The truth about who the 1% is and the inevitability of inequality

With Oxfam pushing headlines about their prediction that half the world's wealth will be owned by the 70 million richest humans, it's only natural that the excitable class over at The Guardian would reply with this drivel:

The rich, via lobbyists and Byzantine tax arrangements, actively work to stop redistribution. Inequality is not inevitable, it’s engineered. Many mainstream economists do not question the degree of this engineering, even when it is highly dubious.
The funny thing about these "Byzantine tax arrangements" is that when the left isn't denouncing them like Moore is here, they are busy demanding them: from Edmonton's second most offensive politician to President Monkey. As has been discussed on this blog earlier this month, when the chance to force everybody from the rich to the poor to shoulder an equal tax burden (in the temporal sense, the only way that makes sense) arises, it's the left who is the fastest to jump up and down and screech.

Moore isn't done mischaracterizing what has actually happened over the past decade either, in case you were curious.
The contortions that certain pet economists make to defend the indefensible 1% are often to do with positing the super-rich as inherently talented and being self-made. The myth is that everyone is a cross between Steve Jobs and Bono; creative, entrepreneurial, unique. The reality is cloned inherited wealth and insane performance-related pay, eg. the bankers who continue to reward themselves more than a million a year after overseeing the collapse of the industry.
Suzanne Moore probably couldn't come up with specific names of economists who think this. Instead, she's merely falling for the celebrity mythos herself: the idea that on one side or another need to be rock stars. Inherited wealth and performance-related pay are instead symptoms of a far more insidious nature, one that Moore assumably wants denied from the rich but not herself: the people who have money decides what happens to it. That this simple concept eludes her is tragic, but its not clear why the world's economic engines need to be shut down just because she thinks she knows better than the bank president how much the vice president of operations should get paid. While she's ranting about "austerity measures", at no point is she asking herself how the alternative -- gross amounts of public debt which ensure that year after year less tax money is spent on British citizens and more goes to fund interest payments that keep these rich bankers in positive cash flow -- is going to achieve her goals faster. The Greek example is just the canary in the welfare state's coal mine: there's nothing special about the UK that prevents it from having the same problem as Greece where the world decides that its government isn't worth lending money to. Like Greece, the only thing Britain would find worse than all these "1%-ers" kicking around would be for them to depart. Moore's class warfare rhetoric falls apart the moment it turns out that the system the rich have used to get super-rich is the one where they convince governments to pay them interest rates on trillions of dollars of debt year after year.

(in Alberta, one remembers, relieving of government debt led to all sorts of extra cash to waste on social programs)

Where the money actually comes from is one of Moore's particularly weak points.
There are always those who will side with the powerful against the powerless, and economists specialize in this. No wonder Prof Gregory Mankiw’s Harvard students walked out of his class following his ludicrous insistence that the system is not gamed for the rich. Such “theorists” flatter the rich by granting them some superpower, which is why they like rock star comparisons. In fact, international finance is peopled by interchangeable guys who are essentially just paying themselves double what they were 10 years ago. They may need to think of themselves as special. We don’t have to.
The only one attributing "superpowers" to the rich is Moore herself, in this passage right here. If the interchangeable guys over in international finance are only "paying themselves double" then how on earth are they getting wealthier? Try that as an experiment sometime: give yourself a $10 bill out of your wallet. Next, give yourself a $20 bill out of that same wallet. How much richer were you the second time around? Of course we all know where these international financiers are getting paid from: the people who are giving them boatloads of money to manage their portfolios. Paradoxically, the only time that hedge fund managers get paid more than good times when they are swimming in profits is the bad times when people are anxious to reward those who can make silk purses from sow's ears.
When we talk of neoliberalism, we are talking about something that has fueled inequality and enabled the 1%. All it means is a stage of capitalism in which the financial markets were deregulated, public services privatised, welfare systems run down, laws to protect working people dismantled, and unions cast as the enemy.
Moore is out to lunch again with this next paragraph: for one, the financial markets (and the banks!) weren't deregulated. For another, the United States just finished a massive government takeover of 1/6th of the economy which was previously in private hands. Finally, as Thomas Sowell has pointed out on many occasions; unions are the enemy, public sector unions in particular. Again, why are bankers so rich? Besides the legitimate services they provide the private sector, they are collecting interest on governments that have let their unions run rampant as Moore demands.
Oxfam’s suggestions at Davos are attempts to claw back some basic rights, with talk of tax, redistribution, minimum wages and public services.
The Oxfam suggestions are individually ludicrous, and collectively destructive. "Redistribution" is even denounced by Moore's own ideological cousins (not to mention those more in tune with the realities of the productive class). Minimum wages, as Learn Liberty shows in this great video, are job killers. Killing jobs means less employment and less employment income and less tax money available to governments (who are then forced to borrow) to spend on the third category of public services (are you writing all this down, Suzanne?).
The poor are always with us. And now the deserving and undeserving super-rich are too? That’s just the way things are? No. This climate can also change.
We've seen the world where this climate changes. It ain't pretty.