Rich people may live on the same planet as the rest of us, but they exist in their own very special world.
The coronavirus pandemic has killed millions of people and caused economic, social, and political crises around the world. During this time of tumult, the world's richest people have seen their income and wealth grow immensely. For example, the world's billionaires have increased their collective wealth by a trillion dollars, at least a 50 percent expansion compared to the previous year.
In the United States, the language of "essential workers" is summoned to describe how the working poor are exploited by huge corporations like Amazon and Walmart. The billionaires who own or control such corporations are becoming even wealthier while preventing their employees from earning a living wage or organizing to defend their rights, health and safety.
Propaganda economy-speak about the alleged "K-shaped recovery" also masks the true extent of poverty and human misery that has been caused by the coronavirus pandemic and the Trump regime's negligent, if not criminal, response.
Of course, while many millions of people have been imperiled by the coronavirus pandemic in the U.S. and around the world, the very rich received early access to vaccines and lifesaving experimental treatments.
Money has been enshrined as a form of free speech in American politics. This has translated into enormous power and influence over the machinery of democracy. The predictable outcome is the peoples' democratic will is smothered, if not wholly ignored by elected officials; what political scientists describe as "plutocratic populism" is doing the work of American neofascism and autocracy.
Gangster capitalists are escalating their exploitation of the rainforests, jungles, and other crucial habitats and wilderness areas. This only increases the likelihood that other pandemic-scale diseases such as COVID-19 will spread from animals to humans.
How have the plutocrats responded to these crises and others? Instead of displaying social responsibility, many of the world's richest individuals and families are building bunkers, buying fortified islands or even making ultimate plans to abandon the planet.
What is it like to be a member of that social class? Chuck Collins knows. He was born into the Oscar Mayer meat and cold cuts family fortune. At age 26, he was compelled by conscience to give away his inheritance in an act of solidarity with the poor and broader community. Living his principles of human solidarity and social change work, Collins is now director of the Program on Inequality and the Common Good at the Institute for Policy Studies.
Collins is also the author of several books, including "Born on Third Base: A One Percenter Makes the Case for Tackling Inequality, Bringing Wealth Home, and Committing to the Common Good" and "Is Inequality in America Irreversible?" His new book is "The Wealth Hoarders: How Billionaires Spend Millions to Hide Trillions."
In this conversation, Collins explains how wealth hoarding negatively impacts American society, and how the very rich use the "wealth defense industry" to hide their assets in order to avoid paying taxes — and to remain above the law in other ways as well. Donald Trump is a prime example of that corrupt and dangerous plutocratic class.
He also discusses the unspoken cultural rules of the wealthy and the antisocial values and beliefs which guide their lives. At the end of this conversation, Collins debunks right-wing talking points about "the death tax" and "makers and takers" that are used to propagandize far too many "working-class" Americans into voting against their own economic self-interest.
During America's ongoing pandemic and this age of death, the rich have become even more powerful and wealthy while "essential workers" are being sacrificed. Unions have been further undermined and income is stagnant, if not declining, for the average American. There is mass unemployment and human misery. Given your life and decision to walk away from an inherited fortune, how do you make sense of this moment?
In a way, the pandemic was the great reveal of what happens when you allow a society to pull apart economically, socially, racially and politically. The fact that billionaires have seen their wealth increase and so many other people have lost so much — their lives, livelihoods, their savings, and their health. In my opinion, we should be making a big pivot and a transition in American society because of these lessons learned. There is a broader recognition that we need to do things to lift up the most vulnerable, pay a living wage, and have proper health care. More people are also realizing how top heavy the country's wealth concentration is.
Because I have an intimate front row seat to the world of wealth, I also see things cracking at that level. There are many wealthy people who do not want our society to keep going down this path. They know it is not going to end well.
What do we do with hope? Is hope a dangerous thing in America today?
I am friends with a labor organizer named Ernesto Cortes. He used to say, "You need to cultivate your cold anger." There is hot anger at the deep and entrenched systemic inequality and systemic racism. We can take that anger and lash out or we can take the steely cold anger and steer it into transformational activities. Let's get organized. Let's get people to run for office. Right now, there is a big fight over this question: Should a small, rich minority rule over America, who want to block the social and political changes that so many people want for this country? I think the pressure is going to keep building for a political realignment.
The concept of the "moneyed classes" is a very important one. I prefer it to the "one percent" or "plutocrats," which is vague and imprecise language. What does the concept and language of the "moneyed classes" allow us to communicate to the public at large?
