U.S. Inequality Keeps Getting Uglier

What is income inequality?
 Inequality in America is getting worse.

On December 22, 2016, Heather Long writes on CNN Money:

The gap between the “haves” and “have nots” is widening, according to the latest data out this week.

The rich are money-making machines. Today, the top mega wealthy — the top 1% — earn an average of $1.3 million a year. It’s more than three times as much as the 1980s, when the rich “only” made $428,000, on average, according to economists Thomas Piketty, Emmanuel Saez and Gabriel Zucman.

Meanwhile, the bottom 50% of the American population earned an average of $16,000 in pre-tax income in 1980. That hasn’t changed in over three decades.

As if that’s not depressing enough, living the American Dream is also getting harder to do.

Millennials, born in the 1980s, only have a 50% likelihood — a coin toss chance — of earning more money than their parents did, according to new research released this month from the Equality of Opportunity Project.

It wasn’t always this way. In the 1940s, almost everyone in America grew up to be better off financially than their parents. While money isn’t the only definition of success, more wealth typically leads to bigger houses, grander vacations, fancier cars and more opportunities to advance.

“Children’s prospects of achieving the ‘American Dream’ of earning more than their parents have fallen from 90% to 50% over the past half century,” the researchers wrote in their report.

fading american dream

Wealthy taking a bigger piece of ‘pie’

The wealthy didn’t always take such a big share of the proverbial “pie.” In the 1970s, a decade generally seen as fairly prosperous, the top 1% of Americans earned just over 10% of all U.S. income (i.e. the “pie”).

Over time, the rich became more lucky — or more greedy. Today the top 1% take home more than 20% of all U.S. income.

As the wealthy earned more, someone else in America had to get less. The bottom 50% went from capturing over 20% of national income for much of the 1970s to earning barely 12% today.

The turning point started around 1980, as seen in the graph below. By the mid-1990s, the fortunes of the top 1% were clearly on the rise and those of the bottom half were declining rapidly.

Inequality Piketty 1

Wages aren’t going up for bottom 50%

The Great Recession hit everyone hard. While job losses hit the bottom half, the tanking of the stock market and the sharp drop-off in home and property values caused the wealth of the top 1% to also fall dramatically.

Around 2009 and 2010, inequality narrowed slightly because the rich had lost a lot of wealth.

But since then, inequality has grown and is on track to widen further. The wealthy have recovered far faster as the stock market has surged over 230% since bottoming out in March 2009 and property values have shot back up to pre-recession levels.

In the meantime, wages for the bottom aren’t moving.

The U.S. tax system is supposed to help the poor. Yet even after-tax income shows that the bottom 50% averaged just $25,000 a person in 2014, according to the latest data. That’s just a touch above the $20,000 someone in the bottom half earned way back in 1974 (after adjusting for inflation).

“Income has boomed at the top: in 1980, top 1% adults earned on average 27 times more than bottom 50% adults, while they earn 81 times more today,” write Piketty, Saez and Zucman.

incomes bottom 50

Both the cause and the solution is our technological advances.

Why are technological advances the cause? Because tectonic shifts in the technologies of production are displacing the need for human labor and at the same time devaluing the worth of labor. Yet labor is the ONLY means to an earned income that the vast majority of people have.

The role of physical productive capital is to do ever more of the work, which produces income. Full employment is not an objective of businesses. Companies strive to keep labor input and other costs at a minimum in order to maximize profits for the owners. They strive to minimize marginal cost, the cost of producing an additional unit of a good, product or service once a business has its fixed costs in place. Reducing marginal costs enables businesses to increase profits, offer goods, products and services at a lower price, or both. Increasingly, new technologies are enabling companies to achieve near-zero cost growth without having to hire people. Thus, private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role.

Over the past century there has been an ever-accelerating shift to productive capital––which reflects tectonic shifts in the technologies of production. The mixture of labor worker input and capital worker input has been rapidly changing at an exponential rate of increase for over 235 years in step with the Industrial Revolution (starting in 1776) and had even been changing long before that with man’s discovery of the first tools, but at a much slower rate. Up until the close of the nineteenth century, the United States remained a working democracy, with the production of products and services dependent on labor worker input. When the American Industrial Revolution began and subsequent technological advance amplified the productive power of non-human capital, plutocratic finance channeled its ownership into fewer and fewer hands, as we continue to witness today with government by the wealthy evidenced at all levels. People invented tools to reduce toil, enable otherwise impossible production, create new highly automated industries, and significantly change the way in which products and services are produced from labor intensive to capital intensive––the core function of technological invention.

Most changes in the productive capacity of the world since the beginning of the Industrial Revolution can be attributed to technological improvements in our capital assets, and a relatively diminishing proportion to human labor. Capital does not “enhance” labor productivity (labor’s ability to produce economic goods). In fact, the opposite is true. It makes many forms of labor unnecessary.

Why are technological advances the solution? Because productive capital is increasingly the source of the world’s economic growth. Therefore, productive capital should become the source of added property ownership incomes for all. Simply put, if both labor and capital are independent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all.

The system of big government and socialistic programs funded by tax extraction and non-asset-based national debt  are not the answer to anything.  The socialistic system almost always results in increased oppression, increased poverty or sameness as EVERY citizen becomes dependent on the State.

What we need is a system that empowers individuals and families to become fully productive, be creative, build businesses and to take care of themselves. The MOST IMPORTANT need is to extend equal opportunity to EVERY child, woman, and man to  share individually in the FUTURE wealth-creating, income-producing capital assets of corprations whereby financing new capital formation and transfers of existing assets is accomplished from the bottom-up and without redistributing property rights of the rich and super-rich with regard to their existing assets

Instead, we have a system where all power and all wealth are increasingly controlled by giant banks and giant corporations that are in turn controlled by the global elite.  The “financialization” of the global economy has turned almost everyone on the planet into “deft serfs,” and the compound interest on all of that debt enables the global elite to constantly increase their giant piles of money.

Not only has EVERY person become a debt slave, but also a wage slave, and increasingly a welfare and charity slave.  Over the past four decades the total amount of consumer debt in America has gone from about 2.2 trillion dollars to nearly 60 trillion dollars.  As Snyder notes, “many of us work as ‘debt serfs’ our entire lives, and we never even know the names or the faces of those that we are making rich as we slowly pay off our debts.”

Most thinking people should realize that never-ending consumer is not a wise situation to put one into. Such consumer debt requires a source of income that is promised to be paid to the owners of the note, credit card, or mortgage.

But there is a good form of debt, which is constantly used by the rich and the super-rich to make themselves richer. It is capital credit, a loan specifically tailored to finance FUTURE investment, repayable out of FUTURE earnings, without the need for “past savings” or the reduction in one’s personal consumption needs and wants. In the business world, physical capital is expected to go on producing income indefinitely with proper maintenance and with restoration in the technical sense through research and development. This is how technological advances occur and develop over time.

What is needed is to reform the system to simultaneously create new wealth-creating, income-producing capital asset formation and broaden its ownership so that increasingly over time more and more citizens will derive financial benefit and second incomes from their expanding diversified wealth-creating, income-producing capital asset portfolios. In this way, we can balance production with consumption––the purpose of production.
This can be achieved with insured, no-interest capital credit loans provided by local banks to EVERY child, woman and man, repayable out of FUTURE earnings generated from new capital asset projects, without the need to pledge “past savings” or equities, or reduce one’s consumption level.
The necessary insurance can either be facilitated with private capital credit insurance or a government reinsurance agency (ala the Federal Housing Administration concept).

While other forms of non-asset-based debt is inflationary, commercial capital credit relies on non-inflationary capital asset creation, unlike government expenditures which rely on tax extraction or non-asset-backed debt to redistribute or inject inflationary money into the system.

The socialism practiced today relies on tax extraction and non-asset-based national debt to firstly redistribute monies collected into social welfare programs and second to finance public infrastructure and the military, etc. To the extent that modern “capitalistic” economies redistribute they are practicing socialism. 

For those who are interested in the specifics of the solution see the Just Third Way and the Capital Homestead Act – the purpose of which is to eliminate privilege and provide EQUAL OPPORTUNITY for EVERY child, woman and man to build independent, sustainable financial security and incomes through acquiring ownership in FUTURE wealth-creating, income-producing capital assets financed without the necessity of pledging “past savings” or a reduction in consumption.

The solution eliminates the barriers to ordinary people forming capital themselves in association with others without the necessity for “past savings” or the pledging of equities which only the wealthy ownership class has.

The JUST Third Way is a radical overhaul of the economic system (i.e., the Federal tax system, Federal Reserve policy, inheritance law, welfare and entitlement system, etc.) that will achieve genuine economic democracy, based on the Platform of the Unite America Party and its links and the proposed Capital Homestead Act. Our Platform is a call for a vision of political economy that can unite the left and the right, based on binary economist Louis Kelso’s ownership-based paradigm. Now is the time to cure America’s political cancer (Crony Capitalism) and restore America to again becoming a model for global citizens in all countries.

For a new vision see http://www.foreconomicjustice.org/?p=12331 andwww.facebook.com/uniteamericaparty. Support the Unite America Party Platform, published by The Huffington Post at http://www.huffingtonpost.com/gary-reber/platform-of-the-unite-ame_b_5474077.html as well as OpEd News at http://www.opednews.com/articles/Platform-of-the-Unite-Amer-by-Gary-Reber-Party-Leadership_Party-Platforms-DNC_Party-Platforms-GOP-RNC_Party-Politics-Democratic-140630-60.html.

Support the Capital Homestead Act at http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/ and http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/.

 

 

The 500 Richest People In The World Got $237 Billion Richer In 2016

Billionaire Bill Gates and World Bank head Jim Yong Kim at the 2016 edition of the hyper-elite World Economic Forum in Davos, Switzerland. CREDIT: AP Photo/Michel Euler

On December 28, 2016, Alan Pyke writes on ThinkProgress:

As right-wing politicians around the world gathered power by scapegoating immigrants for the economic struggles of working people, the world’s richest people got nearly a quarter trillion dollars richer in 2016.

The 500 wealthiest individuals on a planet of roughly 8 billion humans gained $237 billion in personal net worth over the year, according to Bloomberg.

Those massive investment gains followed similarly massive convulsions — a natural byproduct of beginning the investing year with incredible wealth. The same microfraction of the species was almost $400 billion in the hole by Valentine’s Day, then up more than $300 billion in the months before Donald Trump beat Hillary Clinton in November’s election, before slumping to the mere $237,000,000,000 net gain by year’s end, Bloomberg reports.

The poorest 2.4 billion adults worldwide have an average wealth of under a thousand bucks, and a combined net worth of 2.36 trillion. The 500 people on Bloomberg’s list ended the year with close to double that between them: $4.4 trillion.

In other words, capitalism has decided that one crowded nightclub’s worth of people are worth twice as much as a human herd that could fill the cavernous Indianapolis Motor Speedway six thousand times over — assuming none of them brought their children along.

Such inequality isn’t just a condition of economic strife. It’s a cause of it. Yet in countries around the world, the broke billions are being encouraged to blame their own dire straits on other poor people. And it’s working. Xenophobic, nativist politicians on the extreme right edge of the traditional political spectrum have captured a larger and larger share of power.

Trump’s win in November, like the victory of pro-Brexit campaigners in the summer, suggests that the economically oppressed are embracing paranoid, mathematically insane explanations of why their lives are so rotten. Liberal political values seem poised to fall soon in France, Germany, and Brazil. The Trumps and Le Pens of the world are winning at the ballot box even as the evidence grows starker that inequality is to blame for the hardships these populists’ supporters endure.

 The idea that democracies cannot survive intense maldistribution of wealth for very long is not new. But the sheer speed of this transformation is nonetheless breathtaking.

The fall of the liberal idea comes barely five years after a very different political moment around the world, where populists were in the streets decrying the wealthy, the financial industry, and their government abettors. Protests from Wall Street to Madrid to Athens to Reykjavik targeted not immigrants or refugees or government benefits programs, but concentrated wealth.

Sooner or later, governments called down the police on those same protesters. Few of those governments took any aggressive policy steps to redress inequality, or even to repair the devastation of the 2008 financial crisis. The already severe concentration of global wealth in a few hundred hands intensified.

And now, those same masses who rode a leftward breeze for a year or two have retreated — or simply turned right.

https://thinkprogress.org/the-500-richest-people-in-the-world-got-237-billion-richer-in-2016-c9eec9e5361e#.5ff51uv16

Gary Reber comments: The greatest crisis facing our country today is the obscene level of wealth and income economic inequality we now see, which has come about due to concentrated ownership of the productive assets employed in the production of products and services in our economy. This is a moral issue, an economic issue, and a political issue.

The fact is the top 1 percent own more than the bottom 90 percent combined and most of the capital asset growth and sharing of growth profits goes systematically to that same 1 percent. It gets even more concentrated among the top 0.1 percent.

The system is the cause. The solution is to transform basic economic institutions to favor universal citizen participation in capital ownership.

If both labor and capital are independent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all. Yet, sadly, the American people and its leaders still pretend to believe that labor is becoming more productive, and ignore the necessity to broaden personal ownership of wealth-creating, income-producing capital assets simultaneously with the growth of the American economy.

To put this in context, it is important to briefly note that throughout history, man has endeavored to overpower the time constraints of physical and biological processes. It is now an accepted fact that accelerated scientific and technological innovation has directly led to a speeding up of all physical and social processes in the name of progress. The competitive drive has led to a frantic national and international chase for more efficient methods of production and distribution. In the process, humanity has pushed to develop even more powerful technologies, on the assumption that such technologies would accomplish more and more useful functions in less time. The results have been a dramatic acceleration of change and concentration of wealth ownership.

Economic democracy has yet to be tried. We are absent a national discussion of where consumers earn the money to buy products and services and the nature of capital ownership, and instead argue about policies to redistribute income or not to redistribute income. If Americans do not demand that the contenders for the office of the presidency of the United States, the Senate, and the Congress address these issues, we will have wasted the opportunity to steer the American economy in a direction that will broaden affluence. We have adequate resources, adequate knowhow, and adequate manpower to produce general affluence, but we need as a society to properly and efficiently manage these resources while protecting and enhancing the environment so that our productive capital capability is sustainable and renewable. Such issues are the proper concern of government because of the human damage inflicted on our social fabric as well as to economic growth in which every citizen is fairly included in the American dream.

