In 2013, around the time the idea which later became this paper initially occurred to me, the twenty-five highest earning hedge fund managers in the United States together brought in about 24.3 billion dollars in personal income (Vardi 2014
). Average median income for an American wage earner that year was estimated to be $
28,031.02 (Social Security Administration 2013
), which means that the twenty-five hedge fund managers collectively made as much as about 867,000 median wage earners (that’s 34,376 workers apiece). Because much of their income derives from “management fees”, which they receive regardless of how well their funds actually perform, managers can rake in tremendous amounts of money even when it’s questionable whether they contribute anything to the economy, much less as much as thirty-five thousand average workers (Vardi 2014
; Creswell 2011
). An especially striking example of this is Steve Cohen, who made 2.3 billion dollars in 2013—the same year his firm paid 1.8 billion dollars in fines for insider trading, and despite the fact that his investments significantly underperformed the Dow Jones, NASDAQ, and S&P 500 indices (Vardi 2014
; Rooney 2013
). In fairness, though Cohen did worse than the indices, he did, apparently, “beat most other hedge fund managers” (Vardi 2014
). The situation with regard to material inequality is hardly better if we look at wealth, rather than income; between them, the four-hundred richest Americans are worth about as much the bottom one-hundred ninety-four million (Frank 2015
There are a lot of good reasons to be worried about this state of affairs and others like it. We might worry on behalf of the forty-seven million Americans who live in poverty (DeNavas-Walt and Proctor 2015
). We might worry on behalf of American workers, who must deal with not only the hardship but also the insult of having had their wages stagnate or decline for decades while the rich grow ever richer (Greenstone and Looney 2012
; Matthews 2012
) We might worry on behalf of those in poverty in the developing world whose lives might have been drastically improved with the money that went to the managers. We might worry about our society, whose democratic character might be threatened by extreme material inequality (see (Stiglitz 2012
)). We might even worry on general grounds of economic efficiency, which is not likely to be promoted by paying people billions of dollars for doing a bad job. However, it might not occur to us to worry that all this is bad for the hedge fund managers themselves
. I want to argue here that perhaps it should.
Say that people who make, say, tens of millions of dollars or more per year, or who have many tens of millions of dollars or more in assets, and who mostly keep their money or spend it on goods or services for themselves, all while other people, and particularly other members of their own society, have so
much less, are living lives of vast wealth
(or, for short, are vastly wealthy
). I intend this as a semi-technical definition. It’s possible (though extremely unusual) to live a life of vast wealth without ever actually being wealthy
, provided you spend your money fast enough. It’s also possible to be extremely wealthy without living a life of vast wealth; the definition is meant to exclude people who make such sums and then, say, give most to the Gates Foundation, as well as people who use the bulk of their money in ways which, though not exactly altruistic
, are nonetheless unusually productive from society’s point of view (e.g., starting a business which produces something of great importance). I take no stand here about these groups of people here. I will also not attempt to figure out how well those who are wealthy, but don’t reach the level of vastly
wealthy, are doing. (Some of my arguments will apply to the merely very
wealthy, but not all will).1
As for the effect of living lives of vast wealth, I consider two questions. The first question takes for granted that you live in a society basically like the present United States and asks what the effect on your well-being of living a life of vast wealth is likely to be, as compared to the effect of living, say, a comfortable middle-class life, or perhaps a merely very wealthy life. I argue that it’s plausible that it will tend to be pretty bad for you, or at least not nearly as good as one might think. (I think this is true especially, but not exclusively, for rent-seekers who acquire their wealth in a way that’s more or less unconnected from whether they’re producing anything of social value). The second asks whether those who live lives of vast wealth would be better off in a more egalitarian society which discouraged or prevented them from living such lives. I argue that, because such a society would prevent them from experiencing the harms of that kind of life while also providing them with improved access to certain public goods, it’s plausible that they would be better off. Both of these are questions in ethics: they have to do with what’s good for the people in question. The consequences for social and political philosophy are not immediately obvious. For instance, we might think that the purpose of government is to ensure that people have the ability to live their lives as they see fit, regardless of whether those lives are good or bad for them and, in fact, without making any judgments about what’s good or bad for people at all, and that attempting to prevent the wealthy from harming themselves by acquiring too much would be objectionably paternalistic. In the final section, I consider the social and political implications of our answers to the first two questions. Treating the fact that living a life of vast wealth is bad for one as a reason to implement egalitarian distributive policies may be objectionably paternalistic, though I argue that this is far from obvious. But even if it is objectionably paternalistic, I think the position I defend, if taken to heart, could play a useful role in developing and promulgating an attractive egalitarian ethos.
