The most blasphemous idea in contemporary discourse?

by Ingrid Robeyns on September 21, 2019

I have no idea how he found it, but George Monbiot read an (open access) academic article that I wrote, with the title “What, if Anything, is Wrong with Extreme Wealth?’ In this paper I outline some arguments for the view that there should be an upper limit to how much income and wealth a person can hold, which I called (economic) limitarianism. Monbiot endorses limitarianism, saying that it is inevitable if we want to safeguard life on Earth.

As Monbiot’s piece rightly points out, there are many reasons to believe that there should be a cap on how much money we can have. Having too much money is statistically highly likely to lead to taking much more than one’s fair share from the atmosphere’s greenhouse gasses absorbing capacity and other ecological commons; it is a threat to genuine democracy; it is harmful to the psychological wellbeing of the children of the rich, and to the capacity of the rich to act autonomously when it concerns moral questions (which includes the reduced capacity for empathy of the rich); and, as I’ve argued in a short Dutch book on the topic that I published earlier this year, extreme wealth is hardly ever (if ever at all) deserved. And if those reasons weren’t enough, one can still add the line of Peter Singer and the effective altruists that excess money would have much greater moral and prudential value if it were spent on genuine needs, rather than on frivolous wants.

Monbiot wrote: “This call for a levelling down is perhaps the most blasphemous idea in contemporary discourse.”

I agree that mainstream capitalist societies operate on the assumption that the sky is the limit. But it is important to point out that the idea that there should be a cap on how much we can have, is not at all new. Historically, thinkers from many corners of the world and writing in very different times, have either given reasons why no-one should become excessively rich, or have proposed economic institutions that would have as an effect that no-one would become superrich (I suppose Marx would be in that latter category). Matthias Kramm and I have joint research on this that I’ll happily post on this blog once it is published. But to give a flavour of the range of support for the view that there should be upper limits, here are three very different sources. (I’ll leave out any comments on Socrates and Plato, since John and Belle are the obvious experts on those thinkers).

Take Aristotle first. Since for Aristotle the distinction between means and ends is key to his virtue ethics (and hence to human flourishing), the accumulation of wealth that is not ‘natural’ is to be objected. It is not entirely clear how Aristotle’s thoughts on economics that were formed for an agrarian economy would have to be translated to a capitalist world with high intensity of global trade and characterised by the ICT-revolution, but the basic Aristotelian view that the economy is inherently moral is already a claim that the contemporary dominant ideologies do not recognise, and which makes it hard, if not impossible, to see why one might think that upper limits to wealth could be reasonable.

Another example comes from France in 1798, when Sophie de Grouchy (in some circles better known as Madamme de Condorcet) argued against excessive wealth on grounds that it would lead to rich people acting unjustly; moreover, excessively rich citizens could jeopardizing the proper functioning of the legal and political order.

And arguments against excessive wealth can also be found in the writings of several religious thinkers or philosophies based on religious or metaphysical beliefs. In Jainism, one of the vows that Jains take is Aparigraha, a principle against greed; it means to take what one needs and not to take more.

Since about 2014, I have given talks on limitarianism and the reasons why we should worry about excessive wealth to various audiences, both academic and non-academic (here’s a link to an early talk at Stanford). From all these interactions and the research the Fair Limits team is doing, I increasingly have come to believe that if it is to be seen as a crazy or blasphemous idea, then the reason is not the idea itself, but the ideological nature of contemporary discourse and dominant beliefs. Perhaps the unfolding climate disaster may help us see more clearly that what so many of us consider as a given, is an ideology, embedded in a socio-economic system. In another world, with a different dominant ideology, limitarianism wouldn’t be seen as crazy. At least, that’s what I think.

{ 36 comments }

1

Mark 09.21.19 at 10:07 pm

Ingrid, very interesting ideas and discussion here.
Is there any chance “Rijkdom” would have an English translation/publication in the future? If not, what example of your work would you recommend for an American undergraduate course on political economy, ethics, and community development?

2

Ingrid Robeyns 09.21.19 at 10:11 pm

Mark, thanks for asking! I think the paper linked in the OP should be readable not just for philosophers but also for others (it is published in the Journal of HUman Development and Capabilities, which is an interdisciplinary journal). And it’s open access, which means your library doesn’t need a subscription.
I will be working on an English book on the same topic (and by now there are 4 publishers interested, so that part of it should not be difficult), but I am undecided yet how long it should be. ‘Rijkdom’ is only 15.000 words (this was part of a series of books that are all between 10.000 and 15.000 words, which on the one hand is nice because it means more people will read it, but on the other hand some ideas are merely sketched, not worked out). SO there is work to be done! :)

3

Kien 09.21.19 at 11:52 pm

Hi, I think Jesus observed that great wealth makes it harder to enter God’s kingdom (which I assume is a metaphor for being a morally good person). So he advised a rich man to sell all he has, distribute to the poor, if he wanted to “inherit eternal life” (which again I read as a metaphor for being a good person).

4

eg 09.22.19 at 2:39 am

Where wealth denominated in a fiat currency is concerned, the sovereign issuer ought to be wary if too many of its outstanding tax credits are held by any one individual or small oligarchic group of individuals.

This is a concern rather different from any moral objections.

5

DMC 09.22.19 at 3:00 am

We could update Proudhon,”Excessive property is theft”. Or Muir’s notion non-ownership of land, to be effectively leased from the state.

