Many today are dancing on the grave of the multi-billionaire David Koch. And with good reason. No matter how you want to cut it, Koch is not a person most of the world will remember warmly. During much of his 79 years "pan ert," he used his immense power to ruin the lives of millions (if not billions) of people. He attacked unions, he attacked democratic institutions, and his project was the establishment of a terrestrial paradise only for the members of his class. He also died at same time that the whole world had just become greatly alarmed by the thousands of fires that are destroying unbelievably large parts of the "lungs of the earth," the Amazon. Many on Twitter rightly see a connection between the industrialist's aggressive and tireless promotion of climate denialism and the images of apocalypse arriving from Iceland—which recently held a funeral for a glacier (in one day, 13 billion tons of ice melted")—and Brazil.
The world is literally on fire.
If you don't take a moment to dance on the grave of David Koch now you may never get the chance to.
— Ijeoma Oluo (@IjeomaOluo) August 23, 2019
It's fine to be a Koch hater and all that (he deserves the flood of acid and curses on Twitter and Facebook), but we must also understand that just being a billionaire is bad enough. Even if you do not give money to the far right, even if you donate money to the progressive left, the ownership of even a billion dollars exerts great downward pressure on the workers in the middle and bottom of a class-structured society. And the reason for this can be explained in a simple formula by the economist Thomas Piketty: r > g.
There are no real laws in economics (and by real, I mean real). It is not a science; it is, was, and will always be a branch of moral philosophy. Even the author of the founding text of modern capitalism, Adam Smith, was a moral philosopher by profession. Sixteen years before he wrote An Inquiry into the Nature and Causes of the Wealth of Nations, a long and rather messy work (it goes all over the place), he wrote The Theory of Moral Sentiments. Both must be read as one long work. What begins in the former (a general theory for morals), ends in the latter (a specific theory of morals). Both have a line about the famous invisible hand. But my point is that economics is the art of determining what is and is not acceptable in a given culture. What is right and what is wrong. It constructs moral arguments and justifications for the social distribution of cooperatively generated wealth and surpluses. It says: this person deserves this much for such and such a reason. To say more about economics is to delude yourself and those around you.
And so, why does Piketty's key formula for capitalism, r > g, have validity? Why is it testable? Why does he call it a law? What we can say with certainty is that capital (the wealth of very rich people) grows faster than the economy (the wealth produced by workers—this is the essence of the formula). Why? Because the business of buying and selling has parameters that are culturally/politically determined. This is the crucial difference between the mathematics that's concerned with the mechanics of nature's particles (physics) and those concerned with the wealth of nations (political economy).
In the excellent 2018 book Lost in Math (more about it in another post), the German theoretical physicist Sabine Hossenfelder states that "like many theoretical physicists, [she] once considered switching to economics in the hope of better job opportunities." But she turned away from the idea because she found the math in the dismal science to be unimpressive. She also concluded that "[i]t's one thing to expect elementary particles to obey simple, universal laws. It's another thing entirely to expect the same for the human race." She is right and wrong here. The mathematics in economics is simple, correct. But the laws it deals with have next to nothing to do with the human race as a whole, but with one of the many cultures of the human race. That culture is called capitalism. And it has a system of laws that enable the reproduction of its conditions or parameters. Some of these laws send people to prison or the streets. One these laws can be formulated as r > g.
The problem with being a billionaire is that, in our culture, monetary forces such as fixed interest rates and instruments like financial assets are structured to increase, at a spectacularly fast rate, large masses capital (c). This growth (g) is not natural. It is imposed. This is why David Koch spent millions on political projects. It's not the market that makes the rules that spontaneously expand billions. It is the laws and policies of public institutions. Change these rules in one way, and suddenly the billions of billionaires evaporate like the black holes in Stephen Hawkins' math.
David Koch has died. In lieu of flowers please construct a shadow network of tax deductible shell companies to donate to the further perpetuation of environmental destruction and income inequality.
— Josh Gondelman (@joshgondelman) August 23, 2019