Thursday, December 30, 2010


Sam Harris, self-proclaimed member of the "haves," as well as a neuroscientist and author, wrote today in the Huffington Post about the growing wealth gap between the "haves" and the rest of us. 

I ask that my libertarian and Republican friends kindly perservere through my blog today - if for no other reason than to humor me - even after your gut says Harris is probably one of those left wing elitists who want to tell us all what to do and how to spend our money.  I don't really believe that, by the way, but I know some of my pals will see it that way.  Try not to bite your tongues past that point where blood is involved.  Harris begins:

"While the United States has suffered the worst recession in living memory, I find that I have very few financial concerns. Many of my friends are in the same position: Most of us attended private schools and good universities, and we will be able to provide these same opportunities to our own children. No one in my immediate circle has a family member serving in Afghanistan or Iraq. In fact, in the aftermath of September 11th, 2001, the only sacrifice we were asked to make for our beloved country was to go shopping. Nearly a decade has passed, with our nation's influence and infrastructure crumbling by the hour, and yet those of us who have been so fortunate as to actually live the American dream--rather than merely dream it--have been spared every inconvenience. Now we are told that we will soon receive a large tax cut for all our troubles. What is the word for the feeling this provokes in me? Imagine being safely seated in lifeboat, while countless others drown, only to learn that another lifeboat has been secured to take your luggage to shore... "

Many of my readers are youth - my students.  Depending on your upbringing, you may or may not relate to a perfectly comfortable life - a life that has enough of a cushion to weather a financial malstrom.  A life that gets adjusted in an economic downturn by keeping a car a year or two longer, or staying in the U.S. for vacation this year. 

But those of you who do relate, Harris is getting ready to help you think about what happens when the nation's wealth becomes more concentrated into fewer hands.  There are more poor people in our country right now than at any time since the Great Depression.

During the Great Depression, President Franklin D. Roosevelt created jobs programs that created actual jobs.  His largest program, the WPA [Works Projects Administration] created eight million jobs between 1935 and 1943. 

We, by contrast, have created stimulus programs which require that we hold our breath and hope jobs will be created.  One of the reasons we go that route is because jobs programs would be government-run and these days we lack political will for programs that increase government.   Instead, we all get mad at President Obama when holding our breath does not result in enough jobs.  It's such a catch-22. 

Yes, yes, right-leaning friends.  I know you would have created an entirely different stimulus package, for which we would also have been required to hold our breaths and hope.

Since that is not the stimulus package we have, however, you remain free to imagine that your stimulus plan would have resulted in more jobs than the Obama version.  Such imaginings are both the consolation and political weapon of the minority party. 

Frankly, the only sure way to use taxpayer money to create jobs is a jobs program, but these days, that's a "when pigs fly" kind of thing.

But let us return to Harris:

"Most Americans believe that a person should enjoy the full fruits of his or her labors, however abundant. In this light, taxation tends to be seen as an intrinsic evil. It is worth noting, however, that throughout the 1950's--a decade for which American conservatives pretend to feel a harrowing sense of nostalgia--the marginal tax rate for the wealthy was over 90 percent. In fact, prior to the 1980's it never dipped below 70 percent. Since 1982, however, it has come down by half. In the meantime, the average net worth of the richest 1 percent of Americans has doubled (to $18.5 million), while that of the poorest 40 percent has fallen by 63 percent (to $2,200). Thirty years ago, top U.S. executives made about 50 times the salary of their average employees. In 2007, the average worker would have had to toil for 1,100 years to earn what his CEO brought home between Christmas in Aspen and Christmas on St. Barthes."

"We now live in a country in which the bottom 40 percent (120 million people) owns just 0.3 percent of the wealth. Data of this kind make one feel that one is participating in a vast psychological experiment: Just how much inequality can free people endure? Have you seen Ralph Lauren's car collection? Yes, it is beautiful. It also cost hundreds of millions of dollars. "So what?" many people will say. "It's his money. He earned it. He should be able to do whatever he wants with it." In conservative circles, expressing any doubt on this point has long been synonymous with Marxism.

And yet over one million American children are now homeless. People on Medicare are being denied life-saving organ transplants that were routinely covered before the recession. Over one quarter of our nation's bridges are structurally deficient. When might be a convenient time to ask the richest Americans to help solve problems of this kind? How about now?"

