The concept of “elite overproduction” was developed by social scientist Peter Turchin around the turn of this century to describe something specific: too many rich people for not enough rich-person jobs. It’s a byproduct of inequality: a ton of poor people, sure, but also a superfluity of the wealthy, without enough positions to house them in the influence and status to which they think themselves entitled. In a modern context, that would mean senior positions in the government and civil service, along with the top tier of finance and law, but Turchin tested the hypothesis from ancient Rome to 19th-century Britain. The names and nature of the contested jobs and titles changed; the pattern remained. Turchin predicted in 2010 that by the 2020s it would be destabilising US politics.
Turchin didn’t specify exactly how much wealth puts you in a situation with an overproduced elite, but he didn’t mean debt-laden students; he didn’t mean MPs; he meant, for brevity, billionaires or the top 1%. When a lot of your media are billionaire-owned, those media sources become endlessly inventive in taking the heat off billionaires, nipping criticism in the bud by pilfering its vocabulary and throwing it back at everyone.
Elon Musk could never have got himself elected into office in the US. But as the cost-cutting tsar, a made-up role Trump has promised him, he would exert extraordinary power to cause pain, with the only choice left to citizens being whether or not to hug it. Another billionaire donor, John Paulson, has been floated for the treasury secretary job, and Trump has a track record of rewarding big-ticket donors with a seat at the table – the billionaire Stephen Schwarzman boasted in print about his role in the new North America Free Trade Agreement negotiations in 2018, and as part of Trump’s “strategic and policy forum” during the 2017 administration.
So instead of using our magic want to just take it all and convert it to cash we convert 1/4th to cash and keep the rest invested how it was with just the ownership changing to a public trust, that could fund welfare indefinitely based off just the interest and dividend payments that would otherwise just go to the former billionaire doubling their net worth every 5 years.
And what do you do about the fact that this magic wand doesn’t actually exist, and that net worth is just a price tag, not an amount of actual money? The supermarket doesn’t accept stocks as payment.
Also, the vast majority of billionaires’ investments don’t even pay dividends at all, they’re re-invested back into the business for further growth.
I wish people who knew nothing about economics didn’t pretend to have any idea what they’re talking about.
I wish people who claim to know about economics understood what a hypothetical is.
So I’m talking about “if we had a magic wand” and here you go changing the rules and taking it away.
I’m sure there are places for economics professors such as yourself to discuss these things seriously, but this ain’t it.
Now taking back my magic wand, I’m also casting a spell to take advantage of the fact that stocks can be used as collateral for loans, and since my first cast was to move the funds to a public trust I’m now directing said trust to take out loans and give everyone housing, they’ll be paid back over time by a combination of gradually selling off the remaining stocks at a pace that doesnt shock the market…
But I swear if you take my wand away again when I get it back I’m just going to crash the stock market out of spite.