I wasn’t very familiar with Ray Dalio, a hedge-fund manager whom the Bloomberg Billionaire Index reported had a net worth of $15.4 billion. But I soon learned that Dalio, a septuagenarian, isn’t just rich; he’s one of the 1 percenters whom economists and progressives talk about. He’s so-so rich, however, that he’s one of the 1 percenters inside that 1 percent.
In an essay once, Dalio sounded an alarm about runaway capitalism, warning that it threatened the American way. He sketched a picture of how capitalism has put this country in crisis.
He pointed to specific things that the superrich refuse to see: The divide between the superrich and middle-class Americans is creating a larger and larger economic gulf every year.
Dalio said wages for the middle class have not moved upward, despite the fact that people like him are richer than ever. As income gap widens, Middle Americans, whose workweek stretches longer and longer, see their standard of living fall behind what they remember their parents having.
He shined a spotlight on education, which he said was failing the poorest people in America. He called what the well-heeled are doing to the poor “the equivalent of child abuse.”
Such language is sure to start a fuss, but Dalio’s too rich to bother about what critics might think of his opinions. He has the audacity, unlike most of his superrich friends, to view this disparity in its reality and not as some academic exercise that dissects the differences in theoretical terms.
Yet two things he said were even more striking; each is every bit as true as the first two. The easiest one to talk about is this: Poor people face a healthcare crisis, which ensures their lifespan doesn’t come close to matching that of the superrich.
The hardest to talk about is this: The haves and the have-nots are on a collision course.
“Disparity in wealth, especially when accompanied by disparity in values, leads to increasing conflict, and, in the government, that manifests itself in the form of populism on the left and populism on the right and in revolutions of one sort or another,” Dalio wrote.
When rich men like Dalio talk, people have no choice but to listen. No doubt, some of his fellow 1 percenters, if not most of them, disagree. They prefer to talk about American grit and economic smarts, which they put a premium on. They seem to believe their superwealth is in the reach of everybody.
They are wrong, which is the point Dalio was making. While he didn’t point to this, he could have. America grew out of British greed at the expense of those who labored across an ocean to benefit the crown.
The gulf now isn’t an ocean, but the differences are just as real. The rich are piling up the millions as the majority of Americans slog along on the 9-to-5 grind, having seen inflation and rising healthcare cost eat away at any raises a boss might throw their way.
The middle class work more hours for less real money, which is a recipe for insurrection.
No one can see Americans in the middle taking up arms against the government, but they can insist their political leaders take a hard look at this disparity and demand that the rich give more than they do.
