To finish up my discussion of greed I want to talk about the moral implications. In the first part I quantified the disparity, but is disparity the most important aspect? I mean if I could live a life that gave me a good education, lots of opportunities, health care, feed my family…should I care whether or not some billionaire exists on there? If perhaps the lowest economic status was as I described, maybe not, but it’s hard to imagine this to ever be the case. Wealth is only acquired because of other people. And the value of what is made, what is labored for is decided by people. It’s a zero sum game, and while it’s possible to spread the wealth more equitably, it’s also possible to siphon the wealth away from the bottom and funnel it towards the top. Please don’t lose track of the fact upwards of $21 trillion sits in off-shore tax havens. If we have wealth beyond our basic needs, what is such a person’s moral responsibility in a world fraught with people who are without homes, without basic access to education, health care, or even enough food on a daily basis?
Philosopher Peter Singer argues that our moral responsibility to save lives is not relegated only to situations where we see someone suffering. For instance if you passed by someone who was drowning you would immediately act to do something about it. But what about the knowledge that someone is in peril on the other side of the world? Do we not have an equal moral obligation to help our fellow human? I psychologically understand why the two situations are different, but from a moral point of view I can find no flaw in Singer’s argument. We do have a responsibility to help those we can help. I am not saying that I am absolved of this responsibility due to me making less than 10 million a year or anything. There are people like philosopher William McCaskill (by the way he’s single ladies…or maybe guys…who am I to make heteronormative assumptions) who has stated that any money he makes over £40,000 a year he will give away. Few of us have that kind of commitment I imagine, but that doesn’t mean that we shouldn’t try. The fact still remains that there are people in this world who make more money that they could ever use and could do far more to help people than I could ever do in my lifetime. Would putting all the wealth towards people who need it solve all their problems? Probably not. But this shouldn’t be the goal. For any action we do to help others, we are under no illusion that the problem will go away everywhere, but we help when we can. I mean if a friend asked me to help them move, do I say “I’m sorry I can’t help you because there are a lot of people who need help moving and since I can’t help them all, helping you doesn’t really make much of a difference”. This would be a laughable argument at best, but more likely callous. When I see the level of wealth inequality in the world, I personally find it morally reprehensible that so much wealth exists in the hands of so few while so many suffer.
Now we can argue that hoarding wealth is a mental illness, or that their years of economic power have eroded empathy, and that such people can essentially do nothing but continue to hoard their wealth. These are likely valid arguments, but if our goal is a more equitable do such people have a right to such excess wealth? Please keep in mind that I am not saying that we shouldn’t have any income inequality, but rather there becomes a certain threshold of inequality where society becomes unsustainable or at the very least has more suffering than it needs to. But then what is the solution if people with unimaginable wealth are mentally unable to part with it? In an argument I had with a conservative about this subject he argued that the only reason so much money exists in tax shelters is because they don’t want corrupt governments to get their hands on it. And it’s true that money corrupts government officials as much as heads of corporations. But I think we can agree that this does not excuse those with so much wealth from just using it themselves them to do good as a matter of moral responsibility. Especially since so much of that wealth ultimately comes from investors, consumers, laborers, etc.
What then should we do? If the movement of large sums of cash are going to corrupt people along the way, what is the answer? Some have suggested that instead of a minimum wage we should have a maximum wage, or raise taxes on the ultra-wealthy. All of these are prone to the corruption argument. Universal Basic Income is another suggestion, but this is something that only helps in already wealthy nations. The best answer I can come up with is what we shouldn’t do, and that’s nothing. In the election last night San Francisco passed a proposition which introduces a small tax to companies making more than $50 million a year to combat homelessness. This is expected to bring in $300 million in income to the city to deal with the homeless problem there both in terms of getting those people shelter but getting them mental and medical help. Of course there were billionaires against the proposition, but some were for it, and that’s heartening. The arguments against were again largely of the nature of oversight, and I get that this should be a concern. But given the spirit of the bill, then shouldn’t you be working to make sure that process works better and smarter, rather than just saying “strike it down…it’s not perfect”. No bill is going to be perfect when it is trying to help lots of people, but if the goal is worthy, like ending homelessness (in one of the richest cities in the U.S.) then shouldn’t those high tech billionaires be asking “How can I help?” instead? One wonders if the expertise of themselves and their employees in technology would be useful in helping to implement a policy that would help homeless people. It is too often the quest for the perfect solution leads to excuses for inaction. Solving this problem is complicated, perfection is unlikely to occur, but at least some people will be helped if we try.
