the up-and-coming one hears "its the only game in town" rationalizing - well everything. Someone once said that the powers are never more powerful as when they slip invisibly into the background claiming to be the permanent furniture of the universe.

Its wonderful to see the invisible furnishings sprinkled with the ashes/powder of history. Makes bumping your shins more avoidable and first aid applicable.

Professor Schwalbe's argument is correct but tangential. Yes, we all benefit from collective welfare spending by the government, and those at the top benefit proportionally more. But that is not the main source of their wealth, nor does the notion that they "earned it" or created it themselves stand up to criticism.

The main point, which is apparently almost impossible for people raised under capitalism and steeped in its ideology to see, is that the people at the top are just that, people at the top of pyramids of wealth-creating business activity conducted not only by themselves but by others.

It isn't even exactly a matter of "underpaying employees." People can get rich even if they pay their employees a "fair wage." The point is, they get to skim a percentage off the work and transactions of a large number of people over many years. They build larger and larger business empires so that they can do the same skimming on larger and larger scales. They beat out competitors and conquer business "territory" or market shares. Just like the princes of feudal times, they take a cut of everything going on in the domains they control.

The more money you have, the more money you are able to make. At a certain point, it no longer is a matter of the work you do, whether you do it well or not. Money is power. Money attracts money. Money accumulates in larger and larger fortunes. The few people who happen to own their fortunes are simply the beneficiaries of this process. They would be living off the rest of us even if there were no government spending at all.

It is not the government, but the dynamics of capitalism or "the market" itself that concentrates wealth and creates exponential levels of inequality. The ideology of capitalism teaches us to regard this as fair and natural. It may be natural, but I'll be damned if I agree it's fair.

"Those who gain wealth by underpaying their employees are recipients of other people's work. Owners of large businesses and CEOs of corporations make inordinate incomes, own multiple homes and material possessions - all of which they can't possibly really use or enjoy, and assist in maintaining legislation that allows them to keep increasing percentages of their "earnings.""

And who is to be the arbiter of these items you raise? You, right?

"The reply was, "it's all about supply and demand." In one swoop relegating their employees to the status of things."

There is a labor "market". and it is in fact governed by supply and demand. This is a very mainstream idea. In recognizing this, it does not logically follow that you have therefore reduced the status of the people who supply the labor to "things" in the sense of inanimate objects.

It ain't trickle down, it's jokullaup up. Article makes a simple point widely rejected by the ruling class, and therefore ought to be copied and brought up when these greedy bastards start talking about how much they deserve their billions for their "hard work." You want hard work? Head on down to the southern San Joaquin Valley during summer harvests and join the illegals, who basically shorten their lives due to the demanding nature of that work, provide an essential service for the billionaires (getting food into markets), and get paid ridiculously low wages as compensation. And Latinos are STILL sending tens of billions annually back to their families south of us! How can we do anything but admire the enterprising, sacrificing efforts that these people make?

Confucian values, as odd as it may seem to some to look to traditional China for progressive thinking, assumes that the cosmos are fundamentally inter-related and what is good for you is ultimately good for me as well. Lets make the Analects of Confucius and the text of the Mencius required reading for all Americans..and see if that gets us anywhere...

I'm glad several people pointed out the article's obvious omission of the value of labor to creating wealth. But then it's called Capitalism, not Laborism.

Workers, alone among the commodities of the marketplace, are not able to bargain for a fair price for their product--work--unless they (horrors!) establish a union. Capital doesn't want to bargain for labor; it wants to confiscate it. What if consumers had the same power over sellers? What if they just went into a store, took whatever they wanted and paid whatever they wanted? Not nothing, but just enough to keep the storekeeper from quitting? Call it "the iron law of prices".

Just to add to the Girls Gone Wild example, I'd like to see the inheritance tax, often derisively referred to as the "death tax" instead referred to as the "one Paris Hilton is one too many" tax.

wigglybungle - how should we divide the pie? How about equally? E-Q-U-A-L-I-T-Y. The single dirtiest word in America. Screw the notion of the "talented manager", right along with the "government representative". Make workers the owners, spread the risk and the wealth, make it equal and fair. We human beings are actually capable of it and it happens all over the world. I work in a univeristy where they do experiments that simulate the commons and how people establish the rules that govern their use. The most common strategy that a group will come up with is to divide it up equally among themselves. It really is part of our human nature to think in those terms -- especially if there are no existing rules that we have been brainwashed to accept. No one says "the guy with the most money, the biggest house, and the fanciest car should get the most water." And yet...

wigglybungle:

I once worked (many levels) under a turnaround CEO who doubled or tripled the stock price in a year or two. He did it by cutting most of the employees, including half the intellectual capital, and the rest ended up being sold to a "worst value for the buck" company, screwing the customer as well. (In this case, the taxpayers.)

