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Mark Olmsted

Mark Olmsted

Posted: October 27, 2010 10:02 AM

Let's imagine one pizza pie, divided into eight equal slices, shared by eight people. Communism, at least on paper, means each person gets one piece of the pie. In reality, we know that the party elite always got more, so the distribution was more like 1 person getting 2 slices, and 2 people sharing 1, with the middle 5 each having a slice. In theory, this wouldn't have been half-bad, except that communism yields small pies. Without the profit motive, people simply don't produce very efficiently. Under communism most people might be equal, yes, but (mostly) equally poor.

Capitalism involves an acceptance that the pie will not be divided equally, reflecting both a recognition of what makes people work hard and the need to reward enterprise. In the modern age, that's been generally tempered by a political consensus that some of that wealth needs to finance varying versions of the welfare state. In Western Europe, this roughly works out to the richest guy at the table getting 2 slices of pie, the next 2 sharing 3, and the bottom 5 splitting up the 3 slices that are left. (Of course, when a recession hits, everybody's slice gets smaller. Debt piles up in a desperate attempt to maintain the size of pie by borrowing dough from growing economies like China's.)

In the United States, the richest person at the pizza party used to have 3 slices, and the middle class, representing the next 4 down, used to have 4 slices (leaving the poorest 3 to divvy up 1.) Not very fair, but fairly tolerable, as long as the pie kept growing. Then came the Bush tax cuts, transferring trillions to the rich, while the size of the pie stagnated. Now that one guy has 4 slices to himself, leaving the rest of us 7 to divvy the other 4 pieces as best we can. Those in the top half manage to hang on (even 15% unemployment is still 85% employment), but those in the bottom half fight over less and less pie. It's class warfare all right: the rich are waging war on everybody else.

Since corporate America is more interested in hoarding than rehiring, the New Poor are going to be around for awhile. Everyone has been so focused on the froth of the Tea Party that no one seems to be considering the long term political impact of this giant pool of recently disenfranchised Americans. They may have temporarily fallen for all the misdirection about the source of their woes, but over time, the most likely targets of their ire are going to be the most visible beneficiaries of their own lost wealth.

The economy will continue to suck until the fat man at the pizza party gives some of his slices back. And it's in his best interest to do so. Many of the New Poor have lost not only jobs, but their homes and their dreams for the future. They don't have much more to lose. The resulting blowback is going to be a bitch, particularly if the Teapublicans gain power and can no longer blame Obama for everything.

A second American revolution might well be brewing. But watch it come from the opposite direction everyone is expecting.

 

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HUFFPOST SUPER USER
Sheria Reid
12:17 AM on 10/28/2010
I like the pizza metaphor; it provides a concrete visualization for distinguishing the basic structure of Communism vs. Capitalism. I just read a new study that focuses primarily on assessing American's perceptions of the economic disparities in the U.S. and what they believe the ideal wealth distribution should be.

The study didn't address the causes of economic inequities and the participants actually showed a high level of consensus as to what the ideal wealth distribution should be. The problem was that they believe that the wealth distribution is far more equitable than it is; therefore they don't perceive any sense of urgency in changing the status quo. They also tended to have a distorted belief in the upward mobility potential in American society. The authors theorize that this perhaps explains why even people who are not in the upper quintiles when it comes to wealth tend to support the current system--(1) they don't recognize the severe wealth inequities, and (2) they believe that they too can climb the ladder to wealth.