We are drifting toward an oligarchy or what we could also describe as a "hereditary aristocracy of wealth". We could also describe that group as consisting of "wealth dynasties." In 20 years, the sons and daughters of today's billionaires will be calling the shots, running the economy, dominating politics, blocking change that everyone else wants and even using their philanthropy as an extension of their power and influence.
America is going to be moved even more away from a democratic self-governing society and toward raw rule by money. I do not believe this is in anyone's long-term interests. I have been trying to explain to wealthy people how ecological crises impact everybody. The super-rich need to reinvest back into society in order to solve some of the problems that impact and hurt them too. It is in their self-interest.
How is the world you are describing any different from America right now?
It is a matter of degree. The inequality will be even more entrenched than it is today. It will be harder to dig out of the rut if you will. We'll have many more Donald Trumps running for office. The social safety net will be even more dismantled. There will be more political and social polarization. America may even be controlled by autocratic, totalitarian institutions. If these trends continue here in the United States, the country could look more like Brazil, a country with a very weak state, a powerful plutocratic governing class, a very small and precarious middle class and lots of desperate people. That is the dystopian outcome that could await America in 20 years.
What is life like for the rich, especially the extremely wealthy?
These people live in their own distinct realities. I grew up in middle "Richistan." I'm not from "Billionaireville." I'm not from old dynastic wealth. But I know enough about the rich to know that the higher up you get, the more unplugged you are from the day-to-day struggles of most people. In that way, wealth and privilege are a type of disconnection drug.
Some members of the very rich might be politically engaged through their philanthropy and attempts to solve social problems. Some of these people might be liberal or even radical in terms of their politics. But as a group they are far removed from people, the majority of Americans, who experience true economic vulnerability and a feeling of being the precariat.
In discussing the rich we also need to make a distinction between those who are "merely" rich and those who are the very rich. I draw that line at $30 million. At $30 million and up, we see an oligarch class that have more money than they need to meet their needs. Now members of the group are focusing on achieving more social and political power. They are focusing on using their wealth to rig the rules of society to get more wealth. It is these oligarchs who the United States should be focusing tax reforms on. They are hoarding and hiding wealth through a whole "wealth defense" industry. They are also politically engaged and rigging the system to accomplish that goal.
What does their culture teach its members? What are the unstated rules?
One rule is that capital preservation is the norm — that you want wealth to continually grow. Do not touch the principal. Do not touch the assets. If you have to ask how much something is, you can't afford it. Look like you belong everywhere.
There are other rules and cultural norms as well. Be wary of everybody. People are after your money. Be careful who you marry, because they might want to take your money. There is much distrust among this class that keeps them from having meaningful connections with other people.
Among the rich there is also a very deep mythology of deservedness. Even if you are born on third base and you inherit wealth, you repeat that line from Donald Trump: "Well, I'm from a good family. My family's virtuous. My family worked hard, even though I just happened to have picked wealthy parents. There's something virtuous about me too!" That myth of deservedness, whether it's a first-generation wealth builder, entrepreneur or old wealth, is how social inequality is justified. The implication becomes "I deserve all the wealth that I have because I am virtuous and work hard." The corollary of that logic is that those people who are not wealthy deserve to be just where they are.
My response to that culture was to ask myself, "How come I have all this money? I didn't work to get it." To me that was wrong and an example of how the system is broken. All these other people are working incredibly hard, and they experience so much risk and insecurity in their lives. Something is broken here. I know I am not alone in those feelings.
What did the choice to walk away from your inheritance cost you? By this I do not mean money, but the cost in other ways to your life.
To be honest, it did not cost me much. I have so many other types of privilege and advantage. That is the nature of multigenerational advantage. Multigenerational disadvantage is the flipside of that. The privilege and advantage include such things as being fourth-generation property owners, financial literacy, access to education and the like. I also had a debt-free college education. I'm white, I'm male. I don't have to worry about economically supporting my parents in their older years. That is a huge advantage.
What is Donald Trump an example of, in this context?
Donald Trump is an example of a second-generation wealth dynasty. He was born into a privileged circumstance, but he remade his identity. Trump pretends that he is a first-generation entrepreneur. Trump is also a crypto-eugenicist. He talks about his genes all the time. He does not speak in terms of societal opportunities or advantages, but rather in terms of some form of genetic superiority. He is not alone: There are many other rich people who think of the world in the same terms. Donald Trump received $400 million from his father. That is a great head start in life. I would like to do an experiment and give that $400 million to another hundred people and see what they do with their lives.
