Friday, March 18, 2016

The Emergence of the New Aristocratic Era

I think we are headed back to a form of the Aristocratic era that preceded the Industrial Revolution (IR). The IR changed the world in an unprecedented manner. Jobs, Opportunity, wide spread Equality, and Wealth; the creation of a huge Middle Class. But no one saw it coming to an abrupt end; What futurists foresaw did not happen... e.g. a world in which all humanity enjoyed leisure (not enforced unemployment) and wealth (not minimum slave wages nor the humiliating dole). Think for a moment what "slave wages" are are: (eliminating "ownership" of the person) slave wages pay an amount that feeds and clothes and provides minimum housing - nothing more; exactly what slave holders of yore provided. 
The governments of the 1ST World are the new slave owners, but have not provided jobs for their slaves, nor income from those jobs with which to feed the kitty to keep the system going. Instead 1ST World Governments are simply dissipating the wealth that was generated during the IR period And worse they have borrowed against wealth that has for intents disappeared. Even emerging economies are dissipating their natural wealth: Venezuela, the Ivory Coast, etc. 
What a glorious, albeit short, period the IR was. You and I received the best of it and are living to witness the end of it. The period we are in right now is what I'll call, for lack of a catchy phrase, the period of Equity Dissipation/Debt Acquisition; it will be shorter than the period of equity building that occurred during the latter stage of the IR since spending is quick, thoughtless, and requires neither skill nor effort. We are seeing it all around us: Governments of every stripe in debt up to their noses, most people struggling with debt, home ownership declining, home equities evaporating. Even a minimal college education encourages debt and in many fields requires huge debt levels. All only exacerbating and furthering the dissipation of wealth. 
I see it in my own family and in most of the families I am familiar with: the adult children of many would be poor if it weren't for government subsidy and dependence upon parents. Compare those to the economic health of the previous generation: that role was reversed! That generation aided in the financial support of their parents.

The near Future is not rosy: No jobs for the hoi polloi, no broadly enjoyed equity creation. Further concentration of enormous wealth into the hands of the few: Gates, Zuckerberg, Allen, Buffett, Trump, etc., the new Aristocrats. They wield enormous power both economic and political. They generate jobs, but few high paying jobs compared to the era of the IR. 
The new Aristocrat's vast wealth is a result of the nature of the Technological Revolution in which a handful of people (or even a single individual), using digital tools creates a product (using another digital tool, the simple computer, that needs no direct support of a broad spectrum of industrial might - as did say the IR era automobile industry) that when combined with modern financial resources generates - almost overnight - billions of dollars for the "inventors" of products like Facebook! 
The nature of that particular product needs little infrastructural support: little or physical industrial development, no wholesale or retail distribution apparatus... nothing but another $200 digital tool - the iPhone.... which, by the way, needs no telephone lines, no phone poles, no telephone operators, no switchboards, no phone repair men, no millions of miles of copper wires, etc.  

Cheers, Mel

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