Binary economist Louis O. Kelso wrote: “In the distribution of social power, whether it be political power or economic power, all things are relative. The essence of economic democracy lies in the elimination of differences of earning power resulting from denial of equality of economic opportunity, particularly equal access to capital credit. Differences of economic status resulting from differences in advantages taken and uses made of differences based on inequality of economic opportunity, particularly those that give access to capital credit to the already capitalized and deny it to the non- or -undercapitalized, are flagrant violations of the constitutional rights of citizens in a democracy.”

The fact is that political democracy is impossible without economic democracy. Those who control money control the laws that foster wage slavery, welfare slavery, debt slavery and charity slavery. These laws can and should be changed by the 99 percent and those among the 1 percent who are committed to a just and economically classless market economy, true equality of opportunity, and a level playing field in the future for 100 percent of Americans. By adopting economic policies and programs that acknowledge every citizen’s right to contribute productively to the economy as a capital owner as well as a labor worker, the result will be an end to perpetual labor servitude and the liberation of people from progressive increments of subsistence toil and compulsive poverty as the 99 percent benefits from the rewards of productive capital-sourced income.

Revealed: The 50 Richest Families In The U.S. And How They Got Their Wealth

From World Lifestyle:

Do you ever wonder HOW those billionaires made so much money? Was it inherited, did they earn it all themselves, what industry could possibly make someone so much money? Here, we have revealed the richest families in the U.S. along with the stories behind their wealth and even the family feuds that took place over the money. You might be surprised to find out which industries can make people billions of dollars.

Kluge Family- $6 Billion

John Kluge amassed his fortune trading broadcast and cellular properties; notable wins included a $2 billion sale of Metromedia TV stations to News Corp and Hearst in 1985, and a $1.3 billion cash-out for Metromedia’s stake in phone company WorldCom in 1995. Upon Kluge’s death in 2010, he gave $400 million to fund financial aid at Columbia University. His son, John Kluge Jr., is also a Columbia graduate and active philanthropist; his angel investment firm, Eirene, is focused on solving sanitation issues through its Toilet Hackers program. His siblings Samantha and Joseph Kluge share the inheritance.

50. Haslam family- $6 billion

One of Tennessee’s most powerful families, the Haslams own 67% of Knoxville-based $31 billion (sales) Pilot Flying J and one of the founder’s sons, Bill, is governor of Tennessee. James Haslam II founded Pilot Travel Centers in 1958 and merged the company with Flying J in 2001. In 2013 the company was accused of defrauding trucking companies out of promised fuel rebates. Pilot settled a class-action lawsuit brought by customers in November 2013 and with the Department of Justice in July 2014. The company agreed to pay a $92 million penalty to the government in order to avoid prosecution. In April 2015, Pilot settled with 4 trucking companies not part of the class-action settlement. CEO Jimmy Haslam, the founder’s oldest son, has denied any knowledge of the rebate fraud scheme. In 2012 the family (excluding Gov. Bill Haslam) bought the Cleveland Browns football team for a reported $1 billion. Daughter Ann Haslam Bailey has no role at the company.

49. France family- $5.7 billion

The France family -the “First Family of NASCAR” – has controlled the stock car racing organization since its inception in 1948. Brian France, the grandson of founder Bill France, Sr. and son of former CEO Bill Jr., has been at the helm since 2003. Brian’s uncle, James France, formerly served as CEO of NASCAR’s sister company, International Speedway Corp. and still holds sway in the family business as NASCAR Vice Chairman. Current ISC chief executive Lesa France Kennedy is Brian’s older sister; she was married to a plastic surgeon, Dr. Bruce Kennedy, who died in a dramatic plane crash in 2007. Their son, Ben, is a driver with Red Horse Racing, as was his cousin, J.C. France (Jim’s son)- formerly with AX Racing. Twenty family members own shares in publicly traded International Speedway Corp.

49. Smith family

Chicago banker Byron Smith founded the Northern Trust Company in 1889. Twenty-two years later he placed an ad offering to fund a manufacturer. Two Swedish brothers convinced him the world needed more precision-cutting tools, so he cofounded Illinois Tool Works in 1912. More than 100 years later, his descendants still have massive stakes in both companies. Byron’s great-grandson Harold Smith stepped down as president of Illinois Tool Works in 1981. The fifth-generation scion David Smith Jr., a lawyer and former regulator with the SEC, serves on the boards of both Northern Trust and Illinois Tool Works, which are still two of the city’s largest companies.

48. Johnson family- $6.3 billion

Robert Wood Johnson founded Johnson & Johnson in 1886, providing the world with dental floss and first-aid kits and cursing his descendants with billions of dollars and years of family infighting. His son Robert Wood Johnson II, known as the General, took over in 1932 and turned Johnson & Johnson into a global powerhouse. The General and his brother Seward both died with massive fortunes. Most of Seward’s is now out of the family. His much-younger housemaid whom he eventually married, Barbara Piasecka, won a nasty lawsuit with his children for the inheritance and died in 2013 with a fortune worth an estimated $3.6 billion. The General left much of his fortune to the Robert Wood Johnson Foundation, which today has assets of $10.2 billion and is the largest philanthropic organization dedicated solely to health. The rest went to his heirs, the most famous of which is grandson Woody, the much-maligned owner of the New York Jets. Outside of the Jets, Woody’s fortune is hidden in an extremely private New York investment company called the Johnson Company. Woody’s ex-wife told family biographer Jerry Oppenheimer that even she never knew how much money her ex-husband had. Forbes went with a conservative estimate, but it is possible that the Johnson family has more than the $6.3 billion we pinned down.

48. Phipps family- $6.6 billion

Son of a Philadelphia cobbler, Henry Phipps made a fortune as Andrew Carnegie’s accountant and business partner, receiving an estimated $50 million when Carnegie Steel was sold to J.P. Morgan in 1901. Six years later, he established Bessemer Trust (named after a steel making process) to care for his fortune. Bessemer, which started accepting money from outside clients in 1974, has since grown its asset base to nearly $100 billion; it is chaired by Henry Phipps’ great grandson, Stuart Janney, III. The family also has a strong presence in the world of horse racing, having won the 2013 Kentucky Derby with their thoroughbred Orb. Ogden Phipps was Chairman of the Jockey Club for ten years before passing on the torch to his son, Dinny, who remains in charge to this day.

47. LeFrak family- $6.6 billion

The LeFraks oversee one of the largest real estate empires in New York City and the tri-state area. Now heading into the fourth-generation of family involvement, they have been in the real estate business since Harry LeFrak, a glazier who moved to New York to work for Louis Comfort Tiffany, founded the LeFrak Organization in 1901. He bought his first property that year, a 120-acre farm in Williamsburg, Brooklyn. His son Sam entered the family business and helped fuel massive expansion as the post-War construction boom flourished. Now with Sam’s son, Richard, in charge and his sons involved, the LeFrak Organization has evolved further, adding properties in California and Washington State, and investing in natural resources through oil wells and mineral rights. Still it is best known for its New York City metropolitan area properties, including the 5,000-unit apartment complex LeFrak City in Queens and more than 16 million square feet of commercial, residential and retail properties in Newport, NJ (including Forbes’ new home) across the Hudson River from lower Manhattan.

47. Jenkins family- $6.8 billion

The clan behind Publix Super Markets, which operates more than 1,000 grocery stores across the Southeast. George Jenkins (d. 1996) founded the company in 1930 as a protest against his former boss, owner of now-rival Piggly Wiggly, who wouldn’t grant him five minutes of his time even after Jenkins drove eight hours to see him. He gave shares in his business to employees from the outset in an effort to win their loyalty; today it’s the largest employee-owned company in America. By the time George retired in 1989, he had expanded to more than 300 stores, which dominated Florida. The Jenkins family still runs Publix, which did more than $30 billion in sales in 2014. George’s nephew, Charlie Jenkins Jr., is chairman, and his grandson, Ed Crenshaw, is the fourth family member to occupy the CEO role. George’s daughter, Carol Jenkins Barnett, is president of Publix Super Markets Charities. Altogether the family owns 20% of the retailer, while employees hold the remaining 80%. Five family members sit on the Publix board of directors.

46. Marriott family- $6.9 billion

John Willard Marriott got his start opening a nine-stool A&W root beer stand with $6,000 in 1927. The family shifted into the hotel business in 1957, opening the world’s first motor hotel in Arlington, Virginia. Marriott International today controls nearly 4,000 hotels in over 70 countries, including under the Ritz-Carlton and Bulgari brands. Older son Bill served as the company’s CEO for 40 years starting in 1972 and still remains active as chairman. Younger son Richard has run Host Hotels & Resorts since 1993, the year his older brother Bill spun the company off from the family’s Marriott International amid bondholder protests. The Marriotts are devout Mormons. Through their companies, they are strong supporters of gay and LGBT rights.

46. Cathy family- $7 billion

Truett Cathy opened his first Chick-fil-A restaurant at an Atlanta mall in 1967. In 2014, the poultry pioneer–he practically invented the idea of a quickly served chicken sandwich–passed away at age 93, leaving a juggernaut fast food chain in the care of his two sons, Dan, chairman and CEO, and Bubba, senior vice president. Some of Truett’s 12 grandchildren are also working at the company. Chick-fil-A had an estimated $5.9 billion in 2014 revenues and more than 1,900 locations. That’s the result of a cult-like following beginning in 1946, when Truett Cathy and his brother Ben (d. 1949) were first serving their chicken sammies to Ford factory and airport workers around the clock. The Cathy family is as known for chicken as for the business’ Christian values. Stores close on Sundays, and employees and franchisees are advised “to base your business in biblical principles.”

45. E.W. Scripps family: $7.2 billion

The Cincinnati-based E.W. Scripps media empire was founded by Edward Willis Scripps, who borrowed $10,000 at age 24 to start Penny Press in Cleveland in 1878. He established a trust that took control of the company in 1922, and the family has overseen it ever since. In 2008 it spun off its more valuable cable television operations (including HGTV, Food Network, Travel Channel) from its journalistic efforts, calling the new publicly traded company Scripps Network Interactive. E.W. Scripps merged with Journal Communications in April 2015, keeping the broadcast TV stations but spinning out their combined newspaper assets into a new company called Journal Media Group.The close-knit Scripps family, which gets together for meetings at least twice a year, controls two-thirds of the board seats for both E.W. Scripps and Scripps Network Interactive (both are publicly traded), though it’s not involved in day-to-day management. Scripps family members vowed decades ago to avoid divisiveness, for the good of the family and the company. An estimated 60 family members share the fortune.

45. Chao family- $7.2 billion

The Chao family increased its stake in Suzhou Huasu Plastics Co. one of the largest plastic chemicals firms in China, this year to 95%. Their Texas-based Westlake Chemical Corp. is already North America’s largest manufacturer of low density polyethylene, which is used in milk and juice cartons, produce bags and plastic wrap. It’s also the second-largest producer of polyvinyl chloride, or PVC, in the U.S. The late Ting Tsung “T.T.” Chao (d. 2008) moved his family from mainland China to Taiwan in 1946. More than three decades later, he relocated his family to the U.S. where T.T., and his two sons James and Albert quickly began acquiring chemical plants in the Southeast corridor. Eldest son James is Westlake’s chairman; Albert is CEO. With sister Dorothy Chao Jenkins, siblings own 35% of the company.

44. Bechtel family- $7.3 billion

Warren Bechtel started out grading railroad track beds in Oklahoma in 1898 and worked his way to California building railroads. In 1906 he rented a steam shovel for a job with the Western Pacific Railroad, laying the roots of his family’s now giant engineering and construction business Bechtel. Over the decades, the family-run company has built everything from the Hoover Dam to the Channel Tunnel. In early June, it completed the tunneling under London for Crossrail, a new high capacity railway that is the largest engineering project in Europe. Fourth generation Riley Bechtel stpped down as CEO in 2014, due to health reasons, but remains chairman. His son Brendan is president and COO of Bechtel, which now has $37 billion (sales).

44. Rollins family- $7.4 billion

Atlanta’s dysfunctional Rollins clan remains locked in a legal dispute over access to trusts and holding companies worth some $3 billion. Their family feud was back before the Georgia Supreme Court in June, with four of pest control conglomerate founder O. Wayne Rollins’ grandchildren suing their father and uncle Gary (Rollins Inc CEO) and Randall (chairman) for what they claim is their rightful inheritance. Rollins Inc subsidiary Orkin, the termite killing franchise, remains the family’s best known business, although their stake in oil and fracking spin-off RPC Inc is also worth billions.

43. Simplot family- $7.5 billion

The Simplots built a fortune in potatoes, thanks to J.R. Simplot (pictured), who dropped out of the eighth grade in Idaho, worked odd jobs on farms and then bought his own potato farm. He became the father of the frozen french fry when he developed an innovative freezing process in the 1940s. Shortly before Simplot’s death in 2008, his company was supplying one third of America’s french fries. The Simplot company has expanded into phosphate mining and fertilizer production via JR Simplot Co. His three children have run the $5.8 billion (sales) company since his death.

43. Simon family- $7.7 billion

Son of a tailor, Herb Simon grew up working class in the Bronx. In 1960 he and his brother Melvin (d. 2009) founded the precursor to Simon Property Group. It’s now one of the world’s largest REITs, with 228 shopping malls and retail strips. It spans 242 million square feet across America, Europe and Asia. Melvin’s son, David, has been CEO since 1995. Herb also owns the Indiana Pacers, which he bought with his brother; the team’s value has doubled in the past year. Herb also sits on the board of the Cheesecake Factory. He is a father of eight and on his third marriage–this time to a former Miss Universe from Thailand.

42. Pigott family- $7.7 billion

Truck-maker Paccar is a family-owned business run by the Pigotts, who founded the firm back in 1905. Originally dedicated to making railway and logging equipment, the Pigott family made Sherman tanks for the Allied forces during World War II. Then it expanded into building medium- and heavy-duty trucks, now found in more than 100 countries. Mark Pigott stepped down from his role as CEO in late 2013, but remains active as Paccar’s executive chairman. Pigott, who is also a member of the Augusta National Golf Club, is the president of the Paccar foundation which has made more than $160 million in donations to education, social services, and the arts.