6

bad Jim 09.22.19 at 4:29 am

First and least, I’ll exercise the preemptive opprobrium of my sobriquet to note that the OP twice calls Moonbat ‘Mombiot’ (which joke I’ll excuse by noting that we Californians elected Jerry ‘Moonbeam’ Brown twice to two-year terms), and that a name like “de Grouchy” would be a handy handle on a Monday morning.

This story of how Boeing went from an exemplar of American expertise to an abject example of managerial malfeasance gives us all the details of how it goes, but the why is, at least to me, somewhat elusive.

I saw the same thing vicariously, through my father’s eyes, when North American Aviation merged with Rockwell, circa 1970, and again when my partners and I sold our company to a larger and less competent competitor. The denizens of the C-suite are generally not the intellectual elite.

In the linked story, the payouts to the executives are eye-wateringly large: a hundred million dollars or so for nearly destroying the company. Billions spent on stock buy-backs for the benefit of institutional investors. Whatever happened to the classical theory of the firm? I’m an old-fashioned capitalist and prefer long-term profitability to quarterly stock gains.

We need to return to confiscatory taxes on exorbitant incomes. Wealth taxes, apart from estates, strike me as problematic in various ways. Flows may be easier to capture and taxing can approximate the same result.

7

Gareth Wilson 09.22.19 at 5:19 am

I fully support an upper limit to wealth, as long as the limit is chosen by someone with the global median wealth of $4,209 US dollars.

8

Chris Bertram 09.22.19 at 6:24 am

I think people often accumulate excessive wealth because, in an unequal society, they are anxious about two things (a) their own situation in retirement and (b) their children’s prospects (and the risk that their children will fall down the class hierarchy into an abyss). These anxieties, whether rational or not, are different from a mere desire for increased consumption. It follows that we can do a lot to limit the problem if people can look forward to secure retirement income and don’t face catastrophic medical bills and where there isn’t extreme poverty for their children to fall into.

9

Ingrid Robeyns 09.22.19 at 6:51 am

bad Jim – thanks, those typo’s are corrected (I wouldn’t be surprised if there are more, sorry).

Chris – I agree that these are some of the relevant motivations, but I doubt these are the only one’s. It also depends a lot on what levels we are talking about. So one thing we should do, is to make this abstract discussion more concrete: in specific circumstances, how much is ‘too much’? On the other hand, the caps we should have on emissions would hold for anyone (albeit the caps might be sensitive to specific needs, if these were to exist). And my guess is that they are lower then any of us would wish, they will be (psychologically but also often practically) infeasible goals without infrastructural changes, and that the inevitable ecological leveling-down explains some of the resistance towards climate actions and policies.

10

P.M.Lawrence 09.22.19 at 7:33 am

This also reminds me of G.K.Chesterton’s and Hilaire Belloc’s (“Chesterbelloc”) rationale for Distributism, which the former summarised with “the trouble with capitalism is not that there are too many capitalists but that there are too few” (quoting from memory): more capital, more widely and so more equitably, effectively and efficiently held, with the effective euthanasia of the rentier following by dilution (but there then arise the unanswered questions of what means to use to that end, and of what else might inhere in the means). Chesterton also used the analogy that polygamous harems weren’t the acme of the institution of marriage but rather its subversion, undercutting as they did the possibility of more numerous and more normal households of a familiar sort.

Kien, Jesus’s teachings reject the idea that there can be any “good persons” at all in this fallen world. Rather, the hope we have is to be helped by God’s good grace, with “good” being a standard or reference rather than an actually attained or attainable condition. Our only part is to ask and receive – harder for such “rich” as think they have already got there.

Bad Jim, you might like to like to read up the story of how one of the founders of H & P came back and temporarily reversed the adverse corporate cultural changes that had peaked with Carly Fiorino.

11

Matt 09.22.19 at 8:38 am

Ingrid – I have only read your blog posts on this topic, and not your more formal work, so it’s possible that what I’ll say is addressed quite clearly in the formal work. But, at least in the blog posts, the worry I’ve had about the idea of a maximum income or level of wealth is that it seems to either be completely ad hoc, or else based on a sort of intuitionism – a sort of moral sense that there is a certain amount that is enough and no one should have more. Insofar as either of those things are the case, I can see why it would make people nervous – they may not have faith that the people setting the limit will do it at the right point, and worry that a position that they think is fine or desirable, and not extreme, will be cut off by the person setting the limit. That doesn’t seem completely crazy to me – both for the sorts of reasons that Chris sets out, and for more general ones.
(My own worries about the view insofar as it is ad hoc and/or intuitionist is that this is just bad philosophical methodology.)

The way to address this, I think, is to see that any such limit isn’t an end on its own or desirable or valuable on its own. Insofar as it’s valuable, it’s as an imperfect tool to achieve a concrete goal where more perfect tools are not available or are too hard to use. So, if we think that something like the difference principle, the equal worth of the political liberties, and fair equality of opportunity is required by justice, we might well think that, in practice, a maximum limit on wealth (perhaps adjusting to over-all wealth, the state of the environment, etc.) is a good tool, and more plausible than trying to achieve these goals directly. This allows us to give an explanation to people who worry that they will be cut off – to try to show how the limit is working towards the goal, rather than just being a goal in itself, or something taken to be obviously or intuitively true. (We can, of course, do things with other values other than Rawls’s – I just use them as an example.)

Would this be something you’d be happy to take on board? Perhaps you already do, in the more formal discussions. Without something like this, though, the project seems hopeless to me, both philosophically and practically.

