We could call it Romnesia: the ability of the very rich to forget the
context in which they made their money. To forget their education,
inheritance, family networks, contacts and introductions. To forget the
workers whose labour enriched them. To forget the infrastructure and
security, the educated workforce, the contracts, subsidies and bail-outs
the government provided.
Every political system requires a justifying myth. The Soviet Union
had Alexey Stakhanov, the miner reputed to have extracted 100 tonnes of
coal in six hours. The United States had Richard Hunter, the hero of
Horatio Alger’s rags-to-riches tales(1).
Both stories contained a germ of truth. Stakhanov worked hard for a
cause in which he believed, but his remarkable output was probably
When Alger wrote his novels, some poor people had become very rich in
the United States. But the further from its ideals (productivity in the
Soviet Union’s case, opportunity in the US) a system strays, the more
fervently its justifying myths are propounded.
As the developed nations succumb to extreme inequality and social
immobility, the myth of the self-made man becomes ever more potent. It
is used to justify its polar opposite: an unassailable rent-seeking
class, deploying its inherited money to finance the seizure of other
The crudest exponent of Romnesia is the Australian mining magnate
Gina Rinehart. “There is no monopoly on becoming a millionaire,” she
insists. “If you’re jealous of those with more money, don’t just sit
there and complain; do something to make more money yourselves – spend
less time drinking, or smoking and socialising and more time working …
Remember our roots, and create your own success.”(3)
Remembering her roots is what Rinehart fails to do. She forgot to add
that if you want to become a millionaire – in her case a billionaire –
it helps to inherit an iron ore mine and a fortune from your father, and
to ride a spectacular commodities boom. Had she spent her life lying in
bed and throwing darts at the wall, she would still be stupendously
The rich lists are stuffed with people who either inherited their
money or who made it through rent-seeking activities: by means other
than innovation and productive effort. They’re a catalogue of
speculators, property barons, dukes, IT monopolists, loansharks, bank
chiefs, oil sheikhs, mining magnates, oligarchs and chief executives
paid out of all proportion to any value they generate.
Looters, in short. The richest mining barons are those to whom
governments sold natural resources for a song. Russian, Mexican and
British oligarchs acquired underpriced public assets through
privatisation, and now run a toll-booth economy(4).
Bankers use incomprehensible instruments to fleece their clients and
the taxpayer. But as rentiers capture the economy, the opposite story
must be told.
Scarcely a Republican speech fails to reprise the Richard Hunter
narrative, and almost all these rags-to-riches tales turn out to be
bunkum. “Everything that Ann and I have,” Mitt Romney claims, “we earned
the old-fashioned way”(5).
Old-fashioned like Blackbeard perhaps. Two searing exposures in Rolling
Stone magazine document the leveraged buyouts which destroyed viable
companies, value and jobs(6), and the costly federal bail-out which saved Romney’s political skin(7).
Romney personifies economic parasitism. The financial sector has
become a job-destroying, home-breaking, life-crushing machine, which
impoverishes other people to enrich itself. The tighter its grip on
politics, the more its representatives must tell the opposite story: of
life-affirming enterprise, innovation and investment, of brave
entrepreneurs making their fortunes out of nothing but grit and wit.
There is an obvious flip-side to this story. “Anyone can make it – I
did without help” translates as “I refuse to pay taxes to help other
people, as they can help themselves”. Whether or not they inherited an
iron ore mine from daddy.
In the article in which she urged the poor to emulate her, Gina
Rinehart also proposed that the minimum wage should be reduced. Who
needs fair pay if anyone can become a millionaire?
In 2010, the richest 1% in the United States captured an astonishing 93% of that year’s gain in incomes(8).
In the same year, corporate chief executives made, on average, 243
times as much as the median worker (in 1965 the ratio was ten times
lower, namely 24:1)(9,10). Between 1970 and 2010 the Gini coefficient,
which measures inequality, rose in the United States from 0.35 to 0.44:
an astonishing leap(11).
As for social mobility, of the rich countries listed by the OECD, the
three in which men’s earnings are most likely to resemble their
father’s are, in this order, the UK, Italy and the US(12).
If you are born poor or born rich in these nations, you are likely to
stay that way. It is no coincidence that these three countries all
promote themselves as lands of unparalleled opportunity.
Equal opportunity, self-creation, heroic individualism: these are the
myths that predatory capitalism requires for its political survival.
Romnesia permits the ultra-rich both to deny the role of other people in
the creation of their own wealth and to deny help to those less
fortunate than themselves. A century ago, entrepreneurs sought to pass
themselves off as parasites: they adopted the style and manner of the
titled, rentier class. Today the parasites claim to be entrepreneurs.
A list of my faves
- The Curious Cat Lives
- This Could Happen To You
- Girls Doing Men
- Alltop Oddities
- Herald Police Blotter
- My Man Mumbles
- Girl power at its finest
- Super cool T's
- Straight Talk