Beware, fellow plutocrats, the pitchforks are coming | Nick Hanauer

Beware, fellow plutocrats, the pitchforks are coming | Nick Hanauer

You probably don’t know me, but I am one of those .01 percenters that you hear about and read about, and I am by any reasonable definition a plutocrat. And tonight, what I would like to do is speak directly to other plutocrats, to my people, because it feels like it’s time for us all to have a chat. Like most plutocrats, I too am a proud and unapologetic capitalist. I have founded, cofounded or funded over 30 companies across a range of industries. I was the first non-family investor in I cofounded a company called aQuantive that we sold to Microsoft for 6.4 billion dollars. My friends and I, we own a bank. I tell you this — (Laughter) — unbelievable, right? I tell you this to show that my life is like most plutocrats. I have a broad perspective on capitalism and business, and I have been rewarded obscenely for that with a life that most of you all can’t even imagine: multiple homes, a yacht, my own plane, etc., etc., etc. But let’s be honest: I am not the
smartest person you’ve ever met. I am certainly not the hardest working. I was a mediocre student. I’m not technical at all. I can’t write a word of code. Truly, my success is the consequence of spectacular luck, of birth, of circumstance and of timing. But I am actually pretty good at a couple of things. One, I have an unusually high tolerance for risk, and the other is I have a good sense, a good intuition about what will happen in the future, and I think that that intuition about the future is the essence of good entrepreneurship. So what do I see in our future today, you ask? I see pitchforks, as in angry mobs with pitchforks, because while people like us plutocrats are living beyond the dreams of avarice, the other 99 percent of our fellow citizens are falling farther and farther behind. In 1980, the top one percent of Americans shared about eight percent of national [income], while the bottom 50 percent of Americans shared 18 percent. Thirty years later, today, the top one percent shares over 20 percent of national [income], while the bottom 50 percent of Americans share 12 or 13. If the trend continues, the top one percent will share over 30 percent of national [income] in another 30 years, while the bottom 50 percent of Americans will share just six. You see, the problem isn’t that we have some inequality. Some inequality is necessary for a high-functioning capitalist democracy. The problem is that inequality is at historic highs today and it’s getting worse every day. And if wealth, power, and income continue to concentrate at the very tippy top, our society will change from a capitalist democracy to a neo-feudalist rentier society like 18th-century France. That was France before the revolution and the mobs with the pitchforks. So I have a message for my fellow plutocrats and zillionaires and for anyone who lives in a gated bubble world: Wake up. Wake up. It cannot last. Because if we do not do something to fix the glaring economic inequities in our society, the pitchforks will come for us, for no free and open society can long sustain this kind of rising economic inequality. It has never happened. There are no examples. You show me a highly unequal society, and I will show you a police state or an uprising. The pitchforks will come for us if we do not address this. It’s not a matter of if, it’s when. And it will be terrible when they come for everyone, but particularly for people like us plutocrats. I know I must sound like some liberal do-gooder. I’m not. I’m not making a moral argument that economic inequality is wrong. What I am arguing is that rising economic inequality is stupid and ultimately self-defeating. Rising inequality doesn’t just increase our risks from pitchforks, but it’s also terrible for business too. So the model for us rich guys should be Henry Ford. When Ford famously introduced the $5 day, which was twice the prevailing wage at the time, he didn’t just increase the productivity of his factories, he converted exploited autoworkers who were poor into a thriving middle class who could now afford to buy the products that they made. Ford intuited what we now know is true, that an economy is best understood as an ecosystem and characterized by the same kinds of feedback loops you find in a natural ecosystem, a feedback loop between customers and businesses. Raising wages increases demand, which increases hiring, which in turn increases wages and demand and profits, and that virtuous cycle of increasing prosperity is precisely what is missing from today’s economic recovery. And this is why we need to put behind us the trickle-down policies that so dominate both political parties and embrace something I call middle-out economics. Middle-out economics rejects the neoclassical economic idea that economies are efficient, linear, mechanistic, that they tend towards equilibrium and fairness, and instead embraces the 21st-century idea that economies are complex, adaptive, ecosystemic, that they tend away from
