The Problem of Wealth & Poverty
JAMES R. FISHER, JR., Ph.D.
© January 18, 2017
A READER WRITES:
You quote:
Nobel laureate (2001) in Economics Joseph E. Stiglitz argues in “The Price of Inequality” (2013) that America currently has the most inequality, and the least equality of opportunity among the advanced countries.
The numbers are indeed impressive and your concern with them obvious, but I must confess that I don't share those concerns. Perhaps that is because, although I have been listening to them as voiced by a variety of sources for a couple of decades now, I have yet to become aware of any of the negatives that are supposed to have occurred. Perhaps also it is because regardless of the level of income equality anywhere in the world under any form of society, I have never known it to be other than the rich and powerful who make the decisions.
We the people get to influence the action to some extent and I think that extent here in the USA remains as great as anywhere, despite our sins of income inequality and inopportunity.
Simple observation also impacts my inability to get concerned over the issue. The UN does a work up each year on how happy people are with living in their country.
In 2015 the Mexican people came up happier than their neighbors in the USA. In 2015 8.85% of the Mexican population lived outside their country. The vast majority of them in the USA. At the same time only 0.92% of Americans lived outside the USA.
Interestingly, the largest single group of those were living in Mexico. In comparison, however, there were 13.5 Mexicans in the USA for each American in Mexico. The Mexicans were living in the USA so they could earn money to send back home to Mexico, or to live a better life here. The Americans living in Mexico were mostly seeking to stretch their retirement dollar, or Americans of Mexican extraction retiring to their homeland. The USA in fact remains by far the world's preferred destination for immigrants.
The outflow from all those countries rated happier than Americans to the USA is far greater absolutely or proportionally than movement from the USA to elsewhere. Are those people gluttons for punishment, or just ignorant of this country's inability or unwillingness to offer them equality of income or opportunity to rise up economically?
Perhaps it is that income equality just isn't all that meaningful. For example Germany, Denmark and Sweden are all stars of the European Union and each has a GINI Coefficient (measure of income equality where 0 equals equality) of 20 - 30 which is far better than that of the USA at 40-45.
If that is in some sense important, as you indicate, it is then also probably important to note that Ukraine, Ethiopia, Afghanistan and Kazakhstan all have the same 20-30 GINI. Then there is Venezuela, the world's latest effort to prove the benefits of socialism with its GINI a bit worse than the USA at 50-55. Meanwhile, freed from the oppression of apartheid South Africa, along with its neighbors Namibia and Botswana have GINI ratings of an egregious 60-66 while Iran and Chad are caring for their happy people with GINIs of 30-35. I would suggest that simple measures of income are a poor basis for judging the benefits of living in a country.
I also think that criticism of the current situation in terms of a lack of opportunity is inappropriate. In 1985 this country had fewer than 15 billionaires. It now has 525 plus or minus a couple. An equivalent expansion of millionaires has also occurred over the same time period. Mostly these fortunes are new found and result from the creation of value within society. Gates, Zuckerberg, Ellison, Bezos did not come from wealth and advantage.
They made theirs in the face of this supposed unequal, inopportune society. While their wealth may now bring them opportunity for power, that does not mean developed it from some position of power and it doesn't mean they seek it, or if seeking it seek something inappropriate. By no means does it suggest that a new Bezos cannot arrive on the scene tomorrow. In fact the research being done at the behest of Gates, Ellison et al for purposes of supporting philanthropy, work and hobbies may provide the key to new products and means of wealth building that results in new millionaires.
I am far more worried that the government will decide to take a high percentage of their income and give some bureaucrat who has never created a job the authority to decide how it should be spent and to whom it should be given based upon some legislative nonsense such as drives our current government spending.
The truth is that most of these guys are going to give most of their fortunes to society in one way or another and I trust the judgment of those who were smart enough to earn it more than any government bureaucrat as to how it should be spent.
Some of these rich guys will prove to be bad guys and they should be punished for it, but rather than presume they present a natural threat to society and in consequence adjust our society in some way to,... what, preclude the development of millionaires and billionaires. Really? Someone would still influence government bodies and law creation and, relatively, they would still be the "rich and powerful".
Finally, it isn't their wealth that bothers me it is things like Echo and Siri sitting in our homes and listening to all we say. Talk about “1984.” Now there my friend is something to worry about.
DR. FISHER RESPONDS:
When John Locke was coming up with his "life, liberty and property," and John Adams was coming up with his "invisible hand" in commerce, and David Hume was coming up with his “individual self-interest,” and Thomas Jefferson was distilling the product of their minds to write "The Declaration of Independence," it was a much simpler less conflicting world.