42. Stryker family- $7.9 billion

Inventor Homer Stryker founded Stryker Corp. in 1941, selling new medical equipment like the mobile hospital bed. His son Lee took over in 1955 but died in a plane crash in 1976. Lee’s three children Patricia, Jon and Ronda still hold large chunks of Stryker shares. Ronda, the only one who sits on Stryker’s board, gave $100 million to endow a medical school at Western Michigan University. Jon and Patricia are influential in Democratic national politics. Jon was an early donor to Ready for Hillary, a super PAC that encouraged Hillary Clinton to run for the White House. He also founded the Arcus Foundation to promote gay and lesbian causes. Patricia runs the Bohemian Foundation, which supports the arts and education.

41. Meijer family- $7.9 billion

Hendrik Meijer opened his first grocery store in 1934 in Michigan. He and his son Frederik pioneered the idea of one-stop shopping in 1962. Two years later he officially passed the reigns to Frederik, who ran Meijer until 1990, when he then passed it on to his sons Hank and Doug. The brothers remain co-chairman of the $15 billion (estimated sales) company, which now has more than 200 stores in six Midwestern states, including big-box stores and also smaller Meijer Marketplaces. In June 2015, Meijer opened its first stores in Wisconsin.

41. Hughes family- $7.9 billion

B. Wayne Hughes cofounded the company with a single locker in 1972; today he and his children own 15% of Public Storage, the nation’s biggest chain of self-storage facilities with more than 2,200 locations in the U.S. and Europe. B. Wayne retired as CEO of the Glendale, CA company in 2002 and is now chairman emeritus. His daughter, Tamara Hughes Gustavson, and son, B. Wayne Hughes, Jr. sit on the Public Storage board. All three are individual billionaires. Well known in the thoroughbred racing world, B. Wayne Sr. spends much of his time on his 700-acre Spendthrift Farm in Kentucky. He’s also an avid supporter of conservative politics and causes as well as the founder of American Commercial Equities, which is engaged in the acquisition and operation of commercial properties in California and Hawaii.

40. Shoen family- $8 billion

On its 70th anniversary, U-Haul — and the Shoen family behind it — has plenty to celebrate. The ubiquitous, bright-orange trucking company for do-it-yourself movers generated record profits of $357 million in 2015 on $3.1 billion sales (also a record). Its stock, trading under the corporate name Amerco, has also reached record highs this year, boosting the net worths of billionaires Joe and Mark Shoen, the company’s largest individual shareholders. The outlook hasn’t always been this sunny, as the Shoen family lays claim to one of the messiest dramas in American business history. L.S. Shoen and wife Anna Mary Carty (d. 1957) started the company in 1945 renting trailers for $2 per day. Success abounded until the 1970s, when L.S. and eldest son Samuel diversified into rentals of everything from video tapes to jet skis. Profits plummeted and younger brothers Joe and Mark orchestrated a boardroom coup in 1987. Joe became chief (and still is today) and returned U-Haul to truck rentals and, subsequently, prosperity. Not long after Joe took the helm, the fractured family took its squabbles to the courts and remained in nearly constant litigation for 25 years. At one point, L.S. Shoen accused his estranged sons of taking part in the murder of Samuel’s wife in 1990 before a paroled rapist confessed. L.S Shoen committed suicide in 1999. The last of the litigation concluded in 2012.

40. Bass family- $8.2 billion

The four Bass brothers — Sid, Edward, Robert and Lee — inherited a small fortune from their oil tycoon uncle Sid Richardson four decades ago and have been building on it ever since, working with investing talent like Richard Rainwater and David Bonderman. They control an intensely private fortune and may be worth far more than Forbes can pin down. Robert, the richest of the four, started an investment company called Oak Hill in the early 1990s, and it now has more than $35 billion in assets under management. The quartet’s mother Nancy Lee died at 95 in 2013, the day after her best friend and neighbor Van Cliburn, the famous pianist, passed away. She and her husband Perry (d. 2006) celebrated their 50th wedding anniversary by giving away $1 million to 50 different charities. Their collective fortune took a hit from the global rout in oil prices that has put pressure on fracking and domestic oil and gas production.

39. Reyes family- $8.6 billion

The Chicago family owns the largest beer distributor in the U.S., Reyes Beverage Group; the biggest food distributor to McDonald’s, Martin Brower; and food distributor Reinhart Foodservice . In June, Reyes Holdings signed a deal with Coca-Cola to be an exclusive distributor in the greater Chicago area and Northwest Indiana. The family first got into the business when it purchased a small South Carolina beer distributor for $740,000 in 1976. Christopher and M. Jude Reyes are majority owners and co-chairs of the $23.5 billion(sales) company. Brother David “Duke” Reyes is the CEO of Reyes Beverage Group and owns a minority stake. Brothers James and Tom are executives at Reyes Beverage Group while brother William is a director of Reyes Holdings.

39. Crown family- $8.8 billion

The Crown family’s holdings span the ski resort of Aspen, stakes in The New York Yankees and The Chicago Bulls, and 20% of Rockefeller Center. The patriarch is 90-year-old Lester, son of progenitor Henry. Henry and his two brothers started a building-supplies company in 1919. They learned how to defer taxes and construct a business using borrowed money. Henry merged his building-supplies company with General Dynamics in 1958. The Crown family still owns 10% of General Dynamic stock, worth some $4.8 billion at press time and the family’s largest single asset. Henry Crown remained an active investor and financier until his death in 1990. An estimated three family members share the fortune.

38. Marshall family- $9 billion

The Marshall family derives its wealth from a 14% stake in Koch Industries that the late oilman J. Howard Marshall II left to his son E. Pierce Marshall (shortchanging his eldest son and namesake, J. Howard III). J. Howard had invested in Great Northern Oil Co. and got his Koch Industries stock in the 1950s when Koch acquired an interest in Great Northern Oil. E. Pierce died in 2006, leaving the Koch Industries stock in trust with his wife Elaine as income beneficiary. The family has spent millions on lawyers thanks to J. Howard II’s financial and romantic adventures, including a May-December marriage to former Playmate Anna Nicole Smith. In 2014 the Fifth Circuit Court of Appeals largely affirmed the government’s tax claim against the family over J.Howard’s attempt to transfer the Koch stock at an unrealistically low value.

38. Gallo family- $10.3 billion

In 1933, two Gallo brothers, Ernest and Julio, started what would become the world’s largest winemaker in a Modesto, Calif. shed. They sold wine for half the going rate of $1 gallon. Wholesalers loved the bargain. Ernest (d. 2007) and Julio (d. 1993) ran E&J Gallo Winery for six decades: Julio grew the grapes, and Ernest sold them. Five-foot-four-inch Ernest was known for his swagger; he would force distributors to keep growing or threaten to take Gallo’s business elsewhere. More then a dozen children and grandchildren still run the wholly family-owned business, which has an estimated $3.8 billion in revenues, from the same fertile land in California. Wine brands include Gallo Family Vineyards, Barefoot Cellars, Frei Brothers and William Hill Estate. The company has expanded into liquor with New Amsterdam gin and vodka and Familia Camarena tequila.

37. Butt family- $10.4 billion

Florence Butt opened a grocery store in Texas in 1905 after her husband was diagnosed with tuberculosis and unable to work. Her son Howard Butt took over the company in the 1920s and expanded throughout Texas. Howard’s son Charles started as a bag boy at age 8. He has run the company, H.E. Butt, since 1971 and is the majority shareholder. His two siblings and two nephews also own stakes in the $20 billion (estimated sales) business, which has 316 stores in Texas and 52 in Mexico.

37. Rockefeller family- $11 billion

John D. Rockefeller (pictured) struck it rich with Standard Oil in the 19th century, becoming America’s first billionaire — adjusted to today’s dollars he would have been worth in excess of $30 billion. He and son John Jr. later dedicated themselves to philanthropy, giving away more than $1 billion, including establishing University of Chicago and Rockefeller University. John Jr. built Rockefeller Center. His grandson David — who had a long career with Chase National Bank — is the world’s oldest billionaire; he turned 100 in June. A devoted art patron, David still travels the world visiting museums, and his personal collection includes works by Monet, Picasso and Van Gogh.

36. (Don & Doris) Fisher family- $11 billion

The Fisher family’s Gap fortune began when Donald Fisher (d. 2009) became frustrated that he couldn’t find a pair of jeans that fit. He had trouble exchanging ill-fitting Levi’s with a salesman and struggled to find his 31-inch inseam in department stores. He turned his vexation into founding the first Gap store with his wife, Doris, in 1969. Originally a San Francisco jeans and music store, he planned on calling it “Pants and Discs” before Doris came up with “the Gap,” a nod to the notion of a generation gap. Today the $16 billion (sales) giant operates about 3,700 stores globally under brands that include Old Navy, Banana Republic and Athleta. The family still owns a 43% stake, and two of the couple’s three sons (Bill and Bob Fisher) sit on Gap’s board. The company announced in June 2015 that it would be shuttering 175 stores and laying off 250 employees amid sluggish sales. In 2000, Donald and Doris cofounded the KIPP Foundation, which supports a network of charter schools; son John Fisher remains its chairman.

36. Mellon family- $11.5 billion

Judge Thomas Mellon (d. 1908) emigrated from Ireland in 1818 and made a fortune starting in the 1840s with land, real estate and banking. He disliked his peers’ philanthropic tendencies and instead left his fortune to his children–with the expectation that they grow the pile further. And they did. His son Andrew Mellon (d. 1937) was a turn-of-the-century venture capitalist, investing in companies that became Alcoa and Gulf Oil. Later generations haven’t hit grand slams like those, but are still actively building businesses. Andrew’s grandson, Timothy, owns a New England railroad company. His grandnephew Richard Scaife, who owned a media company in Western Pennsylvania that includes Pittsburgh’s Tribune-Review, died in July 2014, leaving much of his fortune to charitable foundations (which Forbes does not count toward the family’s net worth). Matthew Mellon, an entrepreneur and investor in cryptocurrency startups like Ripple Labs, is now the face of the family.

35. Brown family- $12.8 billion

Founded by George Garvin Brown in 1870, Brown-Forman today makes some of the world’s best-known booze. That includes bar-shelf mainstay Jack Daniel’s, as well as Old Forester, the first bourbon bottled in America. The whiskey industry has been resurgent in recent years as consumers try new small-batch whiskeys and and rediscover old ones. Brown-Forman has tapped into that trend, too, making a big marketing push for its Woodford Reserve brand (now officially the bourbon of the Kentucky Derby) and Old Forester, which had been little known. The company also produces Finlandia vodka and Herradura tequila. The Browns own an estimated 51% of the publicly traded firm; George Garvin Brown IV, a member of the fifth generation, chairs the Brown-Forman board. At least 25 family members share the fortune.

35. (Charles and Rupert) Johnson family- $13.4

The Johnson family fortune stems from Franklin Resources, a global investment management firm and mutual fund manager with nearly $890 billion in assets under management. Known as Franklin Templeton Investments, it was started by Rupert H. Johnson in 1947 as a retail brokerage firm on Wall Street. When Rupert retired in 1957, his son, Charles B. Johnson, took over and was later joined by his half-brother, Rupert Jr., in the 1960s. The company went public in 1971. Charles’ son, Gregory, is chairman and CEO, and his daughter, Jennifer, is COO. Rupert Jr. is vice chairman. The family owns about 35% of publicly traded Franklin Resources. Charles also has a large stake in the San Francisco Giants baseball team.

34. Busch family- $13.5 billion

America’s first family of beer lost its business in 2008, when a group of Brazilian investors led InBev’s takeover of Anheuser-Busch. It was a stunning loss for a family that had been making beer since Adolphus Busch brewed his first batch of Budweiser in 1876. Prohibition almost put the company out of business, but his son August Busch Sr. survived by selling soda and ice cream. When Franklin D. Roosevelt repealed Prohibition, August reportedly sent a 24-beer crate to the White House. The family passed down the company through the generations but ended up selling an estimated 25% of the business from 1989 to 2008, leaving the family powerless to stop the $52 billion buyout bid. Seven years later, a branch of the Busch family is back in the beer business, albeit on a much smaller scale. Billy Busch founded William K Busch Brewing in 2011 with two lagers, Kraftig and Kraftig Light. Until recently, its beers were only distributed in Missouri and Illinois — but Billy insists it isn’t a micro-brewery and announced a major expansion into Texas in 2015.

34. Dorrance family- $13.6 billion

At least 11 descendants of one-time Campbell Soup Co. president and owner John T. Dorrance are heirs to his fortune. Together they own an estimated 50% stake in the company. Dorrance was a chemist who invented the formula for Campbell’s famous condensed soup in 1897 and became president of the company in 1914. His billionaire grandchildren Mary Alice D. Malone and Bennett Dorrance, as well as great-grandson Archibold D. van Beuren, sit on the board today. Charlotte Colket Weber, cousin of Malone and Dorrance and a devoted equestrian, stepped down at age 72 in November 2014 due to age limits. Heir John Dorrance III renounced his U.S. citizenship and moved to Ireland before cashing out his 10.5% stake nearly 20 years ago, reportedly to avoid capital gains taxes. Campbell Soup is now a global giant with more than $8.3 billion in revenues and brands such as Prego and Pepperidge Farm.

33. Sackler family- $14 billion

Brothers Arthur (d. 1987), Mortimer (d. 2010) and Raymond Sackler — all doctors — founded Purdue Pharma in 1952 after taking over a small, struggling New York drug manufacturer. The company sold several moderately successful products, like earwax remover and laxatives, but remained under the radar until the mid-1990s when Purdue began selling what amounted to morphine in a pill. OxyContin — a long-lasting, narcotic pain reliever — launched in 1995 and by 2003 Purdue was selling $1.6 billion of the product annually. But it quickly became abused by addicts who would crush the pills for a quick, intense high, sparking controversy and legal action against Purdue. The company paid more than $600 million in 2007 to settle charges with federal prosecutors that it had misbranded OxyContin as safer and less addictive than it was. Today, the company — still 100% owned by the Sackler family — generates more than $3 billion in sales in U.S., mostly from OxyContin. Separate Sackler-owned companies with similar products generate just as much money selling to Europe, Canada, Asia and Latin America. Purdue is once again facing a potentially enormous legal bill: a civil lawsuit by the state of Kentucky could reportedly yield damages in excess of $1 billion. Purdue denies wrongdoing in this case, noting that courts across the United States have dismissed similar cases against Purdue because evidence failed to establish the company’s marketing caused the alleged harm. An estimated 20 family members share the fortune.

