by Umair Haque
May 23, 2018
from Eudaimonia Website
How the U.S. Collapse
is Made of a New Kind of Poverty
By themselves, of course, statistics say little.
But together these facts
speak volumes. The story they are beginning to tell is this.
What do I mean by all that? Let's begin with what I don't mean...
I don't mean absolute poverty. (North) Americans are not living on a few dollars a day, by and large, like people in, for example, Somalia or Bangladesh. America's median income is still that of a rich country, around $50.000, depending on how it's counted.
Nor do I really mean
relative poverty - people living below median income. While
that's a growing problem in the U.S., because the middle class is
imploding, that is not really the true problem these numbers hint
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:
I'll come to what those
We've already seen how steep healthcare costs are.
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
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, (North) 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
Thus, 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.
(North) 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.
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 -
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 (North) American bears them all now.
A bank or hedge fund or corporation might go bankrupt, and liquidate its assets, and its owners stay rich - but if a (North) American's credit rating is ruined, loses his job, cannot pay his bills, or even if he declares bankruptcy, he falls through the cracks, hounded, embattled, institutionally black-marked.
He finds himself outside
society, with little way to get back in. Little wonder then that
(North) Americans work so much harder than anywhere else - they are
always one step away from losing it all, from genuine ruin, but
their peers in truly rich countries aren't.
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.
The kind of poverty that's developed in the U.S. isn't just bizarre and gruesome - it's novel and unseen. It isn't something that we understand well, economists, intellectuals, thinkers, because we have no good framework to think about it.
It's not absolute poverty
like Somalia, and it's not just relative poverty, like in gilded
banana republics. It's a uniquely (North) American creation. It's
extreme capitalism meets Social Darwinism by way of rugged
self-reliance crossed with puritanical cruelty.
Unfortunately, what it's innovating now is a new kind of poverty. Yet poverty is poverty. 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.
Authoritarian soon enough becomes fascism :
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 (North) American collapse...