@Sunstone In furtherance of my last post:
Today, America’s top 1% makes its income primarily from capital, not labour:
The great contemporary economist Thomas Piketty has noted:
America’s new wealthy have so little to offer society
Thomas Piketty paints a dystopian picture of the consequences of this accumulation of wealth in his new book. Piketty describes an underlying property of capitalist economies—if return on capital assets exceeds growth of the economy, wealth will flow into investment in assets, land, companies and financial assets and away from entrepreneurial innovation.
Innovation requires distribution of income to the workers who produce products and services, empowering them to consume such goods and services in a virtuous circle measured by consumption driven growth. In contrast, the pool of passive capital asset investment will grow as earnings accumulate instead of being used for consumption. For Piketty, this is the usual configuration of a capitalist economy, rather than the idyllic days of 1945-1979 during which equality increased and the financial well-being and security of the “typical American family” marched relentlessly forward.
Piketty writes, “In terms of total amounts involved, inheritance has thus nearly regained the importance it had for nineteenth century cohorts.”
He notes, however, that this truth has yet to reach popular culture, where “recent American TV series feature heroes and heroines laden with degrees and high-level skills.”
Piketty concludes that we may soon reach a point in which social rent-seeking àl la marrying wealthy will be a far more effective path to prosperity than entrepreneurship. This is how capitalism dies—not with a revolution—but rather vitiated by rentiers, increasingly myopic and addicted like a junkie to the high of wealth accumulation.
These conditions are closely related to the massive growth of an overtly rent-seeking financial sector. Rather than investing in the “real economy,” financiers make money through increasingly obfuscated and complex financial “innovations.”
Economic inequality perpetuates itself through political inequality, which breeds cronyism. Supreme Court decisions like McCutcheon and Citizen’s United enhance the power of the super wealthy to use the political system to extract rents. Larry Bartels, Martin Gilens, Dorian Warren, Jacob Hacker, Paul Pierson, and Kay Lehman Schlozman have found that the rise in economic inequality has coincided with a rise in political inequality. The wealthy are using the political system to bolster their wealth, and while both parties are certainly complicit, in few eras has the political system been so nakedly captured by big money.
A growing portion of today’s moneyed elite is neither virtuous nor meritorious, it is parasitic. Second, government must create an economy that rewards work, not property. The Lockean ideal quickly becomes farce when one family owns more wealth than the poorest 40 million Americans.
As I wrote to Penguin earlier, St. Chrysostom made this very distinction between income acquired from 'labor' and income acquired from 'rent' 2,000 years ago.
Rentier capitalism, then and now, matches perfectly Chrysostom's description of the superfluous wealth of the rich constituting, in effect, an act of
"theft" upon the lower classes and most especially the poor. Indeed, he actually said something akin to this in that very same homily from my OP:
CHURCH FATHERS: Homily 12 on First Timothy (Chrysostom)
"But do you not see the lucky men", says one, "who with little labor acquire the good things of life?" What good things? Money, houses, so many acres of land, trains of servants, heaps of gold and silver? Can you call these good things, and not hide your head for shame?...
Tell me, then, why are you rich? From whom did you receive it, and from whom he who transmitted it to you? "From my father and grandfather". But can you, ascending through many generations, show the acquisition just? It cannot be. The root and origin of its must have been injustice.
Why? Because God in the beginning made not one man rich, and another poor. Nor did He afterwards take and show to one treasures of gold, and deny to the other the right of searching for it: but He left the earth free to all alike. Why then, if it is common, have you so many acres of land, while your neighbour has not a portion of it?
"It was transmitted to me by my father." And by whom to him? By his forefathers. But you must go back to the original owner. Jacob had wealth, but it was earned as the hire of his labors.
But I will not urge this argument too closely. Let your riches be justly gained, and without rapine. For you are not responsible for the covetous acts of your father. Your wealth may be derived from rapine; but you were not the plunderer. Or granting that he did not obtain it by robbery. What then? Is the wealth therefore good? By no means. At the same time it is not bad, he says, if its possessor be not covetous; it is not bad, if it be distributed to the poor, otherwise it is bad, it is ensnaring.
But if he does not evil, though he does no good, it is not bad, he argues. True. But is not this an evil, that you alone should have the Lord's property, that you alone should enjoy what is common? If then our possessions belong to one common Lord, they belong also to our fellow-servants. The possessions of one Lord are all common. We all share them equally....
Mark the wise dispensation of God. That He might put mankind to shame, He has made certain things common, as the sun, air, earth, and water, the heaven, the sea, the light, the stars; whose benefits are dispensed equally to all as brethren. We are all formed with the same eyes, the same body, the same soul, the same structure in all respects, all things from the earth, all men from one man, and all in the same habitation. But when one attempts to possess himself of anything, to make it his own, then contention is introduced, as if nature herself were indignant, that when God brings us together in every way, we are eager to divide and separate ourselves by appropriating things, and by using those cold words "mine and yours". Then there is contention and uneasiness. But where this is not, no strife or contention is bred. This state therefore is rather our inheritance, and more agreeable to nature...
But as I said, how can he, who is rich, be a good man? When he distributes his riches, he is good, so that he is good when he has ceased to have it, when he gives it to others; but while he keeps it himself, he is not good.
(Schaff, 1886, 13, p.447)
St. John Chrysostom is here addressing Roman-era "rentiers" - including both inherited wealth
and other rental income, which isn't derived from any real increase in value but rather unproductive assets.
Note the crucial line: "
Jacob had wealth, but it was earned as the hire of his labors". St. Chrysostom concluded that the only possible legitimate source of wealth lies in the exercise of our labour power. In the context of Roman economics (in an agrarian and patrician slave economy, built around a system of patronage and clientelism, with all the differences that entails from a contemporary free-market economy), this is analogous to modern rental income / unearned income leeching off society vs income derived from labor, just like the economist Piketty discusses.
In the UK:
Wealthiest 10% cash in as average family income falls
The “unearned income” of the most well-off people in Britain more than doubled while millions endured austerity and stagnant wages, an Observer analysis of government data reveals.
Income from property, interest, dividends and other investment income – sometimes called unearned income, as most of it does not come directly from work – rose by more than 40% between 2010-11 and 2015-16, the most recent year for which HMRC figures are available.
However, the gains were massively concentrated among the top 10% of Britons, whose unearned income doubled from an average of £19,000 each to more than £38,000 – well above the average household income of around £25,000 in 2015-16.
Reacting to the figures, Labour shadow chancellor John McDonnell said: “An economic model that rewards wealth creators less than wealth extractors is not sustainable economically or morally.”
Liam Kennedy, research officer at the thinktank Class, said: “These figures go to show how our economy rewards those with wealth and not those who work. The UK suffers from extreme levels of wealth inequality and we need a much more progressive tax system that reflects this.
“Aligning capital gains tax with taxes on income would be a good place to start, but we need to also think about replacing inheritance tax with a lifetime gifts tax to prevent unjust, intergenerational transfers of privilege and wealth.”
I personally feel that St. John Chrysostom was far more prescient and perceptive concerning the unjust political-economic order of his own fourth century Roman world
and by extension our own too (given that they are increasingly similar, obvious differences i.e. slavery, aside), than you give him credit for.