33. Hunt family- $14.2 billion

Descendants of legendary wildcatter H.L. Hunt, the family has ranked among America’s richest since the 1960s. H.L., an inspiration for the character J.R. Ewing on the long-running TV series “Dallas,” had 15 children (one died in infancy) by three women. Today his descendants oversee discrete fortunes: Son Ray Lee oversees Hunt Oil; son William Herbert is a big player in shale; and daughter Caroline founded and later sold Rosewood Hotels & Resorts. His late son, sports magnate Lamar Hunt, is said to have named the Super Bowl, and his children still own the Kansas City Chiefs. In October 2014, his son Nelson Bunker Hunt, who tried to corner the silver market in the 1970s with brother William Herbert, died at age 88.

32. Du Pont family- $14.5 billion

The du Ponts own the nation’s oldest billion-dollar family fortune. It is also the largest, with an estimated 3,500 members. A prisoner during the French Revolution, E.I. du Pont fled Europe in 1799 for America, where he founded the company that continues to make his descendants rich two centuries later. DuPont started as a gunpowder manufacturer, later expanding into dynamite, paints, plastics, dyes and materials. Its scientists invented nylon, Kevlar and Teflon. Family members no longer run the company, which has evolved into a chemicals giant, but they still hold a substantial chunk of its shares. There is still an E.I. du Pont on the company’s board of directors. Pete du Pont was governor of Delaware from 1977-1985 and ran for president in 1988. Du Pont heir Robert Richards made national news in March 2014 when it came out that he had previously pled guilty to raping his three-year-old daughter. He was not the first member of the family to get in trouble with the law. In 1996 John E. du Pont murdered Olympic gold medal wrestler David Schultz. The story was retold in the 2014 film Foxcatcher, which was produced by another heir, Megan Ellison, daughter of billionaire Larry Ellison.

32. Ziff family- $15 billion

Third-generation Ziff brothers shook up how they’ve been managing their family fortunes: In 2014 the billionaire brothers Dirk, Daniel and Robert shuttered their hedge funds in the U.S. and London, though they’re still using high-profile Ziff Brothers Investments to manage a portion of their investments. Eldest brother Dirk started his own family office Ziff Capital Partners within the past year. The brothers are also reportedly investing some of their billions with investors who were formerly at their hedge funds. The roots of their fortune date back to 1927 when their grandfather William Sr. first started his publishing business. Their father William Jr. built up Ziff Davis, which became best known for such trade publications as PC Magazine and Car and Driver, before selling it for $1.4 billion in 1994. The brothers who got the proceeds have since increased those proceeds tenfold.

31. Lauder family- $16.5 billion

Queens, N.Y. native Estee Lauder started out selling homemade skin creams to women in hair salons. She founded the Estee Lauder cosmetics with her husband in 1946. The company has grown to encompass 30 brands of make-up, including Clinique, Bobbi Brown and MAC. The company board now includes her son Leonard, his son William (the current executive chairman) and Estee’s granddaughters Aerin and Jane, both of whom have spent their careers working for the firm. The Lauder family together controls 77% of the company’s voting power. Estee Lauder’s son Ronald, who is also the former U.S. ambassador to Austria and served as chairman of the cosmetics company, has recently spent time advocating for Jewish rights in the U.S. Congress and speaking out against antisemitism. Both Ronald and Leonard have also made names for themselves as impressive art collectors.

31. Newhouse family- $18 billion

Brothers Samuel (“Si”) and Donald Newhouse run Advance Publications. In March, the company agreed to sell its majority stake in Bright House Networks to Charter Communications for $10.4 billion. Bright House is a cable TV and Internet service provider with customers in Florida, Alabama, Indiana, Michigan and California. The deal is awaiting shareholder and regulatory approval and is expected to close by the end of the year. The brothers also own Conde Nast, publisher of magazines such as The New Yorker and Vanity Fair; the nation’s largest privately-held newspaper chain; and a stake in Discovery Communications, the operator of cable and satellite TV networks such as the Discovery Channel and TLC. Si and Donald inherited the company from their father, Sam Newhouse (d. 1979), who started out with one newspaper in New Jersey. Si reportedly stepped down from managing the magazine side of the business in 2011, but remains chairman. Donald oversees the newspaper division, which has over 30 editions including The Times-Picayune in New Orleans and The Plains Dealer in Cleveland. Donald’s son, Steven, is responsible for day-to-day management of the newspapers.

30. Duncan family- $22.4 billion

Born poor in rural Texas, Dan Duncan was raised by his grandmother from age 7 on, following the death of his mother and brother. He eventually struck it rich in oil and gas pipelines. When Duncan died in 2010 at age 77, he left his nearly $10 billion estate to his four children: Randa Duncan Williams, Milane Frantz, Dannine Duncan Avara and Scott Duncan, all of whom got equal shares. The family fortune has since more than doubled, thanks to generous dividend payouts and a rise in the stock price of pipeline behemoth Enterprise Products Partners. Randa, the eldest, is chairman of the board. Scott, 32, is the youngest American billionaire to have inherited his wealth.

30. (Edward) Johnson $26 billion

The Johnson family owns 49% of money manager Fidelity, the second largest mutual fund company in the U.S. (behind Vanguard) with $1.8 trillion in assets under management. Edward C. Johnson II (d. 1984) founded the Boston-based company in 1946. His son, Edward “Ned” Johnson III, ran the company from 1977 until last year when he stepped down as CEO. He remains chairman of the board. Ned’s daughter Abigail replaced him as Fidelity CEO in October 2014. Ned’s son Edward Johnson IV runs a family-owned real estate company. Another daughter Elizabeth is not involved at Fidelity.

29. S.C. Johnson- $28.8 billion

The Wisconsin family created many of the cleaning products in American homes including Ziploc, Windex, Glade and Shout. The company founder, S.C. Johnson, for whom the business is named, started a parquet flooring company in 1886 and developed a floor wax for his customers two years later. His son Herbert Fisk Johnson, who ran it until his death in 1928, died without a will, leading to a family struggle over the inheritance. Ownership of SC Johnson was divided 60-40 between his two children, Herbert Fisk Jr. and Henrietta Johnson Louis. Their descendants still own 100% of the $9.6 billion (estimated sales) company. Today, Herbert Fisk III, great-great grandson of the founder is CEO.

29. Pritzker family- $30 billion

Powerful Chicago family is best known for creating Hyatt Hotels. The family spent the 2000s feuding over trusts and eventually divvied up the fortune. Penny is Commerce Secretary; Thomas chairs Hyatt Hotels. Gigi is a movie producer (Draft Day); John owns boutique hotel group Commune Hotels; brothers Anthony and JB run Pritzker Group investment firm; Karen and her husband Michael are active investors. Liesel Pritzker Simmons, who sued her father and the Pritzker family in 2003 (the family settled), is an impact investor. Altogether there are 11 individual billionaire members of the family. Roots of the fortune date to A.N. Pritzker (d. 1986), who with his sons Jay and Robert created Hyatt Hotels and invested in holdings like industrial conglomerate Marmon Group, now owned by Berkshire Hathaway.

28. Hearst family- $32 billion

Orson Welles’ Citizen Kane was largely based on publishing magnate William Randolph Hearst, who first placed his name on the masthead of the San Francisco Examiner as “Proprietor” in 1887. His son, William Randolph Hearst Jr., became a Pulitzer Prize winning journalist. His grandson William R. Hearst III now chairs the modern day Hearst media empire, which includes 49 newspapers, nearly 340 magazines around the globe and valuable stakes in cable TV channels ESPN, Lifetime and A&E. Two years into the leadership of CEO Steven Swartz, the Hearst Corporation continues to grow, delivering record revenues north of $10 billion, while investing in up-and-coming media outlets like Vice and BuzzFeed. Over the years, the family had its fair share of scandals, from the kidnapping of Patty Hearst by a guerrilla group in the 1970s, to a nasty divorce between the late John R. “Bunky” Hearst Jr. and his wife Barbara that revealed some of the inner workings of the family’s secretive trust.

28. Cox family- $34.5

The Cox fortune dates to 1898, when James M. Cox purchased the Dayton Evening News. The company subsequently expanded to TV, radio and more: Cox Enterprises includes Cox Communications (cable TV, broadband) and Cox Media Group (newspapers, TV, radio stations), and the company is now adding to its automotive assets. In June 2015 it announced a $4 billion deal to acquire publicly traded DealerTrack, a maker of software for car dealerships. Through Cox Enterprises, the family already owns AutoTrader.com, Kelley Blue Book and Manheim car auctions. The fortune is divided between James Cox’s daughter, Anne Cox Chambers, and his grandchildren, James Kennedy and Blair Parry-Okeden; Kennedy chairs Cox Enterprises and served as its CEO from 1988 to 2008.

27. Cargill-MacMillan family- $45 billion

The Cargill-MacMillan clan includes 14 billionaires, more than any other family in the world. Along with several other cousins, they own 88% of Cargill Inc., America’s largest private company. The $128 billion (revenues) agribusiness giant sells food, processes crops, trades commodities, sources ingredients and provides financial risk management. It all started with W.W. Cargill, the son of a Scottish sea captain, who founded the company as a small grain storage business in 1865 at the close of the American Civil War. He got rich as railroads expanded westward at the end of the century, turning the Great Plains into America’s bread basket. Cargill’s son-in-law, John MacMillan, took over the business in 1909. The final member of the family to serve as CEO, Whitney MacMillan, stepped down in 1995. Today only six members of the family sit on Cargill’s 17-person board, thanks to an agreement between family factions in the mid-1990s. The family leaves 80% of the company’s net income inside the company for reinvestment each year.

27. Mars family- $80 billion

Forrest Jr., Jacqueline and John own 100% of Mars, the largest candy company in the world with $33 billion in sales. The siblings, who sit on the board but have no daily role, inherited the company in 1999 when their father Forrest Sr. died. Their grandfather Frank began selling candy from his Tacoma, Washington kitchen in 1911. Their father joined the company in 1929, around the same time the company invented the malt-flavored nougat that became the basis of Milky Way and Snickers. The company later created M&Ms, over 400 million of which are produced in the U.S. each day. Mars also makes Uncle Ben’s rice and owns pet food brands Pedigree and Whiskas. Jacqueline is a trustee of the U.S. Equestrian Team and sits on the board of directors of the National Sporting Library and Fine Art Museum. Forrest is interested in historical preservation and is a trustee of the Colonial Williamsburg Foundation. John and his wife Adrienne are noted supporters of the Fred W. Smith National Library for the Study of George Washington at Mount Vernon.

26. Koch family- $86 billion

Bitter split led brothers William and Frederick Koch to sell out of the Koch family business – started with refineries by their father, Fred Sr., in the 1930s — for a reported $700 million in 1983. That left the two other siblings, Charles and David, in charge of expanding their conglomerate, Koch Industries, now the nation’s second largest private company (behind Cargill) with more than $100 billion in sales. Feeling shortchanged, William and Frederick spent more than a decade suing for more, but today are worth a fraction of their more powerful siblings, who both rank among the nation’s top 10 richest individuals. Charles and David plan to be big spenders in the 2016 elections through their various conservative organizations. Charles told USA Today in April he and his 450 wealthy followers plan to spend $300 million on the elections over the next two years.

26. Walton family- $149 billion

The Walton family has ironclad control over the world’s largest retailer: Together, six of the Waltons own nearly 54% of the shares. Rob Walton stepped down in June as chairman of the company, a position he held for 23 years. His son-in-law Greg Penner succeeded him. Though often embroiled in controversy — Mexican bribery scandals and criticisms over employee pay have grabbed headlines over the past year — Walmart’s sales haven’t suffered: it generated $486 billion in revenue in fiscal year 2015 . The company has come a long way since it was started by Sam Walton (d. 1992) and his brother James “Bud” (d. 1995) in a small Arkansas town in 1962. The fortune they left behind is now held by Sam’s three living children and daughter-in-law, and Bud’s two daughters.

Revealed: The 50 Richest Families in the U.S. and How They Got Their Wealth

This article reveals the one common trait that each of these 50 wealthy families share – that is they are OWNERS of wealth-creating, income-producing capital assets held by corporations they own individual shares in.

The challenge is to enact financial mechanisms that will empower EVERY child, woman and man, regardless of current financial condition, to acquire future wealth-creating, income-producing capital assets simultaneously with the growth of the economy without the requirement of past savings, using insured, interest-free pure capital credit, repayable out of the future earnings of the investments in the growth of our economy. In this way, we can build an environmentally responsible future economy that can support general affluence for EVERY citizen.

Taxpayer-Funded Capitalism: Here Are The Biggest Corporate Subsidy Deals Of 2016

Taxpayer-funded capitalism: Here are the biggest corporate subsidy deals of 2016Enlarge(Credit: Getty/Sebastien Bozon/Salon)

On December 27, 2016, Angelo Young writes on Salon:

It seems a week doesn’t go by before a local or state government is trying to attract or retain a company by dangling incentives to lure business away from another local or state government trying to do the same. Perhaps this is just the reality of living in a country that in so many ways behaves like 50 little countries competing against each other.

For better or worse, these deal-sweeteners extended by governors, state legislators or local city councils leads to billions of dollars a year of taxpayer money going from public to private coffers. Defenders of the process argue this is money well spent on creating or retaining local jobs, fighting blight and economic stagnation and, ultimately, leading to a net plus return on the investments. Critics question if lofty promises of future revenue and job growth are always kept, and point to how this system encourages companies to aggressively pursue taxpayer-supported private projects.

In one of the last corporate incentive packages for the year, the city of Fresno, California, has offered Seattle online retail and cloud computing giant Amazon.com an incentive package worth up to $30 million to build a massive $200 million order-fulfillment warehouse at an area business park. The package of property- and sales-tax rebates comes on top of up to $15 million the city has spent preparing the site with water, sewer and other utilities, according to a local lawmaker who spoke recently to the Fresno Bee.

The Fresno deal is small compared to some of the largest incentive packages out there, but it adds up. According to Good Jobs First, an organization that tracks public subsidies of private enterprise, Amazon.com has accumulated $241.4 million worth of deals similar to the one offered by Fresno since the start of last year.

