And Now For...The Truth:
Byrnzie
Posts: 21,037
http://www.guardian.co.uk/commentisfree ... destroyers
The 1% are the very best destroyers of wealth the world has ever seen
Our common treasury in the last 30 years has been captured by industrial psychopaths. That's why we're nearly bankrupt
George Monbiot
guardian.co.uk, Monday 7 November 2011
If wealth was the inevitable result of hard work and enterprise, every woman in Africa would be a millionaire. The claims that the ultra-rich 1% make for themselves – that they are possessed of unique intelligence or creativity or drive – are examples of the self-attribution fallacy. This means crediting yourself with outcomes for which you weren't responsible. Many of those who are rich today got there because they were able to capture certain jobs. This capture owes less to talent and intelligence than to a combination of the ruthless exploitation of others and accidents of birth, as such jobs are taken disproportionately by people born in certain places and into certain classes.
The findings of the psychologist Daniel Kahneman, winner of a Nobel economics prize, are devastating to the beliefs that financial high-fliers entertain about themselves. He discovered that their apparent success is a cognitive illusion. For example, he studied the results achieved by 25 wealth advisers across eight years. He found that the consistency of their performance was zero. "The results resembled what you would expect from a dice-rolling contest, not a game of skill." Those who received the biggest bonuses had simply got lucky.
Such results have been widely replicated. They show that traders and fund managers throughout Wall Street receive their massive remuneration for doing no better than would a chimpanzee flipping a coin. When Kahneman tried to point this out, they blanked him. "The illusion of skill … is deeply ingrained in their culture."
So much for the financial sector and its super-educated analysts. As for other kinds of business, you tell me. Is your boss possessed of judgment, vision and management skills superior to those of anyone else in the firm, or did he or she get there through bluff, bullshit and bullying?
In a study published by the journal Psychology, Crime and Law, Belinda Board and Katarina Fritzon tested 39 senior managers and chief executives from leading British businesses. They compared the results to the same tests on patients at Broadmoor special hospital, where people who have been convicted of serious crimes are incarcerated. On certain indicators of psychopathy, the bosses's scores either matched or exceeded those of the patients. In fact, on these criteria, they beat even the subset of patients who had been diagnosed with psychopathic personality disorders.
The psychopathic traits on which the bosses scored so highly, Board and Fritzon point out, closely resemble the characteristics that companies look for. Those who have these traits often possess great skill in flattering and manipulating powerful people. Egocentricity, a strong sense of entitlement, a readiness to exploit others and a lack of empathy and conscience are also unlikely to damage their prospects in many corporations.
In their book Snakes in Suits, Paul Babiak and Robert Hare point out that as the old corporate bureaucracies have been replaced by flexible, ever-changing structures, and as team players are deemed less valuable than competitive risk-takers, psychopathic traits are more likely to be selected and rewarded. Reading their work, it seems to me that if you have psychopathic tendencies and are born to a poor family, you're likely to go to prison. If you have psychopathic tendencies and are born to a rich family, you're likely to go to business school.
This is not to suggest that all executives are psychopaths. It is to suggest that the economy has been rewarding the wrong skills. As the bosses have shaken off the trade unions and captured both regulators and tax authorities, the distinction between the productive and rentier upper classes has broken down. Chief executives now behave like dukes, extracting from their financial estates sums out of all proportion to the work they do or the value they generate, sums that sometimes exhaust the businesses they parasitise. They are no more deserving of the share of wealth they've captured than oil sheikhs.
The rest of us are invited, by governments and by fawning interviews in the press, to subscribe to their myth of election: the belief that they are possessed of superhuman talents. The very rich are often described as wealth creators. But they have preyed on the earth's natural wealth and their workers' labour and creativity, impoverishing both people and planet. Now they have almost bankrupted us. The wealth creators of neoliberal mythology are some of the most effective wealth destroyers the world has ever seen.
What has happened over the past 30 years is the capture of the world's common treasury by a handful of people, assisted by neoliberal policies which were first imposed on rich nations by Margaret Thatcher and Ronald Reagan. I am now going to bombard you with figures. I'm sorry about that, but these numbers need to be tattooed on our minds. Between 1947 and 1979, productivity in the US rose by 119%, while the income of the bottom fifth of the population rose by 122%. But from 1979 to 2009, productivity rose by 80%, while the income of the bottom fifth fell by 4%. In roughly the same period, the income of the top 1% rose by 270%.
