Comment on “Why 1% Of The World’s Population Controls 45% Of The Wealth”
I watched a video published by Jordan Peterson with the title Why 1% Of The World’s Population Controls 45% Of The Wealth. What follows are my initial thoughts on the matter.
The ~15 minute video talks about what could be considered relevant factors of biological differentiation and social behavioural patterns that produce uneven outcomes over a given period of time. There are mentions of elite athletes and how they outdo their peers. Then there is a reference to the personality trait that is associated with creativity and how, basically, successful entrepreneurs share that trait. What the video does not bring attention to is the set of legal-institutional arrangements that turn a cyclical natural phenomenon in to a structural political reality.
First off, why “cyclical”? Consider the case of an elite athlete. They will outperform other athletes for a few years. In that time span they will earn more income, other things being equal. But they cannot continue earning more income from their sheer talent and athletic ability over the long-term. Their performance will eventually deteriorate until it no longer is at that elite level. Consequently, their income will diminish until it matches their present output and eventually fade away (again, ceteris paribus).
What can turn the cyclical in to a structural phenomenon? Let’s continue with our example. For an athlete of this sort to perpetually profit, they must benefit from a favourable legal order that allows them to extract rent. This can be in the form of image rights, for instance. The very notion of owning your image is codified in law and has no meaning and binding effect outside of it. These image rights, this intangible property that the lawmaker has enacted into being, can be transferred, traded, inherited, and generally be treated as an asset. In other words, it no longer is about the athletic performance per se but the marketing—the narrative—surrounding it.
Sport in general is not a good analogy of what happens in the world and why half the wealth is in the hands of a tiny minority (and of that half, how much is at the very top, i.e. the 1% of the 1%?). Outside the confines of sport, we have to account for a non-exhaustive list of factors that includes (i) intellectual property at a much greater scale as it permeates and penetrates every aspect of economic activity, (ii) de facto oligopolistic markets or even shadow monopolies underpinned—and enabled—by legal barriers to entry, (iii) a global order of tax havens or otherwise favourable jurisdictions for the uber-rich to siphon their profits to in order to avoid taxation and erode their tax base (taxable material/wealth), (iv) so-called “incentives” and tax breaks provided by the state which typically favour a small minority of beneficiaries, (v) the favourable institutionalised position of certain corporations, such as mega-banks which are close to the source of practically free new money in the form of the central bank’s quantitative easing policies, (vi) the flip-side of oligopolistic or monopolistic status or institutionalised significance which manifests as implicit or explicit guarantees provided by the state to a handful of corporations which are deemed “too big to fail” for a variety of reasons.
When, say, a mega-bank benefits from the central bank’s QE and when it is blithely bailed out by the state with taxpayer money while people live under grinding austerity, it is not because some genius entrepreneur with peerless business acumen and a unique creative talent is working tirelessly to add value to society. The parallel with the elite athlete is misleading, because it obfuscates the systemic nature of the phenomenon where an individual or relatively small group thereof benefits from a system that is designed for them and, once we factor in lobbying, sponsorships, media ownership, and manipulation of politicians, scientists, journalists, by them.
This brings us back to the distinction between cyclical and structural magnitudes. Yes, it is possible for an especially talented person to win all the awards, enjoy all the accolades, earn more money, and gain whatever else their sheer ability renders feasible. What is not realistic is for that to happen in perpetuity and to always benefit the same class of people. In our world, we cannot afford to treat such issues by reducing them to biology. There is a political reality in place which adds a systemic dimension to the matter at hand. If we insist on ignoring the system, we limit ourselves to the examination of a case whose constitution in our mind does not correspond with its actuality.
The structural nature of inequality has implications on the notion of “equality of opportunity”. We are made to believe that we are all made equal and all have the same chances in life. This would be true if, for example, the central bank’s QE would be distributed evenly among us, the state would bail us all out indiscriminately or not bail out any business whatsoever, tax havens would not exist and everyone paid the same taxes and was at all times subject to the same laws, and so on. If we had what the ancient Greeks called isonomia (isonomy), meaning equality of law or institution, then we would indeed enjoy equal opportunities. Our world does not have isonomy. Some are benefiting from the established order a priori, regardless of biological traits, while others endure a life of agonising precarity and are then brainwashed to think of themselves as simply more stupid and lazy. Instead of isonomy, we as peoples are defined by our heteronomy (the opposite of autonomy; rule by another): those who benefit from the system which they themselves manipulate, rule in our name over a political order that is democratic in name only.
This is not to say that we should disregard biology and psychology. To understand phenomena at a deeper level we need interdisciplinary methods. My concern here focuses on what the emphasis is, for it feels like some are taking certain things for granted, are searching for data points that vindicate the categories they already assume as constant, and are thus inadvertently peddling deep-seated ideological prejudices as impartial, morally neutral insights.
Finally, we have not even mentioned the international aspect of inequality and its colonialist or imperialist expression. Not only do we have egregious inequality within countries, but also between countries as the richest economies—or, rather, a handful of corporate actors—continuously drain the poorer ones of their natural resources as well as their human potential (“brain-drain”, as it is called). At any rate, I think my point is clear: the problem is systemic and cannot be explained solely by the distribution of talents among the population.