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  • You probably don't know me,

  • but I am one of those .01 percenters

  • that you hear about and read about,

  • and I am by any reasonable definition a plutocrat.

  • And tonight, what I would like to do is speak directly

  • to other plutocrats, to my people,

  • because it feels like it's time for us all

  • to have a chat.

  • Like most plutocrats, I too am a proud

  • and unapologetic capitalist.

  • I have founded, cofounded or funded

  • over 30 companies across a range of industries.

  • I was the first non-family investor in Amazon.com.

  • I cofounded a company called aQuantive

  • that we sold to Microsoft for 6.4 billion dollars.

  • My friends and I, we own a bank.

  • I tell you this — (Laughter) —

  • unbelievable, right?

  • I tell you this to show

  • that my life is like most plutocrats.

  • I have a broad perspective on capitalism

  • and business,

  • and I have been rewarded obscenely for that

  • with a life that most of you all

  • can't even imagine:

  • multiple homes, a yacht, my own plane,

  • etc., etc., etc.

  • But let's be honest: I am not the smartest person you've ever met.

  • I am certainly not the hardest working.

  • I was a mediocre student.

  • I'm not technical at all.

  • I can't write a word of code.

  • Truly, my success is the consequence

  • of spectacular luck,

  • of birth, of circumstance and of timing.

  • But I am actually pretty good at a couple of things.

  • One, I have an unusually high tolerance for risk,

  • and the other is I have a good sense,

  • a good intuition about what will happen in the future,

  • and I think that that intuition about the future

  • is the essence of good entrepreneurship.

  • So what do I see in our future today,

  • you ask?

  • I see pitchforks,

  • as in angry mobs with pitchforks,

  • because while people like us plutocrats

  • are living beyond the dreams of avarice,

  • the other 99 percent of our fellow citizens

  • are falling farther and farther behind.

  • In 1980, the top one percent of Americans

  • shared about eight percent of national [income],

  • while the bottom 50 percent of Americans

  • shared 18 percent.

  • Thirty years later, today, the top one percent

  • shares over 20 percent of national [income],

  • while the bottom 50 percent of Americans

  • share 12 or 13.

  • If the trend continues,

  • the top one percent will share

  • over 30 percent of national [income]

  • in another 30 years,

  • while the bottom 50 percent of Americans

  • will share just six.

  • You see, the problem isn't that we have

  • some inequality.

  • Some inequality is necessary

  • for a high-functioning capitalist democracy.

  • The problem is that inequality

  • is at historic highs today

  • and it's getting worse every day.

  • And if wealth, power, and income

  • continue to concentrate

  • at the very tippy top,

  • our society will change

  • from a capitalist democracy

  • to a neo-feudalist rentier society

  • like 18th-century France.

  • That was France

  • before the revolution

  • and the mobs with the pitchforks.

  • So I have a message for my fellow plutocrats

  • and zillionaires

  • and for anyone who lives

  • in a gated bubble world:

  • Wake up.

  • Wake up. It cannot last.

  • Because if we do not do something

  • to fix the glaring economic inequities in our society,

  • the pitchforks will come for us,

  • for no free and open society can long sustain

  • this kind of rising economic inequality.

  • It has never happened. There are no examples.

  • You show me a highly unequal society,

  • and I will show you a police state

  • or an uprising.

  • The pitchforks will come for us

  • if we do not address this.

  • It's not a matter of if, it's when.

  • And it will be terrible when they come

  • for everyone,

  • but particularly for people like us plutocrats.

  • I know I must sound like some liberal do-gooder.

  • I'm not. I'm not making a moral argument

  • that economic inequality is wrong.

  • What I am arguing is that rising economic inequality

  • is stupid and ultimately self-defeating.

  • Rising inequality doesn't just increase our risks

  • from pitchforks,

  • but it's also terrible for business too.

  • So the model for us rich guys should be Henry Ford.

  • When Ford famously introduced the $5 day,

  • which was twice the prevailing wage at the time,

  • he didn't just increase the productivity

  • of his factories,

  • he converted exploited autoworkers who were poor

  • into a thriving middle class who could now afford

  • to buy the products that they made.

  • Ford intuited what we now know is true,

  • that an economy is best understood as an ecosystem

  • and characterized by the same kinds

  • of feedback loops you find

  • in a natural ecosystem,

  • a feedback loop between customers and businesses.

  • Raising wages increases demand,

  • which increases hiring,

  • which in turn increases wages

  • and demand and profits,

  • and that virtuous cycle of increasing prosperity

  • is precisely what is missing

  • from today's economic recovery.

