A New Role for the 1%
A whole lot of us are stuck with credit-card debt that goes up each month, mortgages worth more than our homes and student loans that extend into infinity. So it’s only natural that we look at the debt crisis from the bottom up: from the perspective of the 99% who are getting screwed.
But what if we instead looked at this whole mess from the top down, from the point of view of the 1%: the billionaires and venture capitalists in Mitt Romney’s world? Maybe, just maybe, their problem is our problem.
In fact, as I have come to see it, short of civilization-ending revolution, solving the debt crisis might actually mean saving the 1%.
They have the power and the money, they own our government, and they won’t go down without taking everyone and everything else with them. Instead of backing them even further into the corner of fear and defensiveness, we need to help them find a way out. And that means helping them understand how they got there.
The debt crisis is not entirely President Bush’s or President Obama’s fault. It’s not even Congress’ fault. It actually resulted from a short-term “fix” to the economy made about 700 years ago.
See, for pretty much the entire first millennium — what we call the Middle Ages — the 00.01%, the feudal lords, enjoyed total control over the land and its people. The 99.99% worked the land and served the lords, who created no value at all. But by around 1100, the Crusades moved a whole lot of people and stuff around Europe. Peasants were exposed to sugar, cotton and all sorts of new weaving and milling technologies for the first time. Former peasant farmers started to get smarter and more productive. They established market days and traded what they grew and made with one another. They invented local currencies to store and exchange value instead of bartering.
Local currency then worked very differently from the money we use today. Someone would simply bring grain they harvested to the grain store, and come out with a foil receipt. The receipt could be broken into smaller pieces, which served as money. Since some grain was lost to spoilage, the currency’s value went down over time. This meant it had to be spent instead of saved. So the money circulated very rapidly.
People got wealthy, invested in upkeep on their windmills, paid one another good wages, and got taller. Little towns got so rich that they built cathedrals. That’s how a peer-to-peer economy works.
But the aristocrats weren’t participating in any of this wealth. Without a dependent peasant class, they had no way to survive. They didn’t know how to do anything themselves. They needed a way to make money simply by having money. So they came up with some ways to force new kinds of dependence.
Their first trick was to outlaw local currency. If people wanted to trade among themselves, they would have to borrow money from the central treasury, with interest. Wars were fought, blood was spilled, but they got their way. We have all but forgotten that the money we use today is a monopoly currency that costs us more than it’s worth.
The second great idea was the chartered monopoly: the corporation. It gave just one firm — one friend of the king — the authority to do business in a certain industry. The British East India Trading Company, for example, had all rights to cotton in America. A farmer wasn’t permitted to sell his cotton to neighbors, or to make it into anything. He had to sell it at fixed prices to the company, which shipped it to England and let some other chartered corporation make mittens and hats, which were then shipped back to America for sale.
That’s why we fought the Revolution.