On October 22, 2015, Paul Bloom writes on The Atlantic:
Bernie Sanders talks about economic inequality all the time, and it’s a message that resonates. You don’t need to be a socialist to worry about the divide between rich and poor in America. Many Americans across the political spectrum claim to be deeply troubled by economic inequality, and many say they support changes that would yield a more equal distribution of income and wealth.
But in his just-published book, On Inequality, the philosopher Harry Frankfurt argues that economic equality has no intrinsic value. This is a moral claim, but it’s also a psychological one: Frankfurt suggests that if people take the time to reflect, they’ll realize that inequality isn’t really what’s bothering them.
People might be troubled by what they see as unjust causes of economic inequality, a perfectly reasonable concern given how much your income and wealth are determined by accidents of birth, including how much money your parents had, your sex, and the color of your skin. We are troubled as well by potential consequences of economic inequality. We may think it corrodes democracy, or increases crime, or diminishes overall happiness. Most of all, people worry about poverty—not that some have less, but rather “that those with less have too little.”
Frankfurt argues, though, that we aren’t really bothered by inequality for its own sake. He points out that few worry about inequalities between the very rich and the very well off, even though these might be greater, both absolutely and proportionately, than inequalities between the moderately well-off and the poor. A world in which everyone suffered from horrible poverty would be a perfectly equal one, he says, but few would prefer that to the world in which we now live. Therefore, “equality” can’t be what we really value.
Some of Frankfurt’s arguments get technical, but it’s not hard to think of cases where a mistaken focus on equality makes the world worse. My favorite example here is from the comedian Louis C.K., where he describes how his five-year-old’s toy broke and she demanded that he break her sister’s toy, which would make things equal. “And I did. I was like crying. And I look at her. She’s got this creepy smile on her face.”
Can Frankfurt really be right that people don’t value economic equality for its own sake? Many scholars believe otherwise. The primatologist Frans de Waal sums up a popular view when he writes: “Robin Hood had it right. Humanity’s deepest wish is to spread the wealth.”
In support of de Waal, researchers have found that if you ask children to distribute items to strangers, they are strongly biased towards equal divisions, even in extreme situations. The psychologists Alex Shaw and Kristina Olson told children between the ages of six and eight about two boys, Dan and Mark, who had cleaned up their room and were to be rewarded with erasers—but there were five of them, so an even split was impossible. Children overwhelmingly reported that the experimenter should throw away the fifth eraser rather than establish an unequal division. They did so even if they could have given the eraser to Dan or Mark without the other one knowing, so they couldn’t have been worrying about eliciting anger or envy.
It might seem as though these responses reflect a burning desire for equality, but more likely they reflect a wish for fairness. It is only because Dan and Mark did the same work that they should get the same reward. And so when Shaw and Olson told the children “Dan did more work than Mark,” they were quite comfortable giving three to Dan and two to Mark. In other words, they were fine with inequality, so long as it was fair.
In research I’ve been involved with at Yale, led by then-graduate student Mark Sheskin, we find that younger children actually have an anti-equality bias—they prefer distributions where they get a relative advantage over equal distributions where everyone gets the same. For instance, children prefer one for them and zero for another child over an arrangement where everyone gets two.
This finding meshes well with what other psychologists have found—and which many parents have observed: When treats are being distributed, children will complain bitterly if they get less, but are entirely mellow if they get more. Other primates behave similarly. Monkeys enjoy cucumbers and will normally be happy getting one, but if they are handed one after having just seen another monkey getting a grape—which monkeys love—they freak out. The monkey with the grape, on the other hand, is perfectly comfortable with its relative advantage.
A different sort of argument in favor of a natural bias toward equality comes from observations of small-scale groups, which really do seem to be egalitarian. In small groups, goods are distributed roughly equally, the weak are taken care of, and the power of leaders is limited. It looks a lot like Occupy Wall Street.
