Redistribution of Wealth

Unto whomsoever much is given of him shall be much required.

I find the above in my King James, but I missed the part about retribution against the wealthy. That the wealthy face ultimate judgment for the sharing (or not) of their blessings in no way justifies the taking of their money by those, or on behalf of those, who are without. Robin Hood must have made his appearance in one of the later Nag Hammadi texts that I haven’t read.

The rich should pay more! They can most afford to pay!

If a neo-Nazi group were to go on TV or radio and advocate racial division or hatred against minorities you would be quick to take action. If your government discriminated against ethnic or transgendered minorities you would rightfully pour into the streets in protest. So where’s your moral outrage when your government singles out the wealthy minority for its thieving (aka progressive taxes)? Do the rich consume more public goods? Whence your moral basis for stereotyping and demonizing people according to some accident of fortune?

Contents

  1. Redistribution of Wealth
  2. The Other Guy’s Shoes
  3. Political Influence
  4. Personal Connections
  5. Wealth Disparities
  6. Poor in Spirit
  7. Closing Comments

The Other Guy’s Shoes

I have an idea for a debate show called “The Other Guy’s Shoes”. The premise of the show is for each side in a debate to adopt the opponent’s position and to convince an audience of their newly adopted position. It forces partisans to internalize the thoughts, feelings and beliefs of the other side. The audience selects the winner, with the idea that if I win with arguments to which I really don’t subscribe, then my real arguments, not revealed during the debate – held only in my own mind, must even be better. You win by winning for the other side.

Keeping with this I intend to argue forcefully and convincingly in favor of the following motion: redistribution of wealth in the U.S. is morally justified. We’re not talking about taking money from Bob and giving it to Carol. That’s outright thieving. I will argue instead there is an absolute moral basis for “society” to seek a more equitable distribution of wealth in the U.S., as justified under the following rubrics:

  • Wealth buys political influence which keeps the poor, poor
  • Wealth buys personal connections which keep the rich, rich
  • Wealth disparity per se leads to worse outcomes for the poor
  • Wealth per se leaves the poor, poor in spirit

Whether you believe in redistribution of wealth or not, you should be on the alert as you read my arguments. My approach was to take arguments that favor wealth redistribution as often heard in public discourse and to strengthen them by poking holes in them and then backfilling the holes. I take the best arguments from both sides of the motion, and especially those against the motion, and I craft them into compelling arguments in favor of the motion.[1]

However, implicit in the format of the debate, there is something I am not revealing. My sincerity is feigned.

Political Influence

Wealth buys political influence. True. But only if there’s an economic benefit. That the wealthy use political advantage to keep their wealth hardly surprises. The only fair question is whether this keeps the poor, poor. Yes it’s harder to take from the rich and give to the poor. But is there anything intrinsic in the rich protecting their wealth that keeps the poor down?

I will argue this question in the affirmative.

The wealthy benefit from the problem of hidden taxes which fall more heavily on the poor. Politicians enact legislation without paying for it through higher taxes, which risks voter retribution. They collude with wealthy businessmen to quietly pass along the costs of legislation in the form of higher prices or lower government revenues (e.g., tax shelters). This only happens when it is to the advantage of the wealthy, and that advantage often comes disproportionately at the expense of the poor.

The wealthy block legislation mandating higher minimum wages, hurting the poor. I acknowledge higher wages for the few may at times mean fewer jobs for the many,[2] especially in an age where automation and off-shoring are looking for any opportunity to replace high wage, low skilled labor. But I assert we can carefully design trade, legal and other competitive barriers to both increase wages for the poor, and maintain employment levels for the poor. We enacted trade barriers at the start of our nation to allow domestic manufacturing to catch up with the British. We could enact similar protections for our poor, but this legislation is blocked by the wealthy.

The wealthy use political influence to skew government spending away from programs that benefit the poor, and toward high-ticket industries that benefit the rich (e.g., defense, agriculture subsidies). Politicians have a spending problem and nobody seems to be able to cut up their credit cards. It would be better to rein in these politicians, but experience forces us to acknowledge their spending addiction, and therefore we must reduce the influence of the wealthy in setting spending priorities, which take from the poor.

The wealthy hijack government regulations, through their lobbyists, to allow fraud and corruption to continue; and to keep themselves out of jail (here). They make large donations to politicians to buy immunity from prosecution (or reduced sentencing). With these protections in place the rich are free to prey on the poor, who tend to be more susceptible to fraudulent claims (e.g., nutraceuticals, green products, predatory lending practices). The rich invent ‘get rich quick’ schemes targeting the wannabe rich. These schemes sometimes collapse the economy and the poor end up unemployed (e.g., the subprime mortgage debacle).

There are more, but these are good examples (hidden taxes, minimum wages, spending priorities, hijacking regulations) of how the wealthy use political influence to the absolute disadvantage of the poor.

Personal Connections

Wealth buys personal connections. These are used to keep the rich, rich. Again, it’s not a matter of the rich using these connections to get ahead. It’s how they use these connections to keep the poor, poor.

Upon graduation, children of the rich are given that first professional job in a head-to-head competition with equally qualified children of the poor. In practice, the poor will never have even become aware of the job opening. So at a very personal level, disparity of wealth sends the poor down a less promising future. Certainly the poor can overcome this disadvantage through dint of effort. But this unequal start hints at the innate immorality of a two tier system.

