It takes only two things to keep people in chains:
The ignorance of the oppressed and the treachery of their leaders.
In Economics, everything devolves to Monetary Sovereignty and Gap Psychology.
- Economics studies the relationships among wealth, money, and human psychology.
- Monetary Sovereignty studies a money issuer’s power over the money it issues.
- Gap Psychology describes the human desire to widen the Gap below you on any economic or social measure, and to narrow the Gap above you.
The purpose of this post is to discuss Gap Psychology.
As a social animal, you are protected by your group, or rather, “groups,” for you live in many. There are evolutionary advantages to being protected by a comparatively strong group, so you tend to cherish whichever groups you find yourself in. A group honor is seen as a personal honor.
Just a tiny sampling of our groups includes: Our nation, village, religion, age, sex, school, interest, income, company, and team.
You cheer for your country in the Olympics. You back your village or school in any kind of competition or measure. You take pride in the accomplishments of those whose religion you share.
For similar emotional reasons, you wish to distance yourself from those below you — the “losers,” the poor, the socially unpopular — while you wish to be closer to those above you.
Not only do you wish to be part of a “higher” group, but you wish to be seen as part of a higher group. You take pride in having attended a “good” school, though the quality of a school you may have attended does not, in any way, change who you really are, today.
If you yourself cannot be famously respected, you enjoy having a famously respected friend, or being seen with someone who is famously respected. You might even treasure a “selfie” with someone famous.
So deep are your social ties, the merely being thought of in a certain way — even by total strangers — can be a sufficient proxy for actually being that way.
If members of your group endure embarrassment, you feel that embarrassment. Innocent Chicagoans feel embarrassed by Chicago’s murder rate. Innocent Catholics feel burdened by the clergy’s sexual crimes. Innocent immigrants are weighted by pejorative claims against all immigrants. Your memberships in groups define you.
So, you may buy a too expensive car, or live in an unaffordable house, or wear a costly jewel, so that friends and strangers alike, will view you as being at a certain social level.
Merely being seen, even falsely, as part of a certain group, is sufficient to provide you with actual social strength or weakness.
Words that never left my memory:
“If they think you got the goods, they give you room, even if you know you don’t really got the goods.” (Neighborhood boy from my youth.)
In your social world, perception is truth.
Given all of the above, why do you give to charity? On its surface, charity would seem to be a violation of Gap Psychology.
Giving money or goods to the poor not only narrows the financial Gap (however slightly) between you and the poor, but it widens the financial Gap (also however slightly) between you and those who are richer.
Why would anyone want to do that? There are many reasons why you give to charity, and none of them are totally selfless, and all are Gap-based.
Every college contains buildings named in honor of a generous philanthropist, who stipulated the name. The price of having one’s name adorn a building might be in the millions, but to the giver, the reward was greater than the cost. It was a gift to himself in terms of self-seen prestige.
At some point, the donor made this mental calculation: “Is the cost worth the benefit?”
Was there a time when you volunteered your time to a charity? Your benefit came from the support of your fellow volunteers, and from outsiders who know what a good thing you do. The benefit came from your enhanced view of yourself (“I am a good person.”)
The admiration for “doing a good thing,” or for merely being allowed entrance to a “good” group, can be reward enough. Even in this instance, the ever-present question is asked, “Is the cost (in time) worth the benefit (the membership in the group).
Even if you donated anonymously, you made a cost/benefit decision. The benefit came from your view in your mirror: “I am a good person.”
In essence, everything you do, involves the tacit question, “Is the cost worth the benefit?”
Think about your day, from the time you wake up, until your bedtime, and you will be astounded at how much you do that is based on Gap Psychology — widening the Gap below you and narrowing the Gap above you.
You brush your teeth for a brighter smile, you dress for the approval (or at least to avoid the disapproval) of friends and strangers. You comb your hair; you may apply makeup; you drive a certain car; you live in a certain kind of dwelling in a certain kind of neighborhood, and work at a certain kind of job — and even in the most menial of jobs, if you have co-workers, you act in a certain way, so they will believe certain good things about you.
Solitary animals do not have these concerns.
Your entire life, the lives you bestow upon your children, and the pride you feel in their accomplishments, and the shame you feel in their transgressions — all are a testament to Gap Psychology.
And that also can have negative consequences because you can widen the Gap below you, not only by lifting yourself up, but by pushing others down.
If you are a Chicago Cubs fan, you not only want the Cubs to win, but you want the other teams to lose.
Go to a right-wing site like breitbart.com, and look at the readers’ comments. You will see the most hateful and vile statements about immigrants — how they should be jailed, deported, separated from their children and punished in every way.
Why? Not for factual reasons, but rather because this hatred is born of the terror that the Gap below might be narrowing.
The most extreme bigots are those who feel most insecure or resentful about their position in society.
Bigotry against certain ethnic backgrounds is Gap Psychology at its worst. We see it in the unreasoned excuses to deny jobs to those of a certain sexual orientation or of a certain religion or nationality.
Despite thin rationales to the contrary, those merely are efforts to widen the Gap below.
Similarly, the delight we take in seeing the mighty fall — a rich woman sent to jail, a powerful man humiliated — these events narrow the Gap above us (“They are no better than me.”)
Without the Gaps no person or group would be rich, smart, talented, beautiful, or strong. We all would be the same. It is the Gaps that make you and your groups special, protected, and safe in a harsh world.
Everything in economics devolves to Monetary Sovereignty and to Gap Psychology.
Rodger Malcolm Mitchell
Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell
The most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.
Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.
Implementation of The Ten Steps To Prosperity can narrow the Gaps:
Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Economic Bonus)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:
Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012
Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and business taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.
The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.