Now you may argue that income inequality has gotten a bit better, and that those at the very bottom are doing better than they were 50 years ago. And this may be true, but just because the ultra-rich are willing to keep more people at a basic level of subsistence, doesn’t necessarily lead to a better situation. What many people face who are barely getting by is a feeling of hopelessness. They can live paycheck to paycheck, but they have little opportunities to save, emergencies (like a blown furnace, medical emergencies or car repairs) wipe what little savings they have, and most importantly they work in jobs that have little opportunity for advancement, or chance to save to go back to school to be retrained for a better job. Perhaps all the greedy are doing is to find a “sweet spot” where people aren’t desperate enough to revolt but still poor enough to be compliant. In a consumer driven society, if people don’t have enough capital to buy goods well you don’t have consumers and so I am sure that the raising of the bottom of the poverty charts isn’t entirely out of the goodness of the billionaire’s heart. Not surprisingly people don’t want to toil at a dead end job their entire lives. People don’t just want to survive, they want to live.
I’ve tried hard to objectively look at greed as well. Is there a time when greed is good? Is there a benefit to it in this world? Sometimes even bad things have good consequences even if unintended. The only positive argument I’ve been able to find is that people with large amount of resources are able to invest heavily and develop quickly technologies which might take far longer to develop otherwise. Technologies that might even save lives. But such things are hard to quantify and must also be measured in against the suffering that greed costs. It also assumes that technological advancement should be a priority over other things. I wonder sometimes that even if some discovery save lives, does that mean we are actually learning to value life? If I’ve made the world better, but only did so for more profit, is the world actually better? Or do the intentions matter for building a better future?
In this conversation I have not talked about economic systems much. I don’t consider socialism vs. capitalism a battle of moral systems. I think if our morals were in place both systems can be very effective. Greed is the corruptor of both. My personal feelings are that a dose of each is the best, although I’m still working out the proportions. Fundamentally, to my understanding of capitalism it’s focus is the acquisition of wealth. Socialism makes more statements about how society should have a stake in the wealth it produces. For me, I will personally lean more towards socialism because it is the only system that demands that we think about how we allocate resources in a fair manner. I realize this is a point of contention upon many, and I am not going to make a strong evidence case for my views here in this post as the focus is on greed. Suffice to say I am acutely aware of the positive things that capitalism has done. I’m also aware of the many negatives. Here is just one expressed by a fellow blogger and one of the most well read people I know.
I also want to be clear that while I have spent a lot of time chastising those who have the upper echelon of wealth, the fact remains that most of not all the people who will read this post are in the top 1% globally (including myself), and thus we could all be probably doing more than we are. We certainly can’t use a greater degree of greed as an excuse to not try to do what we can. I am not immune to the comforts that having a decent living wage provides. Perhaps the best way to prevent greed from destroying our society is for all us to adopt a philosophy that prevents it from taking a deeper hold in our own lives.
End Note
Please check out more about Will MacAskill in the link I provided above. His projects towards effective altruism are truly wonderful visions and I think it’s a project we can all get on board with.
Cloak Unfurled 
This is excellent.
Thanks for the compliment though you exaggerate 😁.
I have struggled with the question of what can be done to right inequality.
Maybe paying people a fair wage, is a good place to start. Then employing more people & reducing work hours is the next logical thing to do.
Tax havens should not exist. Money is hidden there that could otherwise improve lives.
Maybe a cap on how much one can inherit. Too much wealth and extreme poverty are both a threat to democracy and peaceful coexistence.
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Well I might have exaggerated if I said you were the most well-read person ever, but perhaps the better compliment is that you seem to read a lot of books which are not the normal books people read, which is probably the right way to do things!
I agree with your suggestions, I mean I think there are some obvious things we could easily say would at least be a step in the right direction, but the people that could enact those types of policies are also wealthy or prone to be corrupted by a wave of cash. This is also why I favor a short term political position over arguments over experience, because I think shorter terms for politicians leads to more opportunities for political courage.
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To deal with the wealthy employers, workers unions need to unite and lobby together instead of having these disjointed fights that are not effective.
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Fromm’s quote could be about heroin.
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Well since hoarding money is very much like addiction it certainly fits!
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…and then chasing the dragon, never being satisfied.
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Greed by itself isn’t such an unnatural condition, I think we all share a bit to some degree, we all would like to keep a little more of our income for example. It is greed’s other friends pride, wrath, and envy, that make greed…well, more presidential.
As in many things there is a sliding bar on the human condition that can take any attribute into an undesirable zone. The sort of massive wealth that ignores the struggles of humanity for the sake of greed itself could use some sort of reality check. At the very least they should have to pay their fair share in taxes and not be sheltered by loopholes in the system.
