California’s New Feudalism Benefits a Few at the Expense of the Multitude

California has been the source of much innovation, from agribusiness and oil to fashion and the digital world. Historically much richer than the rest of the country, it was also the birthplace, along with Levittown, of the mass-produced suburb, freeways, much of our modern entrepreneurial culture, and of course mass entertainment. For most of a century, for both better and worse, California has defined progress, not only for America but for the world.

California Farmworker

Farmworker Cristina Melendez, 36, and her mother Maria Rosales, 60, working on the vegetable garden outside the mother's apartment in Fresno, Calif. on June 1, 2013. Rosales, now a U.S. citizen, brought Melendez to work in California's fields when the girl was 13, hoping farm work would be a spring board to a better life, but Melendez has yet to find a way out of the cycle of poverty. (Gosia Wozniacka/AP)

As late as the 80s, California was democratic in a fundamental sense, a place for outsiders and, increasingly, immigrants—roughly 60 percent of the population was considered middle class. Now, instead of a land of opportunity, California has become increasingly feudal. According to recent census estimates,  the state suffers some of the highest levels of inequality in the country. By some estimates, the state’s level of inequality compares with that of such global models as  the Dominican Republic, Gambia, and the Republic of the Congo.

At the same time, the Golden State now suffers the highest level of poverty in the country—23.5 percent compared to 16 percent nationally—worse than long-term hard luck cases like Mississippi. It is also now home to roughly one-third of the nation’s welfare recipients, almost three times its proportion of the nation’s population.

Like medieval serfs, increasing numbers of Californians are downwardly mobile, and doing worse than their parents: native born Latinos actually have shorter lifespans than their parents, according to one recent report. Nor are things expected to get better any time soon. According to a recent Hoover Institution survey, most Californians expect their incomes to stagnate in the coming six months, a sense widely shared among the young, whites, Latinos, females, and the less educated.

Some of these trends can be found nationwide, but they have become pronounced and are metastasizing more quickly in the Golden State. As late as the 80s, the state was about as egalitarian as the rest of the country. Now, for the first time in decades, the middle class is a minority, according to the Public Policy Institute of California.

The Role of the tech oligarchs.

California produces more new billionaires than any place this side of oligarchic Russia or crony capitalist China. By some estimates the Golden State is home to one out of every nine of the world’s billionaires. In 2011 the state was home to 90 billionaires, 20 more than second place New York and more than twice as many as booming Texas.

The state’s digital oligarchy, surely without intention, is increasingly driving the state’s lurch towards feudalism. Silicon Valley’s wealth reflects the fortunes of a handful of companies that dominate an information economy that itself is increasingly oligopolistic.  In contrast to the traditionally conservative or libertarian ethos of the entrepreneurial class, the oligarchy is increasingly allied with the nominally populist Democratic Party and its regulatory agenda. Along with the public sector, Hollywood, and their media claque, they present California as “the spiritual inspiration” for modern “progressives” across the country.

Through their embrace of and financial support for the state’s regulatory regime, the oligarchs have made job creation in non tech-businesses—manufacturing, energy, agriculture—increasingly difficult through “green energy” initiatives that are also sure to boost already high utility costs. One critic, state Democratic Senator Roderick Wright from heavily minority Inglewood, compares the state’s regulatory regime to the “vig” or high interest charged by the Mafia, calling it a major reason for disinvestment in many industries.

Yet even in Silicon Valley, the expansion of prosperity has been extraordinarily limited. Due to enormous losses suffered in the current tech bubble, tech job creation in Silicon Valley has barely reached its 2000 level. In contrast, previous tech booms, such as the one in the 90s, doubled the ranks of the tech community. Some, like UC Berkeley economist Enrico Moretti, advance the dubious claim that those jobs are more stable than those created in Texas. But even if we concede that point for the moment,  the Valley’s growth primarily benefits its denizens but not most Californians. Since the recession, California remains down something like 500,000 jobs, a 3.5 percent loss, while its Lone Star rival has boosted its employment by a remarkable 931,000, a gain of more than 9 percent.

Much of this has to do with the changing nature of California’s increasingly elite—driven economy.

READ ENTIRE ARTICLE HERE: http://www.thedailybeast.com/articles/2013/10/05/california-s-new-feudalism-benefits-a-few-at-the-expense-of-the-multitude.html

Print this post

Do you like this post?

Showing 1 reaction


commented 2013-10-12 14:21:14 -0400 · Flag
JC writes:

Luckily the mejicanos have an option
return to Mexico