The Real Class War

>>>It doesn’t have to be noble, it doesn’t have to be for the greater good, just do something!

I'd argue that to be inspired to pursue acts of greatness, people need to, in the words of Patrice O'Neal, "Believe in their own righteousness". I'd say that in the Western world today, that is HEAVILY frowned upon, and self-deprecating guilt over economic success is lauded as a virtue. We're in an awkward time, where we haven't reached conditions of post-scarcity, but still have instances of overwhelming material abundance. We are only a few generations removed (if at all), from times when humanity would slaughter each other by the millions to secure resources. It's in our DNA and in our culture, in deep-seated ways. So humans still have an acquisitive nature but have no muse to provide them with direction.

>>>Build a palace to rival the Queen’s! Build an enormous statue of yourself! Hire a thousand concubines on a desert island!

Yeah, that's how you end up with the commoners at your gate with pitchforks when the revolution comes. And on that last one.....arguably Epstein pursued that course of action and nobody says "Well at least he was doing something interesting" about that guy...

The resentment of big capital is not entirely without a reason. Most money right now is "passively" deployed into pre-existing securities. This means it's used to extract existing value by market cornering / scarcity generation / rent seeking / monopolies / oliglopolies.

On the other side there is new value / securities creation. This is what people like Elon Musk are doing. He took circa $50mln of his own money, added a couple of billion from investors. Added 1000 highly skilled jobs and result is $50bn company.

Extractive capital alocation is offering much easier profits, but jobs working it are mostly the "bullshit" type.

As a democracy we have control of the laws, we can "nudge" the big capital away from rent seeking into new value creation by changing the tax code.

This is all driven by globalisation, and don't get me wrong I'm a globalist, but this is just a fact. First manual labour in manufacturing was outsourced abroad, then higher tier tech jobs in software and product engineering. Now big firms from former third world countries are muscling in on markets at every level of the economy, creating competition at every level of business.

You can't add hundreds of millions of Chinese people to the global work force, now at every level of the global economy, without affecting the market for that labour.

I said I'm a globalist, yes I am. My wife is Chinese, I've been going there regularly since 2001. When I first went private car ownership was near unheard of. It's a different country now, near-empty streets with a few donkey drawn carts are now choked with commuter traffic.

The result has been a pause in income growth in the western world. We've benefited from cheap imported goods, but lost out in domestic growth. The upside is that hundreds of millions of people, not just in China but in plenty of other places too, have been elevated out of poverty. I've seen that for myself and it's done an incalculable amount of good, it's just that all the benefits haven't been evenly distributed.

Could we in the west have benefited more if we'd had less globalisation? I really don't know. We have benefited I think, and we've had opportunities to invest and sell into those markets we wouldn't have otherwise had. I don't know, it's hard to evaluate what could have been as it's such a radically different shape for the world economy. Maybe we'd have ended up even worse off, who knows? But we might have been better off, I can't deny it.

For the future, we can already see incomes in China have shot up. Low level manufacturing jobs are moving out of China, because Chinese labourers have more skills now and can command high enough wages in more upmarket jobs that they don't need the low end work any more. I suspect that's why the employment rate in the US and elsewhere, at the bottom end of the economy, is picking up. I hope that continues, and in future growth will be more balanced across the economic and wage spectrum.

> So for many, adjunct faculty are called "elites" while the Koch brothers are not.

I think this is an important point. Wealth in the West knew to stay out of the radar. The whole concept of "old wealth" has the key characteristic of not spending frivolously in public or making a scene. Even in the Instagram age, they largely keep it under control. Their wealth - while beneficial - is not their defining characteristic. Some even argue that the celebrity class exists in part to monopolize the headlines that would otherwise be taken by paparazzi hounding old wealth.

This contracts to the extreme with all the new wealth which spends flamboyantly and spends to get attention. We seem to see this thousand fold with the Chinese new rich and their children - hence the Fuerdai term emerging.

The resentment of the working class against the old wealth is minimal - they stay out of sight and out of mind. The resentment towards the new wealth is tremendous and I don't think it will end well.

> The result has been a pause in income growth in the western world. We've benefited from cheap imported goods, but lost out in domestic growth.

Except that's not true. There's been growth; it's just all gone to the very wealthy in the West.