12

Tim Worstall 09.22.19 at 8:53 am

There’s a certain problem with Monbiot’s agreement with such limitarianism. Not with the idea of a limit itself on personal wealth. That is, there might be other arguments against but they’re not my point here.

Monbiot is arguing that concentrated wealth leads to those emissions from the consumption of that excessively wealthy person.

Well, OK. In the original version of the piece he falls for a spoof about a £3 billion yacht. Which is amusing as it’s a preposterous spoof in the first place. But let’s take the £3 billion figure as an illustration.

Is the one yacht, or the one £3 billion fortune, going to lead to higher emissions? Higher than, say, 3,000 people having a £1 million fortune each? Or even 3 million people having an extra £1,000 wealth each?

Yes, of course, we’ve the well known problem with how we shift the wealth from one to many. And of course we can simply insist, loudly, that more wealth shouldn’t be created anyway.

We can even say that no one individual should be able to impose such costs, by their emissions, on others.

But Monbiot’s claim is that concentrated wealth leads to higher emissions than distributed wealth does. Therefore, to reduce emissions we must break up concentrations of wealth.

But is it either obvious or true that concentrated wealth, as opposed to distributed, leads to higher emissions? That does seem to be the question that needs answering before we accept Monbiot’s specific and limited agreement with limitarianism, that it would reduce emissions.

13

Peter T 09.22.19 at 9:43 am

First – status is all to hominids. A healthy society has multiple status hierarchies, not a single focus on wealth. It would help if wealth over some moderate threshold was an absolute bar to participation in politics.

Second – all wealth is claims on future collective income. This is a truth the wealthy refuse to admit, preferring to think of themselves as lying, like Smaug, on a pile of gold. Their wealth will evaporate as collective future income evaporates.

14

Rob 09.22.19 at 11:14 am

The environmental argument is interesting.

Presumably the greatest damage to the environment is caused by consumption – buying goods in order to use them. Some minimal level of consumption of food, energy and so forth is necessary for survival, and some (hopefully higher!) level of consumption is compatible with ecological stability. Any consumption above that level is unfair, because now the only way to achieve ecological stability is for someone else to consume less. Crudely, if you’re consuming a lot more than this level, then you’re either pushing other people below subsistence or risking ecological catastrophe.

Global GDP is some $84tn, and the World Bank reckons that about $60tn of that is consumption. This includes people on $2/day buying rice as well as the luxury car purchases of the wealthy. If we divide it equally, we get around $8,500/year in consumption for each person – a big increase for the poor, and a big decrease for the rich. Much of the Western working class would spend less, too: $8,500/year is more than you get on Universal Credit in the UK (~$6,000 for a single person with no children), but less than you’d get working full-time for minimum wage, and minimum wage workers will be spending almost their entire income on consumption.

This is obviously a crude comparison as it doesn’t take purchasing power into account, and I’m not sure that boosting third-world incomes to this extent is a necessary part of preventing ecological catastrophe. However, it also does not factor in a need to reduce consumption globally.

The problem for me here is that consumption inequality is far smaller than wealth inequality. To take the example of the rich people given in the paper: they have five holidays a year, and a typical family has one. So, their consumption is five times greater. They have two luxury cars, where a typical family has one normal car – let’s call this 20x. They have two large-ish houses rather than one normal-sized one – generously, this is 10x consumption. Maybe they consume 2-3x as much food (by price, not volume). Yet their wealth, at 70m euros is 450x the Dutch average.

This can be taken two ways: if we’re talking about wealth inequality, then the category of people that everyone would acknowledge as “rich” has a genuinely large fraction of total wealth, and this is a good argument (all other things being equal) that redistribution is both necessary and possible. But when it comes to the environmental argument about consumption, restricting the rich to merely normal levels of consumption doesn’t make anywhere near as big of an impact. It’s not nothing, and obviously those with the highest rates of consumption have the greatest moral imperative to reduce it, but I detect a confusion in Monbiot’s presentation of the case. There is the hint of the comforting argument that we can solve the problem merely by stopping rich people spending so much, where the confusion between wealth and consumption misleads us as to the scale of wealthy people’s direct impact in this case.

If restricting the consumption of the very wealthy helps, it will mostly be because it is a politically necessary component of reducing the consumption of most people in Western societies. Even a minimum wage worker in Europe has a consumption level higher than the global average, and global consumption is held to be environmentally unsustainable.

To me, wealthy people are interesting because of their wealth, much of which is in investments. Incentivising (the polite way of saying “forcing”) them to shift those investments into technology and infrastructure that reduces the environmental impact of economic activity seems like the obvious objective here (though I note that Monbiot takes a pot-shot at Bill Gates for suggesting such investments!) and if they can’t or won’t make such investments then redistribution to people who will do so would seem to be appropriate.

15

Chris Bertram 09.22.19 at 11:18 am

I thought this interview with Vladimir Smil was very interesting:

https://www.theguardian.com/books/2019/sep/21/vaclav-smil-interview-growth-must-end-economists

I’m hoping that it will get a review from another interesting thinker, who also grew up in a “communist” country but who is very sceptical about degrowth, namely Branko Milanovic.

