I read a very eye-opening blog piece today that supports a notion that’s been developing in my head over the last year or so, namely, that the dominance of the capitalist ideology has been built upon the “misdirection play”, or to put it another way, by mastering the magician’s “slight of hand” technique.
“It’s magic!!!” Well no, not really… it’s just that we missed the coin dropping into the magician’s sleeve.
The premise of the argument is that the “deferred compensation” plan that drives the 401Ks and IRAs we’ve all become so dependent upon for retirement isn’t so much about putting ownership in the hands of the laborers, as it is about giving us that impression. I preface the link to this essay by openly admitting that it is highly contingent upon opinion, and a relatively small sample of citation for support. The author readily admits as much. If I ever manage to find some time of my own, I intend to do a little follow-up and check the credibility of the sources. But I also suggest that the argument makes logical sense, and furthermore, that many of the truths we now hold as self-evident themselves began as mere opinion, or hypotheses. For the time being, I’m willing to say that I’m reasonably convinced of the article’s premise. I will also say that if I am presented with convincing evidence that contradicts the premise, I’m willing to rethink the issue.
The conclusion of the essay is posted below. You can find the rest of the essay here: No Deal
Try not to dismiss it outright if you happen to dislike the website on which it was posted. There is a lot of material on these partisan blogs that is exaggerated and one-sided. That goes for the Left as well as for the Right. That doesn’t mean that there aren’t, at times, well thought out, logical positions containing truth from time to time. Our political culture would be much more palatable if we all conceded that.
Broad ownership of deferred compensation plans has greatly changed how we view the stock market and made us more willing to take action that benefits the market. It’s likely that not only the $700 billion bailout, but much of the deregulation that made that bailout necessary, would not have been possible without the change in attitude created through deferred compensation plans. We were willing to let them get away with being weasels, because we thought we would gather part of the benefit from their activities.
This is, of course, an illusion. This impression that stocks are now in the hands of average Americans is a thin veneer over the situation as it has always existed. The median amount of money Americans hold in retirement accounts is around $35,000 – hardly a stock market bonanza — and even this number fails to capture the real situation. For Americans below the 60th percentile on income, the amount held in retirement accounts is around $15,000. For the top 10%, the number is $182,000. Similar numbers apply to direct stock ownership. Around 85% of all stock is owned by those families in the top 10% income bracket. The top 1% owns over half.
What Reagan said in 1975 is still true – a very small number of Americans own the means of production, while the rest work for them. The difference now is that we think we are among the owners, which has been a tremendous benefit to that handful of “real capitalists.”
They turned the pension system into a weapon that worked to their benefit, both at the bank and in the polling booth. Which is why they’re so anxious to do the same for Social Security.