Signs of a Dying Empire

[pbrower2a]

(10-07-2017, 09:02 PM)Galen Wrote: At this point even the normal financial press is starting to realize what the dollar losing reserve currency status means for the US.  The unipolar world that started with the collapse of the Soviet Union is coming to a close as the US empire fades.

Basic needs get meet first, let there be a revolution. I have been re-reading Piketty's Capital in the 21st Century in which (among much else) Piketty discusses much -- including the economic conditions in France on the eve of the 1789 Revolution. Land rents were a gigantic share of the economy, and when the social order broke down the land rents that had been easy money for an aristocratic elite were no longer sustainable.

The United States is approaching the extreme inequality characteristic of fascist societies, plantation societies, feudal orders, and pure kleptocracies. Such was clearly not so in the 1950s. In the 1950s, the top ten percent of income-earners included people in the middle class, like engineers, salesmen, accountants, and high-school teachers. Much of the top 1% was physicians and attorneys. That is over. The top 10% now gets its money from property as rents, dividends, and executive compensation.

The easy money is the least important. Toil, skill, and learning create real wealth. I don't know how surprising it is that software engineers in Silicon Valley are often paying half their income as property rents. It's not out of love for renting a mansion that they do so; I speak of apartments. Note well that software engineers are among the best-paid Americans who make their money off skill, learning, imagination, or toil. Easy money is particularly vulnerable in the wake of revolutions, plagues, economic meltdowns, and apocalyptic wars. All societies need toil, imagination, skill, and learning to meet basic needs. A privileged class is not so obviously necessary.

It is far easier to put an end to a gravy train than to starve and sweat the needed workers. So imagine that this is what an old and distinguished city like Boston or Philadelphia looks like after a military calamity:



(That is Warsaw in 1945, showing what sort of devastation is possible without atom bombs... things could be even worse).

Now what do you do first as the leader of a country -- rebuild the palaces of aristocrats and plutocrats for the use of those people, or rebuild the food-processing plants? Do you pay construction workers or shareholders first?

We well compensate people for grabbing and controlling wealth more than we do those who create it. That could change abruptly.