Certain economists may have downgraded the labor theory of value, but most of us can agree on the basic moral intuition that no one person is worth millions, even billions, more than almost everyone else on the planet. Yet we live in a society that allows individuals to hoard millions and billions of dollars in cash, assets, and capital gains, without even the presumption that they demonstrate why they should have it–especially to the degree that the top 1% now holds more wealth than 90% in the U.S.
What social contract allows for this situation? I’m not personally interested in the answer from economists, though I imagine there are many excellently accredited proponents. The dominant assumptions in economics come from fantasies like ceteris paribus, “all else being equal,” and the concept of “externalities.” World historical inequality, political instability, and ecological devastation do not seem to pose serious problems for most mainstream economic thinking. But what do historians say? This is, after all, a historical question.
Many similar situations have obtained in the past. Sometimes they have resulted in bloody revolutions, sometimes sacking and pillaging, sometimes redistribution schemes. Noblesse oblige: land grants, endowments, hospitals, museums, universities… these have not only eased the consciences of the rich but have stood out as appeasing acts of public generosity. But the only thing that has really mitigated the conditions for societal collapse under capitalism?
According to Dutch historian and writer Rutger Bregman, it’s high taxes on high incomes and estates. It just so happened, however, at this year’s Davos World Economic Forum, as Bregman lamented in a Davos panel discussion, taxes were the one thing billionaires would not discuss. This was so, he observes, at a conference that features Sir David Attenborough “talking about how we’re wrecking the planet.”
I mean, I hear people talking the language of participation and justice and equality and transparency, but then, I mean, almost no one raises the real issue of tax avoidance, right? And of the rich are just not paying their fair share. I mean, it feels like I’m at a firefighter’s conference and no one’s allowed to speak about water.
Picturing firefighters hoarding water and refusing to share it while the planet is going up in flames is a sinister image, but maybe the intentions are beside the point. Even where tax rates are high(ish), governments go out of their way to allow companies and individuals to avoid paying them. Surely, many people believe this is necessary to create jobs? So what if those jobs lack security, benefits, or a living wage?
Bregman pulls back from the inflammatory metaphor to concede that one panel did address the issue. He was one of fifteen participants. We have to “stop talking about philanthropy,” he says, “and start talking about taxes,” just like Americans did in the supposedly halcyon days of the 1950s, when under Republican president Dwight D. Eisenhower the top marginal tax rate was 91%. He says this to people like Michael Dell, who once asked Bregman for an example of a 70% tax rate ever working.
Oxfam’s executive director Winnie Byanyima substantiates his polemic, noting globally “we have a tax system that leaks so much, that $170 billion” annually ends up in tax havens. This is wealth that is extracted from the planet’s resources, from government subsidies and the labor hours and health of grossly underpaid workers. Then it is disappeared. If you’ve seen this video, you’ve seen the charges of “one-sidedness” lobbed by former Yahoo CFO Ken Goldman from the audience. Byanyima’s response rebuts all of his talking points. She deserves her own cheerleading video edit.
Bregman took the same confrontational stance in an unaired interview with Fox’s Tucker Carlson. After Carlson seemed to agree with him, the historian bristled and pointed out that as “a millionaire funded by billionaires,” Carlson has faithfully represented and communicated the interests of his employers for decades, whether that’s the brutal scapegoating of immigrants or the defense of unlimited profiteering and huge tax cuts for the wealthy (and tax raises for everyone else). The host ends the interview sputtering insults and obscenities and sneers “I was willing to give you a hearing.” The problem requires more than a condescending pat on the head, Bregman argues.
His solution to massive inequality and unrest, universal basic income, is one that, like high marginal tax rates, once appealed to Republicans. The proposal has a long history, many serious detractors, and it’s also politically ignored. You can hear Bregman’s argument for it above, and against Margaret Thatcher’s ruthlessly ahistorical characterization of poverty as a “personality defect.” If you think UBI goes too far, or not nearly far enough, maybe you’d be interested in other ideas, like a 15-hour workweek and open borders, part of the “ideal world” Bregman says is possible in his book Utopia for Realists. You can download it as a free audiobook if you sign up for Audible’s free trial program.
Hear Alan Watts’s 1960s Prediction That Automation Will Necessitate a Universal Basic Income
Experts Predict When Artificial Intelligence Will Take Our Jobs: From Writing Essays, Books & Songs, to Performing Surgery and Driving Trucks
Bertrand Russell & Buckminster Fuller on Why We Should Work Less, and Live & Learn More
Josh Jones is a writer and musician based in Durham, NC. Follow him at @jdmagness
With respect, the moral intuition that “no one person is worth millions, even billions, more than almost everyone else” is not correct. I assume what is meant by no one being “worth” such sums, is that no one deserves such affluence relative to others. But, if that were really true, millions of people, of their own free will, would not be bestowing such wealth upon those people. In free markets, wealth accrual results from the provision of goods or services that people want and demand. When one provides those goods and services, people vote with their pocketbooks, rewarding those people. Thus, for example, when Steve Jobs created the iPhone and became fabulously wealthy, it was because he produced something that millions of people loved and wanted. Likewise, when Sam Walton created a chain of stores with goods priced far lower than competing retailers, he too was rewarded by the public. The beauty of free markets — and why no other economic system has come anywhere near the benefits they bestow — is that they give individuals the incentive to provide to others what they truly want, and success is determined by how well they achieve that goal. Adopting policies that would diminish those incentive would impoverish everyone.
Very true Gerald. Not to mention that since the advent of capitalism, poverty has shrunk leaps and bounds.
Society “allows” individuals to “hoard” wealth they “have”? Wealth, whether a nickel or dime or a billion dollars, must first be created. For the people who create wealth at any level (not criminals), they deserve their wealth—their achievement, and have no need to justify their existence to anyone. Wealth creation is moral, and they may do with their property as they see fit. As for society “allowing” people to keep their wealth, that’s why we have a constitutional government based upon individual rights, to prevent “society” and historians from putting their grubby hands on the wealth and persons of those who earned it.
In response to Tony; Quite a lot of billionaires ARE criminals. At least by most conventional standards of ethics and morality.