equilibrium and toward inequality, that they’re not efficient at all but are effective if well managed. This 21st-century perspective allows you to clearly see that capitalism does not work by [efficiently] allocating existing resources. It works by [efficiently] creating new solutions to human problems. The genius of capitalism is that it is an evolutionary solution-finding system. It rewards people for solving
other people’s problems. The difference between a poor society and a rich society, obviously, is the degree to which that society has generated solutions in the form of products for its citizens. The sum of the solutions that we have in our society really is our prosperity, and this explains why companies like Google and Amazon and Microsoft and Apple and the entrepreneurs who created those companies have contributed so much to our nation’s prosperity. This 21st-century perspective also makes clear that what we think of as economic growth is best understood as the rate at which we solve problems. But that rate is totally dependent upon how many problem solvers — diverse, able problem solvers — we have, and thus how many of our fellow citizens actively participate, both as entrepreneurs who can offer solutions, and as customers who consume them. But this maximizing participation thing doesn’t happen by accident. It doesn’t happen by itself. It requires effort and investment, which is why all highly prosperous capitalist democracies are characterized by massive investments in the middle class and the infrastructure that they depend on. We plutocrats need to get this trickle-down economics thing behind us, this idea that the better we do, the better everyone else will do. It’s not true. How could it be? I earn 1,000 times the median wage, but I do not buy 1,000 times as much stuff, do I? I actually bought two pairs of these pants, what my partner Mike calls my manager pants. I could have bought 2,000 pairs, but what would I do with them? (Laughter) How many haircuts can I get? How often can I go out to dinner? No matter how wealthy a few plutocrats get, we can never drive a great national economy. Only a thriving middle class can do that. There’s nothing to be done, my plutocrat friends might say. Henry Ford was in a different time. Maybe we can’t do some things. Maybe we can do some things. June 19, 2013, Bloomberg published an article I wrote called “The Capitalist’s Case for a $15 Minimum Wage.” The good people at Forbes magazine, among my biggest admirers, called it “Nick Hanauer’s near-insane proposal.” And yet, just 350 days after that article was published, Seattle’s Mayor Ed Murray signed into law an ordinance raising the minimum wage in Seattle to 15 dollars an hour, more than double what the prevailing federal $7.25 rate is. How did this happen, reasonable people might ask. It happened because a group of us reminded the middle class that they are the source of growth and prosperity in capitalist economies. We reminded them that when
workers have more money, businesses have more customers, and need more employees. We reminded them that when businesses pay workers a living wage, taxpayers are relieved of the burden of funding the poverty programs like food stamps and medical assistance and rent assistance that those workers need. We reminded them that low-wage workers make terrible taxpayers, and that when you raise the minimum wage for all businesses, all businesses benefit yet all can compete. Now the orthodox reaction, of course, is raising the minimum wage costs jobs. Right? Your politician’s always echoing that trickle-down idea by saying things like, “Well, if you raise the price of employment, guess what happens? You get less of it.” Are you sure? Because there’s some contravening evidence. Since 1980, the wages of CEOs in our country have gone from about 30 times the median wage to 500 times. That’s raising the price of employment. And yet, to my knowledge, I have never seen a company outsource its CEO’s job, automate their job, export the job to China. In fact, we appear to be employing more CEOs and senior managers than ever before. So too for technology workers and financial services workers, who earn multiples of the median wage and yet we employ more and more of them, so clearly you can raise the price of employment and get more of it. I know that most people think that the $15 minimum wage is this insane, risky economic experiment. We disagree. We believe that the $15 minimum wage in Seattle is actually the continuation of a logical economic policy. It is allowing our city to kick your city’s ass. Because, you see, Washington state already has the highest minimum wage of any state in the nation. We pay all workers $9.32, which is almost 30 percent more than the federal minimum of 7.25, but crucially, 427 percent more than the federal tipped minimum of 2.13. If trickle-down thinkers were right, then Washington state should