We owe these lights of the Enlightenment a great deal although they lived 300 years ago.
The mind, not the material world, per se, was the critical mass of science and philosophy in the 17th century. Now, people can't seem to get past talking about money.
As you point out, there are a lot more billionaires today than only twenty five years ago. Many are innovative entrepreneurs who climbed on board the "Information Age" in its infancy, and are now riding its ungodly wrecking machine to financial gain.
Most of the wealth creators -- certainly not all – currently appeal to our self-indulgent side. Zuckerberg recognized that the social media (Facebook) was made for every small town hero worshiper of celebrity. Now, they could be their own celebrity in the small world of their friends and acquaintances without all the aggravation of celebrity super stardom.
As I have written elsewhere: we are all egotists; we all want to think well of ourselves; we want to feel important, special and to amount to something; we seek the approval of others so that we may in turn approve of ourselves. Facebook understood this about people and ran with it.
But like the 17th century, we need minds to evaluate and determine the relevance of these predilections in the scheme of things. asking the question: are we moving towards or away from human enhancement?
That is what such men as Locke, Hume, Adams, Hobbes and others did, giving birth to the most creative and culturally uplifting, the “Age of the Enlightenment.”
It led to the American Revolution and the French Revolution, building on the 16th century’s Protestant Reformation and its work ethic and giving birth to the spirit of capitalism that Max Weber would write about in the early 20th century.
As Christopher Lasch points out, with the collapse of clear boundaries and definitions of power and persons, expectations have diminished. The world is quivering with the wholesale clamor and white noise of voyeurs and exhibitionists crying for attention -- including the terrorists – people desperately needing an audience to legitimize themselves and/or their cause. Madness has become the social norm (look at daytime TV if you need corroboration).
People who have enough to be comfortable and who enjoy the life of relative anonymity may have difficulty understanding inequality because it doesn't visit the front door. For sixty million Americans it does.
Twenty million (or more) of that 60 million are not even in the labor statistics, people who want to work; people who want to make enough to be relatively comfortable; people who are not interested in redistribution of income; or in some welfare scheme that guarantees them a living wage. They want a job. They want their dignity back! They want to be able to walk down the street with their heads held high and feel good about themselves because they are paying their way. They don't want any handouts!
Politicians and corporations have unwittingly taken this dignity away from them. Instead, they use scare tactics talking about income redistribution and free college and free this and that, and of course nothing really happens.
Those in politics could create good paying jobs by sensible tax and trade policies and in constructive infrastructure spending; those in corporations could be more long term imaginative and less short term obsessive.
You can develop a potpourri of algorithms on "happiness," but none have any meaning as only one’s expectations are a reliable gauge to happiness or its lack.
Moreover, happiness is less about security once a living wage is realized and more about being engaged in fulfilling work. In my long life, I have met few (very few) people who actually claimed to be happy in work.
They might say they loved what they were doing, but their behavior suggested otherwise.
The corollary to this, I have asked on several questionnaires over the years what people would like to do if all barriers were removed?
Most people have no idea. They have never thought seriously about it, or taken the risks to do that something.
Now in that sixty million I mentioned earlier, many of them never had the luxury to consider what they would like to do. They were too busy trying to survive below the poverty line.
My criticism of Dr. Joseph Stiglitz has been that he cannot solve the dilemma; nor can he effectively create a laboratory best case scenario.
You correctly point out that you cannot change human nature. As a consequence, metaphorically speaking, the wealthy pick the best fruit from the tree and leave the remaining fruit or fruit that falls to the ground for the rest of us to fight over.
Stiglitz thinks education can change this. Perhaps a little. Obviously, it did for me (I discuss this in my answer to another query) but only to the comfortable level.
If you ever have known a millionaire, and I've known a few, they are generally pretty miserable people; many have made and lost fortunes more than once. Millionaires are like the obese, once they have a sumptuous meal they cannot help but talk incessantly about food and the next meal.
I did my doctorate where the president of the university believed in and was a passionate advocate of social justice. Economic parity is as difficult to define as is social justice. Hume, Spinoza and Hobbes were suspect of man's humanity as am I while Locke and Adams and Hume considered self-interest to dominate behavior, and not always wisely. I believe I am in their camp.
You mention George Orwell's "Nineteen Eighty-Four" and his "Big Brother" constantly watching us. He conceived this ideas almost a century ago, but wrote about it in 1948. Orwell was a dystopian novelist, a visionary. High tech dystopian novelists seemingly are lost today in pyrotechnics and mechanistic mayhem. Where did our thinkers go?
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