Who is Nick Hanauer and Why Should We Listen to Him
He’s the guy behind Pitchfork Economics, the logical antithesis to our current “trickle down” economic model. If Hanauer is correct, there should be broad changes to economic policy that support a “middle out” model.
There are few people that I listen to in this world with rapt attention. When I was young I certainly didn’t listen to my parents with any level of full attention, nor to my teachers nor other authority figures. The leads I followed were those of pop culture and popularity. Teenagers do that. Adults have a responsibility to delve a bit deeper.
Hearing Nick Hanauer being interviewed on NPR made me curious about him. Being good at 21st century research, I Googled him and listened to a 2014 TED talk he gave. It both amazed and delighted me that this self described plutocrat is worth listening to. Most rich guys are just assholes hoping to increase their self worth. Hanauer, however, is a rich guy who wants everyone in our society to reap the benefits that led to his wealth, for perfectly selfish reasons.
The current model our economy is based on, giving to the rich in the hope that some crumbs will trickle down to the worker, has always resonated as false to me. Nick Hanauer explains my intuition about this in terms that I can clearly understand and with evidence easily grasped.
There are people that we should listen to. They may not be the most popular, or the most visible. They may be saying things that are difficult to hear and integrate into our existing frame of reference. As one of these people, Nick Hanauer blew me away in his reasoning.
The central takeaway from this talk for me was the elegance of his argument for increasing the minimum wage to $15/hour. Hanauer argues that an increase in wages will lead to an increase in customers. That businesses, rather than losing employees due to increased wage expenses, will gain customers. The increase in wages will give the workers businesses employ, particularly low wage workers, the ability to buy the goods and services of those businesses, thus leading to more customers and a need for more employees.
More customers will not come from the “tickle down” model we are so used to being told is the means to prosperity for all. His examples of a shift toward “middle out” economies are stunning in their simplicity.
As an example he first he uses a pair of pants he is wearing. Yes, pants. He tells us that he bought the pants, actually two pair of them, nice simple brownish dress pants as “management” pants. But he is a single customer, he bought two pair, he isn’t going to buy 2000 pair. He also asks his audience how often does he need a haircut, how frequently can he eat dinner out. His argument is that no matter how much wealth he has he is only one customer, and our economy is reliant on consumption. Increased consumption can only come from an increasing number of customers.
The answer to the economic change he is proposing is in the questions he asks us. Who are our customers and how do we grow that customer base.
He is giving us the clarity we need to dismiss the notion that giving more to the plutocrats at the very top of the economy is in any way good for the entire economy. The rich can and will contribute only so much as singular customers in an economy.
They are more likely to use their wealth to increase that wealth. Each is a single customer in a capitalist economy whose dependence on success lies in the need for MANY customers. We are a consumer driven economy. We thrive when our middle and working classes have the resources to consume.
It’s like a giant game of Jenga. If you keep pulling the pieces needed to keep the foundation of the tower strong out of that foundation, the top of the tower will fall. In our economy that foundation is made up of the workers and a robust middle class.
He doesn’t use Jenga as part of his argument, he is much more sophisticated, he says that the “pitchforks will come.” He is clear in his thesis. This isn’t an “if” argument, it is a “when” argument. If we continue to build an economy that funnels money to the top, we will only make our economy top heavy. The weak foundation will result in an economic collapse ending in chaos and/or revolution.
The Pitchforks are Coming, hardly seems like an effective battle cry for the 21st century, but it is the most compelling. Hanauer reminds us of the French Revolution, in fact informs us that no economy with the growing income inequality our society is on track to continue, will survive without revolution or a turn to authoritarianism.
I would like to believe that the failure of Trump to overturn the election through a stacked court system of his own making, is evidence that our democracy will remain intact. That answers part of the question: we are not headed toward authoritarianism yet.
The question left unanswered is when our democracy, as it currently operates will devolve into revolution, with the Pitchforks of the workers coming for the plutocrats.
Does this have to happen for us to move forward? Apparently not if government takes steps that ensure certain “liberties” for the working and middle class. These include proper infrastructure for robust research and development, equality in educational opportunities, access to affordable healthcare and a living wage that puts workers in a position to be able to take advantage of each of these.
Government currently defines funding for these pillars of support as a drag on the taxpayer. All the while, that same government is applauding its own charity to the wealthy through tax breaks and subsidies. Let’s get our economy into a position of equity and watch government back itself out where it is no longer needed.
A strong middle class is the basic structure we need to have a robust and thriving society. That begins with making work the basis for fulfilling our needs and desires. Working for below subsistence wages can lead workers to only one position. That is revolution, and that will be very messy. A living wage can lead us in a new direction and help society avoid the need to clean up a very resistant mess.