Value in the corporate world is, too often, creative accounting to screw someone else.

bill peppin, when migrant workers send dollars back to Mexico the question then becomes what/how are things marketed to them in Mexico.

If Mexicans become addicted to capitalist production, this erodes the value of their dollars, because more dollars are spend on useless garbage. If instead Mexicans work to reign in the capitalists, their dollars will stretch much farther, because more dollars may be kept for what's really needed.

The general well-being of people has much to do with the society's ability to reign in the capitalist. The cultivation of market demands should be the domain of people, not capital.

"There's room at the top, they are telling you still,
But first you must learn how to smile as you kill,
If you want to be like the folks on the Hill."

Good luck reforming the system.

Perhaps the funniest cartoon I've ever seen was titled "The Self-Made Man", and had as a caption the doggerel:

"The people on Mars
"Have ears eyes, noses and faces;
"But not in any ...
"Of the same places"

I leave it to your imagination to picture where the Self-Made Man put his nose ...

jakenewton,

"There is a labor "market". and it is in fact governed by supply and demand. THHIS IS A VERY MAINSTREAM IDEA. it does not logically follow that you have therefore reduced the status of the people who supply the labor to "things" in the sense of inanimate objects."

and thus do the people who perpetrate the crimes cover up their sins. The Mainstream living in a perpetual state of self-deluded hypocrisy as we learn here on a daily basis. The self-deluded business owner (and I don't mean all of them) who say that they really do feel, are compassionate for the individuals on the backs of whom they make their fortunes. That the business owners are entitled through proper work ethics to their multiple homes. homes and wealth which their employees, even the best of them, will never and may not deserve in this life not because of accidents of fortune, but because of an accident of something else, something indefinable. All the while saying, "but we really DO care for you. And thus am I justified in using you."

When your back is turned, your employees know you for what you are.

jakenewton,

I'm afraid I won't be able to get back to this argument at this point as I have to leave for the day. My apologies. It might be helpful in some future discussion, if I had a better idea of what idea exactly you are defending? Rather than just state your objections and this devolve into a fruitless argument.

Your objections may be valid, for all I know, I'm just missing your point.

I saw Gary Hart speaking on C-SPAN a few years ago about the contrast between the common wealth and personal corruption. His theme was that our political, legal and economic culture are dominated by the ethic that says
" bend the rules, game the system, do whatever it takes to enrich yourself. Don't concern yourself with the effects of such behavior on the general community." This seems to be the modus operandi of the Bush administration as well as contemporary Republicans in general. They've put absolute faith in that "invisible hand" of the "free market" that has so gently stroked them while violently slapping down the vast majority of us riding the planet.
I wonder if New Deal liberals like Hart have become an anachronism in these times. I mean, John Edwards talks about inequality as his theme and gets called a "faggot" for it by a mainstream editorialist. Despite union endorsements, he's rapidly dropping in the polls. Dennis Kucininch is portrayed as a clown or a mouse. People who make their living as primary producers like farmers and roughnecks are treated as sub-humans and ridiculous stereotypes by the entertainment industry shaping our values. The people at the top must be getting a big kick out of it all.

A modest proposal (of sorts)

I propose that we let those who scream bloody murder over their tax obligations to not pay taxes anymore. Pure and simple. Just say to them that if they no longer wish to pay their share that they are absolved, PROVIDING they eschew all the benefits that living in a taxed society offers them. That's right, no more sewer, electrical, water, infrastructure, refuse collection, public transportation and the like. From now on when they need their portion of the streets paved they pay out of pocket (after all they have the bucks), no more emergency services like police, fire, health will be subsidized for them. This also allows those whose services will be thereby contracted to charge any fee they wish because after all they can afford it, right?

While I believe that there are those who can get along without those things that only civilized society can provide, I am willing to bet that after a month of constantly digging into their nesteggs a vast majority will see how much of a savings is provided in a more collective environment. It is easier to hold onto wealth when one does not have to pay for all the little details that our taxes pay for without our thinking about it. I say let those no-taxers see the true price of maintenance. All it will take is seeing the larger outgo to their income.

"It might be helpful in some future discussion, if I had a better idea of what idea exactly you are defending? Rather than just state your objections and this devolve into a fruitless argument."

