The Basis of Wealth is Violence


The impetus for this War Chest Blog was Jeffrey A. Winters’ (Northwestern University) book Oligarchy (2011).  It’s an eye-opening social/economic/legal/political analysis of how the rich brutally and forcibly preserve their wealth.  Professor Winters’ paper Wealth Defense and the Limits of Liberal Democracy (2014) reiterates the observations made in his book.


Winters’ work cuts through to the hardcore nasty truth of how and why radical wealth stratification is the norm.   Most economic/legal writers focus on markets, exchange, fair competition, efficiency, equilibrium, etc., which parallels political discussions on democracy, freedom, equality and human rights.  Winters sees the ruthless reality of human coercion, force, violence, conflict and the permanent tension in how large concentrations of wealth are maintained.


He traces the historical development of wealth inequality by starting with the most common explanation of inequality as a human “sorting” phenomenon. People vary in their energy, knowledge, skill, intelligence and strength.  Therefore, unequal rewards flow to those who are simply better and more competitive.  The problems with this explanation are:  1) the magnitude of the difference between the rich and poor is way too extreme to be explained by this; and 2) differences among human faculties have been around for over 100,000 years but extreme wealth stratification didn’t occur until about 7,000 years ago.


What’s really happening is that resources are claimed and defended unequally through a process of exclusion, domination and opportunity hoarding. It was raw violence at first (villages were raided and plundered), which later became institutionalized coercion.  Winters explains that current power structures all derive from physical violence, which then evolved into an aggressively forced aristocratic system.


The problem with democracy has been known since Aristotle. Democracy will never be stable unless participation power (voting rights) is subordinated to material resource power (money).  If the poor masses could vote to confiscate the wealth of the rich, they would eventually do that.  So, private property rights are based on a legal and economic system that cannot threaten the rich.  The framers of the U.S. Constitution established a hereditary aristocracy on purpose.


Winters believes that our system has hardened recently because of the “Wealth Defense Industry”.  That’s my business.  Armies of tax lawyers, accountants, lobbyists, investment advisors and “ideologists”, all work very hard to maintain the wealth of the rich.  The ability of the elite wealthy (via their enormous material resource power) to shift any wealth redistribution political efforts down onto us (my Mass Affluent clients) means that I, along with other thinkers, have a profound opposition to high taxes and welfare spending. Winters would call me a “drone” in the wealth defense industry.  As I wrote on 9/2/15, he believes that guys like me have been brainwashed by conservative thinkers who “blaze the ideological path along which drones in the Wealth Defense Industry, who do not need to be significant conceptualizers, can follow.


Well, I’m a happy drone warrior making a good living out here in the private sector as the ivory tower academics and leftist media scream for wealth redistribution. It’s not going to happen.  Our wealth is safely secured by a violent system that cannot be changed no matter how loudly it is decried.   It’s not a nice system but it’s stable, secure and comfortable for families in the top wealth quintile.


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