It hasn't been officially released yet but it's already available online. It makes for interesting reading and pairs well with your analysis. http://www.people.hbs.edu/mnorton/norton%20ariely%20in%20press.pdf
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HUFFPOST BLOGGER
Mark Olmsted
essayist, blogger, activist
02:56 AM on 10/28/2010
Funny; the paragraph I deleted (for length) dealt with my certainty that the fast majority of Americans could give you only a vague take on income inequality both in the abstract and in the concrete. In fact, my division of the pie almost certainly understated how much the richest 1/8 own.
Just read this very interesting Truth Out on the situation in France. http://www.truth-out.org/why-france-matters-here-too64536 The French example gives hope to a U.S. scenario that a backlash from the left could follow the one from the right--which, lets admit it, has far less to do with the tax burden of the tea partiers (less under Obama) then with the color of the President's skin and what that represents to them.
Of course, the French blowback may also have something to do with their much higher level of basic civic and political literacy , and their absence of anything resembling Fox news.
06:25 PM on 10/27/2010
Well said. The entire belief of 'trickle down' was a false premise but somehow enough people believed it.

What continues to astonish me is how the hopefulness and enterprise of the American spirit is being used against the vanishing middle and lower classes. Those groups by far outnumber the true class elites, but because of that 'can do' spirit, we allow political leaders to make laws that favor the rich and powerful going against our own best interests. That is why something like health care is allowed to flounder and tax cuts for those at the top make sense, even though the infrarstructure is crumbling and the very programs that support the people, are being cut and gutted.
Whew!
12:36 PM on 10/27/2010
Agreed. Supply-side Economics (a guiding principle of US economic policies since the 80's) assumes "the fat man at the pizza party" will invest some of his largess, so the huddled mass can enjoy the "trickle-down". This model falls apart when the "fat man" - out of fear and greed - just hoards the largess instead of investing it, which is what's happening in US.
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alan2a
Actual Progressive
11:10 AM on 10/27/2010
This analysis is sort of naively optimistic. Considering that ALL the media(with a very few left of center tv commentators who almost nobody listens to) is totally complicit in perpetrating outright lies, spin, propaganda and are an integral part of the Corporatocracy(another word for fascism) that has taken over the U.S.. Basically the writer is assuming that the electorate which is by most definitions either certifiably insane or incredibly ignorant will somehow realize they believe in a reality that doesn't exist all on their own without any means of seeing actually truth. I think not. One might argue as more and more people are(including me) that what we have is a repeat of the conditions that existed in Germany, Italy, Spain, Argentina, in the early thirties. that is the incipient beginnings of of a fascist state.
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HUFFPOST BLOGGER
Mark Olmsted
essayist, blogger, activist
01:22 PM on 10/27/2010
I don't disagree with your analysis, but I think that positing alternative possibilities is hardly "optimistic." Any eruption from a mass of the angry long-term unemployed may be as messy as it is unexpected. And history is full of examples of that events which change everything and no one predicts. We have in our future moments as history changing as 9/11, the invasion of Iraq, the AIDS epidemic. Some we can vaguely predict, and others not at all. In a year we could be discussing massive unrest in China, a new, unknown killer virus; a nuclear accident etc.
Income inequality may well be leading to a Third World America, but these new poor have a history of upwardly mobile expectations. I think we can safely wonder if some counter movement as potent as the Tea Party is in the offing. (The Russian Revolution was only inevitable in retrospect: at the time is took most by surprise.)
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alan2a
Actual Progressive
03:39 PM on 10/27/2010
Certainly. But given the overt violence already occurring and the overwhelming hatred already existing, the constant drumbeat of hate and bigotry against Gays, Brown people, Liberals and the, I'd guess, foregone reality that nothing positive will happen to unemployment and the economy, peoples reactions historically have not been towards positive "uprisings". Rather, as you well know they have expressed themselves in hate and frustration and a need to blame and take it out on those blamed. And the blamed are almost always those that the corporate elite and the wealthy deem the villains. Was in the 30's first socialists, communists and secondarily Jews. Later it became focused on Jews. Here in the U.S. the possible targets and LIBERALS, Progressives(if there is a difference) Brown people, Gays and Muslims and I would guess any other religion that can be correlated with Islamic Brown(and not so Brown) people. My advice. Head for Canada.
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JohnFromCensornati
Free your mind and your ass will follow.
10:49 AM on 10/27/2010
I thought it was all about letting us eat less and less cake.