have massive unemployment. Seattle should be sliding into the ocean. And yet, Seattle is the fastest-growing big city in the country. Washington state is generating small business jobs at a higher rate than any other major state in the nation. The restaurant business in Seattle? Booming. Why? Because the fundamental law of capitalism is, when workers have more money, businesses have more customers and need more workers. When restaurants pay restaurant workers enough so that even they can afford to eat in restaurants, that’s not bad for the restaurant business. That’s good for it, despite what some restaurateurs may tell you. Is it more complicated than I’m making out? Of course it is. There are a lot of dynamics at play. But can we please stop insisting that if low-wage workers earn a little bit more, unemployment will skyrocket and the economy will collapse? There is no evidence for it. The most insidious thing about trickle-down economics is not the claim that if the rich get richer, everyone is better off. It is the claim made by those who oppose any increase in the minimum wage that if the poor get richer, that will be bad for the economy. This is nonsense. So can we please dispense with this rhetoric that says that rich guys like me and my plutocrat friends made our country? We plutocrats know, even if we don’t like to admit it in public, that if we had been born somewhere else, not here in the United States, we might very well be just some dude standing barefoot by the side of a dirt road selling fruit. It’s not that they don’t have good
entrepreneurs in other places, even very, very poor places. It’s just that that’s all that those entrepreneurs’ customers can afford. So here’s an idea for a new kind of economics, a new kind of politics that I call new capitalism. Let’s acknowledge that capitalism beats the alternatives, but also that the more people we include, both as entrepreneurs and as customers, the better it works. Let’s by all means shrink the size of government, but not by slashing the poverty programs, but by ensuring that workers are paid enough so that they actually don’t need those programs. Let’s invest enough in the middle class to make our economy fairer and more inclusive, and by fairer, more truly competitive, and by more truly competitive, more able to generate the solutions to human problems that are the true drivers of growth and prosperity. Capitalism is the greatest social technology ever invented for creating prosperity in human societies, if it is well managed, but capitalism, because of the fundamental multiplicative dynamics of complex systems, tends towards, inexorably, inequality, concentration and collapse. The work of democracies is to maximize the inclusion of the many in order to create prosperity, not to enable the few to accumulate money. Government does create prosperity and growth, by creating the conditions that allow both entrepreneurs and their customers to thrive. Balancing the power of capitalists like me and workers isn’t bad for capitalism. It’s essential to it. Programs like a reasonable minimum wage, affordable healthcare, paid sick leave, and the progressive taxation necessary to pay for the important infrastructure necessary for the middle class like education, R and D, these are indispensable tools shrewd capitalists should embrace to drive growth, because no one benefits from it like us. Many economists would have you believe that their field is an objective science. I disagree, and I think that it is equally a tool that humans use to enforce and encode our social and moral preferences and prejudices about status and power, which is why plutocrats like me have always needed to find persuasive stories to tell everyone else about why our relative positions are morally righteous and good for everyone: like, we are indispensable, the job creators, and you are not; like, tax cuts for us create growth, but investments in you will balloon our debt and bankrupt our great country; that we matter; that you don’t. For thousands of years, these stories were called divine right. Today, we have trickle-down economics. How obviously, transparently self-serving all of this is. We plutocrats need to see that the United States of America made us, not the other way around; that a thriving middle class is the source of prosperity in capitalist economies, not a consequence of it. And we should never forget that even the best of us in
the worst of circumstances are barefoot by the side of a dirt road selling fruit. Fellow plutocrats, I think it may be time for us to recommit to our country, to commit to a new kind of capitalism which is both more inclusive and more effective, a capitalism that will ensure that America’s economy remains the most dynamic and prosperous in the world. Let’s secure the future for ourselves, our children and their children. Or alternatively, we could do nothing, hide in our gated communities and private schools, enjoy our planes and yachts — they’re fun — and wait for the pitchforks. Thank you. (Applause)