I see Trump as an example of a class of wealthy white people who live largely consequence-free lives.
That is an apt description. Actually, one of the things that the wealth defense industry does is to take a rich person's wealth and put it in asset protection trusts. With these trusts, for example, if a rich person drives through a red light and kills somebody, they are not going to be held financially responsible for their actions. Another scenario: What if a rich person steals money from people and then parks it in an offshore trust or some other type of account or asset? There is a law professor at the University of Richmond named Allison Tait who describes this as "high-wealth exceptionalism." The rich believe that they live by a separate set of rules. You believe you get to have a separate set of rules. And in fact, the wealthy truly do have a separate set of rules than the rest of us in America.
What does that sense of immunity from consequence do to their emotions, morals and values? That core level of what it means to be a human being?
It leads to a breakdown in empathy and a breakdown in individual responsibility for your actions. Privilege is a disconnection drug. It separates people from one another, and it also separates them from the impact of their actions or inaction.
How does the wealth defense industry work?
The wealth defense industry has many tools at its disposal. These are individual wealthy people who help other wealthy people who are worth $30 million or more. There is also a parallel industry and set of personalities who help global corporations to hide their wealth and income.
But in terms of wealthy individuals, let's consider someone who lives in another country, some mineral-rich country in the Southern Hemisphere. You've been siphoning wealth off, through bribery or through deals selling off minerals. Perhaps you are a government official. You want to get that money out of the home country because someday there will be people who want that money back.
So what do you do? You move it into an offshore tax haven. You open up a bank account. You may also create a shell company that does not have your name on it. Eventually you bring that money or company to the United States, where you can purchase a luxury condominium in somewhere like downtown Chicago or New York.
There are other ways to launder the money through the system. You can take that money to South Dakota and create a dynasty trust, where the money can just sit in an account that you control but will never be subject to accountability or taxation.
A wealthy person in the United States can also create a Delaware shell company. There are a variety of complicated loopholes that the rich use. The complication is intentional because complexity is the bread and butter of the dynasty defense industry. At the simplest level, what is being done is to create a labyrinth of ownership structures to pretend that the billion dollars that you have is no longer in your name. When the tax collector comes, you just hold up your hands and say, "It's not my money!"
How do you explain to the average American how the wealth defense industry impacts their lives?
One, it is tax avoidance, which translates into the narrative from the government and elected officials that there is no money, we have to cut services, we can't afford low-cost student loans or mortgage subsidies. We can't alleviate poverty because supposedly there isn't any money. The impact on the average American is also manifest in how the wealth defense industry empowers and enables kleptocrats. It makes social inequality worse. The wealth defense industry and wealth hoarding also enables anti-democratic concentrations of wealth and power.
How do we rebut the right-wing narrative that there are "makers" and "takers" in society and that these discussions of social inequality and economic injustice are just "class warfare" or a politics of resentment?
It's a diabolical framing of the world, one that ignores how we are all interdependent. Even rich people are dependent on the public investments and property law protections in American society. None of these rich people do it alone. They exist in a society that makes it possible.
And what of the "working-class" Republicans and Trump supporters in "middle America" who are obsessed about the "death tax" and class warfare? That right-wing propaganda has been very effective these last few decades.
We have lived through 40 years of intensified class war, where the wealthy have rigged the rules to funnel more income and wealth to the top of the economic pyramid. People who work for wages are being punished. Such an outcome is what happens when you tip the economy to the benefit of wealth against work and against wages.
In terms of the wealth tax, if you have less than $12 million, you are never going to pay this estate tax. It's not a tax on success. It's a tax that slows the creation of these democracy-distorting wealth dynasties. The wealth tax is a good tax.
The rich have funded campaigns to make people think, "Oh, you're going to have to pay the death tax. And that farmer over there is going to have to pay the death tax." It's just helpful to say, "Hey Joe on the barstool there, do you have more than $23 million, you and your spouse? Well, why are you bellyaching about that? Why are you defending the plutocrats who are picking your pocket?"
If rich people were taxed in the same way as regular people — bus drivers, schoolteachers, nurses and the like — what would American society look like?
On a fundamental level, America would be a much better place to live in. There would be so much less stress and fear and division. We would not have people afraid that a job loss or divorce or illness would lead them to destitution and having to live in a car. In the '50s, '60s and '70s, it seemed as if American society was moving towards more egalitarianism. But then the country took a huge wrong turn in the late '70s and '80s. It does not have to be that way.
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