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| Portrait of Australian Mining Billionaire Gina Rinehart by acclaimed artist Vincent Namatjira. National Gallery of Australia has refused to accede to Rinehart's demand for it to be taken down. |
What if the highest annual compensation for anyone in any company could be no more than ten times the salary of the lowest paid employee? What if no one could make more than a million dollars a year or have more than ten million in assets. Easy! You say. Entrepreneurialism would die. Creativity would die. Why try if you could never get rich trying? It's obvious! Only it's wrong. I’ll tell you what would happen. The incentives to be head of a company would change. Those motivated only by money would be relegated to the dustbins of history and because of it, the world would become a much better place. Now the incentive for a person to be head of an enterprise would be not a thirst for Power and money and dominance. That would be impossible. They would instead be motivated by a desire to do the work. The mission of companies would change from unlimited growth at the expense of everything and everybody else to fulfillment of a need.
In truth there have been periods even in American history in which salaries were limited by a tax rate designed to take the burden for funding the public projects that are the domain of our shared government off the backs of the lowest paid in the county and place it where it more properly belongs, off of those who make more money than any person has a moral right to make. The tax rate in the Eisenhower years was 90% for the top bracket. That forced civility was responsible for the building of our interstate system and infrastructure, for a general prosperity of large working and middle classes and for the building of our space program from scratch. The tax rate of the top bracket was 70% when Ronald Reagan took office and 30% when term limits mercifully ejected him. (Yes that was B-movie has-been Ronald Reagan dogging around the worst developments of recent history yet again). Today in the US, the limit on the amount that the top paid can be taxed is 37%. Thanks to loopholes, exceptions, deductions and finaglings of what philosopher Ingrid Robeyns calls the "wealth defense industry", many many of our most heavily salaried and the corporations they run pay next to nothing. This means the burden for keeping our shoestring government together falls on those who are among the most financially precarious themselves.
Robeyns's new book Limitarianism makes the case that unlimited wealth for the tiny minority is not merely immoral for many certifiable reasons but an extravagance that the species and the planet can no longer afford and the cause of the majority of our most urgent crises. The top 1% in income (78 million people) are responsible for the same amount of global warming pollution as the bottom two-thirds (roughly 5 billion of the planet's 7.8 billion people). The top 10% (780 million) are responsible for as much as the other 90%. Through their investments, their wealth and their extravagant lifestyles, Billionaires (of whom there are currently around 2781) are responsible for more than a million times the global warming of those in the bottom 90%.
The extent of the problem of the overpaid is poorly understood (probably on purpose). Robeyns describes an experiment in which people are asked to guess their own place on the spectrum of wealth; to estimate what percentage of wealth is owned by each of the 5 quintiles of the world's population organized by wealth; and to assess a more equitable distribution.
The perfectly equal distribution gave each of the five groups exactly 20 percent of all wealth. A somewhat less equal distribution gave each of the quintiles a different share of the total wealth. They received, respectively, 36 percent, 21 percent, 18 percent, 15 percent, and 11 percent of all wealth. The last option was the actual wealth distribution in America in 2005, with the five groups holding 84 percent, 11 percent, 4 percent, and virtually nothing for the last two groups. A whopping 92 percent of respondents choose the second option.
The top 20 percent of the population at the time of the study had 84.4 percent of wealth, but respondents thought it was 58 percent. They wanted it to be even smaller, namely 31 percent. The bottom 20 percent had almost no wealth (0.1 percent, to be precise), yet participants in the study thought they had 3 percent, and would want them to have about 11 percent
Robeyns theorizes, probably accurately that people identify with the wealthy and advantage them in the study as they would like themselves to be advantaged should they attain the wealth to which we are all enculturated to aspire. Similar logic applies to why inheritance taxes are so unpopular even though they are structured to mitigate the unearned advantage that offspring of the wealthiest have by virtue of being "born on third base." While we like to think our own children will not be penalized for whatever meager wealth we can pass on to them, inheritance tax loopholes are designed to keep money that does not belong in the concentration that the wealthy have it in away from the type of government program that could do the most public good. The "trickle up" nature of our economy that funnels the meager earnings we can make down here to the already bursting coffers of the wealthy up there is designed to make it ever harder for those at the bottom of the pyramid to ever scale the walls. This rigged system nevertheless produces a class of wealth hoarder who thinks his wealth is earned. But as Robeyns writes:
It is fodder for psychologists why so many people have such a great urge to believe that they are strong, capable of life on their own. We are not. None of us can survive very long without other human beings
As Robeyns asks:
How can Tim Cook, the CEO of Apple and who became a billionaire thanks to Apple, sleep peacefully at night knowing about the poor, sometimes horrendous, working conditions endured by men and women in the assembly line of Apple’s Chinese factories?
Fortunately the target of capitalistic excess is a huge one and Robeyns offers several attacks to undertake to bring us closer to a more egalitarian world:
Dismantle neoliberal ideology - It's beyond time to end the hegemony of the well-funded, deviously strategic but ultimately intellectually impoverished neoliberals-- the single greatest cause of our nearly universal misery and a persistent obstacle to a better future for all.
Reduce class segregation - Robeyns suggests that the ultra-wealthy, being rightfully paranoid about mingling with the masses whose lifeblood enriches them by the minute and willfully ignorant of the misery their greed breeds, might not be able to withstand their choices if confronted more regularly with people not of their own class. Likewise exposure to the lifestyles of the rich and famous could be an eye-opening experience for the many who live with the cognitive dissonance of our chosen disparity by tamping down an appreciation of the extent of the injustice being perpetrated against them daily by the slim minority.
Establish a balance of economic power - As most of the nominal democracies of the world have set up balances of political power between the branches of government to keep any of them from dominance over the others, Robeyns proposes the establishment of regulations, laws and institutions to balance the currently unbridled power of the wealth-defending financial sector of the economy.
Restore the government’s fiscal agency - specifically to return to the saner progressive tax rates of the Eisenhower era and beyond. It is high time to end the party at our expense, and to once again begin to expect the kind of service and public good of our government that we deserve and that our current structure-- dependent as it is on our own broke asses-- deprives us of.
Confiscate dirty money and pay reparations for past harms - Robeyns returns again and again to the theme of dirty money (a la Tim Cook, or the mediocre in every way except luck descendants of the many who made their fortunes leaving a trail of broken, dead bodies in their wake). Most of the super wealthy are unclean, but they could purify themselves by repairing the harm they or their forebears did.
Make the international economic architecture fair - The more you know about the behavior of Americans and other Western powers in the world, the clearer it is that our might has almost never been right. The vampiric International Monetary Fund; our campaigns of anti-communist terror; our excursions into every corner in order to assert our dominance. Our superiority is in the way we brandish our gall. We are the free riders. It needs to stop and it needs to be reversed so that the planet can breathe free at last.
Limit executive pay - In essence establish a maximum wage. Some have thought that every billionaire being a policy failure, $1 Billion is the nice round number we should use. Too high says Robeyns who suggests $10 Million as a starter figure (a maximum from which she thinks we should only go down.) I say why stop at $10 Million. Convince me it needs to be more than $1 Million.
Lastly, Halt the intergenerational transmission of wealth - If it rids the world of the billionaire class by attrition, perhaps we should do it first.
