NICK Hanauer sees pitchforks in his future.
For those who may not have heard the name, Hanauer is a Seattle-based entrepreneur and one of the original investors in a little web startup known as Amazon.com. He has a net worth of about $1 billion, and is thoroughly unrepentant about having used his natural smarts and a few lucky breaks to make himself very, very wealthy.
Back in July 2014, Hanauer wrote what should have been a groundbreaking piece for Politico magazine entitled, “The Pitchforks Are Coming . . . For Us Plutocrats,” in which he warns “my fellow zillionaires” that, “If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us.”
“ . . . there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out,” Hanauer writes. “You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.”
Hanauer’s grasp of history is entirely correct. Revolutions do not start in the lower strata of society, they begin somewhere in the middle—somewhere among the productive class that creates the start-ups, and mans the world’s skilled and semi-skilled jobs to create the flow of production and consumption that makes people like Nick Hanauer rich.
The reason for this, although Hanauer doesn’t put it in quite the same terms, is that the broad middle class is the only class with any mobility. Above a certain level, “rich” becomes absolute—there is not much material difference between someone worth $1 billion and someone worth $10 billion, because even the lower of those two figures is grossly in excess of what a person needs to live well, or could possibly even spend in one lifetime. The same is true for the impoverished; below a certain level, poor is poor. Growing inequity in society does not make the poor more poor, in the relative sense. Instead what happens is the middle class is squeezed; they see less in return for the same (or increasing) amounts of their labor, and eventually the point is reached when “One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning.”
Hanauer’s specific point is that the minimum wage should be raised to what could reasonably be considered a “living wage” for American workers in places like San Francisco and Hanauer’s hometown, Seattle, the consensus is that figure is at least $15 an hour, based on a 40-hour work week. If workers are paid more, he argues, they have more to spend, which grows businesses, creates new jobs, and expands consumer markets. Hanauer uses an elegant analogy; the poor, barefoot vendor standing along a dirt road somewhere in Africa selling fruit off a makeshift table is doing so not because he’s stupid, or lazy, or any less entrepreneurial than anyone else—he does it because that’s all the customers available to him can afford. Improve the lot of those customers, and you improve the lot of the businesses that serve them.
The reason Hanauer’s article received a muted response when it was first published is, of course, the heretical suggestion—imperative would perhaps be a better word—that minimum wages should be raised, a notion that is anathema to conventional market economics. Yet, history and the handful of modern examples Hanauer uses to support his case suggest he’s right. Moreover, here in the Philippines we may be watching an object lesson in the descent to chaos Hanauer fears. While the focus of political rhetoric and policy effort is directed toward “the poor,” that part of society that actually drives the economy is being overlooked at best, and bled dry most of the rest of the time. It is not on the poor that the burdens of a rapine tax system, the costs of rapidly deteriorating infrastructure (Excuse slips for faulty MRT trains? Seriously?), and government services that have gone from bad to worse to completely ridiculous fall, it is on the middle class.
It is a part of the population that is much larger than we realize—until that day that the spark is lit, and the mob forms. As Hanauer says, it’s not a matter of if, but when; one of these days, someone will snap. A faceless, nameless citizen just trying to get along and have a life that means something will step out of the blocks-long line for the MRT and declare, “This cannot go on.” And thousands will join him. And it will be ugly, because it won’t be the carefully stage-managed “popular” uprising of the Edsa variety, which only succeeded in shifting control from one faction of the narrow elite to another.
And maybe it’s exactly what this country needs—with the prospect of leadership no better than the present and perhaps even worse (Grace Poe for President? Seriously?) to carry the Philippines into the next decade almost guaranteed at this point, waiting for things to change in a “normal,” non-disruptive way is futile. The change will come to you on its own, in a way you might not like, much sooner than that.