16

Orange Watch 09.22.19 at 4:51 pm

P.M.Lawrence@10:

“Jesus’s teachings” are equivocal and have been since before they were collated and codified. You may have gone all-in on a “church of sinners” interpretation, but that’s no less an interpretation than the “church of saints” interpretation you fairly obviously reject. The by-deeds interpretation that Kien cites is no more clearly right or wrong than your own by-faith interpretation, and countless gallons of ink (and blood) have been spilled arguing this point. Spilling a handful of electrons here is not going to convince anyone of the unequivocal correctness of your preferred reading.

17

Dan Cooper 09.22.19 at 4:59 pm

Your argument on limitationism for democratic reasons makes a number of questionable assumptions.

First, that the wealthy tend to agree with each other rather than disagree and thus greatly neutralize each other. They are in no way a monolithic block.

Second, that wealth is the only pernicious imbalance in power, ignoring the similar imbalances of organized minorities (the NRA), rent seeking organizations (unions and government service workers), Corporate lobbying, political “public choice” imbalances and so on. And this leaves aside the greatest threat of all, majorities taking advantage of minorities, including the minority known as wealthy people (who are ripest for fleecing). The argument is basically that eliminating one source of imbalance actually makes the remaining imbalances worse not better. Pretty sure Madison made this argument about 250 years ago.

Combined with the objections below, the more prudent option would be to limit the scope of political influence via other mechanisms. Heck, just doing nothing at all would be incalculably better, then what you suggest (see below).

Your economic arguments are even worse. First, you are aware that most wealth is held in productive assets right? That it is held in tech companies, supply networks and global fleets, factories, R&D budgets, apartment complexes. You really seem to believe in some kind of Scrooge McDuck vault of gold coins. If you limit wealth (“surplus money”), you are effectively not just limiting, but eliminating, most productive capital from the world. IOW, your assumption that “surplus money” doesn’t contribute to other’s welfare is absurd.

The effects of this confiscation would be the immediate impoverishment of everyone, the loss of every job at once, and the elimination of most technological improvements. I don’t think I would be exaggerating that the majority of humans on earth would die within a decade or two. Of course this solves the global warming issue! But what are a four or five billion broken eggs, right?

The alternative to limiting wealth of course is to encourage it as long as it is expected to be a positive sum, win/win outcome. The tale of median global prosperity (which is increasing faster than ever in recent decades) shows that this is the true answer to widespread poverty. The last three or four decades have seen truly remarkable gains in global wellbeing, and it has all been funded by something that people on this blog often call “neoliberalism,” or more appropriately relatively free enterprise.

I won’t get into your moral crisis of global warming, other than to clarify that the IPCC itself recognizes that we are on a path of doubling or tripling median living standards over the century and that the net effects of AGW are just a few percent by the next century. Certainly I support nuclear energy, R&D into clean energy and carbon removal, but your cure would likely be incomparably worse than the disease.

But for clarity, we can set aside your political and your AGW arguments. Your entire paper fails to grasp the role of wealth in productive capital.

18

Orange Watch 09.22.19 at 6:23 pm

Dan Cooper@17:

You seem to have missed the core point of the discussion. Limiting the wealth held by a single individual does not mean the portion of that wealth in productive assets is cashed out and then burnt. It means that ownership is distributed to a far greater degree – that more people hold stakes in the productive assets. E.g., a major point of confiscatory top marginal tax rates is to make it difficult if not impossible for companies to give disproportionate salaries and bonuses instead of investing in corporate infrastructure (“productive assets”, you say?) or profit sharing with labor (who will then rapidly spend their money in the economy rather than folding it back into financial ouroboroi). E.g., if any income over 5m is taxed at 80% and any over 10m is taxed at 90%, it becomes crippling for companies to pay out 10s of millions in (net) C-suite salaries and bonuses instead of investing in productive assets or company-wide salaries and bonuses (or even just job retention). The company can either grow, pay its workers directly, or pay for their public services through the gov’t.

Further, for someone complaining about questionable assumptions, your ignoring of things like non-productive real property, complex financial instruments, and such when describing how wealth is held is naive at best but more likely highly motivated. I’m particularly inclined to view this reasoning as motivated when you list examples of “rent seeking organizations” as “unions and government service workers”. Corporate rent seeking is far more pervasive and debilitating than these groups, yet you paint a lazy picture of indolent union workers suckling the public teat vs. industrious, noble entrepreneurs creatively working for the greater good, when in fact most of late-stage capitalists’ creativity is devoted to finding creative, coercive new ways to suckle both public and private teats with as little productive effort as possible.

For clarity, we can set aside essentially all of your arguments. Your comment fails to acknowledge that the subject at hand is the concentration of wealth rather than the simple existence of wealth.

19

RichieRich 09.22.19 at 6:25 pm

@ 12

Under, for example, an emissions trading scheme with a hard cap, presumably the distribution of wealth is irrelevant to overall emissions.

If, under the hard cap, emissions rights were, say, auctioned upstream, then the resulting revenue could allocated in more or less progressive ways.

20

Ingrid Robeyns 09.22.19 at 7:26 pm

Matt @11 – yes, all upper limits eventually must refer to another value. And it is possible, even likely, that those ultimate values for which the upper limits are a mere means, lead to thresholds at different levels. In the 2016 (published 2017) paper, I developed a longish account of how one could argue that at some point the marginal value of additional personal wealth to an objective-list account of flourishing would be (asymptotically) zero. If that surplus money would be re-allocated (by taxation, or pre-distributive institutional change) to meet urgent needs, aggregate and average flourishing levels would go up.
But the ultimate value could also be the protection of democratic institutions, or ecological sustainability – and the corresponding upper limits may be at different levels of wealth. My own sense is that the threshold that aims to protect ecological sustainability is the lowest.
If this is correct, then a society would need to decide which public value it wants to give priority, and whether it is willing to accept the possible negative or suboptimal effects of that threshold for other values.