My fellow ethicists and political philosophers in the analytic tradition have mostly dismissed the possibility that, outside of special circumstances, having too much wealth might be seriously bad for you.2
I think Rawls (1999, p. 123)
is representative when, defending the claim that the parties in the original position would want to maximize their share of material resources, he writes:
I have assumed throughout that the persons in the original position are rational. But I have also assumed that they do not know their conception of the good. This means that while they know that they have some rational plan of life, they do not know the details of this plan...How, then, can they decide which conceptions of justice are most to their advantage?...I postulate that they...assume that they normally prefer more primary social goods rather than less. Of course, it may turn out, once the veil of ignorance is removed, that some of them for religious or other reasons may not, in fact, want more of these goods. But from the standpoint of the original position, it is rational for the parties to suppose that they do want a larger share, since in any case they are not compelled to accept more if they do not wish to.
When Rawls talks about “advantage” here, he is speaking, not directly about one’s well-being, but about one’s ability to pursue one’s rational plan of life. However, for Rawls, these are intimately related; see Part III of A Theory of Justice
, which winds up endorsing a kind of desire-satisfaction view. (Ultimately, the things I say about the effects on our well-being of vast wealth according to desire satisfaction views should apply to Rawls’ own view of our well-being, as well as to the question of whether vast wealth is helpful or harmful in our pursuit of our rational plan of life). Besides this, two things are notable about this passage. One is that Rawls apparently thinks that extreme wealth could frustrate our preferences only if we have unusual preferences, such as wanting to be a religious ascetic. The other is that he thinks that, even if having more wealth would
frustrate our preferences, this wouldn’t be very concerning, since we could just refuse it.
The first point will be a major target throughout the rest of this paper. As far as the second point is concerned, Rawls is relying on a standard conception of economic rationality according to which agents always have all the information relevant to satisfying their preferences and always pursue their preferences in the most efficient manner:
The concept of rationality invoked here…is the standard one familiar in social theory. Thus in the usual way, a rational person is thought to have a coherent set of preferences between the options open to him. He ranks these options according to how well they further his purposes; he follows the plan which will satisfy more of his desires rather than less, and which has the greater chance of being successfully executed.
Assuming that well-being consists of satisfying one’s preferences (see Section 2
), agents who were like this usually couldn’t be harmed by excess wealth. As long as no one forced the agent to take it, they could just decline any excess wealth, and if they wound up with a harmful level of wealth (say, by inheriting it as a child, or because their plans changed), then as long as there were no barriers to getting rid of it, they could just give it away. While the parties in the original position are stipulated to be economically rational, however, they are supposed to be the representatives of real human agents, who are not. Real humans do not always know which actions will best fulfill their preferences, and I will argue in Section 3
that, contrary to what many of us suppose, it’s plausible that extreme wealth often tends to frustrate many of our most important preferences. Likewise, humans, being susceptible to akrasia
—weakness of will—often act in ways which they realize
will needlessly frustrate their preferences (see (Stroud 2014
)). Furthermore, as I discuss in the next section, fulfilling your preferences may not always be good for you anyway. Of course, Rawls (as I explain in the final section) realized that actual human agents were not literally economically rational in the sense above; presumably, what he thought was that this conception was close enough
to actual human behavior, while also being manageably simple, to justify the assumption for purposes of the original position. Part of what I hope to show here, however, is that, when it comes to the topic at hand, this may very well be false, and at any rate can’t just be assumed
Against the consensus, a few philosophers have considered the possibility that extreme wealth might be harmful. Wolff (2015, pp. 212–13)
notes that a historically prominent egalitarian tradition does just that:
...there is an egalitarian tradition of questioning the value of material resources, and especially the culture of consumption. A good life is one of friendship, creation and appreciation of art and literature, development of creativity, and mutual support…This view, associated with William Morris and John Ruskin, is that material resources are a snare and a distraction...