But that combined value doesn’t even put Amazon.com at the top of the list of the biggest single subsidy deals of 2016. Below is the list of top corporate subsidy deals offered by state and local governments for 2016. The list includes all known deals worth at least $50 million in public funds and excludes federal grants to private companies. It could be slightly revised if any late-year deals are announced and added to a database managed by Good Jobs First.

VIDEOBEHIND THE BIGGEST DEAL TECH EVER

1. Sagamore Development

The real-estate developer owned by Under Armour CEO Kevin Plank won a $660 million deal from the Baltimore Development Corporation to upgrade Port Covington, a former rail yard that’s being turned into a 660-acre mixed-use site. When completed, this $5.5 billion “mini-city” will include two light rail stations and lots of residential and commercial properties. Under Armour plans also to construct a new 50-acre global corporate campus at the site. Plank had been quietly buying up properties at the site for years using a series of limited liability corporations. The subsidy for the project comes from so-called tax increment financing, or TIF, a common way for cities to refurbish blighted areas. TIFs have been criticized for contributing to gentrification by pricing out nearby residents as new money floods in. They have sometimes been used to benefit developers when they help fund projects that would have moved forward anyway. California passed legislation in the late 1990s to curb TIF abuses.

2. Continental Tire, the Americas, LLC   

The Fort Mill, South Carolina-based subsidiary of the German automotive parts manufacturer Continental AG won a $596 million deal from the state of Mississippi to build a tire plant in Hinds County. The $1.45 billion factory will create 2,500 jobs, according to state lawmakers, or nearly $240,000 in taxpayer subsidies for each job. An Associated Press analysis of the deal suggests the project could lead to additional incentives worth more than $333 million. The package’s worth comes from tax breaks on property, income and sales, among others. Furthermore, state income taxes collected from the employers would be transferred to the company. Some of the tax breaks have no expiration date. The state claims it will come out ahead by $220 million by 2040.

3. Walt Disney

The media and entertainment giant, one of the world’s most profitable companies, received a $267 million gift from state taxpayers for a planned luxury hotel in Anaheim, California. It’s the city’s largest corporate tax break in history, according to the Los Angeles Times. The deal lets the company pocket 70 percent of the bed taxes (a common source of tax revenue for areas with robust tourist activity) collected from the hotel for 20 years. The project will be built on an area that’s currently a parking lot situated next to another Disney hotel. The Burbank, California, company had said it would not build the hotel without the subsidy, but it has numerous properties in the area, including a four-star Disneyland hotel, which accommodates the growing attendance numbers of its area attractions. Disney is also building “Star Wars Land” nearby, so critics have questioned whether Disney was bluffing the Anaheim City Council on its threat to pull the project.

4. Lockheed Martin

The world’s largest defense contractor received a generous $220 million gift from Connecticut taxpayers to keep its Sikorsky Aircraft division in the city of Stratford. The offer from Gov. Dannel Malloy includes grants of up to $8.6 million a year for 14 years if the maker of U.S. Navy helicopters meets certain benchmarks, like increasing its number of employees and using in-state suppliers. The company agreed to spend $350 million procuring supplies locally. If it creates at least 100 jobs a year it can receive additional performance grants of up to $1.9 million a year for 20 years,according to the Harford Courant. Lockheed Martin also agreed to build 200 CH-53K King Stallion heavy-lift helicopters. Lockheed Martin employed about 8,000 people in the state as of August. Moving Sikorsky would have dealt a huge blow to that number. Lockheed Martin bought Sikorsky from its rival United Technologies for $9 billion last year.

5. Shan Dong Sun Paper Industry

The Chinese paper company received a $167.5 million subsidy for its first U.S.-based facility, a $1 billion pulp plant in Arkadelphia, in southern Arkansas. One of the largest private investments in the state’s history, it is expected by state officials to support 250 employees while sustaining about 1,000 indirect jobs in the timber industry, according to the Associated Press. A state official said the company had been considering Mississippi as an alternative location. The incentive package includes $92 million in property-tax abatement and $12.5 million from the state for on-site preparation and equipment. It will also receive $3 million from taxpayers to train the workers. The state will also speed up the process for approving environmental permits.

6. General Electric

While Lockheed Martin received a generous incentive package to keep operations in Connecticut, General Electric accepted a $145 million deal from Massachusetts taxpayers to move its global headquarters 180 miles, from Fairfield, Connecticut, to Boston. Massachusetts Gov. Charlie Baker and Boston Mayor Martin J. Walsh said the deal would create 800 jobs and “cement the company as an anchor in the city’s innovation industry,” according to the governor’s office. The deal includes $120 million in grants and infrastructure improvements and $25 million in property tax abatements. GE will also receive $1 million to train its workforce and has been promised improvements to public transportation in the vicinity of its new headquarters.

7. Novo Nordisk

The Danish leading manufacturer of diabetes treatments won a $110 million package of incentives to build an insulin plant in Clayton, North Carolina. The $1.8 billion project will create the world’s second-largest maker of the diabetes drug and employ 700 workers, according to Raleigh’s News & Observer. Most of the subsidy, $94 million, comes from tax rebates; the rest comes from a grant for job development. The area is part of a burgeoning pharmaceutical production hub that includes Spanish blood plasma manufacturer Grifols.

8. Marriott International

Like Lockheed Martin and General Electric, the world’s largest hotel chain received taxpayer money in 2016 based on the question of whether it would move its corporate headquarters. Bethesda, Maryland, will not lose Marriott after the state agrees to a $62 million package of subsidies to keep its headquarters in place. Instead of moving out of the city, the company will relocate its headquarters and its 3,500 employees five miles from its current location at a cost to taxpayers of $17,500 per employee, the Washington Post reports. In 1999, state and local officials offered Marriott $43 million and a deal to fast-track road improvements if the company promised to stay at its location and create 700 jobs.

http://www.salon.com/2016/12/27/taxpayer-funded-capitalism-here-are-the-biggest-corporate-subsidy-deals-of-2016/#.WGKoMq_ZCuI.facebook

Such subsides ONLY really ever benefit the wealthy ownership class who end up further concentrating their ownership of future wealth-creating, income-producing capital asset wealth with the support of tax-payer subsidies – all in the name of job creation.

Such economic development subsidies enhance the productivity of the wealthy capital ownership class through their ever-expanding capital asset accumulations. It would be far better to make non-owners, such as workers and the vast majority of citizens, productive by owning both labor and capital, than to tax the citizenry to support the further accumulation of capital wealth among a few.

The task is to create ownership opportunities for the vast majority of Americans who derive an income ONLY from wages or welfare, and unleash the full potential of a technological production revolution, in which new owners are created simultaneously with the growth of the economy.

This is what enacting the Capital Homestead Act would accomplish. Support the Capital Homestead Act (aka Economic Democracy Act) at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/.

Growth, Not Forced Equality, Saves The Poor

CreditDanny Schwartz

On December 23, 2016, Deirdre N. McCluskey writes in The New York Times:

Anger about economic inequality in the United States dominated the presidential election. But while polemics about the issue have flourished across the political spectrum, clarity has not.

Lack of clarity about inequality has been around for a long time. Look, for example, at the Illinois state constitution, adopted in 1970. It sought to “eliminate poverty and inequality.”

Note the linkage of poverty and inequality. It sounds good. Who wouldn’t want to eliminate both of them?

But think it through.

Eliminating poverty is obviously good. And, happily, it is already happening on a global scale. The World Bank reports that the basics of a dignified life are more available to the poorest among us than at any time in history, by a big margin. Shanghai, a place of misery not very long ago, now looks like the most modern parts of the United States, though with better roads and bridges. The real income of India is doubling every 10 years. Sub-Saharan Africa is at last growing. Even in the rich countries, the poor are better off than they were in 1970, with better food and health care and, often, amenities like air-conditioning.

It is true that conspicuous displays of wealth are vulgar and irritating. But they are not something that a nonenvious principle of public policy needs to acknowledge.

Poverty is never good. Difference, including economic difference, often is. It is why New Yorkers exchange goods with Californians and with people in Shanghai, and why the political railing against foreign trade is childish. It is why we converse, and why today is the great age of the novel and the memoir. It is why we celebrate diversity — or should.

A practical objection to focusing on economic equality is that we cannot actually achieve it, not in a big society, not in a just and sensible way. Dividing up a pizza among friends can be done equitably, to be sure. But equality beyond the basics in consumption and in political rights isn’t possible in a specialized and dynamic economy. Cutting down the tall poppies uses violence for the cut. And you need to know exactly which poppies to cut. Trusting a government of self-interested people to know how to redistribute ethically is naïve.

Another problem is that the cutting reduces the size of the crop. We need to allow for rewards that tell the economy to increase the activity earning them. If a brain surgeon and a taxi driver earn the same amount, we won’t have enough brain surgeons. Why bother? An all-wise central plan could force the right people into the right jobs. But such a solution, like much of the case for a compelled equality, is violent and magical. The magic has been tried, in Stalin’s Russia and Mao’s China. So has the violence.

Many of us share socialism in sentiment, if only because we grew up in loving families with Mom as the central planner. Sharing works just fine in a loving household. But it is not how grown-ups get stuff in a liberal society. Free adults get what they need by working to make goods and services for other people, and then exchanging them voluntarily. They don’t get them by slicing up manna from Mother Nature in a zero-sum world.

We could use state violence to take wealth from billionaires like Bill Gates and give it to the homeless, achieving more equality. (Mr. Gates is in fact giving away his fortune, to his credit.) Short of expropriation, we can and should join in supporting a safety net, keeping the violence to a minimum. K-12 public education, for example, should be paid for by compelled taxes on all of us. But we should not be doing a lot more.

As a matter of arithmetic, expropriating the rich to give to the poor does not uplift the poor very much. If we took every dime from the top 20 percent of the income distribution and gave it to the bottom 80 percent, the bottom folk would be only 25 percent better off. If we took only from the superrich, the bottom would get less than that. And redistribution works only once. You can’t expect the expropriated rich to show up for a second cutting. In a free society, they can move to Ireland or the Cayman Islands. And the wretched millionaires can hardly re-earn their millions next year if the state has taken most of the money.

It is growth from exchange-tested betterment, not compelled or voluntary charity, that solves the problem of poverty. In South Korea, economic growth has increased the income of the poorest by a factor of 30 times real 1953 income. Which do we want, a small one-time (though envy-and-anger-satisfying) extraction from the rich, or a free society of betterment, one that lifts up the poor by gigantic amounts?

We had better focus directly on the equality that we actually want and can achieve, which is equality of social dignity and equality before the law. Liberal equality, as against the socialist equality of enforced redistribution, eliminates the worst of poverty. It has done so spectacularly in Britain and Singapore and Botswana. More needs to be done, yes. Namely, more growth, which is sensitive to environmental limits and will require a proliferation of rich engineers. Let them have their money from devising carbon-fixing techniques and new sources of energy. It will enrich all of us.

To borrow from the heroes of my youth, Marx and Engels: Working people of all countries unite! You have nothing to lose but stagnation! Demand exchange-tested betterment in a liberal society.

Some dare call it capitalism.

Gary Reber comments: The greatest crisis facing our country today is the obscene level of wealth and income economic inequality we now see, which has come about due to concentrated ownership of the productive assets employed in the production of products and services in our economy. This is a moral issue, an economic issue, and a political issue.

If both labor and capital are independent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all. Yet, sadly, the American people and its leaders still pretend to believe that labor is becoming more productive, and ignore the necessity to broaden personal ownership of wealth-creating, income-producing capital assets simultaneously with the growth of the American economy.

To put this in context, it is important to briefly note that throughout history, man has endeavored to overpower the time constraints of physical and biological processes. It is now an accepted fact that accelerated scientific and technological innovation has directly led to a speeding up of all physical and social processes in the name of progress. The competitive drive has led to a frantic national and international chase for more efficient methods of production and distribution. In the process, humanity has pushed to develop even more powerful technologies, on the assumption that such technologies would accomplish more and more useful functions in less time. The results have been a dramatic acceleration of change and concentration of wealth ownership.

Economic democracy has yet to be tried. We are absent a national discussion of where consumers earn the money to buy products and services and the nature of capital ownership, and instead argue about policies to redistribute income or not to redistribute income. If Americans do not demand that the contenders for the office of the presidency of the United States, the Senate, and the Congress address these issues, we will have wasted the opportunity to steer the American economy in a direction that will broaden affluence. We have adequate resources, adequate knowhow, and adequate manpower to produce general affluence, but we need as a society to properly and efficiently manage these resources while protecting and enhancing the environment so that our productive capital capability is sustainable and renewable. Such issues are the proper concern of government because of the human damage inflicted on our social fabric as well as to economic growth in which every citizen is fairly included in the American dream.

Binary economist Louis O. Kelso wrote: “In the distribution of social power, whether it be political power or economic power, all things are relative. The essence of economic democracy lies in the elimination of differences of earning power resulting from denial of equality of economic opportunity, particularly equal access to capital credit. Differences of economic status resulting from differences in advantages taken and uses made of differences based on inequality of economic opportunity, particularly those that give access to capital credit to the already capitalized and deny it to the non- or -undercapitalized, are flagrant violations of the constitutional rights of citizens in a democracy.”

The fact is that political democracy is impossible without economic democracy. Those who control money control the laws that foster wage slavery, welfare slavery, debt slavery and charity slavery. These laws can and should be changed by the 99 percent and those among the 1 percent who are committed to a just and economically classless market economy, true equality of opportunity, and a level playing field in the future for 100 percent of Americans. By adopting economic policies and programs that acknowledge every citizen’s right to contribute productively to the economy as a capital owner as well as a labor worker, the result will be an end to perpetual labor servitude and the liberation of people from progressive increments of subsistence toil and compulsive poverty as the 99 percent benefits from the rewards of productive capital-sourced income.

The Dark Side Of Christmas: The Impact On Sweatshops

2016.12.17.Ukaegbu.mainIt’s not elves, but underpaid Chinese workers working around the clock that will enable you to unwrap your presents. (Photo: Danijel-James Wynyard / Flickr)

On December 17, 2016 Amage Uknegbu writes on Truth Out:

Television screens are filled with Christmas advertising, propagating the apparent need to buy something, and above all electronics, apparel, toys — the most popular Christmas gifts. The festive countdown is well underway.