I object to the apparent denial that there is a Labor Market, and/or that in recognizing this it somehow reduces people from the status of being people. I also object to someone claiming that a certain level of payment for labor is "unfair", or that someone "does not 'need'" whatever material items they decide to purchase. Both cases involve one's *personal* judgement, which obviously may be at odds with someone else's judgement.

bill pepin,
Thanks for your insights man, the broad perspective of the inequality of wealth distribution.

FUNEOCONS: Your "classroom" example gives me hope! Like Ann Frank, I think people are essentially good (natured), but that the gamed system leads to a rabid dog-eat-dog ethos.

JOHN R: Thanks for the elucidating comments of Gary Hart. It's good to know some political insiders still have a working intellect and soul!

Well said Sir.

As to how much a society has contributed to the rich fortune of some of its people never divulge the step by step build of the societies organization which allow such fortune to be made.

To keep us down, the "self made" or pretend to be "self made" would cut school budget and divert the funds to subsidies to the corporations rather than thank the society for their rise.

In the end, the ungrateful and fortune preservationist of our society are allowed such convinience is the fault of this society.

Debunking the myth that there is such an act as "self made" whatever is crucial for both the fortunate and to be fortunates in our society.

Lets just admit it.

"Those who still believe in the trickle down theory best notice the yellow tint of what is trickling down."

Now this is a cogent and proper comment!

What a great article!!!!!!!!!!!!!!!!!!!!!!!!!

Perhaps a sports analogy would illuminate the problem. Lance Armstrong climbed L'Alpe d'Huez in about 39 minutes. There are easily 100 people in Missoula, Montana who could do it in less than 78 minutes. He is thus less than twice as good a any of them and should make less than twice as much. Any one ambulatory could make the same climb in less than 10 hours.. you get the point. I have no probem with someone who works twice as hard as me making twice as much.

"Perhaps a sports analogy would illuminate the problem. "

I was gonna go with a comparison of brain surgery and burger flipping.

"Guess what? Apparently allot of our citizens still buy this myth,of the hard working self made man. Which is why they stand mute in the face of the outrageous distribution of wealth, and even raise no protest to the tax policy inequalities. Want to know why? Because they believe they too might one day make it onto the list, or at least be a contender. How's that for the effects of a massive and effective propaganda machine in action?"

--Right, many people worship these "monsters," and especially wish they were in their position. That's why they love stories about the intrigues of the rich and famous. As long as we believe in the validity of disparity, and long to be "top dog," the status quo will be maintained.

Ramsay, as Honore de Balzac put it: "Behind every great fortune there is a crime."

Pwrmac5, that's a good plan but you know it's always the people who don't deserve it and don't need it who are first in line for the free government cheese. Try to find a neocon who's all for privatizing everything who will turn down his Social Security check or Medicare when he's sick. Try to find a Republican family who will refuse a state scholarship so that their kid can attend college. Try to find one who lives in a gated community who will wait until their private security shows up to cut them out of the car after an accident. It just will never happen; these privatization folks are just a lot of crybabies and welfare queens when it comes right down to their own well-being or safety, whatever their self-reliant 'principles.'

"Take away the government contracts, the government tax breaks, the government 'corporate welfare' and see how easy it is for these people to claw their way to the top."

Absolutely, LeeAnnG. Where would Halliburton be today without its contacts in government? Or Blackwater if Erik Prince hadn't shoveled a quarter-million dollars to the Bush campaign (don't worry, he's made back more than a billion)? Or any defense contractor you can name that snags the 'revolving-door' generals, admirals and politicians to lobby for the latest contract for a weapon we don't really need to fight a war that will never happen? It's always amazes me how much these corporate types carp about socialism and government welfare -- they are the single largest consumers of welfare in America and they depend on the socialism of the elite to exist.

Speaking of sports analogies, here's another one: consider that when the wealthy get together and form organizations for the purposes of profit, such as the NFL and MLB, their approach is very socialistic. Owning a sports team in either league is a guarantee you'll make a profit no matter how your team fares, if only from the equally-shared TV revenues.

The fact is, in the past labor was necessary to create and perpetuate the riches of the wealthy and to provide a living for everyone else, and that was the capitalist model. In the world we live in today, production is increasingly the province of computers and robots, and that trend will continue. Already Toyota can build a car without a human hand ever touching it. We are going to need a new model for the future to replace our outmoded capitalist structure, and even the socialist structure, which depended on 19th century notions of being paid for work, usually physical labor. The work will simply not be there in the future.

I'm not encouraged by our current crop of politicians recognizing these factors and passing laws that will usher in this new concept of human society that doesn't - because it can no longer -- solely value people by gauging their work output. Perhaps a worldwide economic collapse -- in progress -- brought on by adherence to the old principles will wake them up but, whether it does or doesn't, a change is going to come.