And Harry Frankfurt, in his recent book On Inequality
, writes that:
In addition to the incidence of poverty, another part of our current economic disorder is that while many of our people have too little, quite a number of others have too much. The very rich have, indisputably, a great deal more than they need in order to live active, productive, and comfortable lives. In extracting from the economic wealth of the nation much more than they require in order to live well, those who are excessively affluent are guilty of a kind of economic gluttony…
Apart from harmful psychological and moral effects upon the lives of the gluttons themselves, economic gluttony presents a ridiculous and disgusting spectacle. Taken together with the adjacent spectacle of a sizeable class of people who endure significant economic deprivation, and who are as a consequence more or less impotent, the general impression given by our economic arrangements is both ugly and morally offensive.
But neither Wolff nor Frankfurt does much to develop these thoughts; Frankfurt (2015, 5, fn. 1
explicitly says that while the “moral and psychological problems arising from the fact that some people have too much are eminently worthy of study and analysis”, he will (understandably) instead focus on the “more pressing phenomenon of people who have too little”. I attempt to develop and defend the view here.
Furthermore, and perhaps surprisingly, neither Wolff nor Frankfurt takes these as reasons to be concerned about economic inequality as such
. Wolff (2015, pp. 212–13)
sympathetically glosses the view he discusses as being that, since material resources are a snare and a distraction, “...those who think that we must equalize resources are missing the point and falling into a form of fetishism.” Wolff instead endorses social
egalitarianism, which posits that people are owed a society in which they relate to others as equals, but that whatever material differences are compatible with this are fine. (Some social egalitarians think that very few material differences are compatible with this, so that social equality requires a substantial degree of economic inequality; see, e.g., (Scheffler 2015
). But Wolff’s comment about “fetishism” suggests that he doesn’t think this). Meanwhile, Frankfurt thinks the problem is not inequality
, exactly, but that some have so much while others don’t have enough. The rest of his book argues that distributive justice has been achieved once everyone has enough
, where “to say that someone has enough money means—more or less—that he is content, or that it is reasonable for him to be content, with having no more money than he actually has” (Frankfurt 2015, p. 47
); past that point, concern because some have more than others “tends to distract [those concerned] from recognizing their most authentic ambitions, which are those that derive from the character of their own lives, and not those that are imposed on them by the conditions in which others happen to live” (Frankfurt 2015, p. 89
). My arguments will imply that those living lives of vast wealth are harmed both
because they do so while others do not have enough and
because they do so while having vastly more than the others members of their society, regardless of whether those others have enough. Exactly what this means for egalitarians will be discussed in Section 5
In the next section, I survey the elements involved in the major philosophical accounts of well-being: hedonism, desire theory, objective list theory, and hybrid theories. In Section 3
, I consider the impact of living a life of vast wealth on well-being, arguing that is probably bad (or least not as good as you might think) according to the most plausible versions of any of these theories. In Section 4
, I consider the impact of egalitarian distributive policies upon the wealthy, arguing that those living lives of vast wealth would probably tend to be better off in societies which made it harder to do so. In Section 5
, I discuss some of the implications for social and political philosophy of the earlier sections. Parts of my argument will be somewhat tentative. At times, I will appeal to empirical judgments which seem plausible to me but which it is hard to be sure about, and at times I will appeal to normative judgments which I don’t have adequate space to defend here. Nonetheless, I hope to establish that there is a strong case in favor of my conclusions.