21

Matt 09.22.19 at 8:51 pm

Thanks, Ingrid – that’s helpful. I will read the paper!

22

J-D 09.22.19 at 10:08 pm

Combined with the objections below, the more prudent option would be to limit the scope of political influence via other mechanisms.

What other mechanisms?

The alternative to limiting wealth of course is to encourage it as long as it is expected to be a positive sum, win/win outcome.

Encourage it how?

If that surplus money would be re-allocated (by taxation, or pre-distributive institutional change) to meet urgent needs, aggregate and average flourishing levels would go up.

What kind of pre-distributive institutional change?

23

Bill Benzon 09.23.19 at 11:48 am

A book that has influenced my thinking quite a bit is David Boehm’s Hierarchy in the Forest: The Evolution of Egalitarian Behavior (1999). Boehm is interested in accounting for the apparent egalitarian behavior of hunter-gatherer bands, the most basic form of human social organization. While individuals can assume a leadership role for specific occasions, e.g. a hunt, there are no permanent leaders in such bands. Boehm does not argue that such bands are egalitarian utopias; on the contrary, primitive egalitarianism is uneasy and fraught with tension. But it is real. Boehm finds this puzzling because, in all likelihood, our immediate primate ancestors had well-developed status hierarchies. Boehm ends up adopting the notion that the hierarchical behavioral patterns of our primate heritage are overlain, but not eradicated or replaced, by a more recent egalitarian social regime. Other than suggesting that this more recent regime is genetic Boehm has little to say about it.

What I like about this is the idea that our social behavior is mediated by (at least) two behavioral systems, which are organized on very different principles: hierarchy and dominance vs. equality and anarchy (in the sense of self-organizing w/out orders from above). So let’s accept that as a premise. That is in our ‘nature’. I’m also going to postulate our ‘nature’ has no way of giving priority to one of these systems. Rather, than is something that is done by ‘culture’ according to local social circumstances.

In this view, one of the things we’re working out over the course of history, then, is the relationship between these two systems. The (phylogenetically older) hierarchical system is perfectly happy with extreme wealth because the resulting inequality is consistent with it. But the (phylogenetically newer) system doesn’t like it at all. I don’t see any inherently ‘right’ way to resolve this interaction, but I note that neither system is going to disappear. Both ‘make demands’ on our behavior.

So, it’s all well and good for the economists to tell us that a rising tide floats all boats. But there’s going to be a point where the peasants in the little rafts and zodiacs are going to be angry with the plutocrats and oligarchs in their megayachts sailing around the sea like they own it.

* * * * *

We can see this two-systems dynamic on display in Shakespeare. Consider Much Ado About Nothing. We’ve got two couples. Claudio and Hero interact through the hierarchical system. How does Claudio pursue Hero. Without speaking to Hero at all, he approaches his military commander to broach the matter with her father. Her father accepts on her behalf, all without conferring with her. Beatrice and Benedick, on the other hand, confront one another as equals, and one of the joys of this play is their wit combats. While both are aristocrats (as are all the principals in Shakespeare’s plays), neither is rigidly fixed in the aristocracy. And so the play moves back and forth between the stories of these two couples. Of course, the play has a happen ending; both couples are to be married. But that ending has required the interaction of both of these plotlines.

24

rogergathmann 09.23.19 at 12:48 pm

Limitarianism is an excellent name for the reform we need. I’ve long thought we could start by making corporations pay exorbitant taxes if their upper management makes more than 15 x the average employee. And that, in general, we should settle on an acceptable wealth spread, say, something like 200x the median household wealth.
When we think about the social utility of fatcats, they come in three broad categories: either administrators, investors, or inherited wealth (the latter usually forming a subset of the investor group). It is not a bad thing to pay administrators and investors some premium, even if ultimately all wealth comes from the workers. But there is an easily remarked level at which inequality dooms all the institutions of democracy and popular governance, from the legislative to the judicial.

One must keep in mind, from a political point of view, that the lowering of the marginal tax rate as a result of bills passed in Reagan’s first two years in office was the necessary but not sufficient condition for the subsequent explosion in upper management compensation. The gesture normalized the transgression of the post war pact, which saw the worker in some relation to management. It gave boards of directors a material reason for allowing and even encouraging a practice that, at one time, would have looked like gouging or an exercise in contempt for the stakeholders in the firm. The normalization worked: in the nineties, Clinton Dems showed no inclination to take the punchbowl away from this party, thus cementing the new norm. Rich upper management types – donors! – were now consulted as oracles instead of targeted as moneybags. This, crucially, paid extra dividends once one was out of office. The shadow side of neo-liberalism was the creation of a whole new strata of well paid consultants, lobbyists, and general wheeler dealers. If corporation X could not bribe Senator Y, Senator Y’s children or spouse could perhaps be hired at excellent salaries to lobby, or perhaps to think hard at think tanks, which like business schools experienced a true boom in the eighties. These think tanks were being bankrolled by wealthy philanthropists, who, in time honored fashion, used this instrument to avoid taxes and exert power. As the CEO class became more and more entitled, there was considerable trickle down to the political class, which became abettors and scroungers at the till. Similarly, the CEO model spread to non-profits. College presidents and museum heads were soon being paid astonishing sums to do what previous college presidents and museum heads had done for considerably less. There was no visible increase in the quality of colleges or museums, but this didn’t matter: that standard was obsolete at this point.

