A Philosopher's Blog

Concentration of Wealth

Posted in Business, Ethics, Philosophy by Michael LaBossiere on March 26, 2014
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.

 

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17 Responses

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  1. T. J. Babson said, on March 26, 2014 at 8:15 am

    In the United States, the top 1% received 95% of the growth since 2009 while the 90% lost wealth.

    Mike, who has been running the show since 2009? Has it crossed your mind that perhaps it is Democratic policies that have exacerbated wealth inequalities?

  2. T. J. Babson said, on March 26, 2014 at 8:35 am

    Democratic policies have also been extremely detrimental for the black community.

  3. T. J. Babson said, on March 26, 2014 at 8:40 am

    Democrats suck up to big business and punish small business–exactly the opposite of what they should be doing if they really cared.

    All they really care about is staying in power, and they do this by lying to the low information voters.

  4. WTP said, on March 26, 2014 at 9:35 am

    That there is an extremely unequal distribution of wealth is hardly surprising.

    Yes, especially given that there is an extremely unequal distribution of responsibility, talent, intelligence, and education. The bottom 25% lack the understanding of how to create wealth. So long as academia, D’s, pop-culture icons, and journalists perpetuate the myth that the 1% have somehow stolen from the 99% in order to get wealthy, what results do you expect? Stop lying to people about what wealth is, how it is created, and the responsibilities involved in maintaining it and the lot of the lower 85% will drastically improve.

    That’s about as far as I got in this piece. It occurred to me when scanning his last post that reading the so-called logic in Mike’s screeds causes a similar feeling of revulsion as.looking at gay porn.

    • TJB said, on March 26, 2014 at 9:52 am

      Get married, stay married, work, save. You will accumulate a lot of wealth.

  5. TJB said, on March 26, 2014 at 9:50 am

    Mike, has it occurred to you that the Democrats actually like income inequality as it helps them stay in power?

  6. apollonian said, on March 26, 2014 at 11:36 am

    Culture, Economics Best Understood In Context And CYCLIC Historical Process

    This was good essay by Mike–“good” for bringing-up pertinent issues and challenging discussion.

    So I’ll just make these notes about what gives: presently we’re well into the CYCLIC “Decline of the West,” by Oswald Spengler, Jews and associated criminals in firm grip of things at the top, still, as US Dollar continues to hold up for reserve-currency status, though not for much longer, surely, and then all heck will break loose–as it already seems to be doing, as we see in Syria, Venezuela, and even Ukraine–there’s been serious rioting in Italy, Spain, and Greece too, and it’s going to continue, intensify, and spread.

    “Morality” is mere logic btwn ends and means–there is no “good-evil” which is for dogs and little kids to intimidate them into obedience. “Justice” is keeping to contractual agreement(s).

    Sociologically, note a culture typically and traditionally starts out in obligatory agrarian fashion, the people honest as there’s not too many of them, life not easy, so they understand they have to be honest w. one another. But as culture becomes successful and prosperous, the people steadily, at first, begin to producing more children than would have survived previously under the more onerous conditions, these weaklings now spouting typical philosophies of “tolerance” and “diversity,” as we see today, for example, the little scum-balls pretending to “good-evil” and “moral virtue” of the sort pushed by present institutes of thought-control. “Good-evil” delusion is proven way of controlling/manipulating the goons of society, u see.

    It’s idiotic to pretend present “Democrats” are diff. fm “Republicans”–they’re all controlled by same oligarchs, Jews providing up to 70% of all Democrat funding, 35% for Republicans. Jews are prominent for funding Ron Paul too–look at Rand Paul, sucking-up to Israel for campaign bucks. Nothing will essentially change until things get really bad economically, the Federal Reserve COUNTERFEIT scam collapses, and people begin to more poignantly suffering; then people will begin to facing-up to the Jew problem, heeding to that good old, most successful anti-semitism, known as Christianity, featuring worship of TRUTH above all/any, hence objective (Aristotelian) reality, necessary criterion thereto.

    So there u have it folks, the income and wealth -gap understood and explained in sociologic and historical context. Want things to improve?–first things have to get REALLY bad, as we expect Christian heroes to arise, like dear St. Constantine the Great who revived, at least briefly, the then moribund Roman emp. of the time.

  7. magus71 said, on March 26, 2014 at 4:56 pm

    Sounds like I should copy what the 1% are doing, not the 99%.

    Mike does the same thing with Marxist theory he does with the argument for reductionist determinism: Says he doesn’t believe in it then writes multiple articles supporting its foundational arguments.

  8. magus71 said, on March 26, 2014 at 5:20 pm

    I think Mike’s stat is wrong on the 1% owning 50%. I think it’s more like a little over 1/3. Mike’s going through another phase. He was doing better for a while. Again, instead of encouraging people to do their best, giving advice on study habits, not racking up massive debt, taking responsibility for bad decisions, being honest and timely, being as competitive in the school work as they are in Call of Duty, he’s telling people they should become envious and tear down the system. Most of the 99% in America are satisfied. Much to the chagrin of revolutionary leftists.

    Less than 1% of the population have won gold medals in the Olympics. Clearly there’s some unethical stuff going on in the Olympics. Less than 1% of the population has PHDs. Lets punish people with doctorates. That’ll make it easier for people without PHDs to feel better about themselves. No woman has ever graduated from Ranger school. Let’s lower the standards for Ranger school.

    The universe is hierarchical. I’m fine with that. it’s my job to see how far up the hierarchy I can get, while remaining a good person.

    I try to see how someone having tons of wealth keeps me middle class, and I just can’t do it. I’ll go with TJ’s advice. Stay married, work and save.

    Per usual, a little research shows, just as with military spending, the distribution of wealth is little different than it’s ever been. The highest it’s been in the last 30 years? 1998 under Clinton. It was never as high under Bush as it is now.

    https://encrypted-tbn2.gstatic.com/images?q=tbn:ANd9GcSIzml0_wRUAVuGKLSdLNbTmZ7ZuCwUwjb5wneIjtQV8NHirfwf

    • magus71 said, on March 26, 2014 at 5:22 pm

      Oh I see, it’s the world’s wealth. I was thinking America. So I guess we’re better than the others, Mike?

  9. TJB said, on March 26, 2014 at 10:31 pm

    Good jobs are the best way to redistribute wealth. The best way to get wages to rise is to restrict the supply of labor. Low information voters don’t seem to grasp this simple truth.

    • TJB said, on March 26, 2014 at 10:33 pm

      And Republicans are too dumb to play one Dem group off another.

      • apollonian said, on March 27, 2014 at 12:04 pm

        Good Lord, TJB: Dems and Reps collude (w. very few exceptions) and take orders fm Council on Foreign Relations (CFR), Trilateralists, and Bilderberg–and lots of folks know this. Whole idea is keep taking money fm Fed COUNTERFEIT scam and world gov.–just a bunch of criminals. But u’re doing good, eh?–got ur little crap job, making ZOG bux–so u’re not worried, no less than Mike.

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  11. ckibwwej@gmail.com said, on June 2, 2014 at 12:32 am

    I just arrived in Chiang Mai. I wanted to post on my blog, at Blogspot, but all of the headings are now in Thai, not English. Is the problem with my computer, or the hotel’s wi-fi service, or what? How can I get things back to English again?.

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    Please answer both questions completely:. . What’s the easiest way to make sure that if I copyright something, that it’s mine without have to copyright each article or blog individually?. . ALSO: . . I’m a poet and I want to copyright my work without have to pay “per poem” – how can I do that, but also be able to get things copyrighted regularly?.

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