Author: Kennedi Daugherty

100 thoughts on “Beware, fellow plutocrats, the pitchforks are coming | Nick Hanauer

  1. looks like this man doesn't actually believe any of this:

  2. Since you have no use for all that excess money you have, will you please pay off my student loan? You should use your excess capital to helping society have free education. Student loans are a trap that average people can't afford to pay their way out of. Help me get my life back.

  3. I will cry tears of joy watching plutocrats cry like Marie Antoinette when they are being dragged to the Guillotine. Plutocrats are the sole reason why global warming is happening. They emit the majority of green house gases.

  4. if i don't win i feel like a loser ..that why i squeeze the most out of people to never be in that dreaded category of losers … thats why my heart is made of stone ….and an anti social
    if i see people suffer i feel like a true winner …

    this is the mind set of an antisocial … but in a capitalistic system seen as a true winner .

  5. Be really honest and tell the folks that the heliocentric model of a spinning globe is an absolute lie, it is a lie that has held humanity back on every front and it is evil to the core and we need absolute disclosure.

  6. Hooray! You just made Ronald Reagan do loop the loops in his grave. If most of us had an extra $30k a year, we would spend it.

  7. In my 20s, strolling around Paris, I came to the spot where the astonishing greed of King Louis and Marie Antoinette came to an end with an angry mob of chopping off their heads in public and cheering while doing so. Back then I thought the citizens had been blood-thristy. Now I realize they were simply efficient.

  8. An interesting perspective… I agree with part of this, and disagree with part, but I'm not going to try to debate the merits here in the comments section. I'd love to sit down with Mr. Hanauer and have a conversation, but people like me are not listened to by plutocrats.

  9. He is making a case for minimun wage, why doesn't he make a case for lowering the price of everything that way it should be.

  10. He gave this talk in 2012 under Obama reign and that's why he was banned. Hanauer was invited on Fox News. He will never be invited by CNN.

  11. In the 1950's and '60's many businesses gave employees decent pay and benefits and retirement plans plus they paid their fair share in taxes. Today not so much.

  12. some of it naturally makes sense within capitalist model; however what is glaringly missing is the inclusion of the working class in our economic ecosystem

  13. fake capitalist. Never before in history has inequality been at this LOW level. in 1980 the world had 90% of its population under the extreme poverty level…today its at 10%. in 1800 95% of the worlds population was under the extreme poverty level…in 1700 it was at 99%.

    The world is doing better than it ever has been. Its only extreme far left pigs that think otherwise and thankfully most of them are anti-gun cucks and are too weak to cause a revolution. They will just be killed in mass thankfully so the world can continue to PROGRESS.

    Also. The French Revolution led to Napoleon becoming EMPEROR over those fools.

  14. Only those who want to oppress the middle class support any form of inflation. Inflation is always a short term gain and a long term loss. Getting rich doesn't make you smart, or wise, it only demonstrates your unbridled selfishness.

  15. This was published over 5 years ago and the plutocratic response couldn't be more clear. The greedy wealth of this country are going to push this country to revolution and whatever is left when the dust settles will be an easy target for our enemies.

  16. This guy is so right. I hope the rich take note. I can't even afford enough food and didn't have kids b/c this country doesn't support single mothers. I need to get a car, but can't afford one that is better for the environment much less a decent one. I haven't bought clothes in over a decade. Haven't flown since 2005. I have nothing can therefore can do nothing, leading to apathy.

  17. The worst part of mass data collection is that now the government knows the collective
    awareness of the entire country in real time and therefore how best to “cut them off at
    the pass” through all kinds of “creative activity” to blunt any national grass roots movement.?

  18. There is a prevailing error of perspective regarding this topic of "rising inequality". The rich are getting richer, but the reality is that in a growing economy the poor are also getting richer and also enjoying a better lifestyle, only at a slower rate. These super-rich "plutocrats" by and large have created NEW wealth, not stolen it from the rest of us. The concept of "zero sum gain" which feeds these anti-rich people biases demonstrates a lack of critical thinking. In the absence of business leaders inclined to work hard thus profit from their own efforts, there becomes no new business to hire people. What kills business and jobs is the corruption involved when self-interested dirty politicians start trying to shake down the creators of wealth to keep themselves in power, apparently thinking they as "elites" know better how to run the world.

