At 21:30 24/07/2010 +0200, Michael Gurstein wrote:
Read this article!
M
<<<<
Subject: [IP] The Middle Class in America Is Radically Shrinking. Here Are
the Stats to Prove it
<http://finance.yahoo.com/tech-ticker/the-u.s.-middle-class-is-being-wiped-out-here%27s-the-stats-to-prove-it-520657.html>http://finance.yahoo.com/tech-ticker/the-u.s.-middle-class-is-being-wiped-out-here%27s-the-stats-to-prove-it-520657.html
>>>>
Unless a top class institutes a breeding programme of its own and thus
separates itself genetically from the majority then "gaps" between the
"rich" and the "poor" will continue as they have been in the past --
constantly changing in character and size. Such a separation hasn't yet
happened in history, nor even in pre-history for at least 100,000 years
since the dawn of Homo sapiens. However, there's no reason to think that it
could not happen in the future. Indeed, with our present and growing
knowledge of genetics, the chances of this separation occurring at some
point in the future are growing all the time, whatever governments or
ethical committees at the present time may say about the matter.
But, confining ourselves to history and the better known facts of
pre-history going back to about 40,000 years ago (the time of the
"innovation explosion"), gaps grow rapidly whenever there are significant
economic changes They also decline over time if the new economic regime
beds down without further changes. The reason for this is that the specific
constellations of the new top-class genes and their attendant skills
gradually become dispersed among the masses by intermarriage. At the other
end of the spectrum, the genetic constellations which are not suitable for
the new regime gradually fall away because females generally don't choose
fathers from males who are economically inadequate.
The character of the gap also changes during various periods of history.
For example, the immense gap between the aristocracy (and also the
monasteries) of the middle Medieval Ages in Europe (rather like Tibet until
1950) did not mainly lie in pecuniary wealth but in the possession of land.
However, land itself had no cash value and wasn't bought or sold as it is
today. It was either fought over or was inherited.
Similarly, the plethora of gold artefacts that Aztec kings possessed (and
Anglo-Saxon kings in early Medieval England) was not considered to be
wealth because gold was not coinage at the time. It was a status sign of
power. The gap was mainly due to martial prowess or inherited power.
Today, there can be little doubt that a wealth gap is now growing in
Western countries. For a decade or two after World War 2, a considerable
equalization of incomes started taking place, but then it slowed down and,
since the 1980s, it has reversed -- the average wage of the "ordinary"
worker decreasing in real terms. He hadn't noticed this too much because
the price of food and almost all consumer goods (housing also in the US and
a few other advanced countries where land is cheap) had been steadily
reducing either through cheaper prices from Asia or more industrial
efficiency generally -- particularly in the last ten years or so by the use
of internet-linked computers.
And also, in the last ten years we have seen the rise of a powerful
financial sector. Its activities are largely mysterious to the layman,
though what is obvious is that a new tranche of traders and CEOs are
earning enormous salaries, sometimes so astronomical that they put to shame
the already high earnings of senior managers in retailing and industry.
Nevertheless, the rich-poor gap today is probably not as great as that
which occurred when the production side of the industrial revolution was in
full spate about a century ago when industrialists (and retailers) started
to overhaul the previous land-owning aristocracy in both income and wealth.
And, going back to the height of the English land-owning aristocracy in
Tudor times the wealth gap then was considerably greater still. Indeed,
going back further still to the times of agriculturally-based empires in
many parts of the world, then the further we go back the wider the wealth
gap (in present-day terms) seems to be. Think of the power of Aztec kings
or Emperor Qin of China who could, and did, execute thousands of ordinary
people without a scruple and barely a protest. (Recent figures such as
Hitler, Stalin, Mao Zedong or Pol Pot could be cited as modern exceptions
to the historical trend but their power had to be dressed up in
ideological terms and with the support of many others rather than resulting
from a personal whim.)
Is there a common thread between all of these power-wealth gaps throughout
histroy. I believe there is and it's to do with innovation. Those who can
grasp the significance of an important innovation early enough and
opportunize(!?) it becomes the new top class. In particular, the last major
change (the industrial revolution) came about by a rapid sequence from
scientific experiments with heat which then developed via the steam engine
through to the turbine and thence to electrification.
But this also brought about a far greater flowering of scientific
speculation into a wide variety of subjects. And it is this which underlies
what has been going on particularly in the last decade or so -- a vast
development of many scientific specializations. The new meta-class which
appears to be taking shape today is far from being dominated by scientists
-- not yet anyway! -- but the various strands within it, including the
financial sector, increasingly depends on scientists.
To my knowledge, the first economist to draw attention to this was
Thorstein Veblen in his book The Theory of the Business Enterprise,
published in 1904. He thought that the top dogs in the future would be
engineers, rather than investors or entrepreneurs, because they were
becoming increasingly essential in any modern enterprise. If he were alive
today I'm sure he wouldn't quibble at my coupling of scientists with engineers.
I am coming to the end of my early morning writing routine -- and tiring --
and I'm not writing a book either -- so I won't be quoting chapter and
verse here. Suffice it to say that although there were engineer- and
scientist-entrepreneurs throughout the industrial revolution, and although
there are many non-scientist entrepreneurs today, I've been noticing in
recent years an increasing number of enterprises that have been personally
developed by scientists or at least (I'm thinking of university drop-outs
here) those with a scientific grounding.
The new meta-class which I think is taking shape is composed of many
different strands but all of them today depend on science to a
considerable, or even a total, extent. If I'm right, then what is the
prognosis? Because scientific education takes a great deal of motivation
and mental effort over many years then the new meta-class is likely to
become a permanent feature. The only way of avoiding this would be, to use
Schumpeter's phrase, the "creative destruction" of state education systems
and the development of a free market in which competition, just like any
other economic activity, will allow the full development of quality.
Fortunately, this is being recognized in several countries such as America,
Sweden and lately, the new government in this country. The full
implementation of a free market may take a generation and a "virtuous
circle" (children finally being recycled into parents who take care with
the motivation of their children) will probably take at least two or three
more generations before all children have an equal opportunity. But if this
doesn't happen then the present growing separation is in danger of becoming
an impermeable top caste system -- and who know what they could get up when
considering the growing knowledge of the latest science of the best and
brightest young minds.
Keith
Keith Hudson, Saltford, England
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