Romnesia: The Ability of the Very Rich to Forget the Context in Which They Made Their Money
Continued from previous page
There is an obvious flip-side to this story. “Anyone can make it – I did without help” translates as “I refuse to pay taxes to help other people, as they can help themselves”. Whether or not they inherited an iron ore mine from daddy.
In the article in which she urged the poor to emulate her, Gina Rinehart also proposed that the minimum wage should be reduced. Who needs fair pay if anyone can become a millionaire?
In 2010, the richest 1% in the United States captured an astonishing 93% of that year’s gain in incomes( 8). In the same year, corporate chief executives made, on average, 243 times as much as the median worker (in 1965 the ratio was ten times lower, namely 24:1)(9,10). Between 1970 and 2010 the Gini coefficient, which measures inequality, rose in the United States from 0.35 to 0.44: an astonishing leap( 11).
As for social mobility, of the rich countries listed by the OECD, the three in which men’s earnings are most likely to resemble their father’s are, in this order, the UK, Italy and the US( 12). If you are born poor or born rich in these nations, you are likely to stay that way. It is no coincidence that these three countries all promote themselves as lands of unparalleled opportunity.
Equal opportunity, self-creation, heroic individualism: these are the myths that predatory capitalism requires for its political survival. Romnesia permits the ultra-rich both to deny the role of other people in the creation of their own wealth and to deny help to those less fortunate than themselves. A century ago, entrepreneurs sought to pass themselves off as parasites: they adopted the style and manner of the titled, rentier class. Today the parasites claim to be entrepreneurs.
1. The Ragged Dick series.
4. Mike Lofgren uses this term in this fascinating article: http://www.theamericanconservative.com/articles/revolt-of-the-rich/
8. Emmanuel Saez, 2nd March 2012. Striking it Richer: the Evolution of Top Incomes in the United States (Updated with 2009 and 2010 estimates). http://elsa.berkeley.edu/~saez/saez-UStopincomes-2010.pdf
9. Joseph Stiglitz, 2012. The Price of Inequality. Allen Lane, London.
10. Lawrence Mishel, Jared Bernstein and Heidi Shierholz. The State of Working America 2008/2009. Economic Policy Institute, cited by Joseph Stiglitz, as above.
12. OECD, 2010. Economic Policy Reforms: Going for Growth. Chapter 5, Figure 5.1. http://www.oecd.org/tax/publicfinanceandfiscalpolicy/45002641.pdf