Is this a carefully constructed “PsyOps” strategy used in the Economic War? Or simple human delusion/dishonesty by individuals creating great suffering and trying to justify their actions? Maybe its a simple clash of Myers-Briggs personality types. Whatever it is, I’m staggered and disturbed by the fact that there exists a group who argue that inequality benefits everyone. It seems they want as much of your money as they can get, and they actually want you to love them for it.

The most ardent of these seems to be Edward Conrad. He’s a retired Bain Capital partner, and he’s not apologising for the astonishing wealth-and-power-grab he and his pals have aggressively pursued since the 80’s. You might have heard of this company before – Mitt Romney, the failed presidential candidate in last years US election was founder of Bain Capital. They made billions buying ailing US companies, “fixing them” (by sacking the US staff, outsourcing operations abroad and employing aggressive tax avoidance measures – see here for a wikipedia entry on them, here for Washington Posts critique of Bain “offshoring” jobs from US to China, India and other countries, here for a blogger’s investigation into the scale of “offshoring” jobs in the US and here for the perspective of soon-to-be sacked workers for Bain), then profiting from the share dividends and selling them on. Proper Capitalist dream stuff.

Now, It’s Mr Conrad I really want to concentrate on. Not his personal life, not his Character, but the economic argument he’s putting forward. It seems like “Soft War” stuff to me. He states in an interview given before the release of his book “Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong” that he wants to change the perceptions of economists, politicians, thought-leaders. He wants MORE inequality.

His argument: That “investors” only spend a small portion of their capital on their own lifestyles. The vast majority is used to fund further development of businesses that will go on to employ people and improve the quality of life of everyone. Using the examples of computing and software innovators, the likes of IBM, Microsoft, Google etc, he estimates that for every $1 an “Investor” takes, the general populace experience $20 of “value”. He says the public don’t understand this because they are “consumers” and have no insight into the economy or the role of “Investors”. He sees the job of the “Investor” as facilitator of innovation and growth, and that the more cash they have at their disposal, the more growth there will be and the more everyone will benefit. Here’s the interview: [Click here]

This is clearly at odds with the vast majority of economists, as the interviewer points out. It’s also at odds with reality.

The IMF in 2011 released a study that showed income inequality was the most important factor in deciding how long a period of economic growth will last (under our current “capitalist” economic structure (I note that many argue what we have is anything but a free capitalist system, but it’s a convenient term for the time being)), with lower inequality providing longer periods of growth. They estimate a 10% drop in inequality produces 50% longer periods of growth. They highlight the “dangers” of extreme income inequality: Political and social instability, which discourage investment and business activities, weakening of a state’s ability to respond to external shocks, increasing debt burden on the part of the poorer members of the society as they attempt to keep pace with the cost of living while their wages stagnate. Sounds a bit like our world right now doesn’t it? Here’s the info I’m using: [Click here]

Let’s just see again what the trends are regarding income equality:Image

This is for the UK. Yeah, bad isn’t it? Well, if you’re not part of the richest 0.1% that is.

A very recent report suggests the richest 0.1% in the UK have increased their share of the UK’s wealth to 10%. Wow. That’s actually at a faster rate than the chart above, produced in 2009 by the High Pay Commission, predicted. The bottom 50% of the UK population have 18% of the wealth. That’s a smaller proportion of than before. So, Mr Conrad is getting his wish. The super rich are now even superer richer, and getting more so every day. The rest of us are measurably poorer. Middle-class included. Are we experiencing the benefits he espouses? Is there now even greater investment in business, are new start-ups exploding into being? Are we all experiencing 20 times more value in our lives than the super-rich are hoarding? No. Clearly not. The economy is stagnating, even shrinking. Businesses are constantly crying over the lack of funding streams available. Ordinary people, working families are having to rely on foodbanks to survive.

A 2005 Ohio State University study of the 50 US states found that actually the inverse of Mr C’s ideas was the case. Quelle suprise. A “more vibrant middle-class” meant long-term stable growth i.e if the super-rich don’t hoard all the money the economy grows. Here’s where I sourced this info: [Click here].

So, we can safely say the numbers don’t agree with the pro-inequality lobbyists. It’s interesting to note who makes the pro-inequality arguments: The super-rich. The people who directly benefit from the inequality they want to increase. Is it self-delusion, borne out of cognitive dissonance when the super-rich see the chaos and poverty they are producing? Is it because I’m an idealistic INFP from the Myers-Briggs way of looking at people, and these “Investors” are ISTJ? just a misunderstanding? Or is it that they fully know what they are doing, but they like it, and you know what? they’ll have more if they can persuade you to give it to them. As Nye Bevan said: “How can wealth persuade poverty to use its political freedom to keep wealth in power? Here lies the whole art of Conservative politics in the twentieth century.” Seems to me it’s even more the case in the 21st Century, and they’re trying a multi-pronged soft war to do it. Advancing an absurd argument that making poor people poorer will “add value” to their lives, or stimulate growth by reducing demand and supply simultaneously (sacking workers, shutting firms and paying less for those left in work) is probably part of such an economic war effort. Orwellian doublethink is clearly a useful weapon in the soft-war arsenal.

Remember: just last year the richest 100 earned FOUR TIMES what would be required to eradicate extreme poverty ACROSS THE WHOLE GLOBE PERMANENTLY. Mass poverty is a deliberate policy of the very richest to increase the money and power they have, at everyone else’s cost.

There’s a couple of points I want to explore another time:

1 Is “class” really the issue? Mr C talks about a single distinction between people: “Investors” and “Consumers”. Is the “Class War” a distraction from the real economic war?
2 How these sneaky “Investors” have the majority of us fighting their battle for them without even noticing.