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Hi SD. Thank you for the comment! I agree with you that it is not that much of a mystery why we would be greedy, especially in a large society in which we are detached from people who are decisions touch. In our hunter-gatherer days you knew, personally, every single person who was impacted by the things you did, but today that’s not the case. If you’re a wealthy CEO, guaranteed you don’t know personally and grew up with all the people that work for your corporation. You probably surround yourself with people who have your excesses as well and thus your life becomes somewhat normalized. But I do think there is an extra pathology that develops by that excess becoming normalized in which you work to not only protect the excess but get more of it. Living in a tribe I think empathy for our fellow tribespeople was our natural reins on excess. This does not exist in “civilized” society.
As in many things there is a sliding bar on the human condition that can take any attribute into an undesirable zone. The sort of massive wealth that ignores the struggles of humanity for the sake of greed itself could use some sort of reality check. At the very least they should have to pay their fair share in taxes and not be sheltered by loopholes in the system.
Extremely well said.
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… But I do think there is an extra pathology that develops by that excess becoming normalized in which you work to not only protect the excess but get more of it.
BINGO!
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Yeah, those wealthy CEO’s, the one percenters, want nothing to do with us “normal” people 😉 They want to rub elbows with tRumps and pass the Grey Poupon amongst themselves, well away from the likes of us.
Just as well, I don’t think It would be long before they called security on the likes of me. 🙂
But they are certainly disconnected from our reality as much as we are disconnected from the barefoot hillbillies in E Tn. I guess there is some sort of moral in there somewhere, but all I can think is, equality means different things for different people, but we all deserve an opportunity at a fair shake in life. Making the most of it is our problem…
I was driving home the other day after picking the wife up from work, there was a guy parked on the side of the road, in a blind curve no less, and I slowed to see what was the issue. He started in about his wife throwing him out, he got this far and ran out of gas, and he is disabled and blah blah stuff I didnt really need to know. I told him I’d do what I could to get him some gas. Now Im 20 miles from home and a gas can that I already own, so went to Wal Mart and got a 2 gallon gas can (something like 15 bucks! We all need another gas jug right? Plus… a funnel because you cant just pour gas into a car with a jug anymore Add another 2.50) Then went and put gas in it, (5 more bucks) and I was wondering if the guy would still be there when we got back. He was. I put the gas in his car and handed him a 10 dollar bill, told him to go get something to eat. That was all I could do. (Damn near 30 bucks now) Then he asked me if I could help him with another 20 bucks to mount a tire on his car. I was like sheesh! By this time I’m out 45 minutes, 30 dollars, plus my time, and the guy wants more. I politely told him I have done the best I can. Here’s the kicker, after my wife’s patient died recently, she hasn’t been getting much for hours, Im about taxed out on the money I get, and we could darn well not afford at this time to go out of our way in such a fashion. But the thing is we did.
How many CEO’s would have done the same?
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You’re a good man SD. No question. I agree that not many CEOs would have stopped.
While I agree that we tend to live in our financial bubbles, I would say that when you are middle class you tend to at least be more aware of what poor people go through simply because either you grew up that way, or maybe your parents did. Wealthy people I think are further removed from that reality so I think it’s even harder for them to have empathy from something they really aren’t exposed to in any experiential way. The rags to riches stories are few. Bill Gates might be a good example of somebody who has stronger memories of poorer beginnings and is giving back to the world.
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I find this sort of discussion incredibly confusing because establishing parameters is so very difficult. To decide what’s excess, first we have to decide what’s “normal” – and there things get tricky.
Can you answer what normal is? Isn’t minimum wage or struggling the actual normal? An interesting figure caught my eye recently. Macron proposed a reduction to one of the two property taxes in France (Fonciere is for the property owner, and Habitation is for the person who occupies the property). Habitation tax will be reduced to zero in households where the total income is less than 43,000 per year. And 80% of the population will benefit from the measure. You wouldn’t think of people on 43,000 a year as the “elite”, wold you? And yet that’s where the top 20% begin. Here’s an eye opening illustration for you:
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This is a very good question Pink, I definitely understand your concerns. Let me first say that I hope I haven’t given the impression that I am trying to make everybody’s salary the exact same by any means. I think that a society should definitely have some income inequality. I think a degree of it is healthy. I don’t think that we have a healthy amount in the U.S. And keep in mind the U.S. is in a far worse situation for income inequality than all other western countries but Luxembourg which I think we can agree is not your normal country!