Thomas Picketty, who studied changes in the source of wealth along with Emmanuel Saenz, targets the income derived from administration as as a major driver of income and wealth inequality in his book Capital. For a quick rundown of this, I’d recommend Mike Konczal’s excellent essay in the Boston Review in 2014.

Even so, if the exorbitant sums paid to administrators had resulted in a great increase in the pay to the median worker, it might be said that, on some level, it works. But this hasn’t happened. The very wealthy have seen their income growing by about 6 percent per year since the seventies – in fact, the starting point seems to be 1973. The middle has grown, if at all – it flatlined during most of the 00s – by one percent per year. The workers who comprise the lower eighty percent have seen their wealth, in Piketty’s phrase, “collapse”. This reverses the trends from 1945 to 1973, when it was just the opposite, with the wealthiest having less percentage gains than the middle.

To little attention, by economists, is paid to the positional economy. But it is easy to see that consolidating one’s position at the top is a power move that is relatively cheap. Lester Thurow in the seventies was concerned with designing the kind of wealth taxes that could break up the consolidation of wealth – and I think he is half right. But the other half is obviously organized labor power, which is presently bound in by laws that it should disobey on a mass scale. Othewise, the consolidation of wealth at the top is inevitable, and with it all the odious consequences.

25

Dan Cooper 09.23.19 at 3:45 pm

Orange @18

“You seem to have missed the core point of the discussion. Limiting the wealth held by a single individual does not mean the portion of that wealth in productive assets is cashed out and then burnt. “

No. She specifically suggested in her argument for limitations on wealth, that the justification is to use the money to fund urgent needs of the poor, the homeless and to combat global warming. Allow me to quote:

” limitarianism claims that 100% of surplus money should be re-distributed and re-allocated to meet the three sets of urgent unmet need”

This certainly doesn’t imply “burning” capital, but it does involve confiscating capital, selling it off (to an environment where nobody can profit much from its use) and using the proceeds to fund her capers. This means selling off the factories, the retail stores, the tanker ships, the technology companies for pennies on the dollar and giving the meager proceeds to “worthy”recipients right up until the entire global economy collapses. It might just as well be burnt, the effects on global prosperity will be the same either way.

“…your ignoring of things like non-productive real property…”

My argument does not depend upon all wealth being held in productive capital. Nor did Ingrid’s argument focus on confiscating unproductive wealth. My argument is that “most” (though it works fine if it was just a significant share) of “surplus wealth” is held in productive capital assets and reinvested in the same.

The net result of confiscating “surplus wealth” would be the elimination of incentives to create wealth. In a positive sum complex adaptive system such as properly functioning economics, that effectively eliminates the incentive for producer surplus, which effectively negates the incentive for creating consumer surplus. There would be less incentive to make large risks and investments, less reason to delay consumption by risking it in entrepreneurial endeavors, and no reason to grow at all beyond however Ingrid decides to draw the line on surplus wealth. Thus the net result of her idea is to substantially reduce entrepreneurial activity, capital investment, reinvestment, R&D, new start ups, aggressive expansion and so on. On top of it, as above, she would actually confiscate significant portions of current productive capital and cash it out for redistribution (a Somali herdsman isn’t going to stick his allocated shares of Apple under his prayer mat, he is going to cash it in for immediate consumption).

“Corporate rent seeking is far more pervasive and debilitating than these groups…”

I literally included corporate lobbying in the very same sentence. My point was to give wide examples of rent/privilege/special interest seeking.

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Jerry Vinokurov 09.23.19 at 4:15 pm

“If you tax the rich literally everyone will die,” is definitely a novel defense of exorbitant wealth, I’ll give it that.

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Dan Cooper 09.23.19 at 4:16 pm

JD @22

I am not sure why you are combining quotes from me and Ingrid, but let me respond to mine.

I wrote:

“…the more prudent option would be to limit the scope of political influence via other mechanisms.

JD: “What other mechanisms?”

I was assuming people reading this are familiar with campaign finance reform and similar discussions. I am not suggesting anything in particular, just that there are more graceful ways to reduce the excessive political influence of groups you disagree with than by eliminating the existence of said group. Especially considering that it would destroy the global economy.

I wrote: The alternative to limiting wealth of course is to encourage it as long as it is expected to be a positive sum, win/win outcome.

JD: “Encourage it how?

It’s a new idea which I just made up. I call it the “invisible hand”. Catchy huh? The idea is that we set up agreed rules so that individuals can flourish and prosper for themselves and their loved ones by attending to the needs and values of others by creating products and services which they will gladly and freely exchange for. I know it sounds wacky, but the idea involves such components as agreed property “rights”, requirements for voluntary exchange, impartial courts and open competition.

Are any of those reading this not familiar with the historically unprecedented positive sum gains in living standards, lifespan, education, freedom, opportunity and so on fostered by freed markets? Does anyone fail to understand how profit and prices act as incentives and signals to coordinate cooperative human problem solving?

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Doug K 09.23.19 at 4:56 pm

Greta Thunberg to world leaders at UNGA summit: “We are at the beginning of a mass extinction and all you can talk about is money and fairytales of eternal economic growth.”

The fairytales of eternal growth are seductive but it is time to resist..