This conversation brings to mind another writer, economic historian and philosopher, Carl Polanyi.  In his seminal work, "The Great Transformation," Polanyi explains how capitalism came into existence, what evils it erases and what evils it cannot erase.  By the way, if you've never read this book, do it!  It may have been the singular best use of nonfiction reading time I've ever spent.  I don't say that lightly.

Polanyi discusses the role of redistribution of wealth across time and culture.  It's always been with  us.  From small society to large.   Consider the Trobriand Islanders of Malanesia, whose chief is the recipient of a substantial portion of the locally grown produce.  He, in turn, stores and distributes it to his people as needed.  Hammurabi's kingdoms in Babylonia and in Egypt were similarly centralized bureaucratic despotisms to which spoils were gathered, and from which they were redistributed to the population.  Our biblical history tells us that Joseph's Pharoah gathered and stored grain to redistribute to the people, especially during times of famine.  In fact, until secular government displaced the Church as the primary institution, regional and local churches were the institutions of wealth gathering and redistribution, and had primary responsibility for the poor.

Today the wealthy collect money, not storehouses of food goods.  That makes it more difficult to see that redistribution can sometimes be fair and necessary.  Recalling Harris' figures (40 percent of the poorest own just .03 percent of the wealth):

If 120 million Americans owned only .03 percent of the foodstores, it would become obvious that the horded foodstores needed to be redistributed. 

It's harder to understand that coins, bills, gold bars, land holdings, redistributed, becomes food, clothing, shelter in the hands of the poor.  This is not to say that wealth should simply be handed out.  There is nothing to say that some of this redistribution cannot be contractually handled - e.g. folks can work for their supper.  But let's put that issue on the shelf for the moment.

Harris notes that part of the objection to redistribution is because the money goes through the government in the form of taxes.  Not only do people not like to give up their money, but they particularly, in our day and age, do not like to give it up through government, which is viewed as bloated and bureaucratic on the one hand, and as spending our hard-earned money to pay for assorted pork projects for special interests on the other. 

"It is easy to understand why even the most generous person might be averse to paying taxes: Our legislative process has been hostage to short-term political interests and other perverse incentives for as long as anyone can remember. Consequently, our government wastes an extraordinary amount of money. It also seems uncontroversial to say that whatever can be best accomplished in the private sector should be. Our tax code must also be reformed--and it might even be true that the income tax should be lowered on everyone, provided we find a better source of revenue to pay our bills. But I can't imagine that anyone seriously believes that the current level of wealth inequality in the United States is good and worth maintaining, or that our government's first priority should be to spare a privileged person like myself the slightest hardship as this once great nation falls into ruin.

# # #

And here I omit a few of Harris' words. To make it flow without the missing transition, I offer up the word, "Yet...

American opposition to the "redistribution of wealth" has achieved the luster of a religious creed. And, as with all religions, one finds the faithful witlessly espousing doctrines that harm almost everyone, including their own children. For instance, while most Americans have no chance of earning or inheriting significant wealth, 68 percent want the estate tax eliminated (and 31 percent consider it to be the "worst" and "least fair" tax levied by the federal government). Most believe that limiting this tax, which affects only 0.2 percent of the population, should be the top priority of the current Congress.

According to Harris, however, sooner or later the wealthy must favor at least enough redistribution of wealth to ensure the preservation of their wealthy status.  That requires a consumer class.  Consumers create the market for goods and services upon which the economy thrives.  A thriving economy supports the wealth accumulation and preservation efforts of the rich.  A failing economy tends to take wealth with it.   To ensure a consumer class, we must educate our workforce, since jobs for the uneducated are dwindling due to the double whammy of technology and the export of manufacturing overseas to cheaper labor sources.  Educated, employed workers can remain consumers. 

"Who will pay for this?" Harris asks. 

Harris says, "The wealthiest Americans often live as though they and their children had nothing to gain from investments in education, infrastructure, clean-energy, and scientific research. For instance, the billionaire Steve Ballmer, CEO of Microsoft, recently helped kill a proposition that would have created an income tax for the richest 1 percent in Washington (one of seven states that has no personal income tax). All of these funds would have gone to improve his state's failing schools. What kind of society does Ballmer want to live in--one that is teeming with poor, uneducated people? Who does he expect to buy his products? Where will he find his next batch of software engineers?"

