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The Tuesday Column
Wealth Worship

[This is a reworked version of a post that first saw light of blog last week as "Wealth and Plutocracy."]

Forbes’ annual ranking of the world’s billionaires — the plutocracy’s swimsuit issue — is out along with its familiar bods: Bill Gates at the top with $50 billion, which is more than the total GDP of about 150 countries; Warren Buffet at $42 billion; Carlos Slim Helu, the Mexican-Lebanese financier, at $30 billion; the gang of five Waltons (Sam’s heirs), each of whom clocks in at close to $16 billion for a sum-total of $79 billion; and so on. Three years ago there were 476 billionaires. Now there are 793, each of them a tea leaf of speculation for the rest of us. Wealth these days elicits reactions usually associated with sex: desire, envy, resentment (toward those who have so much of it), moral judgments. But no matter how ostentatious, other people’s sex lives are irrelevant to public welfare. Not so with wealth, least of all the wealth of the wealthiest, because that wealth isn’t of their making as much as they’d like you to believe.

“Some people automatically associate great wealth with evil, and they deserve the ridicule they get,” Michael Kinsley wrote in a recent column. “But the automatic association of great wealth with virtue is equally fatuous.” He then followed with this fatuous line: “It’s probably true that most billionaires have acquired their wealth in ways that make life better for the rest of us.” The last line assumes cause-and-effect between wealth and material virtue that adds up to this: The wealthier you are, the more you’ve contributed to the general well-being. It’s a convenient way of saying that the wealthy should be praised most and taxed less because they contribute so much. The proposition has been taken pretty much at face value since Ronald Reagan began the go-go years of tax-cutting. But to equate wealth accumulation with making life “better for the rest of us” is absurd.

First, why is it so “ridiculous” to associate great wealth with great evil? Kinsley would not dispute Lord Acton’s adage that power corrupts, and absolute power corrupts absolutely. Money is power. Big money is big power. You get the idea. Politicians aren’t corrupt because of the way they go about fighting culture wars on abortion clinics’ doorsteps, but because of the way they go about using their power to divvy up that $2.5 trillion in the federal budget. Power accrues where money does. So the association of great wealth with something less than virtuous (rather than evil, which is a straw word) is anything but ridiculous.

Christ Driving the Money Changers Out of the Temple/Valentin de Boulogne, 1618; Galleria Nazionale d'Arte Antica, Rome

Second: Wealth accumulation is exponential where creative “improvements” are not: If Bill Gates is eight times richer today than he was in 1992, when he was worth $6.3 billion, that doesn’t mean he’s made life eight times better for those who take advantage of Microsoft products. He’s merely profited eight times more from — for instance — using his market power to lock in his windfalls, and possibly preventing life improvements for the rest of us by limiting competition. In fairness, the Gates foundation, which gives away at least $1 billion a year from an endowment of $25 billion, does make life better for tens of thousands of people in exponential ways, if one vaccine has the potential of multiplying life expectancy. But Gates is the philanthropic exception. The Wal-Mart heirs, $30 billion richer, give away less than a fifth of what Gates does ($170 million in 2004), and with self-serving strings that turn “community giving” into public relations and political campaigns. Wealth of a certain size can just as easily become moribund in the hands of those who inherit it, keeping wealth from re-circulating in productive ways. That’s the argument against ending the inheritance tax, incidentally — to prevent money from creating a sclerotic aristocracy. Those 793 billionaires could easily be that aristocracy’s tip, soaking up wealth while drying up betterment for the rest of us.

Now, it’s indisputable that, as economist Brad De Long once wrote, most people these days enjoy standards of living that “were beyond the reach of even the richest of previous centuries.” But to leap from this to crediting the super-rich for the transformation is to buy into the wealth-worship of the last two decades — and to dismiss factors that enable entrepreneurship: Actual labor, government and tax policies, economic climate, open and robust public discourse and pressure. It isn’t because Gates was an American in Seattle that he managed to become a billionaire, or that an individual in Ghana doesn’t because his brain is deficient. Circumstances don’t just help. They’re the driving force. The greater the wealth, the smaller its relationship with any single individual credited for generating it, and the greater the credit to circumstances enabling that wealth. Which makes taxing that wealth at far greater rates — that is, giving circumstances their fair due — the more defensible, virtuous way.

From the Burning Man Festival

 

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