Billionaire Nick Hanauer: "The Top 1% of Americans Have Taken $50 Trillion From the Bottom 90%—And That's Made the U.S. Less Secure"
Billionaire Nick Hanauer's TED Talk: "Capitalism's Dirty Little Secret"
I came across an amazingly disturbing number today. Some numbers are more than numbers — they tell stories, that cut across time, and hold the destinies of nations in their hands. This is one of them. This one, in particular, explains how America became a failed state.
This particular number is easy to understand. It goes like this. America’s billionaires now hold so much wealth that it’s now more than 20% of GDP. Let me put that to you more formally, and then I’ll tell you the story of why this number matters so much: America has about 700 billionaires, and collectively, they control about $5 trillion.
Those are just numbers, though. The story they tell is what matters — and it’s a grim, bizarre one of how a nation, even one as rich and powerful as America, can fall into poverty and ruin, and become a failed state.
Why does crossing the line of 20% of GDP matter so much? Well, 20% of GDP is also how much America puts toward public investment. It’s roughly the amount Americans invest in things like healthcare, retirement, schools, education, childcare — all of it.
Billionaires now have more wealth than America invests in itself, collectively.
Maybe you’re beginning to see the problem here.
If not — or if you do — let me spell it out in even more painful detail. America has one of the world’s lowest rates of public expenditure as a percent of GDP. Public investment makes up just 20% of it’s economy, compared to about 50% in Europe and Canada. If we subtract defence spending, then America’s level of public investment drops to about 15% — less than a third of what Europe and Canada spend.
Because America, as a society, invests a third as a percent of its economy that Canada and Europe do is why Americans live such abysmally poor lives. Investing 15% of your entire economy isn’t enough. To what? To give people things like healthcare, retirement, education, childcare, even incomes, jobs, and upwards mobility. That is why Americans don’t have those things — which are called “basic public goods” — while Europeans and Canadians do. Europeans and Canadians invest triple what Americans do in each other, and so their living standards go on rising.
America’s living standards, on the other hand, go on plummeting. America’s one of the only countries in the world where we see a totally bizarre and gruesome situation — every socieconomic indicator you can think of is cratering.
From incomes to savings to trust to happiness to life expectancy — all those things are in decline in America, usually rapid, steep decline. Americans have suffered a catastrophic fall in living standards since around the turn of the century — precisely because America does not invest enough in Americans to ever make living standards rise again, really.
If that doesn’t make sense, just think about the average American’s life. They never retire, because they have to pay Wall St to “manage” their “401Ks,” instead of just having a functioning retirement system like in every other rich country, and even many poor ones. They can’t get decent healthcare, because it costs a staggering amount, millions of dollars. Having relationships and families is something that young people are “delaying” indefinitely into the future — because when you can’t get decent healthcare, and you can’t afford your own place to live, and you’re living with your parents forever, well, who can start a family?
America’s living standards at this point are so incredibly abysmal that a child born in a poor Southern county has a lower life expectancy than someone in Bangladesh — one of the world’s poorest, most decrepit nations.
That’s what happens when billionaires control more wealth than an entire society invests in itself collectively. The rest of society does not have enough left over to invest in itself — in the things it needs most, which are basic public goods, the things we all need to enjoy rising living standards, whether healthcare, retirement, education, childcare, a little bit of income, a home of our own, and so forth.
When billionaires control such an immense amount of wealth that it becomes more than an entire society invests in itself, of course that society is going to end up being a failed state. Why, precisely? Well, if you can’t see it yet, it goes like this. People don’t have enough left over to invest in each other — or even themselves. Life becomes a bitter, bruising battle for self-preservation, subsistence, mere survival. But that way, without collective investments in education, healthcare, retirement, democracy, parks, libraries, hospitals, roads, schools — life never improves. It only ever falls apart, faster and harder.
