November 1, 2008

A Question of How

Justin Katz

In a comment to Marc's post mocking Obama's campaign wealth, Erik cites some data related to wealth and stock ownership and states the following:

Considering the USA has the widest gap between rich and poor in the entire industrialized world, the idea of "spreading the wealth" seems pretty realistic at this time. ...

Is it really fair or just that 80% of all stocks are owned by just 10% of Americans, and 60% of all Americans barely own any stock at all, especially considering that corporations have to harness the labor of huge numbers of workers, many of whom never get to equitably share in the fruits of their labors?

Let's stipulate that wealth disparity of massive proportions is unjust. Having spent many days toiling in the frigid ocean-side wind under the verbal equivalent of a whip for the benefit of clientele whose occupation seems mainly to be the extraction of every comfort and pleasure from life, I certainly believe it to be. The question — which many on the left find far too easy to answer — is how we go about salvaging justice from such a scenario. There are basically three options.

The first is to take wealth from the rich by disorganized force. In other words, those who want simply take. Where police authority to stop and to punish such activity has been subverted, inequity leans toward those of physical or martial strength. The stronger one is — however strength may be measured — the more one gets to keep, and the end result is likely to be that the public buys its way out of the bloody chaos by giving unprecedented power to whoever can restore order.

The second is to take wealth from the rich by organized force — that is, through the government. In order to avoid the pitfall of option 1, the government seeks to take via taxation, to filter the money through its bureaucracy, and to redistribute it more justly. But the government is, by definition, a playground of influence, and the wealthy are disproportionately influential. The innovation of such socialism is to create another layer of power for redistributionists in which interested individuals will vie for positions, the price of which will be the protection of those who already hold power. As Shannon Love puts it:

The ugly truth is that the really wealthy can manipulate the political system to their own ends better than ordinary people. They can lobby for specific tax breaks that only they can take advantage of. They can get government trade protection for their companies. They can get bailouts. If all else fails, the truly wealthy can simply relocate their wealth into whatever area the government policies du jour make the most profitable.

In the extremes, they can simple sit on their wealth and wait for the political winds to change.

The third option is to find ways to get the rich to give up their money voluntarily, whether through charity or commerce. The former requires the application of cultural pressure, and the latter requires freedom of trade with careful, principled regulation, such that those with disproportionate influence cannot rig the system — via the aforementioned government bureaucrats — to decrease the price to them.

Glenn Reynolds periodically posts a great quotation from science fiction writer Robert Heinlein:

Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

This is known as "bad luck."

The answer to the slippery "how" of economic justice is to allow the system to expand to the degree that very few at the low end have lives of true poverty, no matter the effect on the dollar amounts at the high end. Attempting to exert godlike power on what is essentially a natural system (rooted in human nature) will disproportionately harm those at the bottom, because they are so much closer to mere subsistence and because the ultra rich live upon a massive cushion from which they have a strategic high view of the playing field.

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Taxing the rich probably wouldn't "spread the wealth" at all, because those taxes would likely go to pay down the national debt, which nearly doubled during Bushs reign, in part due to his disproportionate tax cuts for the wealthy.

Regarding the means of effecting change, you bring up great points... forcing people to do things is the least favorable option, because it can create resentment, and possibly the urge to circumvent the law.

The best way to stimulate change is to through education and awareness, to illustrate to leaders and future leaders in college and in the boardrooms, the ill effects on individuals, families and society, when workers are not paid a living wage or given reasonable compensation.

The best change comes from an expansion of the consciousness of those making the decisions, so they can see the need for, and benefits of, treating their workers fairly, and having them decide on their own to treat the less fortunate more equitably and compassionately.

The problem with relying on a natural mechanism to manifest economic balance, is that there will always be an occassional (or frequent) individual like Rockefeller, who would go to church on Sundays, and then scheme to cheat his competitors and exploit his workers monday through saturday, even going so far as to hire a private security company to murder striking workers and their families.

So, when you have extreme cases of an occassional anomalous sociopath like a Rockefeller, then that is when society has to be prepared to use legislative coercion if and when necessary, to preserve social stability, and uphold the well being of it's citizens.

Posted by: Erik D. at November 1, 2008 12:32 PM
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