  19. A profit sharing system could be established, but would be workable only if employees are willing to accept both Gains and Loses. Unions would never accept loses, therefore $#&&*&#@-&*

  20. There are few parallels between 18th Century France and contemporary American society. The peasant class that brought forth Revolution was a hardy group, accustomed to rough living and violence within its domestic and societal life. Americans today are soft, effete, and largely distanced from agriculture, hard laboring jobs, and actual violence (as opposed to fictitious violence). France was a Catholic country in which the traditional tacit approval of the clergy salved individual consciences–American people are suffused with liberal morality and Protestant cultural injunctions against the violence required by Revolution and enjoining obedience to civil government. In short: Anyone forecasting mobs of pitchfork-wielders should really look elsewhere than contemporary America, because the raw material of Revolutionaries isn't present here and now, as it was in Pre-Revolutionary France–and, of course, there's a great shortage of pitchforks…  What Mr. Hanauer alluded to in his speech as an alternate future is much more likely to occur: Namely, a Police State, in which the evils produced and the excesses allowed by out-of-control capitalism will be secured and protected by force–allowing the Plutocrats to live out their achievement of that utiopa-for-the-rich sought since the time of the Pharoahs, while the rest of us scrabble for scraps amid the ruins of the America we once knew.

  21. Yep, and it's now 2019 and in the land of Trump, nobody listened to this man's words of warning and wisdom.

    It's all going to go down the guzzler!

  22. People are not chickens or rats to belong to someone or experimenting with. The year is not 1820 or 1963 when Human-trade, Scheduled assassinations and Secret societies were totally buried by the fake news corporations. Today most plutocratic crimes are under a vast surveillance Worldwide and almost fully exposed while the unpredictable human volcano is wildly ((((((shaking))))))

  23. This video is dumb! The rich can buy anything under the sun and the poor can’t. The poor hate the rich. Let’s all sit down and listen to the rich man agree with the poor. Hmmmmm…..why, oh why, would the rich agree? Could it be that whatever happens, they are going to get out of it because they already know what is coming, have made plans, and will know when to put those plans into action. You can sharpen up your pitchforks and get the guillotines ready all you want, but NO heads will roll! They will escape! They are only leading y’all down a road they want you to go down!

  24. He is correct, even I think that the 1% needs to be confronted and dealt with, especially because of the corruption it has created.

    You feel it too, just think how many times you feel helpless to change enough things because your voice doesn't count and when you open your mouth you get smacked down by government.

  25. Right now in America there over 8 million
    AR 47's
    And at least at last count 120 million small arms and light Weapons ( Rifles)
    The military particularly army and National Guard is made up primarily of working poor and some middle class they are not going to go against their own.
    the army is predominantly minoritys
    When the 2nd American revolution begins it won't be pitchforks the mansions will burn
    And it will be the end of America as we know it.

    And it could be as early as 2021.

  26. Plutarchs in Mexico can't drive a luxury car, they run the risk of carjacking and kidnapping. That Phenomenon is increasing here in California. Most Walled Communities are but a target, and the Guards? They don't work for you, the take notes for us, the barefoot upon that dirt road.

  27. Stop all immigration, particularly of highly skilled workers. Do that and those at the top will realize they will need to invest in our primary schools. It is not healthy to have American born citizens too stupid and uneducated to access the best jobs.

  28. 4:49. Listen to what he says very closely. Now let me put his words into a more subversive perspective: We plutocrats cannot continue to treat our automatons as if they have no stake in our plutocracy's success. Continued abandonment of their survival (you, automaton) is throwing away our future, all of our futures. Then he brings it all home by using Henry Ford as an example, or, even better, his manager pants example.

    What's so weird about this is how politics as usual prefer to keep people in the dark about such things. How often do you hear any politician say what Nick Hanauer just said? To put it another way, how often do your hear the wizard behind the curtain tell you, "Hey, let me tell you how far I can go ripping off this country before you get fed up and revolt. At the same time, let me telll you how and why my fellow colleagues benefit from your ability to buy in to our success."

