The Second Gilded Age Has America Become an Oligarchy?



Part 3: An Evolutionary View of Economics

Cornell Univesity economist Robert Frank analyzes this development in his recently published book "The Darwin Economy." In it, he concludes that financial realities are best described not by Adam Smith's economic models but, rather, by Charles Darwin's thoughts on competition.

Frank writes that, with its often extreme deregulation, today's financial and economic system makes it impossible for individuals' self-serving behavior to ultimately contribute to the prosperity of society as a whole, as Smith had envisioned it. Instead, it leads to an economy in which only the fittest survive -- and the general public is left behind.

The question is: How long can the US withstand this internal tension?

Differences between rich and poor are tolerated as long as the rags-to-riches story of the dishwasher-turned-millionaire remains theoretically possible. But studies show that increasing inequality and political control concentrated in the hands of the wealthy elite have drastically reduced economic mobility and that the US has long since fallen far behind Europe on this issue. Indeed, only 4 percent of less-well-off Americans ever successfully make the leap into the upper-middle class.

"The major difference between this Gilded Age and the last one is the relative absence of protest," historian Gary Gerstle told the online magazine Salon in October. "In the first Gilded Age, the streets were flooded with protest movements."

Manhattan hasn't yet quite reached that point.

Translated from the German by Ella Ornstein

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verbatim128 10/28/2011
1. It Goes Deeper
Inequality is only a symptom of the severe erosion of democracy and fair government in the US, and don't believe for a moment that this is not true for the rest of the Western world. The article mentioned "the news" of just a few weeks ago about Warren Buffet's tax rate --17% on $63 million income for last year-- to illustrate how the rich get to keep the bulk of the wealth generated in America, at the expense of the middle class. Warren Buffet has been talking about this favorable treatment for the past 10-11 years, pleading for higher taxes for the rich. Nobody in government did a thing about it, and he was ridiculed. Until the Occupy Wall Street became a reality demanding a human face for Capitalism. Unlike the political system of Socialism which could never have been fit to receive the "Human Face" that the protesters of the 1968 Prague Spring were hoping for, Capitalism and free enterprise were meant, indeed have done so for many years, to bring about progress and wellbeing for more than just the speculators and crooks of recent past. This will require some structural fix for democracy and governing of a free society. Otherwise, what was wrong about Socialism is wrong about this hijacked Capitalism: there is no equality, the privileged have the lion's share of every resource and all pleasure, damned be the rest of everybody.
lakechamplainer 10/29/2011
2. Not become one
In my view America has not "become" an oligarchy. It has always been one - nothing has changed.
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