  • And this is why we need to put behind us

  • the trickle-down policies that so dominate

  • both political parties

  • and embrace something I call middle-out economics.

  • Middle-out economics rejects

  • the neoclassical economic idea

  • that economies are efficient, linear, mechanistic,

  • that they tend towards equilibrium and fairness,

  • and instead embraces the 21st-century idea

  • that economies are complex, adaptive,

  • ecosystemic,

  • that they tend away from equilibrium and toward inequality,

  • that they're not efficient at all

  • but are effective if well managed.

  • This 21st-century perspective

  • allows you to clearly see that capitalism

  • does not work by [efficiently] allocating

  • existing resources.

  • It works by [efficiently] creating new solutions

  • to human problems.

  • The genius of capitalism

  • is that it is an evolutionary solution-finding system.

  • It rewards people for solving other people's problems.

  • The difference between a poor society

  • and a rich society, obviously,

  • is the degree to which that society

  • has generated solutions in the form

  • of products for its citizens.

  • The sum of the solutions

  • that we have in our society

  • really is our prosperity, and this explains

  • why companies like Google and Amazon

  • and Microsoft and Apple

  • and the entrepreneurs who created those companies

  • have contributed so much

  • to our nation's prosperity.

  • This 21st-century perspective

  • also makes clear

  • that what we think of as economic growth

  • is best understood as

  • the rate at which we solve problems.

  • But that rate is totally dependent upon

  • how many problem solvers

  • diverse, able problem solverswe have,

  • and thus how many of our fellow citizens

  • actively participate,

  • both as entrepreneurs who can offer solutions,

  • and as customers who consume them.

  • But this maximizing participation thing

  • doesn't happen by accident.

  • It doesn't happen by itself.

  • It requires effort and investment,

  • which is why all

  • highly prosperous capitalist democracies

  • are characterized by massive investments

  • in the middle class and the infrastructure

  • that they depend on.

  • We plutocrats need to get this

  • trickle-down economics thing behind us,

  • this idea that the better we do,

  • the better everyone else will do.

  • It's not true. How could it be?

  • I earn 1,000 times the median wage,

  • but I do not buy 1,000 times as much stuff,

  • do I?

  • I actually bought two pairs of these pants,

  • what my partner Mike calls

  • my manager pants.

  • I could have bought 2,000 pairs,

  • but what would I do with them? (Laughter)

  • How many haircuts can I get?

  • How often can I go out to dinner?

  • No matter how wealthy a few plutocrats get,

  • we can never drive a great national economy.

  • Only a thriving middle class can do that.

  • There's nothing to be done,

  • my plutocrat friends might say.

  • Henry Ford was in a different time.

  • Maybe we can't do some things.

  • Maybe we can do some things.

  • June 19, 2013,

  • Bloomberg published an article I wrote called

  • "The Capitalist’s Case for a $15 Minimum Wage."

  • The good people at Forbes magazine,

  • among my biggest admirers,

  • called it "Nick Hanauer's near-insane proposal."

  • And yet, just 350 days

  • after that article was published,

  • Seattle's Mayor Ed Murray signed into law

  • an ordinance raising the minimum wage in Seattle

  • to 15 dollars an hour,

  • more than double

  • what the prevailing federal $7.25 rate is.

  • How did this happen,

  • reasonable people might ask.

  • It happened because a group of us

  • reminded the middle class

  • that they are the source

  • of growth and prosperity in capitalist economies.

  • We reminded them that when workers have more money,

  • businesses have more customers,

  • and need more employees.

  • We reminded them that when businesses

  • pay workers a living wage,

  • taxpayers are relieved of the burden

  • of funding the poverty programs

  • like food stamps and medical assistance

  • and rent assistance

  • that those workers need.

  • We reminded them that low-wage workers

  • make terrible taxpayers,

  • and that when you raise the minimum wage

  • for all businesses,

  • all businesses benefit

  • yet all can compete.

  • Now the orthodox reaction, of course,

  • is raising the minimum wage costs jobs. Right?

  • Your politician's always echoing

  • that trickle-down idea by saying things like,

  • "Well, if you raise the price of employment,

  • guess what happens? You get less of it."

  • Are you sure?

  • Because there's some contravening evidence.

  • Since 1980, the wages of CEOs in our country

  • have gone from about 30 times the median wage

  • to 500 times.

  • That's raising the price of employment.

  • And yet, to my knowledge,

  • I have never seen a company

  • outsource its CEO's job, automate their job,

  • export the job to China.

  • In fact, we appear to be employing

  • more CEOs and senior managers than ever before.

  • So too for technology workers

  • and financial services workers,

  • who earn multiples of the median wage

  • and yet we employ