The wealth gap is a distorted distribution of power which intellectualism could help solve.
A king or tyrant has all the power, and their free will dictates how it is applied. The risk for that king is keeping power. The risk to the plebeians is the king. Say money is power. The more you have, the greater your power. In that case, the king would have the money, and your life would be in his hands.
Luckily society in the US isn’t that harsh. But with that same framework of money being power, we can interpret the present-day wealth gap as a distribution of power instead of wealth. Right now, the bottom 50% of the US population hold only 2.6% of the wealth while the top 1% controls 32.3%. The risk concerning power is too much in too few hands. For over three decades the top 1% has kept gaining more power. As the economy grows, the owners of capital get richer and consequently more powerful. It is natural.
However, wage growth is not natural. Wages are set by laws and choice, and profit and wages have an inverse relationship. Given that relationship, the wage payers are incentivized to minimize wages. On the other hand, workers want to earn as much as possible. Where wage growth, or power distribution, ends up is dictated by those two parties’ respective balance of power. The trend has been squarely on the side of the 1% since the 80s. Correspondingly, wages have mostly stagnated for most all wage earners.
The 1% are becoming king. Their risk is keeping power (money), and everyone else’s risk is them. Power without checks or balances is a situation that democracy’s aim to avoid. With wealth driven power, the only way to instill checks and balances is to reduce or limit the power. This is not a conceptual, intangible power. Money is real. But a redistribution of wealth is the wrong way to think about this.
It is a redistribution of power. And empowering anything has a consequence. Is there an institution or segment of society that would more productively utilize this excess power over the mega-rich retaining it? After ensuring there are no working poor, there are several options. The middle-class could be empowered, but the American unavoidable propensity to consume assures the problem never resolves. Or simply put, if given power the middle-class would give it right back a couple times over with the inclusion of credit. Give surplus power to the poor and uneducated and what is produced from that power is a function of their aptitude and behavior. Which amounts to riskier proposition when compared to other options, and the stakes are infinitely high as the nation’s well-being and future are on the line. Perhaps a class could be created of citizens that fit certain requirements, but we know that is immoral, and the social cost of that would be disastrous.
We are still trying to find the qualitative answer to what would be best to empower if power was redistributed. The scope here is many billions of dollars so the recipient must be already big. As with any investment or promotion, we want it to be a positive that makes the country better. To make a long list considerably shorter, I will skip to an institution that I think is worth considering, public universities. A lot of laws and quantitative measures would have to be formulated to make it happen, but if it did happen, power would be in a place where, like business, advancement is its natural condition. Colleges are not perfect, but neither are corporations or anything else. But the goal is not perfection but to distribute power away from the mega-rich in a way where our economy is still benefiting and growing. Some R&D can be re-positioned in a value-added way. The venture capital route to commercialization could be made a lot more efficient. Those are just a couple examples of countless other potential benefits. Overall power would be given to educational institutions that strive for prestige and accomplishments rather than pure profit, but they would have to be transparent in financial dealings.
The end result would be public universities having more influence in society. Along with Main Street and Wall Street, Campus would become a discernible part of our nationhood. The manifestation of this outcome would change our social, economic, and political landscape. But with the root of change coming from the seed of intelligence and intellectual ambition, it is a safe institution to empower that could bring tremendous benefits. Power cannot be hoarded if we want to have the healthiest possible democratic capitalism. And growth is still required for prosperity. So, when redistributing power we must entrust it to a place that can create more of it. In the infinitely competitive world we live in, there is one thing besides guns and capital that is power, and that is knowledge.
