Page Body

Page Main

Post Main

Post Article

Why America is the World’s First Poor Rich Country

Linked by Paul Ciano on June 13, 2018

Umair Haque, Eudaimonia and Co.:

Consider the following statistics. The average American can’t scrape together $500 for an emergency. A third of Americans can’t afford food, shelter, and healthcare. Healthcare for a family now costs $28k — about half of median income, which is $60k.

By themselves, of course, statistics say little. But together these facts speak volumes. The story they are beginning to tell is this.

America, it seems, is becoming something like the world’s first poor rich country. And that is the elephant in the room we aren’t quite grasping. After all, authoritarianism and extremism don’t arise in prosperous societies — but in troubled ones, which are growing impoverished, like America is today.

America appears to be pioneering a new kind of poverty altogether. One for which we do not yet have a name. It is something like living at the knife’s edge, constantly being on the brink of ruin, one small step away from catastrophe and disaster, ever at the risk of falling through the cracks. It has two components — massive inflation for the basics of life, coupled with crushing, asymmetrical risk.

The average American has a relatively high income, that of a person in a nominally rich country. Only his income does not go very far. Most of it is eaten up by attempting to afford the basics of life. We’ve already seen how steep healthcare costs are. But then there is education. There is transport. There is interest and rent. There is media and communications. There is childcare and elderly care. All these things reduce the average American to constantly living right at the edge of ruin — one paycheck away from penury, one emergency away from losing it all.

In Europe, Canada, and even Australia, society invests in all these things — and the costs of basic necessities societies don’t provide are regulated. For example, I pay $50 dollars for broadband and TV in London — but $200 for the same thing in New York — yet in London, I get vastly more and better media for my money (even including, yes, American junk like Ancient Aliens). That’s regulation at work. And when basic goods like healthcare or elderly care or education are provided and managed at a social scale, that is when they are cheapest, and often of the best quality, too. Hence, healthcare costs far less in London, Paris, or Geneva — and life expectancy is longer, too.

…incomes stretch much further in other countries, which enjoy a vastly higher quality of life, even though people there earn roughly the same amount, because they pay vastly less for basic necessities. Americans are rich, but only nominally — their money doesn’t buy nearly as much as their peers does, where it matters and counts most, for the basics of life.

…a strange thing has happened to the American economy. While it’s true that things like TVs and Playstations have gotten cheaper, the costs of the basics of life have skyrocketed. All the things that really elevate people’s quality of life — healthcare, finance, education, transport, housing, and so on — have come to consume such a large share of the average household’s income that they have little left to save, invest, or spend on anything else. And what’s worse, while the basics of life have seen massive inflation, wages and incomes (not to mention savings and benefits and safety nets and opportunities) for most have stagnated. The result is an economy — and a society — that’s collapsing.

…the average American, who is left high and dry, must borrow, borrow, borrow, just to maintain a decent quality of life — because handing capitalism control of the basics of life has caused massive, skyrocketing inflation in necessities, while flatlining his income. Healthcare didn’t used to cost half of median income even a decade ago, after all — but now it does.

Well, what happens if the average American steps over the line? Misses a mortgage payment, gets ill and is unable to pay a few bills on time, can’t pay the costs of healthcare? Then they are punished severely and mercilessly. Their “credit rating” (note how banks and hedge funds don’t have them) is ruined. They can easily find themselves out on the street, without finance, without a second chance, without access to any kind of redress or support. And then they are rejected, shunned, and ostracized. They might not have an address anymore — so who will hire them? They are no longer a part of society — they have fallen through the cracks, and finding one’s way back is often next to impossible. Asymmetrical risk — corporations and lobbies and banks bear no risk at all, precisely because the average American bears them all now.

We don’t see America as a poor country, but we should begin to. Americans live fairly abysmal lives — short, lonely, unhappy, full of work and stress and despair, compared to their peers. That is because they cannot afford better ones — predatory capitalism coupled with total economic mismanagement of social investments has made the basics of life ruinously unaffordable. In this way, it’s effectively a poor country — yes, there’s a tiny number of ultra-rich, but they are outliers now, off the map of the normal. Because it’s not just any kind of poverty, yesterday’s poverty, or even poverty as we are used to thinking about it.

America is pioneering a new kind of poverty.

The kind of poverty America’s pioneering today isn’t absolute, or even relative, but something more like perfectly tuned poverty, strategic poverty, basic poverty— nominally well-off people whose money doesn’t go far enough to make them actually live well, constantly living at the edge of ruin, and thus forced to choke down their bitter anger and serve the very systems which oppress and subjugate with more and more indignity and fear and servility by the year.

What happens in societies where poverty is growing? Authoritarianism rises, as people lose faith in democracy, which can’t seem to offer them working social contracts. Authoritarianism soon enough becomes fascism — “this country, this land, its harvest — it is only for the true volk!”, the cry goes up, when there is not enough to go around. And the rest of the dark and grim story of the fall into the abyss you should know well enough by now. It ends in words we do not say.

Still, history, laughing, has told this tale to us many times. And it is telling it to tomorrow, again, in the tale of American collapse.

Paul Ciano

Enjoyed this post?

Subscribe to my feed for the latest updates.