Posted by Sir Four at 10:16am Dec 14 '14Nick Hanauer begins this NPR piece with as good a defense of capitalism as I've heard.
The reason that capitalism is the unmatched social technology in the history of the world for creating prosperity is that it's an evolutionary system for finding solutions to new human problems. Prosperity in human society really is the sum of the solutions that we find to make people's lives better. And the genius of capitalism is that it rewards people for solving other people's problems.
The more innovators you have in your society, the more people you enfranchise as people who can innovate, the faster the rate of innovation goes.
He then pivots and attacks supply-siders head on:
The more people we enfranchise as robust consumers, by for instance raising the minimum wage, having fair labor standards, etc. the more robust the demand is for that innovation. And prosperity in our technological capitalist society is a consequence of the feedback loop.
If you accept the idea that somebody like me, a capitalist like me, that rich people are job creators, then you have to believe that the richer I get, the more jobs I create and the better it will be for you. And it is simply not true. It's just a lie. The truth is, that prosperity in capitalist economy does not trickle down from the top. It is built from the middle out. A thriving middle class isn't the consequence of prosperity and growth. It's not an effect. A thriving middle class is the cause of prosperity and growth.
Basically the message is, tax cuts for people like Nick Hanauer create growth, and investments in the middle class balloon our debt and will bankrupt our great country. This is the oldest argument that rich people have told poor people in history.
Hanauer concludes with a warning to his fellow 1%-ers, referring to how people historically react to steep inequality:
At some point, most people get so angry that they react strongly and violently, and often not constructively. What would be ideal is to moderate the amount of economic inequality our economy is creating, and thus head off some sort of very unfortunate circumstance where people get so pissed that they start burning stuff down.
No one in our society has a bigger stake in its future than the people like me who have benefited asymmetrically from it. I find it unconscionable that more people of wealth and means are not out in front of this issue. Nobody has a stake in the American middle class like a capitalist like me. Rising inequality isn't just making poor people poorer and rich people richer. It's destroying the size of the market that rich people's businesses address. It's just mind-bogglingly short-sighted. We own this problem. And only people who have benefited in this way are probably going to be able to fix it.