Nick Hanauer is a rich guy with a conscience. Over the last few years, he’s become the poster boy for plutocratic guilt, urging his fellow 1 percenters to get serious about surging inequality. In particular, he’s been a champion for raising taxes on the rich and boosting wages for the working poor.
But Hanauer is no bleeding-heart liberal. In fact, he’s driven by self-interest, not self-loathing. Rich people should be worried about inequality, he insists, not because it’s wrong, but because it’s dangerous.
“If we don’t do something to fix the glaring ineqities in this economy,” he recently declared in an article for Politico, “the pitchforks are going to come for us.”
Hanauer is a colorful and compelling guy. Like any good polemicist, he speaks in broad strokes and strong terms. This doesn’t leave him much room for subtlety or nuance. “No society can sustain this kind of rising inequality,” he insists in a typical passage:
- In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.
Not much wiggle room in that sociohistoric statement. But it’s certainly overstated. Sure, the aristocrats of the ancien régime ended up at the guillotine. But they had a pretty good run before heads started rolling. Revolution may be inevitable, but only if you take a very long view of history. In the United States, inequality has been rising for about 40 years, so the plutocrats can probably slip in a few more rounds of golf before things start to heat up.
But this is nitpicking. Hanauer’s basic point is valid: Inequality does have social and political consequences. And rich people ignore them at their (eventual) peril.
Hanauer is not the first rich guy to have this insight. In fact, he’s only the latest in a long string of “corporate liberals” who have championed redistribution as a way to protect wealth from the forces of envy, privation, and injustice.
Hanauer gives a nod to this history, especially as it played out during the 1930s. Writing of inequality, he declares:
- If we do something about it, if we adjust our policies in the way that, say, Franklin D. Roosevelt did during the Great Depression – so that we help the 99 percent and preempt the revolutionaries and crazies, the ones with the pitchforks – that will be the best thing possible for us rich folks, too. It’s not just that we’ll escape with our lives; it’s that we’ll most certainly get even richer.
Hanauer’s point is a good one, but it skirts an inconvenient truth: Redistribution has never been popular with the rich, even when it was in their best interest. Those farsighted policies of the New Deal? They were enacted over the vigorous and nearly unanimous opposition of the nation’s economic elite.
Sure, a few liberal business leaders joined FDR’s drive for economic reform. But they were the exception, not the rule, and their numbers – small to begin with – shrunk steadily over the 1930s. FDR might have been saving plutocrats from their own excesses, but increasingly they saw “that man” as a “traitor to his class,” rather than its savior.
I suspect that Hanauer knows all this; I doubt he expects the 1 percent to heed his dire warnings. Historically speaking, rich people are almost never fans of redistribution. As Hanauer himself acknowledges: “The thing about us businesspeople is that we love our customers rich and our employees poor.”
Of course, Hanauer’s central point is that employees are customers, so beggaring the former will necessarily impoverish the latter. Henry Ford famously embraced that argument in the early 20th century (although his enthusiasm for high wages has been overstated and misunderstood. But few business leaders have chosen to follow his lead.
Hanauer is right: Inequality is dangerous, and rich people should get serious about dealing with it. But that doesn’t mean they will. After all, they never have before.