The Pitchforks Are Coming: Plutocrat warns of revolution

One of the richest men in the world says big business should increase wages or face social chaos

An Italian capitalist has a crisis of conscience, strips himself of all material possessions, hands his factory over to its workers and then he wonders off naked into the wilderness. A scenario from the Sixties cult movie Teorema by Italian Director, Pier Paolo Pasolini. The factory boss in the 1968 film, comes to mind, when watching a Ted Talk by arch plutocrat Nick Hanauer who has created an internet furore.

Hanauer describes himself as an unrepentant capitalist but advocates for a dramatic increase of the minimum wage, affordable healthcare and paid sick leave. In a talk entitled, Beware, Fellow Plutocrats, the Pitchforks are Coming, Hanauer warns growing inequality could spark social chaos, reminiscent of the French Revolution.

In the light of our recent coverage of hungry students and the human cost of platinum, we went in search of what significance the sentiments of an obscenely rich American capitalist has for us. First stop was the Public Protector Thuli Madonsela who made a damning statement recently about South Africa being one of the world’s most unequal societies. Madonsela was speaking at the University of Stellenbosch, when she said:

Public Protector Thuli Madonsela says we are one of the most unequal societies in the world.

Public Protector Thuli Madonsela says we are one of the most unequal societies in the world.

“We may not be paragons of non-discrimination as that is impossible. We are products of a society where the hierarchisation of difference is entrenched through socialisation from birth. All we need to do is play our part in our respective spaces as earnestly as possible. Compounding the situation is that poverty and unemployment have worsened and also the fact that, that too follows the contours of racial, gender and other forms of structural inequality or discrimination.”

Clarion Call To Capitalists

The Nick Hanauer clarion call to capitalists to cough up or face chaos, recorded more than 304 000 views within days of being posted. The 600 plus comments are indicative of the online frenzy he has created.

Hanauer, a venture capitalist, investor and entrepreneur who calls himself one of the richest men in the world, says:

“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.”

Way ahead of many in the South African corporate world, Hanauer argues for a balancing of power between workers and big business saying this is essential for the survival of capitalism. He says:

“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.”

Inequality Fundamental to Capitalism

Niall Reddy, a local economist who works for the Alternative Information Development Centre (AIDC) in Cape Town says the issue of fundamental wealth redistribution is an important one but there is little value in trying to persuade capitalists to share the wealth being created. Reddy says:

“Inequality is fundamental to Capitalism, there is no space for redistribution of wealth. Capitalists use inequality as a driver to maximise their profits. If one looks at the Marikana labour rebellion and the response of the mine owners it is clear local capitalists have become even more aggressive.”

Reddy says there has been no evidence that significant amounts of capitalists are prepared to meet worker rights like affordable healthcare, paid leave and higher wages. He argues that trying to plead for wealth distribution and superficial transformation inside the capitalist society makes no sense. “The capitalist system has to be replaced altogether.”

Government economist Setepane Mohale.

Government economist Setepane Mohale.

Setepane Mohale an economist who works for the South African government’s Department of Mineral Resources, says that Hanauer’s light bulb moment is aligned with government’s economic strategies to address historical imbalances in our society. She claims that South Africa is ahead of the game, given the focus on economic empowerment and wealth redistribution.

“Addressing income inequalities is not just something nice to do, its imperative”, says Mohale.

Better Wages Make Business Rich

Mohale says Hanauer’s comments simply emphasise that if businesses pay their workers more this gives them more buying power. “When people become rich, they make businesses rich.”

She cites the Mining Charter as an example of how far South Africa has come, to put redistributive policies on paper but warns that businesses need to make sure the changes go beyond just the paper.

“Economic transformation should not just be a matter of ticking the right boxes to show compliance, the transformation should be meaningful.”

TED is a nonprofit devoted to spreading ideas, usually in the form of short, powerful talks. It began in 1984 as a conference where Technology, Entertainment and Design (TED) converged. After a season of rather pedestrian offerings recently, Hannuer’s comments about imminent revolution sparked the most controversy on the organisation’s site. Hanauer says:

“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.”

Too Little Too Late

This is how Jo McKay responds online to the industrialist’s progressive sounding utterances at Ted:

“Interesting. Unfortunately like pre revolutionary France, too little too late. $15 (R160) an hour I support, and maybe, just maybe if all embraced it without fuss, it might stem the tides for a while. It won’t increase significant benefit to the middle class, but more importantly it does not address any of the inherent problems within capitalism itself. Greed. The loss of good jobs & the failures of dishonest and dishonorable trade through the exploitation of others in our own and in other countries. The corruption of governments and media and the rampant abuse of monopolies.”

Some contributors felt the Hanauer talk was inciting violence. One of the contributors on the page, kk oneworld, says: “I hope people like Nick would try not to unconsciously encourage violence (pitchfork) to resolve problems for it could be viewed as a legitimate way of solving problems. This world need less violent approach to solving problems.”

But the Government’s Setepane Mohale, says meaningful transformation is the only way to avoid a growing tendency toward revolution.

“We need to be more brave in our support of economic transformation, and of government attempts to create a more sustainable economic growth plan for business and society.”

Provocatively independent economist Niall Reddy argues that it is only until the pitchforks come out and capitalists are forced, that fundamental economic change will become possible.

“It is only when workers and political movements allied to them, build their own power and organisations, that fundamental redistribution of wealth will be possible.”

The End of Capitalism?

Now back to the movie, “Teorema” where Paolo the capitalist, hands the means of production, his factory, over to the workers. In the opening of the Pasolini film a reporter asks if this handover gesture means an end to Capitalism and whether there will be no more bourgeois in the future. The revolutionary in me wonders if this means Nick Hanauer, like the character Paolo, is getting ready to hand over his enterprises to the workers and whether he is predicting an end to capitalist society?

This is how Hanauer answers this question:

“Fellow plutocrats, I think it may be time for us 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.”

Alas, it appears Hanauer is imagining a new capitalism and is not about to put the tools of production in the hands of his workers, like his fellow Italian plutocrat, Paolo. However, what Hanauer’s comments do, just like Pasolini’s film, is open the debate on redistribution of wealth and how best it can be achieved.

If you have a yen for the great Paolo Pasolini film here is a trailer with English subtitles: