The financial self-help grifter Robert Kiyosaki (of Rich Dad, Poor Dad fame— you should not read it and it is not good) advised his readers to “pay yourself first.” As personal advice this ranges from unnecessarily obvious to something like tax fraud; exactly the worthless reminder you’d expect to get in the ever-scammy self-help bestseller genre.

But I’ve been thinking about “paying ourselves” collectively, in a different sense lately. Americans today are richer than ever– but often don’t feel that way. There are a lot of reasons for that, some of which I’ve written about here before. Here’s one I haven’t said much about: we’ve forgotten how to pay ourselves. 

With even a token American salary you can afford a driveable used good car and gas, subscriptions that will let you experience a functionally infinite trove of art, an AI platform that will make any software you might imagine. But you will not be able to pay for a mortgage. And while housing prices are much too high, this isn’t just a problem in and of itself. It’s also indicative of a deeper, and deepening, economic issue with 21st-century capitalism.

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Markets are predicated upon scarcity: you pay me because you would not otherwise have the thing I can deny you. As economies become more complicated and more productive, denying anyone anything becomes harder. Buying gets easier. Selling gets harder. This isn’t a bad thing in and of itself– abundance is good, and to pine for the economy of the past is never a good thing. But if we don’t make adjustments, increasing productivity and competition creates problems.

I like flow metaphors for money. Our increasingly stratified economy has thunderous waterfalls. Anthropic is filing for an IPO at a valuation of $1.5 trillion dollars, a sum so large that at many, problem most institutions in this country, it could pay one university adjunct to teach from roughly the year the asteroid wiped out the dinosaurs to the president. Our economy also has deep pools– the median American home is worth half a million dollars. All of this means lots of water but very poor circulation. Stagnant, mosquito-breeding property values spread pestilence instead of plenty. Cascades of wealth come down not as widespread life-giving rain, if you’ll forgive stretching the metaphor, but tightly-targeted torrents that flood some markets and leave others parched.

The greater the flow, the more you need to take out and redistribute if you want to keep the whole thing moving. We have a social technology for doing so: taxes. Unfortunately people hate them. My beloved New England is in the middle of a tax revolt– my current city of Windham was among the many towns in the region that repeatedly refused to pass school budgets. The resulting local austerity causes everyone, homeowners included, to suffer. School water fountains break, understaffed institutions cut hours and services, roads and bridges erode. Scale this up from towns to nations and you have a global crisis. 

Advocates of austerity at any level, from the miserly town selectmen to the tighten-your-belts Prime Minister, look at the world and especially at the state and see only costs. But in reality, government action creates new opportunities rather than parasitizing them, especially in democracies. “Property” is not a thing you have without the government– good luck defending your imaginary lines on a map without the state! 

More generally, as post-Keynesian economists have rightly identified, at the federal level taxes do not fund spending– spending money creates new money which is then reclaimed by taxes. A popular internet meme comic shows a dog refusing to drop a stick– like many real dogs, it wants the stick to be thrown but never taken. Taxes are how we take the stick so we can throw it again. And taxes are how we pay ourselves, collectively, from our individual wallets. All of our wallets: if all you want is to tax the rich, you’re making this same mistake. Tax the rich progressively, dramatically, into oblivion, sure– but it will never be enough either to “fund” key services nor to do all the distributional work taxes need to do.

RS Benedict wrote a great essay a while back about body image and sexuality in the Marvel Cinematic Universe arguing “everyone is beautiful and no one is horny.” Our economy is somewhat similar: (almost) everyone is spending and no one feels rich. Some of this really is just consumers being spoiled. Some of this is massive home prices. Some of this is precarity– unemployed and underemployed Americans often see, and often have, little way out of their situation. 

But undergirding all of these problems is a political inability to pay ourselves. Hypersensitive to costs and blind to benefits, our institutions save us money by pruning the very services and functions we need. This is an old problem even if it’s growing now. When industrializing countries figured out how to mechanize textile labor, they didn’t free women from the toil of domestic handicrafts– they pushed them further into market competition and domestic labor. 

Likewise, for decades computers have been making previously expensive tasks nearly free. But we accelerate forward and frequently concentrate instead of widely distributing the benefits– the money this frees up, the time this allows. It took labor regulation to keep the factory from extending work into every hour of the day and every possible year of our lives. It will take taxes and public services to keep market competition from infiltrating our every second now. 

We’ve got software that can make other software easily? Pay ourselves first! New machines make it easier than ever to make clothes? Pay ourselves first! Don’t know how to fund the state university? Pay ourselves first! The cost of a cost-first mindset is grave indeed.