[Ip-health] Tangential ref to US Drugs - How the 99 Percent Really Lost Out - in Far Greater Ways Than the Occupy Protesters Imagine

Riaz K Tayob riaz.tayob at gmail.com
Sun Oct 30 14:21:45 PDT 2011

How the 99 Percent Really Lost Out - in Far Greater Ways Than the Occupy 
Protesters Imagine
Saturday 29 October 2011
by: Gar Alperovitz, Truthout | Op-Ed

Joanne Kathleen Farrell, a protester from Occupy Albany, waved an 
American flag on Washington Avenue, which borders Academy Park near the 
state Capitol, in Albany, New York, October 26, 2011. (Photo: Nathaniel 
Brooks / The New York Times)

"Property is theft," French anarchist Pierre-Joseph Proudhon famously 
declared in 1840 - a judgment clearly shared by many of those involved 
in the occupations in the name of the 99 percent around the country, and 
especially when applied to Wall Street bankers and traders. Elizabeth 
Warren also angrily points out that there "is nobody in this country who 
got rich on his own. Nobody." Meaning: if the rich don't pay their fair 
share of the taxes which educate their workers and provide roads, 
security and many other things, they are essentially stealing from 
everyone else.

But this is the least of it: Proudhon may have exaggerated when, for 
instance, we think of a small farmer working his own land with his own 
hands. But we now know that he was far closer to the truth than even he 
might have imagined when it comes to how the top 1 percent really got so 
rich, and why the 99 percent lost out. The biggest "theft" by the 1 
percent has been of the primary source of wealth - knowledge - for its 
own benefit.

Knowledge? Yes, of course, and increasingly so. The fact is, most of 
what we call wealth is now known to be overwhelmingly the product of 
technical, scientific and other knowledge - and most of this innovation 
derives from socially inherited knowledge, at that. Which means that, 
except for trivial amounts, it was simply not created by the 1 percent 
who enjoy the lion's share of its benefits. Most of it was created, 
historically, by society - which is to say, minimally, the other 99 percent.

Take a simple example: In our own time, over many decades, the 
development of the steel plow and the tractor increased one man's 
capacity to farm, from a small plot (with a mule and wooden plow) to 
many hundred acres. What changed over the years to make this possible 
was a great deal of engineering, steelmaking, chemistry and other 
knowledge developed by society as a whole.

Another obvious example: Many of the advances that have propelled our 
high-tech economy in recent decades grew directly out of research 
programs financed and, often, collaboratively developed, by the federal 
government and paid for by the taxpayer. The Internet, to take the most 
well-known example, began as a government defense project, the Advanced 
Research Projects Agency Network (ARPANET), in the 1960s. Today's vast 
software industry rests on a foundation of computer language and 
operating hardware developed, in large part, with public support. The 
Bill Gateses of the world might still be working with vacuum tubes and 
punch cards were it not for critical research and technology programs 
created or financed by the federal government after World War II.

The iPhone is another example: Its microchips, cellular communication 
abilities and global positioning system (GPS) all flowed from 
developments traceable to significant direct and indirect public support 
from the military and space programs. The "revolutionary" multi-touch 
screen was developed by University of Delaware researchers financially 
supported by the National Science Foundation and the CIA. It is not only 
electronics: *of the 15 modern US-developed "blockbuster" drugs with 
over $1 billion in sales, 13 received significant public research and 
development support.
But taxpayer-financed government programs (including, of course, all of 
public education!) are only the tip of the iceberg. And here we are not 
talking rhetoric, we are talking the stuff of Nobel prizes. Over the 
last several decades, economic research has begun to pinpoint much more 
precisely how much of what we call "wealth" society in general derives 
from long, steady, century-by-century advances in knowledge - and how 
much any one individual at any point in time can be said to have earned 
and "deserved."

Recent estimates indicate, for instance, that national output per capita 
has increased more than twentyfold over the 200-plus years since 1800. 
Output per hour worked has increased an estimated fifteenfold since 1870 
alone. Yet the modern person is likely to work each hour with no greater 
commitment, risk or intelligence than his counterpart from the past. The 
primary reason for such huge gains is that, on the whole, scientific, 
technical and cultural knowledge has grown at a scale and pace that far 
outstrips any other factor in the nation's economic achievement.

A half-century ago, in 1957, economist Robert Solow showed that nearly 
90 percent of productivity growth in the first half of the 20th century 
alone, from 1909 to 1949, could only be attributed to technical change 
in the broadest sense. The supply of labor and capital - what workers 
and employers contribute - appeared almost incidental to this massive 
technological "residual." (Solow received the Nobel Prize for this and 
related work in 1987.) Another leading economist, William Baumol, 
calculated that "nearly 90 percent ... of current GDP [gross domestic 
product] was contributed by innovation carried out since 1870."

The truly central and demanding question is obviously this: If most of 
what we have today is attributable to knowledge advances that we all 
inherit in common, why, specifically, should this gift of our collective 
history not more generously benefit all members of society? The top 1 
percent of US households now receives far more income than the bottom 
150 million Americans combined. The richest 1 percent of households owns 
nearly half of all investment assets (stocks and mutual funds, financial 
securities, business equity, trusts, nonhome real estate). A mere 400 
individuals at the top have a combined net worth greater than the bottom 
60 percent of the nation taken together. If America's vast wealth is 
mainly a gift of our common past, how, specifically, can such 
disparities be justified?

Early in the American republic, Thomas Paine urged that everything 
"beyond what a man's own hands produce" was a gift that came to him 
simply by living in society, and, hence, "he owes on every principle of 
justice, of gratitude, and of civilization, a part of that accumulation 
back again to society from whence the whole came." Another American 
reformer, Henry George, challenged what he called "the unearned 
increment" that is created when population growth and other societal 
factors increase land values.

To be sure, someone who genuinely makes a real contribution deserves to 
be rewarded. But Proudhon is right on target for many, many others: when 
what is created by all of society for many centuries gets turned into 
wealth, and, somehow, directly or indirectly, shunted away from the 99 
percent by the 1 percent, much of that process, in fact, is reasonably 
described as "theft." The demand of the occupations that this theft 
stop, that it be reversed, is also right on target - both in what we 
know about how wealth is created, and, above all, in what we know about 
how a just society ought to organize its affairs.
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