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Dan Cooper 09.23.19 at 5:11 pm

Bill @23

Nice to find another fan. I think Boehm’s two books are treasures.

Just to add a bit to your summary, I would like to clarify that by “egalitarian’, Bohman specifically defines it as males treating each other as equals. To quote the author, Foragers are “not intent on true or absolute equality, but on a kind of mutual respect that leaves individual autonomy intact.” He stresses that they are “universally” and “obsessively” concerned with being “free from the authority of others.” He also clarifies that often do have leaders, just not authoritarian ones.

He also spells out that the demise of these egalitarians is the loss of nomadic lifestyle. Once foragers become dependent on a fixed chunk of land and its surplus they can be controlled. In my words, the forager egalitarian ethos requires exit options and freedom of association. Farmers are tied to their land and crop surpluses and thus lose exit options and are easily controlled by the authoritarian alphas. Modern institutional economies re-establish exit options and voluntary reciprocity among market participants. Thus we have what Boehm refers to as an egalitarian “U shape” where we regain equal rights and opportunity that flourished among foragers (though just the men, forager women were often treated like crap).

“The (phylogenetically older) hierarchical system is perfectly happy with extreme wealth because the resulting inequality is consistent with it. But the (phylogenetically newer) system doesn’t like it at all.”

Remember, there is nothing in Boehm’s definition of egalitarian which suggests equality of outcome. Indeed he specifically mentions that men can differ from each other significantly in skill, strength, influence, wives and offspring. Just not in dominance.

In a zero sum, Malthusian world of nomads who could only possess what they could carry, this certainly led to very little discrepancy in wealth. Indeed the concept would be pretty abstract and foreign. Excess for one, almost by definition comes at the expense of others in the group in a Malthusian, zero sum world.

In a positive sum, post Malthusian world, where institutions are set up in such a way that one can make a hundred billion dollars by enriching billions of people with your creative products and services, wealth becomes good as long as it was created via voluntary exchange without significant negative externalities.

I would suggest that the Ingrid and some commenters are caught up in a view where they are conflating wealth with dominance, and a positive sum world view with a zero sum paradigm. They are wrong on both counts.

“So, it’s all well and good for the economists to tell us that a rising tide floats all boats”

Just to clarify, any serious review of median global incomes and health and child mortality will clearly reveal that the tide did indeed rise greatly for billions, and that extending free markets to previous Socialist hell holes rose the tides everywhere it has been imported. See the global reductions in poverty for the past three decades. We shouldn’t need an economist to tell us this.

“But there’s going to be a point where the peasants in the little rafts and zodiacs are going to be angry with the plutocrats and oligarchs in their megayachts sailing around the sea like they own it.”

But we aren’t just talking about plutocrats We are also talking about people who got rich by creating value for others. In this case, they bought their yachts with the proceeds which came from building 7 billion rafts and dinghies for people who would otherwise have dog-paddled until they drowned. I know some reading this think they are being noble and good by encouraging the rebellion, but it would be based on a dysfunctional narrative and would result in the mass death and impoverishment of those revolting. I am all for not allowing the wealthy to be plutocrats. But anyone thinking this requires eliminating wealth is horribly wrong.

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Dan Cooper 09.23.19 at 5:18 pm

Jerry @26

Please stop making fake quotes to win arguments. It is extremely deceptive and, honestly beneath civil discourse.

The argument is that confiscating all “surplus wealth” as per Ingrid will eliminate all incentives to create wealth and will result in the liquidation of productive capital. This will result in absolute global catastrophe.

Do you get the difference between what I wrote and the straw man argument you hope somebody would write because you could then win?

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Jerry Vinokurov 09.23.19 at 7:29 pm

Please stop making fake quotes to win arguments. It is extremely deceptive and, honestly beneath civil discourse.

This presumes that I have any interest in civil discourse with you, and, indeed, that you yourself have any actual interest in civil discourse and are not here to merely troll people. But the thing is, I don’t believe that you’re here to do anything except offer exceedingly bad-faith arguments about why we shouldn’t do the morally just thing, which strongly reduces my inclination to take any of this seriously.

You might also do well to research the concept of satire, it might be quite illuminating for you.

The argument is that confiscating all “surplus wealth” as per Ingrid will eliminate all incentives to create wealth and will result in the liquidation of productive capital. This will result in absolute global catastrophe.

You made up a dumb story about how Ingrid wants to take surplus wealth and set it on fire, so maybe you should, like, follow your own advice about strawmen. You’re just engaged in tiresome question-begging that assumes the conclusion you want to reach (all, or so much as to be effectively close to all wealth is actually productive capital) and then you use that question-begging to beat people over the head for not agreeing with you. This is deserving of nothing except contempt and ridicule.

Do you get the difference between what I wrote and the straw man argument you hope somebody would write because you could then win?

Win what? Are they giving out prizes for CT comments these days?

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Chip Daniels 09.23.19 at 7:31 pm

The strongest defense of property rights I’ve heard is the one that has the most intuitive moral logic, namely that a person has a rightful claim over the fruits of their own labor.

Yet that also argues for a cap on wealth. There is a finite limit to the amount of wealth a person can produce, no matter how skilled or ingenious or productive they are.

The only way a person can amass a pile of wealth of say, a billion dollars is through some combination of financial engineering and political structures. The further away one gets from the actual production of wealth, the weaker the claim over it becomes.

As to the idea that a cap on wealth will be a disincentive, I think it depends entirely on what the cap is.

