Tag Archives: Economic

Concentration of Wealth

WEALTH IN THE USA

WEALTH IN THE USA (Photo credit: er00mb0b)

In early 2014 Oxfam International released some interesting statistics regarding the distribution of the world’s wealth. Here are some of the highlights:

 

  •          1% of the population owns about 50% of the wealth.
  •          This 1% owns $110 trillion.
  •          $110 trillion is 65 times the wealth owned by the bottom (economically) 50% of people.
  •          The bottom 50% owns the same amount of wealth as the top 85 wealthiest people.
  •          In the United States, the top 1% received 95% of the growth since 2009 while the 90% lost wealth.

That there is an extremely unequal distribution of wealth is hardly surprising. In my very first political science class, I learned that every substantial human society has had a pyramid shaped distribution of wealth. Inevitably, the small population of the top owns a disproportionally large amount of wealth while the large population at the bottom owns a disproportionally small amount of wealth. This pattern holds whether the society is a monarchy, dictatorship, communist state or democracy.

From a moral standpoint, one important question is whether or not such a distribution is just. While some might be tempted to regard any disproportional distribution as unjust, this would be an error. After all, the justness of a distribution is not a simple matter of numbers. To use an easy example, consider the distribution of running trophies. Obviously enough, there is a very unequal distribution of such awards. First, almost all people who have them will be (or will have been) runners. As such, most people will not have even one trophy. Second, even among the population of runners there will be a disproportionate distribution: there will be a fairly small percentage of runners who have a large percentage of the trophies. As such, there is a concentration of running trophies. However, this is not unjust: the competition for such trophies is open, the competition is generally fair, and a trophy is generally earned by running well. Roughly put, the better runners will have the most trophies and they will be a small percentage of the runner population. Because of the nature of the competition, I have no issue with this. There is, of course, also the biasing factor that I have won a lot of trophies.

Those who defend the unequal distribution of wealth often endeavor to claim that the competition for wealth is analogous to the situation I presented for running trophies: the competition is open, the competition is fair, and the reward is justly earned by competing well. While this is a plausible approach to justifying the massive inequality, the obvious problem is that these claims are not true.

Those who start out in a wealthy family might not make their money by inheritance, but they enjoy a significant starting advantage over those born into less affluent families. While it is true that a few people rise from humble origins to great financial success, those stories are so impressive because pf the difficulty of doing so and the small number of people who achieve such great success.

There is also the obvious fact that those who hold wealth use their influence to ensure that the political and social system favors the wealthy. While this might not be aimed at keeping people from becoming wealthy, the general impact is that existing wealth is favored and defended against attempts to “intrude” into the top of the pyramid. Naturally, people will point to those who succeeded fantastically despite this system. But, once again, these stories are so impressive because of the incredible challenges that had to be overcome and because such stories are incredibly rare.

There is also the obvious doubt about whether those who possess the greatest wealth earned the wealth in a way that justifies their incredible wealth. In the case of running, a person must earn her gold medal in the Olympic marathon by being the best runner. In such a case, there is little doubt that the achievement has been properly earned. However, the situation for great wealth is not as clear. Now, if a person arose from humble origins and by hard work, virtue, and talent managed to earn a fortune, then it seems fair to accept the justice of that wealth. However, if someone merely inherits a pile of cash or engages in misdeeds (like corruption or crime) to acquire the wealth, then it seems reasonable to regard that as unjust wealth.

As such, to the degree that the competition for wealth is open and fair and to the degree that the earning of wealth is proportional to merit, then the incredibly unbalanced distribution can be regarded as just. However, it seems evident that this is not the case.  For example, a quick review of the laws, tax codes, and so on will show quite nicely how the system is designed to work.

Suppose, for the sake of argument, that the distribution of wealth is actually warranted on grounds similar to the distribution of running trophies. That is, suppose that the competition is open, fair and the rewards are merit based. This still provides grounds for criticism of the radical concentration of wealth.

One obvious point is that the distribution of running trophies has no real impact. After all, a person can live just fine without any such trophies. As such, letting them be divided up by competition is fine—even if most trophies go to a few people. However, wealth is another matter. At the basic level, a degree of wealth is a necessity for survival. That is a person needs it (or, rather, what it can buy) to survive. Beyond mere survival, it also determines the material quality of life in terms of general health, clothing, living quarters, education, and entertainment and so on. Roughly put, wealth (loosely taken) is a necessity. To have such a competition when the well-being (and perhaps the survival) of people is at stake seems to be morally repugnant.

One obvious counter is a variation on the survival of the fittest arguments of the past. The basic idea is that, just like all living things, people have to compete to survive. As in nature, some people will not compete as well and hence they will have less and perhaps even not enough to survive. Others will do better and some few will do best of all.