It’s tempting to see small-group behaviors as reflecting some natural preference for equal treatment, but the anthropologist Christopher Boehm, who has extensively studied these groups, tells a different story. He argues that these egalitarian structures emerge because nobody wants to get screwed. Individuals in these societies end up roughly equal because everyone is struggling to ensure that nobody gets too much power over him or her. As I’ve discussed in my last book, Just Babies, there’s a sort of invisible-hand egalitarianism at work in these groups. Boehm writes, “Individuals who otherwise would be subordinated are clever enough to form a large and united political coalition. … Because the united subordinates are constantly putting down the more assertive alpha types in their midst, egalitarianism is in effect a bizarre type of political hierarchy: The weak combine forces to actively dominate the strong.”
This analysis helps us explain why such huge power differentials exist in the world right now, where it’s far harder for the weak to team up to dominate the strong. As Boehm tells it, in a small society, a wannabe dictator can be ignored or ridiculed by everyone else, and if he doesn’t get the message, he can be beaten up, expelled from the group, or killed. But this is a harder trick to pull in a society of millions where interactions are no longer face-to-face and where the powerful have guns and gulags.
What we see from studies of children and studies of small-scale societies is an early-emerging desire for fairness, and a particularly strong motivation not to get less than anyone else. But we don’t find a smidgen of evidence that humans or any other species naturally value equality for its sake.
Behavioral economists Michael Norton and Dan Ariely recently showed sample distributions of wealth to Americans, in which the people in the bottom fifth have X percentage of the wealth, those in the next fifth have Y percentage of the wealth, and so on. They found that Americans are very wrong about just how unequal their country is—they think that the bottom 40 percent has 9 percent of the wealth and the top 20 percent has 59 percent, while the actual proportions are 0.3 percent and 84 percent.
They also find that when asked about what distribution would be ideal, Americans, regardless of political party, want a far more equal society than they actually live in or believe that they live in. In an article published in The Atlantic, Ariely writes, “the vast majority of Americans prefer a distribution of wealth more equal than what exists in Sweden, which is often placed rhetorically at the extreme far left in terms of political ideology—embraced by liberals as an ideal society and disparaged by conservatives as an overreaching socialist nanny state.”
These are important findings, but Frankfurt’s analysis motivates us to question what they really mean. Ariely emphasizes that Americans want a far more equal society than they have, but it’s worth noting that they don’t actually want equality. The study finds that when asked to create a perfect society, respondents choose one in which those in the top fifth have about three times more wealth than those in the bottom fifth. This hardly settles the issue, but it should motivate us to take seriously Frankfurt’s skepticism about what we really want—and his concern that we worry too much about relative differences, and not enough about fairness and, above all, the suffering of the poor.
https://www.theatlantic.com/science/archive/2015/10/people-dont-actually-want-equality/411784/
Gary Reber Comments:
Bernie Sanders’ platform for change, that he talks about during his rallies, is all about a responsible change in our political landscape that will bring about a better life for ALL Americans. But to do that is largely centered on economic policy. Unfortunately, Bernie never talks about empowering non-owners, the vast majority of Americans, to become owners of wealth-creating, income-producing productive capital assets, exactly why and how the rich are rich, and continue to become richer.
The system is broken and results in the concentration of capital wealth among a tiny few. Bernie talks about three families hoarding the ownership of capital wealth. If he wants to solve the problem of economic inequality, Bernie should be advocating for broadening productive capital ownership. He should be advocating for equal opportunity for Americans to become productive capital owners by a policy to allocate an equal annual amount of capital credit issued to EVERY child, woman and man by local commercial banks strictly to invest in new capital asset formation, with repayment solely from the earnings of the investments in our future, and without the requirement of past savings. To replace the requirement for past saving and equity as collateral against the risk that the investments will not pay off the capital credit as expected, Bernie should advocate for capital credit insurance and re-insurance.
Bernie is stuck in the paradigm of one-factor thinking: earn an income solely through a job. The American people, except for those understanding that ownership is the means to affluence, also are stuck in the paradigm of jobs only. Bernie speaks of others owning and hoarding productive capital assets compared to the vast majority of Americans, who only have a job and dependent on the few who own and control the businesses they work for, but not empowering EVERY American citizen to become a productive capital owner.
Owning the future must be a central plank of his platform for economic justice. He should advocate for the reform of the “system,” re-structuring the system so that eventually all citizens produce an expanding proportion of their income through their privately owned productive capital and simultaneously generate enough purchasing power to consume the economy’s output.