Three points specifically define the ‘festive’ season: advertisements and commercialisation, shopping and spending, and increased revenue for the Western economy. Data from Capgemini and new in the UK‘s industry association for e-retail, the Interactive Media in Retail Group (IMRG), reveal that in 2015, British retailers took in over £24 billion (roughly $30 billion) during the Christmas period alone, more than the entire GDP of countries like Nepal or Honduras. This spending craze is linked with advertisement and the increasing consumerism promoted by mass-, and now social media.

US discount events, hyperbolically labelled ‘Black Friday’ and Cyber Monday’, have been transposed across Europe, with the periods before Christmas and between Christmas and New Year’s Day becoming the busiest spending times in our annual calendars.

Over last year’s discount weekend, British consumers spent a whopping £3.3 billion ($4.16 billion). Masses took to the internet to buy, spending £968 million on Cyber Monday alone, causing the websites of large UK retailers, including Argos, Tesco and John Lewis, to crash. Struggling to cope with the surge of online purchased goods, courier firms imposed daily caps on the number of orders accepted from online retailers.

Real World Elves

The imagery of cheerful elves making gifts in Santa’s workshop is far from the reality, and contributes to hide from our sight the conditions of workers in the factories that make what we so enthusiastically buy. Some 80 per cent of the world’s toys are manufactured in China, with just about every popular children’s toy bearing a ‘made in China’ label on its underbelly. The harsh reality is that long before Christmas songs are blasting from every department store in the West, these ‘elves’ who are in fact, real, living Chinese workers, are forced to work around the clock to churn out millions of products, ready for arrival in western stores for the festive season.

In the UK alone, Chinese toy factories serve a market worth of £2.8 billion ($3.53 billion) a year, yet the big brands for which these products are made — including Lego and Disney — pay factories only a fraction of the shop price, with the social and environmental costs not reflected in the price of these toys. Exploitation is the only term to adequately describe this phenomenon.

Of course, sweatshop labour is not limited to toys, also including electronics and apparel. Topping many Christmas wish-lists are Apple, Amazon and Samsung gadgets, companies all found to be complicit in worker rights violations within their supply chains, in the company of notable high street brands such as Nike and Topshop. Samsung have come under criticism for exposing their workers to toxic chemicals and for their ‘no union’ policy in Asia, and Apple for working conditions that have forced workers to suicide. Conflict minerals from the Democratic Republic of Congo end up in more than 50 per cent of all battery powered equipment.

To cope with this, workers are forced to endure inhumane treatment, working excessively long hours for unethically low wages, in unsafe conditions, facing verbal, and often physical or sexual abuse. All in complete violation of their fundamental human rights.

This is the gruelling monotonous life endured by millions of factory workers across the world, to meet the increased consumer demand of the Christmas shopping period.

A Call to Action

Christmas consumerism undoubtedly fuels sweatshop labour, but to place blame on consumers is misguided, landing us in the old trap of blaming individuals for a problem ultimately systemic. For many consumers facing stagnating wages and increasing product prices, the mainstream goods are the most, if not only, affordable options. Products like the Fairphone are expensive, and no such alternatives exist for the common laptop or desktop.

Arguments that sweatshops increase gender empowerment for women who work in factories, or increase the wealth of individuals previously impoverished, fail to accept one harsh reality: in some places sweatshop employment is akin to slavery. Benefiting while wronging is exploitation at its core.

On the other hand, to abandon the global industry in favour of only ‘buying local’ or accepting the existence of sweatshops as an ‘escalator out of poverty’, is to abandon workers in the Global South. Many workers have been made to work in sweatshops because they have no alternatives for making a living.

It is the structure that leaves workers with poor ‘choices’, if any, that must be questioned.

Genuine worker participation remains the key for making real progress in the fight to abolish sweatshops in supply chains. As consumers, the best approach to the injustice of sweatshops is to support the unionisation of workers, highlight the resistance from workers themselves, and provide opportunities for their voices to be heard, supporting campaigns for better wages and conditions, despite their often slow and incremental progress.

Critics argue that campaigns for higher standards often translate to factory closures, but there are two reasons to doubt this claim. Firstly, the gap in pay and conditions between the Global South and the Global North is so large that significant improvements can be made without removing the incentive for companies to remain invested in the Global South. Secondly, in fact major progress has already been made by labour activists challenging the status quo, yielding promising results.

Bangladesh is an important example. The disturbing collapse of the Rana Plaza building in 2013 killed over a thousand workers. After that, over 200 apparel brands (such as Adidas and Primark), retailers and importers (from over 20 countries across four continents) have signed up to the Accord on Fire and Building Safety in Bangladesh. A total of 1,592 factories are now covered under the Accord inspection programme.

In addition, although Bangladesh still has the lowest minimum wage in the world, this has increased significantly from $38 per month to $68. This change can be attributed to labour unrest and public protest.

Bangladesh remains very much open for business. Undoubtedly, this is a reason more and more workers around the globe are coming out in their thousands, braving unemployment, reprisals, and police brutality, to press for better pay and conditions.

Despite their courage, sweatshop labour persists. We need to show solidarity. It is unacceptable that a century after 146 workers perished in the 1911 Triangle Shirtwaist Factory fire in New York City, after which public outcry brought US workers basic rights and protections, we are still advocating for the same basic rights and protections in the Global South.

Current laws prohibiting sweatshop labour within countries are largely ineffective, inadequately enforced and are too often circumvented or ignored. The absence of effective policy action and legal frameworks to ensure worker rights, together with the lack of sanctions against these abuses, represents state complicity and neglect of the UN Declaration of Human Rights. This applies to states in which manufacturing occurs, and states that benefit from the imports. So, governments and businesses are jointly to blame. The persistence of sweatshops directly reflects the failure of the collective global responsibility to protect the human rights of the world’s most vulnerable people.

Eradicating sweatshop labour is daunting, but possible. It requires political will, pro-active multifaceted approaches at the community, national and international levels , and relentless pressure from workers, stakeholders, governments and consumers.

In a complex global economy, with supply chain webs, transparency is the first step to accountability. By supporting campaigns by groups like Maquila Solidarity Network, the Worker Rights Consortium, Electronics Watch and SweatFree communities, consumers can show solidarity with those on the frontlines fighting to ensure that the gifts under our Christmas trees are sweatshop free.

http://www.truth-out.org/news/item/38771-the-dark-side-of-christmas-the-impact-on-sweatshops

 

Higher Wages v. Higher Incomes

On December 13, 2016, Michael D. Greaney writes in the Perth Herald Tribune:

The closing week of November in the United States saw “National Day of Action to Fight for $15,” meaning an across the board hike in the federal minimum wage of $7.25 to $15.00 per hour throughout the country. Many low-paid workers walked off the job and participated in protests, with a number being arrested in various demonstrations.
Ironically, McDonald’s U.S.A., the poster child for minimum wage jobs, had recently announced a nationwide program to replace human workers with robots. Another restaurant chain, Eatsa, has established five fully automated stores around the U.S., essentially giant vending machines. This is a concept familiar to anyone who has visited Tokyo, where you can buy almost anything in vending machines, even a hotel room.

As a result, people who once had an inadequate income now face the possibility of having no income at all. And replacing human beings with technology is not the worst of it.

Technology is expensive. Some companies may be forced out of business because they can’t afford the investment in technology to replace the labor that they also can’t afford. This also artificially raises labor costs, which increases prices. This hurts the poor and under-employed workers.

 That, however, is not the only drawback to raising wages. If the (former) workers have no income, they cannot buy products. If there are no sales, there are no profits. If there are no profits, why produce anything? As Ronald Reagan related in an anecdote he told when governor of the state of California:

“Some years ago a top Ford official was showing the late Walter Reuther through the very automates plant in Cleveland, Ohio and he said to him jokingly, “Walter, you’ll have a hard time collecting union dues from these machines and Walter said, “you are going to have more trouble trying to sell automobiles to them.” Both of them let it stop there. There was a logical answer to that . . . the owners of the machines could buy automobiles and if you increase the number of owners you increase the number of consumers.

“Over hundred years ago Abraham Lincoln signed the Homestead Act. There was wide distribution of land and they didn’t confiscate anyone’s privately owned land. . . . We need an industrial Homestead Act.”

The implied lesson was ignored. Unions continued to push for higher fixed wages and benefits . . . and U.S. automakers either installed robots or shipped jobs to lower-wage countries. Detroit, Michigan went from being a prosperous city in the heart of industrial America, to disaster area. Detroit didn’t mere decay. It decomposed.

Contrary to Reagan’s statement, however, Reuther didn’t let it stop there. As he testified before Congress prior to dying in an airplane crash:

“Profit sharing in the form of stock distributions to workers would help to democratize the ownership of America’s vast corporate wealth which is today appallingly undemocratic and unhealthy. . . . Profit sharing in a form that would help to correct this shocking maldistribution would be highly desirable for that reason alone. . . . If workers had definite assurance of equitable shares in the profits of the corporations that employ them, they would see less need to seek an equitable balance between their gains and soaring profits through augmented increases in basic wage rates. This would be a desirable result from the standpoint of stabilization policy because profit sharing does not increase costs. Since profits are a residual, after all costs have been met, and since their size is not determinable until after customers have paid the prices charged for the firm’s products, profit sharing as such cannot be said to have any inflationary impact upon costs and prices.”

A detailed proposal that would address the concerns of both workers and business owners — by turning workers into owners — can be found in a brief version of the Capital Homesteading proposal of the Center for Economic and Social Justice (CESJ), which can easily be adapted for application in any country.

http://ph-tribune.com/higher-wages-incomes-kurland/

These Are The Countries Where Robot Automation Could Decimate The Economy

On March 3, 2016 , Jack Smith IV writes on Tech.Mic:

The robot revolution isn’t going to be a science fiction vision of war between humans and our mechanical creations. It’s going to be humans buying these machines, digital and physical, to replace other humans in the workforce. Baristas. Drivers. Tailors. Bankers.

But not everyone will suffer equally.

It’s estimated that 47% of jobs in the U.S. are at risk of automation, and some cities will be hit worse than others. Worldwide, that number averages at 57%. And in some nations, according to a report from Oxford Martin School and Citi Research, some nations have it as bad as 85%.

Using data provided to Mic by the Oxford Martin School, we’ve put together a visualization of the most at-risk countries:

These Are the Countries Where Robot Automation Could Decimate the Economy

The high-risk standouts are countries like Ethiopia, China and Bangladesh, where the United States has exported domestic manufacturing jobs for cheaper labor to make things like clothing and technology.

Until now, foreign outsources has meant rocketing GDP growth. In China’s case, these new jobs have helped China rapidly industrialize and seize the world stage as a contemporary superpower. But all that could change if the workers in these countries start asking to be treated like, well, humans.

What is a worker worth? So far, the developing world has been spared the pains of automation because labor is so cheap there. Robots are expensive, and replacing people with machines is only a profit-driver if those people are expensive, as they are in the United States.

But that could right itself eventually if conditions get better for workers and they begin to demand adequate pay and more stable working conditions.

These Are the Countries Where Robot Automation Could Decimate the Economy
Source: Vincent Yu/AP

“Thus, in essence, while the potential labor market disruption associated with the expanding scope of automation is likely to affect the developing world later than advanced economies, it may be potentially more disruptive in countries with little consumer demand and limited social safety nets,” the report says.

The idea of those countries losing their new manufacturing empires to robots is compounded by the possibility that they don’t have safety nets capable of supporting a sudden wave of unemployment. The Oxford Martin report suggests these countries focus on education to “upskill” workers, the way cities like New York and San Francisco, which have diverse range of industries, have created and recruited new workforces in response to big economic shifts.

Otherwise, the fate of cities like Detroit and Flint could become the harbingers of entire foreign countries.

https://mic.com/articles/136783/these-are-the-countries-where-robot-automation-could-decimate-the-economy#.Tv1g9YHsK

 As is other articles about the non-human factor dominating the future of production, the focus is on jobs loss and a safety net for citizens displaced by technological invention and innovation.

This is another recent article that looks at a future where there will be  hordes of citizens of zero economic value.  That is, unless the system can be reformed to empower EVERY citizen to acquire OWNERSHIP in the wealth-creating, income-producing capital assets resulting from technological invention and innovation.

Because productive capital is increasingly the source of the world’s economic growth it should become the source of added property ownership incomes for all. The reality is if both labor and capital are independent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all.

Rather than focus on Job Creation, Job Retraining, and a redistributed Minimum Guaranteed Income that holds back technological invention and innovation, our economic policies should focus on wealth-creating, income-producing capital Ownership Creation, and abating monopoly concentrated ownership.

Given that there is no question that robotic technology will continue to expand the productivity and in large measure destroy jobs and devalue the value of human labor, the question that SHOULD be urgently addressed is WHO SHOULD OWN THE FUTURE TECHNOLOGY ECONOMY? Will ownership continue to concentrate among the 1 percent wealthy ownership class who now OWNS America, or will we reform the system to provide equal opportunity for EVERY child, woman, and man to acquire personal OWNERSHIP in FUTURE non-human capital assets paid for with the FUTURE earnings of the investments in our technological future?

The conclusions should surprise no one who is conscious and who has even causally observed the constant shift to non-human productive inputs in the manufacturing, distribution, and sales of products, as well as the delivery of services, that has been occurring during their lifetime. The first burst of this phenomena was the Industrial Revolution. But now we are in an age of technology sophistication that is permeating every sector of industry and our day-to-day lives.

There’s nothing new about machines replacing people, but the rate of replacement is exponential and the result is that productivity gains lead to more wealth for the OWNERS of the non-human factor of production, but for others who have always been dependent on jobs as their source of income, there has been a steady decline to poverty-level labor incomes.

What must be understood (which unfortunately is not understood by conventional economists) is that there are two independent factors of production––human or labor workers and non-human or physical productive capital––productive land, structures, machines, super-automation, robotics, digital computerized operations applied to production, etc.

Fundamentally, economic value is created through human and non-human contributions.

Also what needs to be understood is that human productivity has not advanced (our human abilities are limited by physical strength and brain power––and relatively constant), but that the productiveness of the non-human factor of production––productive capital––is the reason that private sector corporations, majority owned by the “1 percent,” are utilizing the non-human factor of production increasingly to create efficiencies and save labor costs. It is the function of technology to save labor from toil and to enable us to do things that otherwise is humanly impossible without non-human input.

The critical question becomes who should OWN productive capital? The issue of OWNERSHIP is unbelievably overlooked by those in academia and politics, as well as by the author of the MIT Technology Review article. Yet we live in country founded upon private property rights.

