by Rutger Claassen and Ingrid Robeyns
Let’s establish an upper limit on the personal wealth any individual can possess. This is the core principle behind ‘limitarianism’. Limitarianism represents one of the more radical proposals in the debate on wealth inequality. Over the past few years, one of us has developed the philosophy of limitarianism (first in the academic realm, and then more recently also in the public sphere, as regular readers of this blog know). The proposal has since been endorsed, and in some cases further developed, by other scholars and writers, including Thomas Piketty and the Dutch journalist Sander Heijne.
Of course, not everyone likes the idea. One of the most important critiques on limitarianism is that it is unclear whether company owners can continue to hold on to their flourishing businesses in a limitarian world. Or no longer being able to receive exceptionally high pay for running these companies. Think, for example of the $46 billion compensation package Elon Musk received for serving as Tesla’s CEO.
Annemarie van Gaal, described as one of the most well-known businesswomen in the Netherlands and columnist for the influential Dutch newspaper De Telegraaf, claims that with a wealth cap, there will no longer be any business activity:
“But anyone who is willing to take significant risks, endure immense stress, and sacrifice sleepless nights to apply their talent and perseverance in order to reach the top, should be given free reign. These people are the ones who create jobs and ensure that our country remains among the wealthiest in the world. (…). Would top entrepreneurs still be willing to sacrifice years of their lives, take countless risks, and endure hardship if they knew in advance that there’s a limit to their success? No. We will never become a happy society if we allow this.”
But is this correct? Can business owners remain owners of their business under limitarianism? And can their businesses thrive? This is an important question. Because even if there are strong moral arguments for limitarianism, they are not worth much if limitarianism destroys the economy. [click to continue…]
