Poverty and Primus Inter Pares

A while ago, some asshole with a blog noted:

There are a lot of people, especially the upper-middle class and gentry class*, whose quality of life is better because others’ quality of life is demonstrably worse. There are many who are used to having de facto servants–and on the cheap too. When I was younger (and I’m old enough to say that now…), income inequality wasn’t so stark as it is now, and the expectations around ‘servants’ (as opposed to the actual quality of service) were lower: luxury goods–and service is a luxury good–was more expensive and less prevalent…

*The wealthy and rich do well in this largely through exploitation–the direct siphoning of salary into profits.

We’ll outsource this to Ezra Klein (boldface mine):

The American economy runs on poverty, or at least the constant threat of it. Americans like their goods cheap and their services plentiful and the two of them, together, require a sprawling labor force willing to work tough jobs at crummy wages. On the right, the barest glimmer of worker power is treated as a policy emergency, and the whip of poverty, not the lure of higher wages, is the appropriate response.

…But it’s not just the right. The financial press, the cable news squawkers and even many on the center-left greet news of labor shortages and price increases with an alarm they rarely bring to the ongoing agonies of poverty or low-wage toil

I suspect the real political problem for a guaranteed income isn’t the costs, but the benefits. A policy like this would give workers the power to make real choices. They could say no to a job they didn’t want, or quit one that exploited them. They could, and would, demand better wages, or take time off to attend school or simply to rest. When we spoke, Hamilton tried to sell it to me as a truer form of capitalism. “People can’t reap the returns of their effort without some baseline level of resources,” he said. “If you lack basic necessities with regards to economic well-being, you have no agency. You’re dictated to by others or live in a miserable state.”

But those in the economy with the power to do the dictating profit from the desperation of low-wage workers. One man’s misery is another man’s quick and affordable at-home lunch delivery. “It is a fact that when we pay workers less and don’t have social insurance programs that, say, cover Uber and Lyft drivers, we are able to consume goods and services at lower prices,” Hilary Hoynes, an economist at the University of California at Berkeley, where she also co-directs the Opportunity Lab, told me.

This is the conversation about poverty that we don’t like to have: We discuss the poor as a pity or a blight, but we rarely admit that America’s high rate of poverty is a policy choice, and there are reasons we choose it over and over again….

Hamilton, to his credit, was honest about these trade-offs. “Progressives don’t like to talk about this,” he told me. “They want this kumbaya moment. They want to say equity is great for everyone when it’s not. We need to shift our values. The capitalist class stands to lose from this policy, that’s unambiguous. They will have better resourced workers they can’t exploit through wages. Their consumer products and services would be more expensive.”

Unfortunately, it could be harder because it’s not just “the capitalist class.” Upper-middle class and gentry class people have a higher standard of living because of these cheaper goods and services. The benefits aren’t just economic either: more than a few upper-middle class and gentry class people believe that ‘unskilled labor’ deserves lower wages because they are unworthy of higher wages. That’s where the real challenge will come: not from the economic costs, but from the reality that some people like large wage differences because they allow some people to feel better than others.

Same as it ever was.

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3 Responses to Poverty and Primus Inter Pares

  1. Ron Zoscak says:

    Ever notice that the uppers very rarely, if ever, use “the whip of poverty” on their own offspring?

  2. Joseph Shelby says:

    My main concern with guaranteed income is that without price controls, the ‘rich’ will just inflate the prices on everything (and they’d be able to do that without inflating currency itself, which is an anathema to them because it lowers the value of debts they collect on). Every extra dollar in the economy could still be syphoned out of it to sit in the coffers of Wall Street as soon as there was a government who either supported that (R), or couldn’t make up its mind to stop it (D).

    • js says:

      Right, the landlords would just raise everyone’s rents and make off like bandits. Same for other rentiers. Makes a lot more sense to try to make the necessities of life themselves free or at least quite affordable. To reduce the strength of the whip.

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