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I've been watching in horror the story of Tom Perkins, wealthy co-founder of famous VC firm KPCB, who used a Hitler analogy to make a point about the demonization of the rich. I haven't yet seen a rational discussion of it in the media so I guess it's up to me.

For starters, using a Hitler analogy is almost always a self-refuting argument. And by that I mean that if you need to invoke a Hitler analogy, there's probably something deeply wrong with your point of view in the first place.

But I said "almost always." Interestingly, the Hitler analogy actually works in this particular case. My interpretation of Perkins' point is that the growing level of contempt for the rich is fueled by scapegoating. And if the economy falls into something like a depression, it is a legitimate concern that angry mobs might drag rich people out of their mansions and do harm under the theory that the rich are the problem.

What are the odds of that, you say? Low? Impossible?

I'd put the odds somewhere in the 5% range and growing. Remember, Perkins didn't say it will happen next Tuesday; he's simply identifying an emerging trend. Is it legitimate for Perkins to identify a potentially dangerous trend in its early stages with the hope of heading it off early? I'd say that's a legitimate position.

Keep in mind that Perkins got rich by identifying trends before others recognized them. His firm invested in AOL, Amazon.com, Citrix, Compaq, Electronic Arts, Genentech, Geron, Google, Intuit, Netscape, Sun, Symantic and more. So if you disagree with Perkins' assessment of the risk, please compare your success rate to his. And no fair saying VCs only get it right 10% of the time because in this case that would be often enough to totally justify raising the issue. And I don't believe anyone disagrees with Perkins' observation that the public's opinion of the top 1% is worsening.

Before delivering my verdict in this case, I'd like to state the facts as I see them.

1. I keep seeing comments and even headlines saying Perkins compared the suffering of the rich to the suffering of Jews during the Holocaust. As I have often written, all analogies invite wrong interpretations. I interpreted his analogy to mean that if the demonization of the rich continues there is a non-zero chance it could escalate into violence. That's far from saying rich people are exactly like Jews in concentration camps. The willful misinterpretation of his point (or perhaps confirmation bias) is strong evidence of his point. 

2. I often hear it said that the rich are torpedoing the U.S. economy by shipping jobs overseas or introducing robots. For starters, big corporations are owned by shareholders, most of whom are not rich. Second, the idea that the rich are, on average, subtracting jobs from the economy is economic illiteracy, not an opinion. That's the same sort of ignorance that drives most forms of discrimination and violence. 

3. If a pundit of modest means had raised a warning that worsening attitudes about the rich might someday escalate to violence no one would raise an eyebrow. The angry contempt shown to Perkins' opinion piece supports his opinion. Sure, the Nazi analogy was a bad choice, but does that make his point wrong? 

4. The fact that few citizens seem to care there is a chance that the rich might someday be dragged from their homes and killed is evidence of Perkins' point. The rich have already been dehumanized to the point where an offensive analogy seems the bigger crime against humanity than the possibility that the rich could someday be slaughtered by mobs. 

5. Much of the public believes the economy is a zero-sum game and therefore the rich are stealing their money from the poor. That is economic illiteracy, not opinion. It's the same sort of ignorance that made ordinary German citizens think the Holocaust might be a solution to their national problems. 

My verdict is that Perkins' point about escalating contempt for the rich potentially leading to violence is legitimate, in large part because the media contributes to economic illiteracy and highlights the bad apples in the top 1%.

The Nazi analogy wasn't politically correct. Nor was it a brilliant choice because all analogies cause fights, and when you throw in some Holocaust references you're just asking for trouble.

Is Perkins sort of a dick? Yes. But I have some respect for the fact that he's not trying to be a phony. And based on what I've read online, most of his critics are ignorant dicks. That seems one level worse than being a well-informed dick.

Yeah, I know, I'm a dick too. That goes without saying. Let's not get sidetracked.

 

 
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Jan 30, 2014
"My verdict is that Perkins' point about escalating contempt for the rich potentially leading to violence is legitimate, in large part because the media contributes to economic illiteracy and highlights the bad apples in the top 1%."

Agreed.

And also because the vice of envy--not to be confused with jealousy--is running wildly unchecked.
 
 
 
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