Can anyone imagine an inventor tinkering with some piece of software and upon being told that her personal return on this invention will be capped at a billion dollars, and her declaring, “Forget it, its not worth it now!”

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Orange Watch 09.23.19 at 7:44 pm

DC@25:

. She specifically suggested in her argument for limitations on wealth, that the justification is to use the money to fund urgent needs of the poor, the homeless and to combat global warming.

This was one of several justifications offered. The democratic justification had not preceded the ones you myopically focus in an explicitly labeled section. You have no credible way of pretending you missed it, so we’re left with the conclusion that you’re selectively quoting Robeyns’ paper to misrepresent it.

This certainly doesn’t imply “burning” capital, but it does involve confiscating capital, selling it off (to an environment where nobody can profit much from its use)

Strawman. Everything about it implies burning capital (which is precisely what your rephrased denial STILL boils down to). You’re arguing a crayon sketch of a strawman of redistribution – a bizarre caricature of economics where property and currency are exclusively physical goods that can be touched and held… which is a strange irony given that your prior contention seemed to be that this was precisely the kind of wealth the rich never have.

The net result of confiscating “surplus wealth” would be the elimination of incentives to create wealth.

And yet enormous wealth (and productive assets, industries, technologies, increases in standards of living, etc etc etc) can and has been generated in the face of confiscatory marginal tax rates. The post-war growth of the US occurred under creativity-obliterating, demotivating, soul-crushing 70-90% top marginal rates, and yet somehow the noble, indispensable job creators found it within themselves to try to make themselves merely rich even if they couldn’t make themselves unfathomably rich. So it looks rather a lot like you’re at best confabulating, but more likely repeating a dogmatic belief in spite of knowing it’s false.

(a Somali herdsman isn’t going to stick his allocated shares of Apple under his prayer mat, he is going to cash it in for immediate consumption).

Strawman. Again. There is no reason to believe this is something that would happen, and that you cannot imagine anything else shows how blinkered you are. Hilariously, while arguing against a leveling-down of a mixed economy to increase the share of socialism in the economy scaling back capitalism, you invoke the specter of capitalist sell-offs of collective enterprises à la post-Soviet Russia. If the social safety net is expanded, your crude wicker herdsman has less immediate need for hard currency, so there’s even reason to parcel out industries into individual shares. Not that there would be any reason to do that ever given its predictable outcome, unless you were an unscrupulous “innovator” looking to use your economic stability and disposable income to bilk your fellow citizens out of long-term prosperity in exchange for immediate gratification (or to assauge desperation).

Do you get the difference between what I wrote and the straw man argument you hope somebody would write because you could then win?

The irony of you writing this after your unceasing rhetorical malfeasance is both rich and bitter. You’re a monumental hypocrite making extremely motivated arguments in incredibly bad faith.

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P.M.Lawrence 09.24.19 at 8:34 am

OW, it seems that I was too telegraphic and brief.

I wasn’t trying to bring out any issues of commentary or interpretation at all, but rather the narrow set of actual statements we have from which those are drawn. Jesus did specifically remark that “no one is good save God alone”. Yes, we can go many other places from such starting points*, but no, those are actually the places to start. Those things he (He?) said for study and reference are actually the only direct teachings – even if more can be reached than that. All I actually wanted to do was show Kien that Jesus was not – in the terminology available – telling the rich young ruler how to be a good person, because that wasn’t what was being presented. Kien can talk in those terms, or you or I can, but it would be anachronistic to ascribe them to Jesus – even if they are convenient parts of describing what follows from all that, because they weren’t express items presented within the starting point material as such.

* Which is why you can not infer what position I myself hold, from the mere fact that I presented some parts of the study material.

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Z 09.24.19 at 1:43 pm

Thomas Piketty, one of the most widely read economist in the world, just published 1200 pages arguing for quite extreme forms of limitarianism, as he advocates not only for limitations in the amount of wealth an individual can own, but also for limitations on the time period an individual can own wealth (for instance the replacement of inheritance by a universal donation at age 25) and for limitations of the social rights that accompany owning wealths (for instance, the owner of 99% of a large company would still only have say 10% of voting rights at the board). Interestingly his argument is largely logically independent from ecological considerations (that is to say, he absolutely believes in the necessity of limitarianism because of environmental considerations, but he is adamant that limits should be put even if, contrary to facts, our economical system was not destroying the biosphere, and they largely follow from the purely internal logic of the economical system).

Whether the easy to predict enormous editorial success of his book will help making the idea of limits to wealth slightly less blasphemous remains to be seen (though I find that ordinary people find this idea quite natural and intuitive, it seems it is only among the very rich and those who write for them that the idea is deemed so scandalous).

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Shirley0401 09.24.19 at 3:14 pm

I used to regularly lurk on CT before my employer’s firewall reclassified it as objectionable, but here I am with some time to burn and have to admit I’m somewhat surprised to see people still making the argument that taxing large amounts of wealth or incomes over X “too much” will result in the Blessed Innovators and Capital Allocationists pretty much refusing to do anything at all. (Which, even more surprisingly, it is assumed will lead to the collapse of modern society.)
I mean, sure the world is on fire and species are dying off at record rates since the invention of the human and maybe it’s true we’ve produced more plastic in the past dozen or so years than in the preceding history of history but I saw a guy pay for his fancy coffee by waving his phone at the barista he couldn’t be bothered to make eye contact with the other day so I guess the tradeoff is 100% worth it.

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