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The Self-Destruction of the 1 Percent
Key Excerpts from Article on Website of New York Times
Posted: October 16th, 2012
http://www.nytimes.com/2012/10/14/opinion/sunday/the-self-de...
In the early 14th century, Venice was one of the richest cities in Europe. By 1500, Venices population was smaller than it had been in 1330. In the 17th and 18th centuries, as the rest of Europe grew, the city continued to shrink. The story of Venices rise and fall is told by the scholars Daron Acemoglu and James A. Robinson, in their book Why Nations Fail: The Origins of Power, Prosperity, and Poverty, as an illustration of their thesis that what separates successful states from failed ones is whether their governing institutions are inclusive or extractive. Extractive states are controlled by ruling elites whose objective is to extract as much wealth as they can from the rest of society. Inclusive states give everyone access to economic opportunity; often, greater inclusiveness creates more prosperity, which creates an incentive for ever greater inclusiveness. The history of the United States can be read as one such virtuous circle. But as the story of Venice shows, virtuous circles can be broken. Elites that have prospered from inclusive systems can be tempted to pull up the ladder they climbed to the top. Eventually, their societies become extractive and their economies languish. That ... is the danger America faces today, as the 1 percent pulls away from everyone else and pursues an economic, political and social agenda that will increase that gap even further ultimately destroying the open system that made America rich and allowed its 1 percent to thrive in the first place.
Note: The author of this article, Chrystia Freeland, wrote the book Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else, from which this essay is adapted. For deeply revealing reports from reliable major media sources on income inequality, click here.
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