# # #

"There is only one group of people who can pay for anything at this point: the wealthy." 

That is because they have gathered all the wealth into their own storehouses.  Redistributing some of it to pay for education and other infrastructure to shore up the realm may readily be seen as a cost of wealth preservation. 

So, what, exactly is the objection?

# # #

"Perhaps Ballmer is simply worried that the government will spend his money badly--after all, we currently spend more than almost every other country on education, with abysmal results. Well, then he should say so--and rather than devote hundreds of thousands of dollars to stoking anti-tax paranoia in his state, he should direct some of his vast wealth toward improving education, like his colleague Bill Gates has begun to do."

Can you see where this is headed?  Harris knows the politicos are in no mood to extract monies from the storehouses of the wealthy by taxation fiat.  He is about to suggest that the wealthy step up to the plate and deliver the gold bars themselves!  Brilliant!

"There are, in fact, some signs that a new age of heroic philanthropy might be dawning. For instance, the two wealthiest men in America, Bill Gates and Warren Buffett, recently invited their fellow billionaires to pledge the majority of their wealth to the public good. This is a wonderfully sane and long overdue initiative about which it is unforgivable to be even slightly cynical. But it is not sufficient. Most of this money will stay parked in trusts and endowments for decades, and much of it will go toward projects that are less than crucial to the future of our society. It seems to me, however, that Gates and Buffett could easily expand and target this effort: asking those who have pledged, along with the rest of the wealthiest Americans, to immediately donate a percentage of their net worth to a larger fund. This group of benefactors would include not only the super-rich, but people of far more modest means. I do not have 1/1000 the wealth of Steve Ballmer, but I certainly count myself among the people who should be asked to sacrifice for the future of this country. The combined wealth of the men and women on the Forbes 400 list is $1.37 trillion. By some estimates, there are at least another 1,500 billionaires in the United States. Something tells me that anyone with a billion dollars could safely part with 25 percent of his or her wealth--without being forced to sell any boats, planes, vacation homes, or art. As of 2009, there were 980,000 families with a net worth exceeding $5 million (not including their primary residence). Would a one-time donation of 5 percent really be too much to ask to rescue our society from the maw of history?"

"Some readers will point out that I am free to donate to the treasury even now. But such solitary sacrifice would be utterly ineffectual, and I am no more eager than anyone else is to fill the pork barrels of corrupt politicians. However, if Gates and Buffett created a mechanism that bypassed the current dysfunction of government, earmarking the money for unambiguously worthy projects, I suspect that there are millions of people like myself who would not hesitate to invest in the future of America.'

I like Harris' idea.  I often thought that the Health Care lobby should have gathered into a room and figured out how to reform itself, and offered that up to the country.  It would have been bold, the right thing to do, an acknowledgement of reciprocity and symbiosis with the consumers who support the industry.  In the same way, the storehouse keepers of the realm's wealth ought to get together to figure out how to fairly redistribute some of it for the health of the realm.  Harris goes on to imagine what that redistribution might look like, and you can click this sentence to be whisked to Harris' article for the full roll-out.  Myself, I will end this blog with a few supportive words from some historic figures. 

"Money is like muck, not good except it be spread. ”

—Francis Bacon, 'Of seditions and Troubles', Essays, 15

"Surplus wealth is a sacred trust which its possessor is bound to administer in his lifetime for the good of the community."
—Andrew Carnegie, citation unknown.

"Jesus, looking at him, loved him and said, 'You lack one thing; go, sell what you own, and give the money to the poor, and you will have treasure in heaven; then come, follow me."

— Mark 10:21.

"If a free society cannot help the many who are poor, it cannot save the few who are rich.'"

— John F. Kennedy


  1. This is a very compelling essay. I must admit that while I consider myself somewhat more toward the conservative end of the political spectrum, I was very moved by this article. it is truly scary to ponder where our country is headed. I do agree that philanthropy must be a priority among wealthier Americans. Unfortunately, it seems that greed has overtaken many of the wealthiest Americans desire to be philanthropic, as exemplified by the comments of Steve Balmer, a man of far greater means than anyone likely to read this blog.

  2. So, Dr., does that mean you'd join Sam and give over some part of your hard-earned salary to help the poor if called upon to do so? ;)