Today, large streams of data, coupled with statistical analysis and sophisticated algorithms, are rapidly gaining importance in almost every field of science, politics, journalism, and much more. What does this mean for the future of work?

But what about China and Asia, the place where all the manufacturing jobs are supposedly going? True, China has added manufacturing jobs over the past 15 years. But now it is beginning its shift to super-robotic automation. Foxconn, which manufactures the iPhone and many other consumer electronics and is China’s largest private employer, has plans to install over a million manufacturing robots within three years. Thus, in reality off-shoring of manufacturing will eventually be replaced by human-intelligent super-robotic automation.

The pursuit for lower and lower cost production that relies on slave wage labor will eventually run out of places to chase. Eventually, “rich” countries, whose productive capital capability is owned by its citizens, will be forced to “re-shore” manufacturing capacity, and result in ever-cheaper robotic manufacturing.

“The era we’re in is one in which the scope of tasks that can be automated is increasing rapidly, and in areas where we used to think those were our best skills, things that require thinking,” says David Autor, a labor economist at Massachusetts Institute of Technology.

Businesses are spending more on technology now because they spent so little during the recession. Yet total capital expenditures are still barely running ahead of replacement costs. “Most of the investment we’re seeing is simply replacing worn-out stuff,” says economist Paul Ashworth of Capital Economics.

Yet, while the problem is one that no one can no longer ignore, the solution also is one starring them in the face but they just can’t see the simplicity of it.

The fundamental challenge to be solved is how do we reinvent and redesign our economic institutions to keep pace with job destroying and labor devaluing technological innovation and invention so not all of the benefits of OWNING FUTURE productive capacity accrues to today’s wealthy 1 percent ownership class, and ownership is broadened so that EVERY American earns income through stock OWNERSHIP dividends so they can afford to purchase the products and services produced by the economy.

None of this is new from a macro-economic viewpoint as productive capital is increasingly the source of the world’s economic growth. The role of physical productive capital is to do ever more of the work of producing more products and services, which produces income to its owners. Full employment is not an objective of businesses. Companies strive to keep labor input and other costs at a minimum. Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role. Over the past century there has been an ever-accelerating shift to productive capital––which reflects tectonic shifts in the technologies of production. The mixture of labor worker input and capital worker input has been rapidly changing at an exponential rate of increase for over 235 years in step with the Industrial Revolution (starting in 1776) and had even been changing long before that with man’s discovery of the first tools, but at a much slower rate. Up until the close of the nineteenth century, the United States remained a working democracy, with the production of products and services dependent on labor worker input. When the American Industrial Revolution began and subsequent technological advance amplified the productive power of non-human capital, plutocratic finance channeled its ownership into fewer and fewer hands, as we continue to witness today with government by the wealthy evidenced at all levels.

People invented tools to reduce toil, enable otherwise impossible production, create new highly automated industries, and significantly change the way in which products and services are produced from labor intensive to capital intensive––the core function of technological invention. Binary economist Louis Kelso attributed most changes in the productive capacity of the world since the beginning of the Industrial Revolution to technological improvements in our capital assets, and a relatively diminishing proportion to human labor. Capital, in Kelso’s terms, does not “enhance” labor productivity (labor’s ability to produce economic goods). In fact, the opposite is true. It makes many forms of labor unnecessary. Because of this undeniable fact, Kelso asserted that, “free-market forces no longer establish the ‘value’ of labor. Instead, the price of labor is artificially elevated by government through minimum wage legislation, overtime laws, and collective bargaining legislation or by government employment and government subsidization of private employment solely to increase consumer income.”

Furthermore, according to Kelso, productive capital is increasingly the source of the world’s economic growth and, therefore, should become the source of added property ownership incomes for all. Kelso postulated that if both labor and capital are interdependent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all. Yet, sadly, the American people and its leaders still pretend to believe that labor is becoming more productive.

The 400 wealthiest Americans and the other 1 to 10 percent richest Americans are rich because they OWN wealth-creating, income-generating productive capital assets. The disenfranchised poor and working and middle class are propertyless in terms of OWNING productive capital assets.

Because productive capital is increasingly the source of the world’s economic growth, shouldn’t we be asking the question why is not productive capital the source of added property OWNERSHIP incomes for all? Why are we not addressing how the system facilitates greed capitalism and envy while concentrating productive capital OWNERSHIP among the 1 to 10 percent of the population?

The change that is necessary is to reform the system to provide equal opportunity for EVERY American to acquire wealth-creating, income-generating productive capital assets on the basis that the investments will pay for themselves––and on the same terms that the wealthy OWNERSHIP class now utilizes. They are able to use the investment’s earnings to pay off the capital credit loans used to finance their investments, without having to use their own money or deny themselves consumption.

A National Right To Capital Ownership Bill that restores the American dream should be advocated by the progressive movement, which addresses the reality of Americans facing job opportunity deterioration and devaluation due to tectonic shifts in the technologies of production.

There is a solution, which will result in double-digit economic growth and simultaneously broaden private, individual OWNERSHIP so that EVERY American’s income significantly grows, providing the means to support themselves and their families with an affluent lifestyle. The Just Third Way Master Plan for America’s future is published at http://foreconomicjustice.org/?p=5797.

The solution is obvious but our leaders, academia, conventional economist and the media are oblivious to the necessity to broaden OWNERSHIP in the new capital formation of the future simultaneously with the growth of the economy, which then becomes self-propelled as increasingly more Americans accumulate OWNERSHIP shares and earn a new source of dividend income derived from their capital OWNERSHIP in the “machines” that are replacing them or devaluing their labor value.

The solution will require the reform of the Federal Reserve Bank to create new OWNERS of FUTURE productive capital investment in businesses simultaneously with the growth of the economy. The solution to broadening private, individual OWNERSHIP of America’s FUTURE capital wealth requires that the Federal Reserve stop monetizing unproductive debt, including bailouts of banks “too big to fail” and Wall Street derivatives speculators, and begin creating an asset-backed currency that could enable every child, woman, and man to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income. Policies need to insert American citizens into the low or no-interest investment money loop to enable non- and undercapitalized Americans, including the working class and poor, to build wealth and become “customers with money.” The proposed Capital Homestead Act would produce this result.

Through Just Third Way reforms, economic growth would be freed from the slavery of past savings (“old money”), while creating a domestic source of new asset-backed, interest-free (but not cost free) money and expanded bank credit to finance new capital repayable out of future savings (earnings). To ensure that OWNERSHIP of future private sector growth and newly created wealth is universally accessible to every citizen, such newly created money and credit would only be available through economic democratization vehicles, administered through the competitive member banks of a well-regulated Federal Reserve central banking system.

Under the first tier, future increases in the money supply (“new money”) would be linked to actual growth of the economy’s productive assets, creating new OWNERS of new capital asset wealth through widespread access to interest-free capital credit repayable with future profits. The Federal Reserve would create (i.e., “monetize”) interest-free credit, with lenders adding their normal markup as service fees above the cost of money. This would establish an unsubsidized minimal rate for financing technological growth. This would provide the public with a currency backed by increasingly more efficient instruments of production, real wealth-producing capital assets, rather than unsustainable government debt.The creation of new money and credit would be non-inflationary and would simultaneously broaden purchasing power throughout the economy. To accomplish this, a key reform is a two-tiered interest policy by the Federal Reserve that would distinguish between productive and non-productive uses of credit.

The second tier would allow substantially higher, market-determined interest rates for non-productive purposes, for which “past savings” would remain available. The Federal Reserve would be restrained from future monetization of national deficits or encouraging other forms of non-productive uses of credit, causing upper-tier credit to seek out already accumulated savings at market rates.

Capital Homesteading would also provide through capital credit insurance a rational way to deal with risk, as well as an additional check on the quality of loans being supported by the Federal Reserve. Capital credit insurance and reinsurance policies would offset the risk that the enterprises issuing new shares on credit might fail to repay the loans. Such capital credit default insurance would substitute for collateral demanded by most lenders to cover the risk of non-payment, thus enabling the poor and others with few assets to overcome the collateralization barrier that excludes poor people from access to productive credit.

Support the Capital Homestead Act (aka Economic Democracy Act) at http://www.cesj.org/learn/capital-homesteading/http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/.See the article “The Absent Conversation: Who Should Own America?” published by The Huffington Post at http://www.huffingtonpost.com/gary-reber/who-should-own-america_b_2040592.html and by OpEd News at http://www.opednews.com/articles/THE-Absent-Conversation–by-Gary-Reber-130429-498.html.

Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice.

Also see “The Path To Eradicating Poverty In America” at http://www.huffingtonpost.com/gary-reber/the-path-to-eradicating-p_b_3017072.html and “The Path To Sustainable Economic Growth” at http://www.huffingtonpost.com/gary-reber/sustainable-economic-growth_b_3141721.html. And also “Second Income Plan” at http://www.huffingtonpost.com/gary-reber/second-income-plan_b_3625319.html

Also see the article entitled “The Solution To America’s Economic Decline” at http://www.nationofchange.org/solution-america-s-economic-decline-1367588690 and “Education Is Critical To Our Future Societal Development” at http://www.nationofchange.org/education-critical-our-future-societal-development-1373556479. And also “Achieving The Green Economy” at http://www.nationofchange.org/achieving-green-economy-1373980790. Also see it complete with the footnotes at http://foreconomicjustice.org/?p=9082.

Also see “Financing Economic Growth With ‘FUTURE SAVINGS’: Solutions To Protect America From Economic Decline” at NationOfChange.org http://www.nationofchange.org/financing-future-economic-growth-future-savings-solutions-protect-america-economic-decline-137450624 and “The Income Solution To Slow Private Sector Job Growth” at http://www.nationofchange.org/income-solution-slow-private-sector-job-growth-1378041490.

Capitalism Is For Everyone?

On December 14, David Howell writes on The Japan Times:

The opposite of alienation is belonging. The opposite of division is unity and solidarity.

So how do these admirable aims square with a world in which all the talk, at least in the West, is of increasingly disunited societies, legions of people feeling “left behind,” of widening inequality and of rage against “establishments” who are alleged to be doing better all the time while the rest are doing worse?

“Capitalism that works for everyone” has recently become a favorite slogan of Western leaders, including the British prime minister. But that plainly is not happening. On the contrary, while the system seems to work very well for various chief executives, high-rolling financiers and their friends, who pay themselves eye-watering salaries at hundreds of times the levels of average wages, for too many people and communities lower down the benefits of the capitalism are becoming hard to find.

In the United Kingdom, some top executive pay is running at about 400 times the average wage. In the United States, for some executives it is said to be about 1,000 times. The U.K. is particularly vulnerable to divisive tendencies and antagonisms with its history of class warfare and the fact that even today, two centuries or more after the original industrial revolution, too many towns and cities are struggling to raise standards, defeat poverty and improve their environments.

It has been estimated that while London and the surrounding southeast constitutes one of the richest area in Europe the U.K. still has several of the most deprived areas as well.

If the politicians mean what they say — always a big “if” — then something radical clearly needs to be done in the way of further spreading prosperity. The answer in the 20th century to the inequality concern used to be that booming capitalism would lift wages and salaries for all, which in turn would expand purchasing power and new industries in a comforting upward spiral. Karl Marx, it was contended, had been in error with his gloomy forecast that workers would be constantly oppressed and eventually rise up to destroy the capitalist system. Instead, it was confidently pointed out, the workers were getting richer and the benefits of capitalist wealth creation were trickling down to the masses.

But latterly the confidence has faltered. Something in the system does not seem to be working. At least a part cause of the mood of popular discontent and rejection of authority that is sweeping across both Europe and America is attributed to the fact that the trickle appears to have stopped working and the gap between the rich and the struggling classes below — the “just-about-managing” households and those in outright poverty — is yawning wider and wider. So is the apparent gap between richer and poorer communities.

Undoubtedly, some of the more lurid and ideologically driven descriptions of what is happening need a touch of perspective. It is obviously true that massive inequality is nothing very new. Eighteenth or 19th century dukes or industrial plutocrats might well have had annual incomes 5,000 times as high as the armies of people they employed on their many estates. And when it came to actual wealth there was no comparison at all because most workers had none, not even the house they lived in.

The difference between then and now is that what was hidden then is universally known, and discussed, now. Workers and their families need to look no further than their mobile phones or daily media coverage to see the full and glaring disparities between their own tight circumstances and the charmed lives of the super-rich, the celebrities, the soccer stars and above all the company bosses. Transparency rules, and makes comparisons not only odious but enraging.

In face of this tide of anger, indignation and division, vague assurances that capitalism works for all make zero impact. There have to be clear policies and measures to give substance to these aims.

The superficial solution, and one being heard now on all sides, is that ever higher taxes, especially on those in the upper income quartile, should be applied and the proceeds redistributed by the state through ever bigger welfare programs. But this always evolves into a vast process of discouraging wealth creation and penalizing entrepreneurship, leaving everyone poorer in socialized stagnation.

A far more promising method of making capitalism work for all was in fact put forward half a century ago by the American visionary Louis Kelso in California. He produced a stream of ideas for promoting wider capital ownership, for instance via employee share-ownership schemes. He argued that giving more and more workers a solid share in the capitalist economy would heal divisions between employers and employees, as well as reduce the constant pressure for higher wages. It would make people feel they were all in the system together — that they “belonged” instead of being left to struggle along outside.

But his biggest idea went further. He wanted millions of households and workers not just to own capital, but to benefit from the proceeds of new capital formation, rather than see all the future growth go to those already enriched, or to big funds and corporations. This would put a stop not just to social division and alienation but to the trend for the already rich to grow richer while the rest trailed behind, reliant only on salaries and wages, with growing inequality all round.

His ingenious scheme for making this possible, for creating a form of social capitalism that really did benefit all, went untried for many decades. The world had other worries. But now perhaps the time is ripe. The alternative could be a lot more alienation and populist anger, with demagogues taking over and democratic methods losing out. That led to disaster in the 20th century and we want no more of it in the 21st.

Capitalism is for everyone?