The rich dominate public discourse by their media connections, for example, pushing agendas of individual initiative, free markets, left-wing bias in traditional media, etc. Latchkey kids have high individual initiative, but unfortunately directed toward illegal activities. The spirited defense of free trade by the rich allows cheap labor to sneak past the border patrols under the guise of cheap products sold by Walmart. Attempts to regulate industry are branded as government takeovers. Again it’s the poor who suffer.

The rich have the time, education and resources to advance their agendas through a variety of interest groups, think tanks, lobbyists, trade groups and academic research centers. Their agendas are subtly tilted toward maintaining the current system, to the detriment of those unable to break into the system.

Wealth Disparities

Wealth disparities per se hurt the poor. Doesn’t matter how much money the poor have, if there’s wealth disparity then the poor are worse off than in a more egalitarian society. The $1 per day poor in Eritrea could be better off than the poor in the U.S. having a car, cell phone, cable TV, air conditioning and food stamp debit cards.

The poor are better off in nations with less income disparity, regardless the overall level of wealth of the poor.

And women who eat pickles are more likely to get pregnant. There is no (none, zip, zero, nada) comparator study that can show wealth disparity per se has adverse effects which disproportionately fall on the poor. These ‘comparator studies’ can be quite convincing for university professors with a quantitative bent. No. I will not argue a sterile numbers game. Comparator studies get us into chicken-and-egg arguments with the wealthy and do not advance the cause.

Instead I argue that wealth disparity per se hurts the poor through economic leakage. I get my $12 haircut from Giovanni who goes to my church, and get my Taurus serviced cheaply by Walker who was scout leader for my kids. We make about the same income and we buy and sell from each other. Our local economy is in equilibrium. However, gasoline prices at the local Valero gas station seem quite erratic, and at times feel like extortion. That’s because the oilmen get $100 haircuts and drive a Lexus or Ferrari. Their equilibrium leaks down into mine.

The leakage is one way. The oilmen can come to my community and get a $12 haircut, pocketing the difference. I’m stuck paying gasoline prices to support their $100 haircuts. The poor pay more to the benefit of the rich.

Poor in Spirit

You must be healthy and reliable to find and keep a job, and exit from poverty. You need a mindset, a worldview, which tells you to concentrate on activities to keep you healthy, and habits that make you reliable, diligent and sociable.

That the poor more often make poor healthcare and lifestyle choices can probably be shown to be true. That poverty causes the choices or vice-versa cannot be shown.

Can we show that having the rich in our midst somehow contributes to poor choices by the poor?

I argue this point in the affirmative.

During colonial times the rich in the U.S. would be vaccinated for smallpox (subcutaneously, with a live virus) and become carriers of the disease during the lag time to full immunity. The rich would continue their business in public and pass the infection onto the unvaccinated poor. The rich got a mild form of the disease and lived. The poor died.

Today, risky, anti-social or unfrugal behaviors by the rich are tolerated and often celebrated by popular culture. The rich pass these infectious worldviews onto the receptive poor, who are quick to pick them up. The rich have support nets and live. The poor can die.

The rich are said to set positive examples for the poor: work hard and you too can succeed. But too often the poor find the path forward choked by inadequate childcare, drug dependencies, broken households, credit issues, or other mental challenges. Wealth accumulates slowly (2% per year), whereas a single setback can erase decades of progress.

Instead of measuring progress by their own standards, of celebrating the many small leaps forward, the poor are often tempted by the culture in which they are immersed to measure their progress vis-à-vis the rich.[3] This can lead to frustration, withdrawal and despair. For example, women can fall into one broken romantic affair after another in search of lasting happiness. The culture celebrates all examples set by the rich, and this per se takes the poor down the path to spiritual poverty.

Closing Comments

Did I win?

If you previously believed in redistribution of wealth did I firm up your moral indignation? Did I improve your thinking? Did I miss anything? Remember we have to show that wealth disparity per se makes the non‑wealthy worse off. Look at it this way. If we line up the rich and execute them in a firing squad, as they did during the Russian peasant uprisings of the early 1900’s, does this make the poor better off? My arguments above support the conclusion that yes the poor would be better off in the U.S. (e.g., no more hidden taxes, enactment of living wage legislation). It’s better not to have a ‘class’ of people holding overwhelming power in a society that they then use (perhaps unwittingly) to hold down other classes.

If you previously didn’t believe in redistribution of wealth did I change your thinking? Did I at least get you to pause? Could you convincingly argue against my above stated position? You can poke holes in some of the individual arguments. For example one of my arguments is “I assert we can…”. But can you argue against my overall thrust? Could you sit down and write out a cogent counter-blog to refute this entry? I warn you I can shred arguments based on neo-classical economic theory, libertarian thinking or other gross generalizations. No? Then I win.

If I’ve won the argument, if you now agree that I have given a strong moral justification for the redistribution of wealth, then you should at least be curious as to what I have in my back pocket as a counter-argument. Recall the rules of the debate. I win by winning for the other side.


1. This is an academic debate. This is not a political debate with its disingenuous trotting out starving or crippled children as human shields, as often practiced by terrorists and politicians. I also ignore arguments for redistribution that I considered patently stupid, e.g. that money stops buying happiness above a certain income level.

2. The Card, Krueger study  purports to show moderate wage increases would not reduce employment levels (in the fast food industry). The study is disingenuous in that it ignores a significant geological barrier (the Delaware River) between its comparator sites in NJ and PA, and it’s flawed in that one study does not a generalized conclusion make. But the study does hint that barriers, either geographical, trade or legal, can be enacted to increase low-skilled wages without resulting in higher unemployment for low wage workers.

3. Some pundits estimate that Americans watch over 25 hours per week of television, an amazing amount of indoctrination into the culture of the rich.

 

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