In the UK, the money earned by the poorest tenth fell by 12% between 1999 and 2009, while the money made by the richest 10th rose by 37%. The Gini coefficient, which measures income inequality, climbed in this country from 26 in 1979 to 40 in 2009.
In his book The Haves and the Have Nots, Branko Milanovic tries to discover who was the richest person who has ever lived. Beginning with the loaded Roman triumvir Marcus Crassus, he measures wealth according to the quantity of his compatriots' labour a rich man could buy. It appears that the richest man to have lived in the past 2,000 years is alive today. Carlos Slim could buy the labour of 440,000 average Mexicans. This makes him 14 times as rich as Crassus, nine times as rich as Carnegie and four times as rich as Rockefeller.
Until recently, we were mesmerised by the bosses' self-attribution. Their acolytes, in academia, the media, thinktanks and government, created an extensive infrastructure of junk economics and flattery to justify their seizure of other people's wealth. So immersed in this nonsense did we become that we seldom challenged its veracity.
This is now changing. On Sunday evening I witnessed a remarkable thing: a debate on the steps of St Paul's Cathedral between Stuart Fraser, chairman of the Corporation of the City of London, another official from the corporation, the turbulent priest Father William Taylor, John Christensen of the Tax Justice Network and the people of Occupy London. It had something of the flavour of the Putney debates of 1647. For the first time in decades – and all credit to the corporation officials for turning up – financial power was obliged to answer directly to the people.
It felt like history being made. The undeserving rich are now in the frame, and the rest of us want our money back.
The 1% are the very best destroyers of wealth the world has ever seen
Our common treasury in the last 30 years has been captured by industrial psychopaths. That's why we're nearly bankrupt
George Monbiot
guardian.co.uk, Monday 7 November 2011
If wealth was the inevitable result of hard work and enterprise, every woman in Africa would be a millionaire. The claims that the ultra-rich 1% make for themselves – that they are possessed of unique intelligence or creativity or drive – are examples of the self-attribution fallacy. This means crediting yourself with outcomes for which you weren't responsible. Many of those who are rich today got there because they were able to capture certain jobs. This capture owes less to talent and intelligence than to a combination of the ruthless exploitation of others and accidents of birth, as such jobs are taken disproportionately by people born in certain places and into certain classes.
The findings of the psychologist Daniel Kahneman, winner of a Nobel economics prize, are devastating to the beliefs that financial high-fliers entertain about themselves. He discovered that their apparent success is a cognitive illusion. For example, he studied the results achieved by 25 wealth advisers across eight years. He found that the consistency of their performance was zero. "The results resembled what you would expect from a dice-rolling contest, not a game of skill." Those who received the biggest bonuses had simply got lucky.
Such results have been widely replicated. They show that traders and fund managers throughout Wall Street receive their massive remuneration for doing no better than would a chimpanzee flipping a coin. When Kahneman tried to point this out, they blanked him. "The illusion of skill … is deeply ingrained in their culture."
So much for the financial sector and its super-educated analysts. As for other kinds of business, you tell me. Is your boss possessed of judgment, vision and management skills superior to those of anyone else in the firm, or did he or she get there through bluff, bullshit and bullying?
In a study published by the journal Psychology, Crime and Law, Belinda Board and Katarina Fritzon tested 39 senior managers and chief executives from leading British businesses. They compared the results to the same tests on patients at Broadmoor special hospital, where people who have been convicted of serious crimes are incarcerated. On certain indicators of psychopathy, the bosses's scores either matched or exceeded those of the patients. In fact, on these criteria, they beat even the subset of patients who had been diagnosed with psychopathic personality disorders.
The psychopathic traits on which the bosses scored so highly, Board and Fritzon point out, closely resemble the characteristics that companies look for. Those who have these traits often possess great skill in flattering and manipulating powerful people. Egocentricity, a strong sense of entitlement, a readiness to exploit others and a lack of empathy and conscience are also unlikely to damage their prospects in many corporations.
In their book Snakes in Suits, Paul Babiak and Robert Hare point out that as the old corporate bureaucracies have been replaced by flexible, ever-changing structures, and as team players are deemed less valuable than competitive risk-takers, psychopathic traits are more likely to be selected and rewarded. Reading their work, it seems to me that if you have psychopathic tendencies and are born to a poor family, you're likely to go to prison. If you have psychopathic tendencies and are born to a rich family, you're likely to go to business school.
