Wealth and precarity

A lot of people remarked in yesterday’s thread about the sources of right wing revanchism that anxiety and dread about economic precarity is a central fact of life for so many people: the sense that, no matter what your economic circumstances may be at the moment, you could fall very far very fast, in a country with essentially no social safety net, and in which traditional forms of protection such as the extended family or the church or the labor union or the neighborhood also seem increasingly frayed or non-existent.

This is all true, but it also brings to mind a couple of other related things:

(1) When I researched Harry Truman’s looting of government funds for his own nest egg when he was president, one thing I discovered was that, at the time that FDR was considering him for the VP slot in the summer of 1944, Truman was a 60-year-old man who would be in a world of economic hurt if and when he lost his Senate seat, which in retrospect he almost certainly would have in 1946, which was a wave year for the GOP. Truman’s net worth in 1944 consisted of a few thousand dollars in US government bonds — equivalent to around $100K today, and literally nothing else. He owned no real estate or stocks — he didn’t even own a car –he had no pension from any of his government jobs, he had no profession other than politician, he had an unemployable wife, a 20-year-old unmarried daughter, and his only means of support if he lost his senate seat was an $113 per month Army pension, which is about $2k per month in 2025 money.

In other words he would have been basically broke, with a poverty-level income, and no apparent economic future. This, needless to say, was at the time an extremely common circumstance for even the most respectable elderly people who didn’t come from the monied classes. Poverty in old age was absolutely the expected outcome of life for almost everybody outside the genuine upper class, and as a consequence you had better hope you had forebearing children and other relatives (Bitter Yiddish proverb: A father can support ten children, but ten children cannot support a father).

This is related to a larger historical point, which is that, as Galbraith argues in The Affluent Society (1958) even into the 20th century it was part of the basic mental world of educated people in general and economists in particular that most people were some variety of poor, and that even modest amounts of wealth and security were very much the exception rather than the rule. Galbraith points out that Malthus and Ricardo and Marx all took this to be an iron law of capitalism and demography, although Marx tacked on his eschatological revolution as an eventual escape. Galbraith’s further point is that the mental habits of the conventional wisdom remain in place far longer than they ought to, given changing historical circumstances. Speaking of which, GDP per capita in the US, 2017 dollars:

1826: $1,977

1892: $6,399

1958: $18,325

So America was fantastically wealthier at the end of the 19th century than it was towards the beginning, and was fantastically wealthier in the middle of the 20th century, when Galbraith wrote his book, then it had been 66 year earlier.

Of course today’s conventional wisdom is that things have slowed down quite a bit since then, given that the 1950s were the golden age of affluence and all. Not quite it turns out:

2024: $68,658

So America a quarter of the way into the 21st century is fantastically wealthier than it was when Galbraith wrote his book, when it was fantastically wealthier than it had been a couple of generations earlier, etc. etc.

The point of all this is that anybody who claims that we can’t “afford” economic security and decent life for everyone in this country was already speaking nonsense in 1958, but is speaking nonsense times 3.75 in 2025, because the country is 3.75 times richer today than it was when Galbraith was pointing toward, in his memorable phrase, all that private affluence and public squalor.

A vignette of our time from a friend:

My daughter is a student at UC-Berkeley, and does catering gigs for extra money. Last weekend she worked at a billionaire’s house in San Francisco

The house is worth 30 million and overlooks the city. She was let into the basement level of the house and told to sign a “guest book.” She was then taken through the immaculate basement, which included a room specifically for gift wrapping that was larger than her apartment, and brought upstairs.

Everyone at this event was a billionaire in the tech industry. One was a prominent leader of AI company, who she said was uncomfortable being there and left after 15 minutes. The rest were a mix of the older tech bros and the some new tech people. She said you could tell them apart because the older tech bros treated the servers like they were lice on a dog and the newer ones were friendly and were relieved to have the servers to talk to. The wives of the tech bros were also interesting because they had so much botox and plastic surgery and, compared to the nannies, they didn’t look real.

The security was over the top. Someone followed her around while she did her job. Her phone was disabled by some technology as soon as she entered the house. She couldn’t leave the main area because every other room required a biometric to unlock it.

My daughter said working there made her feel ill. These people gave off bad, bad vibes and she was clenching her jaw a lot. She was disgusted because there was enough food there for 100 people and no one was eating it, and just got thrown away.

The tip she received doubled the amount she made, so that was good.

The “guest book” she signed was actually a 17 page NDA that they gave her a copy of when she left. They never told her it was a contract. The contract said she could not share what she heard during the event nor mention who attended.

There will be blood. At least at this point I’m beginning to hope so.