  29. $15 sounds good but it kills small businesses. The plutocrats should help finance small businesses so they can afford to pay their employees $15 without laying off people or losing their profit. From what I read $15 didn't work out too good in Seattle.

  30. Why are school shootings have been happening more and more often? Practice? Nah.
    Some just don't like the way things have become, and are responding.

  31. Five years since this video was made… can't say I've seen a lot of action on it yet… I don't even see the peasants gathering in the town-squares with pitchforks any more.

  32. There's very few of these plutocrats that we can fit all of them in Guantanamo; side by side with their fellow terrorists. They've financially terrorized us for a long time.

    Should we spare this man?

  33. History is replete with examples of the correction that always come when the masses are eating dirt while the rich feast on the best…

  34. Capitalism is a bit of a snake pit.
    But of course snakes are not immoral or out to profit at any cost,
    so this is an unfair and stigmatizing comparison for reptiles…

    Reptilian theme in Vigelandsparken Park, Oslo Norway

  35. Doesn't matter who owns the wealth. In a socialist country all the wealth is owned by the government (they laughingly say the people own it) but the people are financially worse off.

  36. great you've done this, you've done that…your still a c**ksu**er. so many of these people think that Their gain and Their happiness is all that matters.

  37. The source of growth is a prosperous middle class. So now, we know, why the eco-fascist Malthusian nutcases in the deep state system complex who obsessively want a growthless future for all of humanity are so obsessed with trying to destroy the global middle class and "cutting C02": There can be no global growthless future as long as a global middle class exists.

  38. The only problem with his message is that, this man apart, rich people only understand the language of pitchforks.
    Ever dealt with rich folks ?

  39. This man is wasting his time. The superwealthy have no good reason to ever stop the current hamster wheel we're on. Only a complete blood soaked revolution will ever stop them. It's sad but very true. It's ALWAYS been that way.

  40. Rothschild decendents .."The few who understand will
    either be so interested in there profits, or so dependent
    on its favors, that there will be no opposition from that
    class. The great body of the people, mentally incapable
    of comprehending the tremendous advantages, will bear its…..

  41. I stopped listening when he emphasized multiple times that he is a "proud capitalist." REMEMBER, when capitalists finally give you a 15 dollar minimum wage, itll be like pennies them. The dumb people will celebrate and be complacent, the smart people will still be sharpening their pitchforks.

  42. They know it's coming.
    Why else do you think they've stolen your money to build their underground havens?

  43. Capitalism is a bit of a snake pit.
    But of course snakes are not immoral or out to profit at any cost,
    so this is an unfair and stigmatizing comparison for reptiles…

    Reptilian theme in Vigelandsparken Park, Oslo Norway

  44. 2014 vid…
    Clearly no one has listened!!!

    Seattle is not what it used to…
    It’s not te possibility of maneuvering with economic numbers…it’s the population out of control numbers you guys can’t cope with.

    Greed will always blind human beings.

    By the way…capitalism is contrary to democracy.
    A sound political system must be based on resources and society rather than money!

    Great effort and analysis though.

  45. he's wrong; i have just some money, he has lots; so what? i have most of what i need, he has most of what he needs; this way we are equal

  46. Read "The French Revolution, What Went Wrong" by Stephen Clarke. It could be written about today, with a few name changes……

  47. Interesting that I have been aware of TedTalk for over 6 years myself and don't remember ever seeing this talk.
    Now that it's been a mere 5 years from the time that this talk was given and I can only report on what I've been fortunate to personally witness & experience, I gotta say that it sadly seems like this guy's TedTalk was largely ignored by his fellow pluto cult ilk.
    Tsk, tsk, tsk {SmH}

  48. Jacking up the minimum wage hurts small business. Employees working at a large companies already have a living wage. People need jobs in areas of the country well away from the large cities where housing and the basic necessities are much lower. This clown lives in the bubble he complains about.

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