Concentration of Wealth
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.