The fundamental right of every person to become an owner is asserted in Article 17 of The Universal Declaration of Human Rights adopted on December 10, 1948 by the United Nations. Article 17 reads:
(1) Everyone has the right to own property alone as well as in association with others.
(2) No one shall be arbitrarily deprived of his property.
It should be sadly noted, however, that no nation in the world systematically promotes and protects this fundamental human right. The Declaration, in promoting the right to own, would have been strengthened by adding the Founding Fathers language in the Virginia Declaration of Rights emphasizing access to “the means of acquiring and possessing” property.
The central feature of Bernie’s platform to achieve economic justice should be his advocacy for enacting the proposed Capital Homestead Act.(aka Economic Democracy Act and Economic Empowerment Act).* This proposal calls for a comprehensive restructuring of America’s economic policies to grow a sustainable economy in ways that create a nation of citizen owners. As all citizens gain equal access to the most effective financial means to become owners — through insured capital credit repayable with “future savings” — the growing dependency of most citizens today for their economic well-being on big government, big business, and big labor would be reversed.
Because it is based on changing the system for financing future growth to equalize future ownership opportunities, Capital Homesteading will empower poor and middle-income Americans, without redistributing existing wealth from today’s ownership elite (at least while they are alive as in 8. below).
Through the democratization of the economic system and money power (now controlled by today’s super-rich in partnership with the political elite of both major parties) to all citizens under the Capital Homestead Act, our political democracy will be strengthened. With a more just foundation, we will be able to attract authentic and responsible leaders to run for offices at all levels. Bernie will be able to use these reforms to attract political independents and frustrated activists of other parties to his campaign.
The capital frontier has no known limits. We therefore can open up economic opportunity for all citizens to become owners, without having to take away anyone’s private property rights or current accumulations.
Without a fair and democratic economic system, society can never attain social justice. A government of, by and for the people can only be supported and sustained by a stable and just money system and a tax system that is fair and simple to understand.
As part of a movement respectful of civilization’s most humanizing traditions, Bernie’s movement can help overcome the so-called “clash of civilizations” by bringing out the best of all cultures in their common understanding of justice as a necessary moral framework for peace, freedom, and democracy. America, by creating a culture based on universal values and sound ideas, will serve as a model and beacon of hope for every nation seeking a more free, just, and life-enhancing future for all of its citizens.
Bernie should promote economic democracy through equal ownership opportunities as a key to effective political democracy and freedom through the following measures:
1. Democratize Capital Credit and Ownership of Wealth-Creating, Income-Generating Productive Assets, in order to promote full and sustainable production, a life-enhancing environment, affordable shelter, democratic and transparent corporate governance, and rising property incomes for all. The moral omission of every economy on the globe is the total indifference of political leaders, academics, and the media to exclusionary barriers faced by ordinary citizens and the poor in gaining equal access to capital ownership and capital credit.
2. Limit the Economic Power of the State, in order to end special privileges and monopolies, especially discriminatory access by already wealthy people to the money-creation and credit powers of the Federal Reserve System.
3. Restore Private Property Rights, especially in corporate equity shares, by reversing laws and court decisions that deny capital owners: (a) full voting powers in corporate governance; (b) full transparency over management decisions; and (c) access to full profit distributions. Discriminatory double- and triple-taxation of corporate profits would be ended by full dividend payouts, with capital incomes taxed at the same rates as labor incomes. Furthermore, new capital would be financed by the issuance of new shares, to be purchased by workers and other new owners using capital credit. Capital credit would be insured to cover the risk of default and made repayable with the full stream of future profits earned on those shares.
4. End Wage and Welfare Slavery through Ownership Incomes for Every Citizen.
Reform American economic policy to shift from its present reliance on inflationary wages, job-destroying employer benefits, and incomes dependent on redistributing incomes earned by taxpayers. Instead, promote income independence for every citizen by accelerating investment in new wealth-creating, income-generating productive assets in ways that widely broaden individual capital accumulations, new jobs and property-based earnings, while improving ecological conditions for healthier lives and a healthier planet earth.