This is not to suggest that all executives are psychopaths. It is to suggest that the economy has been rewarding the wrong skills. As the bosses have shaken off the trade unions and captured both regulators and tax authorities, the distinction between the productive and rentier upper classes has broken down. Chief executives now behave like dukes, extracting from their financial estates sums out of all proportion to the work they do or the value they generate, sums that sometimes exhaust the businesses they parasitise. They are no more deserving of the share of wealth they've captured than oil sheikhs.
The rest of us are invited, by governments and by fawning interviews in the press, to subscribe to their myth of election: the belief that they are possessed of superhuman talents. The very rich are often described as wealth creators. But they have preyed on the earth's natural wealth and their workers' labour and creativity, impoverishing both people and planet. Now they have almost bankrupted us. The wealth creators of neoliberal mythology are some of the most effective wealth destroyers the world has ever seen.
What has happened over the past 30 years is the capture of the world's common treasury by a handful of people, assisted by neoliberal policies which were first imposed on rich nations by Margaret Thatcher and Ronald Reagan. I am now going to bombard you with figures. I'm sorry about that, but these numbers need to be tattooed on our minds. Between 1947 and 1979, productivity in the US rose by 119%, while the income of the bottom fifth of the population rose by 122%. But from 1979 to 2009, productivity rose by 80%, while the income of the bottom fifth fell by 4%. In roughly the same period, the income of the top 1% rose by 270%.
In the UK, the money earned by the poorest tenth fell by 12% between 1999 and 2009, while the money made by the richest 10th rose by 37%. The Gini coefficient, which measures income inequality, climbed in this country from 26 in 1979 to 40 in 2009.
In his book The Haves and the Have Nots, Branko Milanovic tries to discover who was the richest person who has ever lived. Beginning with the loaded Roman triumvir Marcus Crassus, he measures wealth according to the quantity of his compatriots' labour a rich man could buy. It appears that the richest man to have lived in the past 2,000 years is alive today. Carlos Slim could buy the labour of 440,000 average Mexicans. This makes him 14 times as rich as Crassus, nine times as rich as Carnegie and four times as rich as Rockefeller.
Until recently, we were mesmerised by the bosses' self-attribution. Their acolytes, in academia, the media, thinktanks and government, created an extensive infrastructure of junk economics and flattery to justify their seizure of other people's wealth. So immersed in this nonsense did we become that we seldom challenged its veracity.
This is now changing. On Sunday evening I witnessed a remarkable thing: a debate on the steps of St Paul's Cathedral between Stuart Fraser, chairman of the Corporation of the City of London, another official from the corporation, the turbulent priest Father William Taylor, John Christensen of the Tax Justice Network and the people of Occupy London. It had something of the flavour of the Putney debates of 1647. For the first time in decades – and all credit to the corporation officials for turning up – financial power was obliged to answer directly to the people.
It felt like history being made. The undeserving rich are now in the frame, and the rest of us want our money back.
Post edited by Unknown User on
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Comments
Not a particularly well written piece?
It hit's the nail on the head, and highlights some studies that reveal some pretty arresting findings. What more could you want from an article?
George Monbiot also happens to be one of the most highly regarded English journalists.
oh ... i've read a bit of his stuff (mostly from you ... haha) ... but it is of my opinion that the article is disjointed ... it is written for an audience that is already there or close to being there ...
how is this article going to reach people who will easily rationalize his points?
You mean how will this article reach the masses? Those people who prefer to read the tabloids? It won't.
Though I'm not sure I understand your point.
my point is that the article is disjointed and as a reader - you have to make a few leaps ... not a problem, if you understand certain key aspects ... but for your average reader, it doesn't piece together well enough to make its primary point ...
I don't see it as disjointed at all. It makes perfect sense to me. It's primary point being the financial elite are not people possessed of superior intellect or skills, and that they are in fact not much more than legal gangsters. The article makes a good point that these 1%'rs have no inherent right to plunder the majority of the wealth from the rest of the population and that maybe at last they will be held accountable.
It also presents some interesting findings produced by various studies conducted on these people.
I really don't see what the confusion is here.
He starts off on a track that anyone with knowledge of markets understands is mostly correct. You cannot outsmart the market. In most cases, the "successful" investment managers are just those that came up heads 5 times in a row, and are due for a tails (but, their bonuses are safely in the bank already). There are some folks that clearly show an aptitude for outplaying the markets (and, are in fact the richest of them all). But, most good (and rich) traders are lucky, not really superior.
