I came across this video today from TED Talks where self proclaimed "plutocrat" Nick Hanauer addresses the issue of rising inequality in America.
In the video he says that if America continues on it's current course the wealth gap will continue to get worse and America will resemble
pre-revolutionary France which could in turn will lead to revolution.
Nick Hanauer TED Talk
I couldn't agree with him more, there are many similarities between current America and Pre-Revolution France. I like his idea on how hiking the
minimum wage would potentially fix this problem, however I personally think it's a little too late for that which I'll get into later.
From my reading on good ole Wikipedia it seems the main Causes of the French
were National Debt, Income Inequality/Repression, and Famine. America is experiencing two at the moment and very well could
experience the third.
First, the National Debt
In pre-revolutionary France King Louis XV and Louis XVI dramatically increased France's National Debt because of
their policies. The accumulation of debt is credited to the Seven Years War and the American War for Independence, spending on building a large navy
after the Seven Years War, and spending on government/monarchy infrastructure at Versailles. Because the budget deficit was so large and most of it
was borrowed from foreign powers Louis XV had to raise taxes which of course angered the people of France. Of course as a consequence of large debt
inflation struck the country as well.
There are many similarities between France's debt situation in the late 18th century and America's now. Under Obama's administration we have now
topped 18 Trillion Dollars
in National Debt that doesn't include social security, medicaid, medicare and other
unfunded liabilities. George Bush Jr. before him nearly doubled the national debt while he was in office to $10 Trillion and Obama is right on course
of doing the same. The accumulation of this debt is due to spending on the war on terrorism, the bailouts, and now the ACA. Of course just like in
France if our debts are reigned in (in the form of countries cashing in treasuries) inflation will occur as well.
Second, Income Inequality and Repression:
In 18th century France one of the main reasons for the hatred of the upper class nobility was a semi
feudal social structure in place. Basically the nobles had such a tight hold on the King and the government of France that their special interests
trumped the interests of the peasants of France. The nobles held the majority of land, could claim immunity to taxes, and the peasants had to pay
fees to nobility through landlords and parishes.
The similarity between this and America isn't hard to see. The Oil Kings, Bankers, and other big company CEO's have their hands in the pockets of
our branches of government. Anyone that opposes a bill that threatens them and their power is likely to lose campaign funding. Tax cuts for the rich
because of G.W. Bush's "trickle down" ideology mirrors that of France's Nobles. There's also many deductibles and tax incentives they can claim
as well. These tax cuts also helped the National Debt accumulate on a higher level too.
Now finally the ridiculous CEO to Average worker pay. It is no secret to this site that since the 1980's CEO pay has dramatically risen in
comparison to average pay. For instance
it can be up to 300x the average
at least in the case of these top 350 companies. Compare that to minimum wage which goes up a dollar or two every 5 years or so. You
can see also this income inequality in the market. The main street economy of the past 6 years has been lackluster, unemployment is still high, and
many good jobs have been eroded by outsourcing and replaced with lower wage jobs. While the stock market is at all time highs in the 17,000 range.
The out of touch stock brokers then wonder why consumer spending during the Black Friday weekend was down 11%.
Finally the Famine:
one huge motivator for any revolution is food. If the people are not fed you can expect riots and this was the case in
pre-revolutionary France. A course of crop failures due to poor growing conditions and the possibility of the nobles hoarding food lead to high food
prices and hungry peasants.
This last one thankfully hasn't happened in America yet and because of our large ag industry, likely wont. However, if things in California and
other drought stricken parts of the country don't improve it could potentially drive prices up in the near future. Competition for water because of
fracking could cause some some food production problems as well. Although famine was a huge part of the French Revolution there are other ways the
lower class in America could face hunger and that's through inflation and job scarcity. All it would take is one more economic crash.
If the economy crashes one more time we likely wont be able to stall it like in 2008. With all the debt the government and the people are in, the
lack of good jobs and just jobs in general, the erosion of the middle class, the economic slowdown in Europe, the Chinese economy overtaking the US,
our trade deficit, and the huge drop in oil, the move away from the petrodollar, it is likely that a new economic crash is coming soon. This crash
could trigger a famine like effect where people just don't have any money to buy the things they need.
Overall from the conclusions I have drawn I believe the United States could be headed in a similar path as Pre-Revolutionary France. Though I
sincerely hope we don't take a destructive and violent path as they did. Without the proper reforms as Nick Hanauer put it "it's only a question
of when it will occur". Personally I think we need some sort of revolution (preferably a non-violent one), and not to change the founding documents
but rather to actually honor what they say.