And as life falls apart faster and harder, something even darker and more dangerous begins to happen. The working class grows afraid, anxious, angry. They feel betrayed and abandoned by the very elites who sold them a lie — that one day, if they just accepted a handful of billionaires growing ultra mega rich into infinity, they’d benefit too. But instead of coming to their senses — they lose them.
Demagogues emerge, who point a finger of rage at scapegoats — social groups even more powerless than the working class. Ethnic and religious minorities, usually. The demagogues shout — “cleanse society of those dirty, filthy subhumans! They’re the ones responsible for your woes! Get rid of them, and we’ll Be Great Again!!”
Sound familiar? It should. It’s the vicious cycle of fascism that America fell into, by way of Trumpism. The one that’s still going on, as figures like Kevin McCarthy block an investigation into the coup attempt of Jan 6th, figures like Marjorie Taylor Greene celebrate and openly call for civil war and secession, figures like Josh Hawley openly admire white supremacy. American fascism happened by way of a catastrophic plunge into poverty and despair for its working class — a fatal event that always, always predicts a climax of fascism.
All that’s why the figure of “billionaires hold more than 20% of America’s entire GDP in wealth” matters so much. Decoded, it really says: “billionaires hold more than America invests in itself, collectively. That leaves too little left over for the rest of America to invest in itself. So living standards fall, in a downward spiral. That downward spiral is what set off the vicious cycle of fascism. And all that’s what it means to be a failed state.”
No society should ever, ever be in a situation where billionaires hold more wealth than everyone else can invest in each other, put together. If and when that situation occurs, a society is almost certainly destined to end up a failed state. Fascism is almost certainly its destiny. I say almost certainly because now we’re talking about near-deterministic — not “stochastic” — social processes, as in, those that leave little to chance. Too much wealth in too few hands equals cratering lives for everyone else, as a society develops chronic shortages and deficits — and that almost inevitably means a working class turns fascist, hard and fast. Weimar Germany, the Muslim World — America. They’re all examples of this fatal trend.
What’s even worse than all that is that billionaire wealth skyrocketed over the last year — during the pandemic. That figure alone tells us why Trumpism is hardening — going from the relative incompetence of Trump’s bumbling idiot crew of advisors, to the slick professionalism of Josh Hawley, or the rabid fanaticism of Lauren Boebert, or the outright, proud violence of MJT. Inequality is accelerating, not declining, which means the working class continues to grow poorer, which predicts more fascism. When you see crazy-making figures like “70% of Republicans believe the election was stolen,” it all comes back to the numbers we’re talking about.
When people fall into sudden, sharp poverty, and the ruin, despair, and rage that comes with it, they’ll believe anything, no matter how absurd it seems to the rest of us, if it gives them some combination of a scapegoat to blame, an easy solution, and a movement to be part of.
The numbers I’ve discussed with you are almost iron-clad determinants that American fascism will only continue to surge and grow in fanaticism, fury, resentment, grievance, and rage. Because the central problem in society hasn’t yet been solved — there’s too much wealth in too few hands, and that leaves too little for everyone else, and so of course the working class will feel betrayed and abandoned, and turn to scapegoats to take revenge on.
What does too much wealth in too few hands mean, by the way? 700 Americans effectively control more wealth than the other 330 and million or so can invest in each other put together. That, my friends, is the surest, starkest indicator of social collapse there’s ever been. It’s what it means to be a failed state — by way of fascism, every flavour of it, from violence, to brutality, to hate, to theocracy, to coups.
America’s a failed state because it’s grand experiment failed — making a tiny, minuscule number of people ultra rich didn’t make everyone else better off. It made them worse off. So much so that about half of them turned to outright fascism as a result — and they’re hardening, every day, in their commitment to violence, revenge, and hate. That’s America’s real problem. The numbers don’t lie, and some numbers do more than reveal the truth — they tell stories, great and grand ones, which cut through history like a knife. This story? It’s a tragedy, of how a society’s dying.
Umair
Eudaimonia and Co
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