The obvious reply is that this sort of competition makes some degree of sense when resources are so scarce that all cannot survive. To use a fictional example, if people are struggling to survive in a post-apocalyptic wasteland, then the competition for basic survival might be warranted by the reality of the situation. However, when resources are plentiful it seems morally repugnant for the tiny few to hyper-concentrate wealth while the many are left with very little. To use the obvious analogy, seeing a glutton stuffing herself with a vast tableful of delicacies while her guards keep people away so her minions call sell the scraps would strike all but the most callous as horrible. However, replace the glutton with one of the 1% and some folks are quite willing to insist that the situation is fair and just.

As a final point, the 1% also need to worry about the inequality of distribution. The social order which keeps the 99% from slaughtering the 1% requires that enough of the 99% believe that the situation is working for them. This can be done, to a degree, by coercion (police and military force) and delusion (this is where Fox News comes in). However, coercion and delusion have their limits and society, like all things, has a breaking point. While the rich can often escape a collapse in one country by packing up and heading to another (as dictators occasionally do), until space travel is a viable option the 1% are still stuck on earth with everyone else.

 

My Amazon Author Page

My Paizo Page

My DriveThru RPG Page

Enhanced by Zemanta

Protesting Distance

 

A group of Anonymous protesters opposite the L...

(Photo credit: Wikipedia)

 

In response to the NATO summit meeting in Chicago a diverse and large number of people took to the streets in protest. As is to be expected, the police also took to the streets to maintain order and to ensure that the people did not intrude on the meeting of the elites attending the event.

Obviously enough, the protesters generally wanted to get close enough to the summit so that their protests could be seen and heard by those attending. Equally obvious is the fact that the police were intent on preventing that from happening. In addition to the particular concern regarding this specific event, there is also the more general concern regarding how close protesters should be allowed to get to these sorts of events.

On the one hand, there are clearly legitimate grounds for keeping protesters a considerable distance from such events. The most obvious justifications are those based on security concerns. After all, not all protesters are peaceful and some of them might intend to have a go at those attending the event. There is also to concern that the ever-terrifying terrorists might use the protests as a cover for a terrorist attack.  Given the potential for such danger, keeping the protesters a significant distance from such events can be justified on both moral and practical grounds. In terms of the moral grounds, the justification would (presumably) be that the rights of the protesters to protest close to the event would be outweighed by the rights of those attending not to be harmed. Alternatively, this could be argued on utilitarian grounds: the harm done to the protesters is outweighed by the potential harms prevented against those attending the meeting. In terms of the practical grounds, it is clearly easier to maintain security by keeping what might be regarded as the public rabble away from those attending such events.

On the other hand, a case can be made that the protesters should be allowed close (or at least closer) to such events. One argument is that the protesters do not give up their rights simply because they are engaged in a protest. Assuming that they wish to engage in their protest where they would normally have the right to be, then it would seem to follow that they should be allowed to protest there.

One obvious reply to this argument is that people do not automatically have  the right to engage in protest in all places they have a right to visit. For example, a public library is open to the public, but it does not follow that people thus have a right to shout protest slogans about NATO or taxes or whatever while occupying the public library. This is because the act of protest would violate the rights of others in a way that would seem to warrant not allowing the protest. To use another example, while people have a right to access public streets and sidewalks, it is one thing to be walking, running, biking or otherwise occupying these places as an individual and quite another to be occupying these places in a group that would stop traffic and impede travel.  As might be imagined, getting through crowds of protesters takes more time than driving streets that have been cleared of mere citizens. Such a delay would no doubt be annoying, even if one is in a limousine and has access to a car bar. As yet another example, the noise of the protesters might  interfere with the event, even through the soundproofing of a modern building. As a final example, those attending the event might find the protests upsetting or disturbing. After all, being accused (for example) of being a war profiteer or of destroying the middle class might cause the attendees some emotional disturbances. No doubt people attending such events would prefer a quiet event without anyone shouting such things at them.

This reply can, of course, be overcome by showing that the protest does more good than harm or by showing that the right to protest outweighs the right to quiet and free travel.  After all, to forbid protests simply because they might inconvenience or annoy people would be absurd. However, to allow protests regardless of the imposition on others would also be absurd.

In the case of the NATO summit meeting, the protesters would disrupt things, but being closer to the event would not seem to cause significantly more disruption than being kept away from the event. While it is true that those attending the event will face some logistical challenges getting through the crowd, this could be managed. After all, the police in large cities routinely handle large events in which celebrities, athletes and so on need to be moved through large crowds (such as at concerts and sporting events). As such, it would seem that the logistics objection would not suffice to deny the right of a close protest.