5. Expand Capital Ownership through Capital Homesteading
Enable EVERY child, woman and man from birth to set up a personal Capital Homestead Account at a local bank and receive at least $7,000 of Federal Reserve-created, interest-free, and insured capital credit every year throughout their lives to invest their annual Capital Homestead credit allocation in newly issued corporate growth stock of an expanding private sector, with such credit repayable entirely with future pretax profits derived from the added productiveness of the newly formed capital assets.
Reduce Social Security, Medicare and welfare benefits to the extent property incomes from accumulated assets in a citizen’s tax-sheltered Capital Homestead Account replace that citizen’s dependency on incomes redistributed from other taxpaying workers and capital owners. This would radically reduce future deficits for Medicare and Social Security, a mounting burden on future generations the present value of which is now projected at $129 trillion, or a hidden debt of over $400,000 on every child, woman and man in today’s America.
6. Lift Barriers to Universal Access to Money Power and Broad-Based Ownership of Newly-Created Capital Assets
Reactivate Section 13(2) of the Federal Reserve Act of 1913 to supply asset-backed currency through the discount windows of each of the 12 Federal Reserve Banks in order to: (a) enable local commercial banks to finance sustainable, non-inflationary regional growth of industry, commerce, and agriculture through tax-sheltered Capital Homestead Accounts, (b) de-monopolize the power of money, productive credit and ownership and decentralize ownership power to every citizen as a new right of citizenship, and (c) restore an elastic, asset-backed reserve currency to replace the present government debt-backed currency system. Amend the Federal Reserve Act to democratize share ownership of each of the 12 regional Federal Reserve Banks so that ownership rights and governing powers in each region’s central bank would be exclusively and equally shared by each one of its regional citizens.
7. Create a Radically More Simple and Just Tax System
Control government spending through a national tax system designed to: (a) encourage accelerated rates of investment, sustainable green growth in urban and rural communities, productive jobs, and widespread personalized ownership opportunities; (b) eliminate the double- and triple-tax on corporate profits and job-destroying Social Security, Medicare, and other payroll taxes; (c) continue to fund all personal entitlements out of general revenues until reduced and eventually exceeded by capital incomes earned through Capital Homestead Account assets; (d) eliminate all individual income taxes below a “living income” exemption of $30,000 per adult and $20,000 per dependent, (or $100,000 for a family of four); and (e) balance the Federal budget and gradually repay old debt through a single rate tax on all personal incomes above the taxpayer’s “living income” exemptions.
Enable all citizens to report their incomes from all sources on a postal card, while allowing corporations, as with subchapter S corporations, partnerships, and cooperatives, to avoid business income taxes by treating full dividend payouts and other profit-based distributions as business deductions, taxable only when received at the personal level. Provide citizens whose incomes (whether from private charity or other sources) are below the poverty level, with a monthly voucher check to meet their basic subsistence needs until earned income from their Capital Homesteading dividends and labor incomes rises above the poverty level.
8. Avoid Concentrations in Wealth Transfers from One Generation to the Next
Advocate reforms to the laws dealing with inheritance and gift tax policies that encourage the top 5 percent of wealth-holders to distribute broadly their capital accumulations from one generation directly to the next, or through tax-sheltered Capital Homestead Accounts of individual members of their families, workers, teachers, the poor and disabled, and other citizens with little or no income-producing assets. Recipients would be subject to a one-time individual income tax on the gift or bequest, applied to the portion of the gift or bequest that brings their personal capital accumulations (excluding their primary residence) above $1 million.
This is the true path to inclusive prosperity, inclusive opportunity, and inclusive economic justice.
* Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice and the enactment of the proposed Capital Homestead Act (aka Economic Democracy Act and Economic Empowerment Act) at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/…/capital-homestead-act-a-plan-for-get…/, http://www.cesj.org/…/capita…/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/. And The Capital Homestead Act brochure, pdf print version at http://www.cesj.org/…/uploads/2014/11/C-CHAflyer_1018101.pdf and Capital Homestead Accounts (CHAs) at http://www.cesj.org/…/ch-v…/capital-homestead-accounts-chas/
To read more see “Economic Democracy And Binary Economics: Solutions For A Troubled Nation and Economy” athttp://www.foreconomicjustice.org/?p=11
