Nichols: Billionaires and income inequality ruin our democracy

In any political system, wealth inequality is an inevitable consequence of human hierarchical organization. It occurs because of innate human differences in temperament and abilities.

A recent opinion commentary on CNN posits that “extreme wealth inequality is a threat to our economy and democracy, and we need a tax specifically aimed at constraining it.” While the authors, one a sitting U.S. representative from California who has been in Congress for 25 years, simply reiterate a socialist utopia of wealth redistribution, they are either ignorant of these innate human differences or choose to ignore them.

All human endeavors organize on a hierarchical scale. Few people ever reach the top of the pyramid. There aren’t many Albert Einsteins, great novelists or outstanding musicians.

In my sales career, it was understood that 20% of the sales force generated 80% of the revenue. I learned much later in life that this is considered an inevitable outcome of all organizations. It is known as the “Pareto principle.” Salesmen called it the 80/20 rule.

But wealth inequality isn’t the real problem. Income inequality, which the authors conflate with wealth inequality, is a real problem, but their proposal does nothing to eliminate wealth inequality. Rather, it seeks to consolidate wealth in government, using income inequality as the rationale for the proposed policies.

Societal upheaval occurs when the very wealthy fail to use their wealth to create income opportunities for everyone else. As long as the disparity in income differences is minimized by job creation, societal cohesion exists. When the income differences become too great, the bonds that hold people together begin to break, and chaos ensues, as is daily seen on the streets of any major American city.

In the United States, income differences occur due to foolish trade and tax policies, which make domestic investments less advantageous for the wealthy. In pursuit of their self-interests, the rich move their wealth (capital) abroad.

Moving capital abroad creates income opportunities in Asia and, to a lesser extent, South America, but the loss of domestic capital increases the income disparity of United States citizens due to the loss of jobs. Government control of capital won’t lead to better decision-making or less income disparity. Rather, it will lead to worse central planning decisions by the few who rise to power due to the Pareto principle. See the former Soviet Union and California for proof.

Current U.S. government policies hollow out the middle class and lead to the creation of two classes of citizens: the very rich and the very poor. Again, California is a classic example.

In this day and age, it is easy to blame the wealthy for the problems of the poor, but the real villains are the ideologues and those in the political class, who serve to enact policies that lead to the consolidation of power — and, ultimately, capital — in government.

The ideologues (e.g., at the World Economic Forum, the United Nations and the World Health Organization) see this as necessary in their quest to control businesses (capital formation) and bring about a fascist Utopia on Earth.

Businesses (oligarchs) are certainly complicit in the scheme, but this is because titans of industry believe they will eventually control government power. They are destined to lose because, as Mao Zedong remarked, “Political power grows out of the barrel of a gun,” and oligarchs don’t have the guns.

Too many times, this Utopian experiment has been tried in the 20th century. But it bears repeating, since “those who fail to remember history are destined to repeat it.” And the many millions who have died at the hands of those pushing their dystopian Utopia will be joined by many more. It won’t be any different this time, except that more people will needlessly suffer and die.

John Nichols

Clayton