Defining a normal salary is difficult as it varies by country and even within a country. Depending on whether you live in a rural area, small town, small city, major city, coastal or inland. My goal here wasn’t to establish this minimum, although I do think there are ways to calculate such a figure for a particular region, but I think we can do a pretty good job of at least saying what’s not normal. Being homeless is not normal. Not getting basic nutrition and 3 meals a day is not normal. On the other end I think we can safely say that you don’t need a yacht or a mansion or a 7 or 8 digit Christmas bonus. Somewhere below 10,000 euros and above a million euros I think we can agree that we are starting to get into the not normal range there. It seems to often be the case that those within this range are more often the ones that are asked to be the safety net for those less fortunate, and that those with immense wealth seem to remain that way. As I said in the first part of this, every homeless person could get shelter and 3 meals a day for a 2% reduction of the average income for the top 0.1% in the U.S. That was based on assuming that the average homeless person would need 30K a year. Maybe it’s a little higher or lower, but in the U.S. that seemed like a reasonable number. The exact boundaries of normal certainly will find themselves lots of debate and so I have largely stayed away from that area, given that I can find some things that are obviously not normal.
My other goal here was to look at how the wealthy have normalized what’s not normal. If we think of this in terms of a normal distribution in statistics, all I’m looking at is largely the tail ends.
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I´ve been thinking about this. Has any economist done a model of how income distribution might look with higher levels of tax at the wealthier end
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I do know that federal income taxes were far more progressive from the post WW2 era in the U.S. until the 70s. The Reagan presidency, which was when taxes to the rich became significantly lower is when income inequality began to take off in this country. I am sure the picture is much more complex than just that, and it probably depends on what the tax money gets used for. Is it straight redistribution? Or is it for health care, Education, progressive methods for dealing with addiction, more progressive criminal reform programs, etc.
In trying to answer your question I found some interesting research on income inequality in the U.S. from a historic perspective that also includes data up to this year. One of its findings is that in the U.S. transfers (things like social security and welfare checks) are more effective at reducing income inequality than progressive federal income tax rates, since those can often be offset by other taxes like sales tax, or property taxes etc.
https://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality
I’ll also e-mail you a journal article my colleague here in the economics department sent me that looks at taxes vs transfers in OECD and how that impacts income inequality.
In doing some research on Universal Basic Income there also seemingly so good evidence to suggest that this would be beneficial in helping people have more social mobility and survive so they can get further training and education. There are some who feel that UBI in the U.S. could be paid for by some sort of tax applied to tech companies, so redistribution from the wealthy to rich may not be necessary.
Anyway, I’ll send you the e-mail now.
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Well considered post, Swarn. You’ll find no argument here. It’s astounding, this kind of overreach when so many are without basic necessities. Thanks for your contributions here. ❤️
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Swarn,
WOW again!! I have been on both sides of the fence!! And climbing out of “medical poverty is a bitch!!” And it has not been fun. While I was once well respected in Colorado, those who have found out due to my extreme costs of medical took everything I had, that I had to live in my car with my service dog and cat; they made for the road via Jamaica – France &c….
They are millionaires and I had to recover on my own, including those who were middle class left.
Now to the Greed mention, a great example was Rockefeller, a herculean billionaire out to squelch all!! In the end he donated his wealth to charities.
Why is it hard for many to give even a $1 to a homeless person is beyond understanding, except we are staunch prejudice and project the worse on those who do not have money.
The Greed side seems to be a deepened fear in being that very person on the corner, or the persecution aspect “Let them work for their millions I did” attitude – and why should anyone of us help refugees, homeless, mental ill, why should we help anyone who fails in our nation,” all is equal.
It is NOT Equal. Some have more opportunities – Trumps’ father gave him 400$ million.
Should we share? Altruistic humanitarians will say YES. Others say, they need to pull themselves up by their own boots straps; which is impossible. We all have some degree of help along the way, or we become homeless, live in utter despair – PTSD and suicide. Because living at this stage lends nothing to a poor person.
Now, knowing and have lived in socialize countries, I am advocate!
1) I would still have my home and possibly the proper medical treatment I required instead of me figuring it all out on my own and falling into the depths of shame.
2) Lends to equal opportunity
3) Most really rich people are not going to give in.
What they do not realize, all of us have work damn hard!!!
OK Next :d
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Well said MicheleElys. I think the pull yourself up by your own bootstraps ideology is one that can easily be used as an excuse. It sounds good on the surface, and it is important to have self-determination in one’s life, but it’s also true that circumstances also matter.
Some people are just extraordinarily talented and have a greater ability to pull themselves up. But most of the time people delude themselves in thinking that they alone pulled themselves up, without recognizing the support in their life, without recognizing the structure that society provides to make so many things possible.
And then there is the assumption that if people’s lives aren’t improving they must not be working hard. This is just a myth,
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Swarn,
I found something you may like to listen to from TedTalks about oxytocin and greed
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