There is, of course, some legitimate concern to protesters disrupting an event. After all, being a protester does not grant a person the right to override the rights of everyone else. Of course it is also true that attending an event and being a political or economic elite does not give someone the moral right to deny others their right to protest (although it certainly can provide the means to do so). Hashing this matter out requires a fair assessment of the legitimate rights of the protesters weighed against the legitimate rights of those being protested. In the NATO summit situation, it does seem that the protesters, at least those that are citizens of the respective states involved or at least affected by said states, do have the right to protest on the basis of their involvement in the issues at hand and to make their views on this matter known to those who make the decisions that impact their lives (and deaths). Given that mere citizens are typically not invited to such events, one of the few ways to express their views directly is via protest that can be heard and seen by the people being protested. This seems to be a rather important right, at least in states that purport to be democratic. After all, the vast majority of people do not have the money needed to hire lobbyists or create super PACS. As such, one of the few avenues of political expression left open is the protest and to impose on this right is to further dampen the voices of the people.

There is, of course, also the pragmatic concern that keeping the protesters at a “safe” distance from the elites by deploying riot police to beat down intruders serves to reinforce the impression of a truly sharp class division between the mere citizens and those who control things. Seeing riot police beating protesters like pinatas to keep them away from the rich and the powerful certainly does create an impression of real class warfare which certainly cannot be good for a state that purports to be a classless democracy.

Enhanced by Zemanta

Can Everyone be Wealthy?

Emma Goldman

Emma Goldman (the tattoo, not the person)/

It is sometimes asked whether or not everyone can be wealthy. This depends, obviously enough, on what is meant by “wealthy.” Determining what “wealthy” means requires sorting out the nature of wealth.

As might be imagined, there is a fair amount of debate about the true nature of  personal wealth.  While this oversimplifies things, a fairly standard view of wealth is that it consists of the net economic value of a person’s assets minus their liabilities. To be a bit more specific, these assets typically include possessions (cars, guns, art, computers, books, appliances, and so on), monetary resources (cash, for example) and capital resources. Not everyone buys into the stock view, of course. For example, Emma Goldman claimed that “real wealth consists in things of utility and beauty, in things that help to create strong, beautiful bodies and surroundings inspiring to live in. But if man is doomed to wind cotton around a spool, or dig coal, or build roads for thirty years of his life, there can be no talk of wealth.” As another example, some thinkers include non-economic goods (such as knowledge) within the realm of wealth. To keep thing simple and within our current economic system, I will limit the discussion to the “stock” account of wealth (that is, economic assets).

In our current economic system, it is obviously not the case that everyone is wealthy. When this fact is brought up, some folks like to claim that even the poor of today are wealthier than the wealthy of the past. In some ways, this is true. After all, the typically poor person in North America or the United Kingdom has possessions that not even the greatest pharaoh or Caesar possessed (such as a microwave oven). In many other ways, this is not true. After all, a wealthy noble of the past would have land, structures, gold, art, and so on that would make him a wealthy man even today. Also, there is the obvious fact that there are poor people today who are as poor as the poorest people in human history in that they possess just the tatters on their backs and just enough food to not die (at least for the moment). In any case, the fact that the sum total of wealth of humanity is greater now than in the past (even taking into account that there are so many more of us) does not tell us much beyond that (such as whether the current distribution is just or whether we can all be wealthy or not).

Getting back to the main subject, what needs to be determined is what is meant by “wealthy.” As noted above, I am limiting my discussion to economic wealth, but a bit more needs to be said.

In some ways, wealth can be seen as being analogous to height. A person has height if they have any vertical measurement at all. Likewise, a person has wealth if she has any economic assets in excess of her liabilities. This could be as little as a single penny or as much as billions of dollars. Obviously, everyone could (in theory) have wealth, just as everyone can have height. But, of course, a person is not wealthy just because s/he has wealth, no more than a person is tall simply because s/he has height. On the other side, lacking wealth is described as being destitute and lacking height is described as being short.

Continuing the analogy, being wealthy or wealthier  can be seen as analogous to being tall or taller. Being tall means having more height than average  and being taller than another means having more height than that person. Likewise being wealthy would seem to mean having more wealth than average and being wealthier than another means having more wealth than that person. If this view is correct, then we cannot all be wealthy anymore than we can all be tall. Obviously, we could all have the same height or the same wealth, but the terms “tall” and “wealthy” would have no application in these cases. As such, we cannot all be wealthy-if we had the same amount of wealth, then no one would be wealthy.

It could be contended that being wealthy is not a matter of comparison to the wealth of other people, but rather a matter of having economic assets that meet a specified level. Depending on how that level was specified, then everyone could (in theory) be wealthy. Of course, the question of whether or not such a level should be considered wealthy or not would be a matter of debate.

It might be contended that focusing on whether or not everyone can be wealthy is not as important (or interesting) as the question of whether or not everyone can be well-off in the sense of having adequate resources for a healthy and meaningful existence. This is, of course, a subject for another time.

Enhanced by Zemanta