Monday, June 27, 2011

Once Upon A Time. A Fairy Tale About Income Inequality: The Story So Far

NOTE: This post is the first in a short series about American income inequality and why we should really, really care about it.

Once upon a time there was a country where the peasants and serfs did fairly well. They had to work hard, true, but they got to keep at least a portion of their own harvest and the annual days they had to work for the feudal lords were bearable in number.

When they got old and sick the feudal lords and ladies brought them doctors and baskets of food. In some towns the children of the poor even had schools paid by the towns or the feudal lords. They were taught to read and write and to do simple sums so that they could work in the workshops of the wealthy.

Those included not only the feudal lords but also the merchant classes. The market places were booming and the local authorities made sure that the scales they used were fair. Town councils made sure that the water was clean and that the sewers didn't breed infectious diseases. They also ran orphanages, fire brigades and police forces. All this was viewed as natural and proper by most in the society.

Sometimes a male peasant could rise up to the merchant class or even become a feudal lord! No, the system was not perfect. Serfs had little power and much work, women were sometimes treated as cattle (not a misspelling) and the law was not the same for the poor and the rich. But it was a better system than what followed.

And what did follow? Something ominous and frightening, something that appeared to have no real cause: A collapse of the whole society.

The stories told of those events depends on the teller. But what we know is this: The feudal lords suddenly had their bards sing about the ungrateful and lazy peasants, the great expense they had to keep the system going, the unfairness of having to care for the sick and infirm servants after they no longer could serve.

And what we know is this: The merchant classes would complain to each other of their trials tribulations over pints of friendly beer: Having to fill in forms, having to refuse good bargains in food stuffs just because they might be adulterated, having to maintain the scales, having to endure the inspectors of the town councils. All that paper! All that ink! Who needed it? And good help was too expensive.

But what we do not know is this: What did the peasants sing about? Did they sing at all? Were they too tired to sing, too uninformed to know about the growing disgruntlement of their betters?

What is left as a record of their complaints has to do with a desire for more religion and less help. What we are told is that the peasants saw themselves as the feudal lords and ladies because they had a small patch of ground to farm. Or perhaps they thought that their sons would be the next feudal lords, the new generation of merchants? They believed that everything was too expensive, that this was why they had to work so many days for the feudal lords and ladies, that this was why they couldn't keep more of their harvest.

Whatever might have gone on among the peasants (and the tales are mostly silent about that), we know that the bards were sent out to sing to them about the poor princes and princesses who were mistreated, about the problems of the rich and about their solutions. The peasants were taught to identify with the lords and the ladies!

The bards sang beautifully, the notes easily entering the minds of the peasants, lulling them into believing that they were only a step removed from belonging to the takers rather than the givers, and that they, too, deserved more available for the taking.

That all this taking would have to come from the peasants themselves, did anyone wonder about that? Perhaps some did, and perhaps that is the reason why the priests were sent out, to preach about degeneracy, the anger of the sky god, the need to repent, the need to control those below even the peasants. There would be witch burnings. There would be public entertainment for all!

These versions are confusing, seen through a mist, perhaps all wrong.

But what happened next all agree on: This society decided that having a society was too expensive! It was too expensive to guarantee clear water, it was too expensive to take care of the educational needs of the peasants, it was too expensive to make sure the merchants' scales were fair or that the meat they sold wouldn't stink. All too expensive! The police forces were too expensive, the fire brigades were too expensive. Everyone with power agreed, everyone ignorant agreed, and the country changed. What we would call taxes and public spending essentially disappeared.

The lords of the manor houses liked the initial changes. They were no longer expected to pay for the peasant schools or to visit the sick or elderly peasants. If those lazy and ignorant creatures needed physicians or schools they should pay for them out of their own pocket. They should pull themselves up with their bootstraps!

The merchant class also liked the initial changes. Suddenly a clever but dishonest man could make a whole lot of money overnight and disappear with the takings! Or even better, did not have to disappear with them because there were no longer any police officers to investigate such cases. The honest merchants were relieved of the burdens of bureaucracy. They could concentrate on making profits and taking care of their own lives. They agreed that up-by-the-bootstraps and every-man-for-himself were the proper foundations of the new society.

The peasants... The peasants couldn't quite understand why everything got so much worse. They were cheated in the market place, and the trips there and back were dangerous because of pickpockets and gangs of hooligans.

Nobody came to put off the fires which were common in those days, and a family who lost their home in a fire had no help from the feudal lord or the town council (which was disbanded) but was expected to rebuild it without help or to move out of the community. And they didn't understand the bootstraps concept, what with not owning boots in the first place.

Let's look at the society after the change happened. Note that the lords and the merchants are happy, the peasants are unhappy and confused. But in the next round the merchants become unhappy, too.

Why? Because the peasants are now too scared to come to the marketplace, both because of the crime and because of the bad weights and adulterated produce, and because many of them are now poorer, having to care for the sick and the infirm themselves, having to help each other rebuild the houses that fires burnt down.

The merchants now make less money. Their customers can't tell bad and deceitful sellers from good sellers, so all merchants suffer. As their incomes decline, some start slip-sliding down in the class system. Just one fire, just one burglary, and down the whole family goes: Out of the door with bundles on their backs. It may be that the feudal lord will accept them as servants or serfs.

Finally even the feudal lords and ladies will suffer. The peasants can no longer read and write which makes them less profitable workers. When infectious diseases strike the area, the peasants die like flies and those who survive are too weak to work well enough. The standard of living at the manors goes down because of all this. The manors may try to raise the peasants' annual required work days or tax them more in other ways to return to the old good days, but those moves will simply initiate the next round in the societal destruction.

What a silly story, you might mutter. You forgot all about the foreign wars the feudal lords will wage. Yes, I forgot about those, but the story works even in their absence. It works, whether some of the peasants indeed were lazy good-for-nothings exploiting the system, and it works even if the feudal lords and ladies and merchants were all good people except for having decided that a society is no longer affordable.

Because it is not only in this fairy tale that the concept of a society absolutely requires some shared concerns and some shared control. Once we dispense with it bad things happen.

The ending of this fairy tale: Best to pick your own ending, because the tale is not finished. But bad things are likely to happen before we can all live happily ever after.