Yes, as the author of this article states, capitalism’s benefits are hard to fine because the capitalism today should be properly labeled “Hoggism.” “Hoggism,” propelled by greed and the sheer love of power over others. “Hoggism” institutionalizes greed (creating concentrated capital ownership, monopolies, and special privileges). “Hoggism” is about the ability of greedy rich people to manipulate the lives of people who struggle with declining labor worker earnings and job opportunities, and then accumulate the bulk of the wealth through monopolized productive capital ownership. Our scientists, engineers, and executive managers who are not owners themselves, except for those in the highest employed positions, are encouraged to work to destroy employment by making the capital “worker” owner more productive. How much employment can be destroyed by substituting machines for people is a measure of their success––always focused on producing at the lowest cost. Only the people who already own productive capital are the beneficiaries of their work, as they systematically concentrate more and more capital ownership in their stationary 1 percent ranks. Yet the 1 percent are not the people who do the overwhelming consuming. The result is the consumer populous is not able to earn the money to buy the products and services produced as a result of substituting machines for people. And yet you can’t have mass production without mass human consumption made possible by “customers with money.” It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.

Whenever an author cites, as in this article, executive pay running at about 400 to 1,000 times the average wage, they confuse the reader because most of executive pay is not in wages but in shares of stock whose valuation the executives are incentivized to increase, so that stockholders, including themselves can sell at a future date and benefit from the increased valuation minus the far lower valuation when they were given stock or purchased stock from their savings. People are getting rich not because of earnings through wages but because they are owners of wealth-creating, income-producing stock in the corporations dominating the economy.

The author is absolutely correct in stating that “something radically clearly needs to be done in the way of further spreading prosperity.” Otherwise, the gap between the wealthy capital ownership class and the struggling classes below––those “just about-managing” households and those in outright poverty––will wides exponentially.

The author states: “The superficial solution, and one being heard now on all sides, is that ever higher taxes, especially on those in the upper income quartile, should be applied and the proceeds redistributed by the state through ever bigger welfare programs. But this always evolves into a vast process of discouraging wealth creation and penalizing entrepreneurship, leaving everyone poorer in socialized stagnation.”

The author then credits binary economist Louis O. Kelso with the idea of significantly broadening individual ownership of wealth-creating, income-producing capital asset formation at it occurs in a growing economy. Louis Kelso was my mentor and partner in the economic advocacy firm I founded with him: Agenda 2000 Incorporated. During the late 1960s and throughout the 1970s, following university doctorate studies in economic development and urban and regional planning, I became a political economist and economic justice advocate. During that period I co-founded the advocacy consulting firm Agenda 2000 Incorporated with Louis Kelso and John W. Dyckman, Chairman of the Graduate School of Urban Planning at the University of California, Berkeley.

Louis Kelso was a leading corporate, tax and financial lawyer, and political economist based in San Francisco and the author of The Capitalist Manifesto (Random House 1958), The New Capitalists (Random House 1961), Two-Factor Theory: The Economics Of Reality (Random House, 1967), and later Democracy And Economic Power: Extending The ESOP Revolution Through Binary Economics (Ballinger Publishing Company, Cambridge, Massachusetts, 1986; reprinted University Press of America, Lanham Maryland, 1991). The first two books were co-authored with Mortimer J. Adler, President of the Institute for Philosophical Research, former professor of the Philosophy of Law at the University of Chicago, and author of The Idea Of Freedom. Kelso’s latter two books were co-authored by Patricia Hetter Kelso, his collaborator and wife since 1963. The four books present Kelso’s theory of binary economics (or the economics of reality), which describes labor and capital as independently productive and the financial tools for democratizing capital ownership in a private property, market economy where most products are exponentially made by physical capital. For more reading visit www.kelsoinstitute.com and download free at http://www.cesj.org/resources/free-ebooks/.

As the author states, “…[Kelso’s] biggest idea went further. He wanted millions of households and workers not just to own capital, but to benefit from the proceeds of new capital formation, rather than see all the future growth go to those already enriched, or to big funds and corporations. This would put a stop not just to social division and alienation but to the trend for the already rich to grow richer while the rest trailed behind, reliant only on salaries and wages, with growing inequality all round.”

For how these ideas can be applied to reform the system with the end result being that citizens would become empowered as owners to meet their own consumption needs and government would become more dependent on economically independent citizens, thus reversing current global trends where all citizens will eventually become dependent for their economic well-being on the State and whatever elite controls the coercive powers of government, see Monetary Justice at http://capitalhomestead.org/page/monetary-justice and the Capital Homestead Act (aka Economic Democracy Act) at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/.

Socialism For The Rich, Capitalism For The Poor: An Interview With Noam Chomsky

Noam Chomsky at a SISSA event on September 17, 2012. In a democracy, the public influences policy but the US state largely works to benefit the privileged and powerful. Noam Chomsky at a SISSA event on September 17, 2012. In a democracy, the public influences policy but the US state largely works to benefit the privileged and powerful. (Photo: Dimitri Grigoriou / SISSA; Edited: JR / TO)

On December 11, 2016, C.J. Polychroniou interviews Noam Chomsky on Truthout:

How did we reach a historically unprecedented level of inequality in the United States? A new documentary, Requiem for The American Dream, turns to the ever-insightful Noam Chomsky for a detailed explanation of how so much wealth and power came to be concentrated in so few hands. Click here to order this DVD by making a donation to Truthout today!

The United States is rapidly declining on numerous fronts — collapsing infrastructure, a huge gap between haves and have-nots, stagnant wages, high infant mortality rates, the highest incarceration rate in the world — and it continues to be the only country in the advanced world without a universal health care system. Thus, questions about the nature of the US’s economy and its dysfunctional political system are more critical than ever, including questions about the status of the so-called American Dream, which has long served as an inspiration point for Americans and prospective immigrants alike. Indeed, in a recent documentary, Noam Chomsky, long considered one of America’s voices of conscience and one of the world’s leading public intellectuals, spoke of the end of the American Dream. In this exclusive interview for Truthout, Chomsky discusses some of the problems facing the United States today, and whether the American Dream is “dead” — if it ever existed in the first place.

C.J. Polychroniou: Noam, in several of your writings you question the usual view of the United States as an archetypical capitalist economy. Please explain.

Noam Chomsky: Consider this: Every time there is a crisis, the taxpayer is called on to bail out the banks and the major financial institutions. If you had a real capitalist economy in place, that would not be happening. Capitalists who made risky investments and failed would be wiped out. But the rich and powerful do not want a capitalist system. They want to be able to run the nanny state so when they are in trouble the taxpayer will bail them out. The conventional phrase is “too big to fail.”

The IMF did an interesting study a few years ago on profits of the big US banks. It attributed most of them to the many advantages that come from the implicit government insurance policy — not just the featured bailouts, but access to cheap credit and much else — including things the IMF researchers didn’t consider, like the incentive to undertake risky transactions, hence highly profitable in the short term, and if anything goes wrong, there’s always the taxpayer. Bloomberg Businessweek estimated the implicit taxpayer subsidy at over $80 billion per year.

Much has been said and written about economic inequality. Is economic inequality in the contemporary capitalist era very different from what it was in other post-slavery periods of American history?

The inequality in the contemporary period is almost unprecedented. If you look at total inequality, it ranks amongst the worse periods of American history. However, if you look at inequality more closely, you see that it comes from wealth that is in the hands of a tiny sector of the population. There were periods of American history, such as during the Gilded Age in the 1920s and the roaring 1990s, when something similar was going on. But the current period is extreme because inequality comes from super wealth. Literally, the top one-tenth of a percent are just super wealthy. This is not only extremely unjust in itself, but represents a development that has corrosive effects on democracy and on the vision of a decent society.

What does all this mean in terms of the American Dream? Is it dead?

The “American Dream” was all about class mobility. You were born poor, but could get out of poverty through hard work and provide a better future for your children. It was possible for [some workers] to find a decent-paying job, buy a home, a car and pay for a kid’s education. It’s all collapsed — and we shouldn’t have too many illusions about when it was partially real. Today social mobility in the US is below other rich societies.

Is the US then a democracy in name only?

The US professes to be a democracy, but it has clearly become something of a plutocracy, although it is still an open and free society by comparative standards. But let’s be clear about what democracy means. In a democracy, the public influences policy and then the government carries out actions determined by the public. For the most part, the US government carries out actions that benefit corporate and financial interests. It is also important to understand that privileged and powerful sectors in society have never liked democracy, for good reasons. Democracy places power in the hands of the population and takes it away from them. In fact, the privileged and powerful classes of this country have always sought to find ways to limit power from being placed in the hands of the general population — and they are breaking no new ground in this regard.

Concentration of wealth yields to concentration of power. I think this is an undeniable fact. And since capitalism always leads in the end to concentration of wealth, doesn’t it follow that capitalism is antithetical to democracy?

Concentration of wealth leads naturally to concentration of power, which in turn translates to legislation favoring the interests of the rich and powerful and thereby increasing even further the concentration of power and wealth. Various political measures, such as fiscal policy, deregulation, and rules for corporate governance are designed to increase the concentration of wealth and power. And that’s what we’ve been seeing during the neoliberal era. It is a vicious cycle in constant progress. The state is there to provide security and support to the interests of the privileged and powerful sectors in society while the rest of the population is left to experience the brutal reality of capitalism. Socialism for the rich, capitalism for the poor.

So, yes, in that sense capitalism actually works to undermine democracy. But what has just been described — that is, the vicious cycle of concentration of power and wealth — is so traditional that it is even described by Adam Smith in 1776. He says in his famous Wealth of Nations that, in England, the people who own society, in his days the merchants and the manufacturers, are “the principal architects of policy.” And they make sure that their interests are very well cared for, however grievous the impact of the policies they advocate and implement through government is on the people of England or others.

Now, it’s not merchants and manufacturers who own society and dictate policy. It is financial institutions and multinational corporations. Today they are the groups that Adam Smith called the masters of mankind. And they are following the same vile maxim that he formulated: All for ourselves and nothing for anyone else. They will pursue policies that benefit them and harm everyone else because capitalist interests dictate that they do so. It’s in the nature of the system. And in the absence of a general, popular reaction, that’s pretty much all you will get.

Let’s return to the idea of the American Dream and talk about the origins of the American political system. I mean, it was never intended to be a democracy (actually the term always used to describe the architecture of the American political system was “republic,” which is very different from a democracy, as the ancient Romans well understood), and there had always been a struggle for freedom and democracy from below, which continues to this day. In this context, wasn’t the American Dream built at least partly on a myth?

Sure. Right through American history, there’s been an ongoing clash between pressure for more freedom and democracy coming from below and efforts at elite control and domination from above. It goes back to the founding of the country, as you pointed out. The “founding fathers,” even James Madison, the main framer, who was as much a believer in democracy as any other leading political figure in those days, felt that the United States political system should be in the hands of the wealthy because the wealthy are the “more responsible set of men.” And, thus, the structure of the formal constitutional system placed more power in the hands of the Senate, which was not elected in those days. It was selected from the wealthy men who, as Madison put it, had sympathy for the owners of wealth and private property.

This is clear when you read the debates of the Constitutional Convention. As Madison said, a major concern of the political order has to be “to protect the minority of the opulent against the majority.” And he had arguments. If everyone had a vote freely, he said, the majority of the poor would get together and they would organize to take away the property of the rich. That, he added, would be obviously unjust, so the constitutional system had to be set up to prevent democracy.

Recall that Aristotle had said something similar in his Politics. Of all political systems, he felt that democracy was the best. But he saw the same problem that Madison saw in a true democracy, which is that the poor might organize to take away the property of the rich. The solution that he proposed, however, was something like a welfare state with the aim of reducing economic inequality. The other alternative, pursued by the “founding fathers,” is to reduce democracy.

Now, the so-called American Dream was always based partly in myth and partly in reality. From the early 19th century onward and up until fairly recently, working-class people, including immigrants, had expectations that their lives would improve in American society through hard work. And that was partly true, although it did not apply for the most part to African Americans and women until much later. This no longer seems to be the case. Stagnating incomes, declining living standards, outrageous student debt levels, and hard-to-come-by decent-paying jobs have created a sense of hopelessness among many Americans, who are beginning to look with certain nostalgia toward the past. This explains, to a great extent, the rise of the likes of Donald Trump and the appeal among the youth of the political message of someone like Bernie Sanders.

After World War II, and pretty much up until the mid-1970s, there was a movement in the US in the direction of a more egalitarian society and toward greater freedom, in spite of great resistance and oppression from the elite and various government agencies. What happened afterward that rolled back the economic progress of the post-war era, creating in the process a new socio-economic order that has come to be identified as that of neoliberalism?

Beginning in the 1970s, partly because of the economic crisis that erupted in the early years of that decade and the decline in the rate of profit, but also partly because of the view that democracy had become too widespread, an enormous, concentrated, coordinated business offensive was begun to try to beat back the egalitarian efforts of the post-war era, which only intensified as time went on. The economy itself shifted to financialization. Financial institutions expanded enormously. By 2007, right before the crash for which they had considerable responsibility, financial institutions accounted for a stunning 40 percent of corporate profit. A vicious cycle between concentrated capital and politics accelerated, while increasingly, wealth concentrated in the financial sector. Politicians, faced with the rising cost of campaigns, were driven ever deeper into the pockets of wealthy backers. And politicians rewarded them by pushing policies favorable to Wall Street and other powerful business interests. Throughout this period, we have a renewed form of class warfare directed by the business class against the working people and the poor, along with a conscious attempt to roll back the gains of the previous decades.

Now that Trump is the president-elect, is the Bernie Sanders political revolution over?

That’s up to us and others to determine. The Sanders “political revolution” was quite a remarkable phenomenon. I was certainly surprised, and pleased. But we should remember that the term “revolution” is somewhat misleading. Sanders is an honest and committed New Dealer. His policies would not have surprised Eisenhower very much. The fact that he’s considered “radical” tells us how far the elite political spectrum has shifted to the right during the neoliberal period. There have been some promising offshoots of the Sanders mobilization, like the Brand New Congress movement and several others.

There could, and should, also be efforts to develop a genuine independent left party, one that doesn’t just show up every four years but is working constantly at the grassroots, both at the electoral level (everything from school boards to town meetings to state legislatures and on up) and in all the other ways that can be pursued. There are plenty of opportunities — and the stakes are substantial, particularly when we turn attention to the two enormous shadows that hover over everything: nuclear war and environmental catastrophe, both ominous, demanding urgent action.

http://www.truth-out.org/opinion/item/38682-socialism-for-the-rich-capitalism-for-the-poor-an-interview-with-noam-chomsky