Peer2Politics

If you applied the logic of Complex Adaptive Systems Theory to economics, it would make perfect intutive sense as to how economies with high inequality remain stagnant and how high inequality happens when there is no distributive function applied an economy.  Very simply put, when people aren't able to afford to buy, invest or save, the economy isn't able to grow because of the lack of participants in the market.  Access is denied, and people are stuck using their increasingly meager earnings to buy necessities rather than the goods, services and investments that they'd ordinarily be making, not to mention also being less able to save safely to guard against economc misfortune.  That's how the economy stagnates when only a few are allowed to have so much while many are denied the ability to maximize their well being and quality of life.

As for how this comes to be, it's simply a case of wealth enabling one to accumulate more wealth, especially if they're disinclined to spend money on a regular basis.  The current rich reflect those who have husbanded money and essentially hoarded it, relative to what they brought in, thus enabling them to accumulate more and more of it through low-risk capital investments.  Their priority is the accumuation of financial wealth, not necessarily the enjoyment of it. There's also the social network that wealth enables, which helps to preserve the production of wealth amogst a few individuals who are able to stay well connected to one another.

Factor in the policy changes and chages in attitude that Ronald Reagan and Margaret Thatcher brought into government during the 1980's, and you've got the poitical conditions conducive to allowing economic inequality to thrive and real economies to stagnate.  Think of it as a change in operating system on a computer drive.  The different programs instituted and present in government enabled conditions in society to tend towards these less equal and less growth conducive states that we're all presently in.

Therefore, taxation possibly isn't the answer, but an increase in wages across the board to reflect the real profit value of labor in the market.  These concepts were known at the time of Adam Smith and advocated for by Adam Smith, as opposed to the traditional "laissez-faire" attitude that has been ascribed to him after a serious misinterpretation of his work, "The Wealth of Nations".  It's important to remember that Mr. Smith viewed profit as something that should not be had in "immoderate amounts" and that it is secondary to the well being and rent value of the economy (which is where David Ricardo steps in to advocate for a minimum wage based on rent/profit value of the work that is produced in the economy.  Marx foresaw the inherent flaws in the Capitalist system and predicted its downfall very accurately (although some 150-200 years early) and none of them foresaw or thought of the environmental impacts of our economic activity that is more vital to our survival and well being than any amount of economic growth, real or unreal.

It's time we really get away from the Neoclassicists and especially the Neoliberals who don't view the economy as the complex system that it is.  There is no lasting equilibrium in the economy, and everything doesn't balance out into neat, rational little equations.  It's a large messy system that we're only starting to get insight into, and it's time we take that into consideration along with its interconnectiveness to our governments, our societies, our environments and our universes and social relations.  Failure to do this will result in continued poor policy from both the Left and the Right and people will just get frustrated with the politcal powers that be, regardless of ideology, and just swing helplessly back and forth from mediocrity to mediocrity, until the string snaps and they go into another level of mediocrity.

It's sad.  It's predictable.  It's the story of us.  And I see no reason to believe that the present is going to be really any different than it has for the past several thousand years.

Think about it.