However, it then falls off the rails. I won't go into all of it, but will address 2 points:
1) Just because the richest are x times more wealthy than the "workers," does not equate to the "workers" being poorer than their predecessors. 2 is 2 times bigger than 1. 100 is 25 times bigger than 4. Is 4 less than 1?
2) Who says the richest are the smartest? I don't recall that argument. The richest (heirs aside) are smart. But, not necessarily the smartest. That's the fallacy of this line of thinking. There's a lot that goes into this. And, yes. Luck is part of it. But a small part of it. Intelligence, hard work, business sense, etc. all go into it.
And, please. If that last line is pandering to the lowest common denominator, then I don't know what is. If Hilton gave his wealth to the gov't instead of his daughters, nobody would be better off (Well, we wouldn't have to see shows about them, so we WOULD in fact be better off. Just not financially). I, personally, do not want anyone else's money. What they have does not effect what I can earn.
However, to Byrnzie's implicit point (B: "What more do you want from an article?"), this isn't a novel-length book on the morality and inherent skill of the rich, it's an article -- though it reads more like an op-ed -- with a word limit. It makes some claims and offers some study references to back it up. In my opinion, it could have done with some softening of claims if it wanted to be taken seriously by anyone who didn't already hold the opinions it espouses.
I thought the most interesting and telling parts were these: By themselves, not enough to draw the conclusions the author draws, but certainly impactful enough to stimulate further research on the readers' part.
So you see no correlation or pattern in the following statistics then? They are just a coincidence that has nothing to do with disparity of wealth?:
'But from 1979 to 2009, productivity rose by 80%, while the income of the bottom fifth fell by 4%. In roughly the same period, the income of the top 1% rose by 270%.
In the UK, the money earned by the poorest tenth fell by 12% between 1999 and 2009, while the money made by the richest 10th rose by 37%. The Gini coefficient, which measures income inequality, climbed in this country from 26 in 1979 to 40 in 2009.'
He didn't say the wealthiest people were the smartest. He said they were too often portrayed that way by governments and media. Interesting that you distort his words before attacking him. Why don't you stick to what he actually says instead?
And just what is Hilton worth? Is the figure higher or lower than the amount of tax-payers money used to bail out the banks a couple of years ago? (Since we're on subject of taking 'other people's money').
The conclusions he draws are that the rich elite - the 1% - are taking the rest of us for a ride, and that they are in no way entitled to the massive amount of wealth they possess at the expense of the rest of us. The studies and statistics Monbiot uses support this conclusion. And this involves no leap of logic at all.
Are you suggesting that EdsonNascimento's word is final and sacrosanct? :problem: Weird.
it was made partly in jest as the reality is that the best written article on this matter still would have a hard time penetrating the minds of those who are opposed to the so called "99%" ... i think motodc is saying it is cut right down the middle as far as our debate on the writing merits ... it is written for the already convinced ... but not so much so that if one were to be open about it - they could investigate further ...
It is terrifying when you are too stupid to know who is dumb
- Joe Rogan
No need to hide behind sarcasm. It's perfectly understandable that some people's reaction to an article that vilify's the rich and powerful is to squirm like a slug that's had salt poured on it.
I say take it all. that will make it all better right?
I don't think you would ever hear me say that rich people are more intelligent or have a right to be rich... This article stated nothing new, but certainly pointed out the author's bias. No one has the right to billions of dollars...finance is a game...but no one has the right to take what some else has...if it is stolen then it should be proven...if it wasn't stolen than it was earned, maybe not ethically, but earned none the less. Exploitation is a subjective term...it isn't objective...there is no point where something automatically becomes exploitation...and I think it demeans real exploitation to use it to describe what has happened in the US and the UK in terms of labor, management, and finance.
The undeserving rich are now in the frame, and the rest of us want our money back.
no agenda there, this must just be truth.
Byrnzie, I appreciate your point of view. I don't agree with it (shocking I know) and to call this truth validates every other opinion piece written with a few study facts to back up it up. People used the bell curve to validate things too byrnzie...remember that always and forever...always and forever...
you seem like a smart person, well read and passionate and I applaud anyone who attempts to pay attention. The sarcasm was aimed at calling an opinion piece the truth, not you are your point of view.
It is terrifying when you are too stupid to know who is dumb
- Joe Rogan
Fair enough.