2. Accounts of Well-Being
Philosophers have discussed four major families of theories of well-being
—of what, fundamentally, makes your life go well or poorly for you
(see (Parfit 1984
), Appendix I for a historically important overview, and (Crisp 2013
) for a more recent one). Hedonists
(e.g., (Crisp 2006
)) think that well-being consists of pleasant phenomenal states (such as the pleasing warmth I feel when I rub the bellies of my cats, Apollo and Artemis) and that ill-being consists of nasty ones (such as the sharp pain I feel when Apollo decides he’s had enough and scratches me). The more and better the nice experiences you have, the better your life is for you, and vice versa. Desire theorists
(e.g., (Rawls 1999, chp. 7
)) think that well-being consists in the satisfaction of one’s desires, or of some subset of one’s desires, while ill-being consists in their frustration. Generally, the more and stronger the relevant desires which you satisfy, and the fewer and weaker your relevant frustrated desires are, the better your life is for you.3
Both hedonists and desire theorists are subjectivists
, insofar as they think that whether something is good or bad fundamentally depends wholly, in one way or another, on my mental states.
By contrast, objective list theorists
(e.g., (Griffin 1986
)) think that, while pleasure or desire satisfaction may be components of our well-being, other states of affairs can also be intrinsically good or bad for us regardless of the attitudes or hedonic responses we have towards them.4
There are many candidates for inclusion on the list, and objective list theorists need not claim to have identified all of the list’s elements; Derek Parfit (Parfit 1984, p. 499
) suggests as paradigmatic objective goods “moral goodness, rational activity, the development of one’s abilities, having children and being a good parent, knowledge, and the awareness of true beauty” and as paradigmatic objective list evils “being betrayed, manipulated, slandered, deceived, being deprived of liberty or dignity, and enjoying either sadistic pleasure, or aesthetic pleasure in what is in fact ugly.”
Finally, many philosophers (e.g., (Kagan 2009
)) are attracted to the thought that there must be some sort of objective element to our well-being, but doubt that anything could be good for us
while we remain totally cold to it (for a statement of this as a criticism of the objective list theory, see (Railton 1986, p. 9
)). These hybrid theorists
think, that for something to be good for us, it must be true both
that we have some subjective response to something (such as enjoying it (Kagan 2009
) or wanting it, e.g., (Lauinger 2013
that the thing in question has the right kind of objective value. (As Heathwood 2014, p. 207
) puts the point, the hybrid theory suggests that “well-being consists in receiving things that (1) the subject has some pro-attitude toward… and that (2) have some value, or special status, independent of these attitudes. One’s life goes better not simply when one gets what one wants or likes, but when one is wanting or liking, and getting, the right things
This partition of theories is not logically exhaustive, and the boundaries between them are not always precise,6
but they give us a good sense of the major lines philosophers have pursued when thinking about well-being.
These theories can all agree that well-being consists in having one of, or some combination of, three things: nice hedonic states, desire satisfaction, and objective goods. Likewise, they agree that ill-being consists in having one of, or some combination of, three things: nasty hedonic states, desire frustration, and objective bads. My method in the next section, then, will be to consider what impact living a life of vast wealth might have on each of these putative components of well-being; we can then use our judgments about the impact on these putative components to determine what the impact will be according to whatever overall theory we endorse. I will argue that, by the metric of any of these components, living a life of vast wealth will probably tend to be bad (or at least only minimally good) for us, and accordingly that living such a life will not be a good bet, regardless of which theory we hold. I hope that what I say will be have fairly broad appeal, but at times I will appeal to points which seem plausible according to my own sympathies (which lie in the direction of an objective list or hybrid theory) but are controversial. Accordingly, I will first say a bit about my views on how these different components relate to well-being.
I think it’s clear that hedonic states play some
role in our well-being; that agony is intrinsically bad for us, for instance, seems about as clear to me as anything. On the other hand, I’m somewhat skeptical that desires are intrinsically important for well-being. The mere fact that I desire something does not seem to me to be the right sort of thing to explain why
that thing’s good for me; rather, I think I desire things because (among other reasons) I think that, for reasons other than the fact that I desire them, they would be good for me and therefore worth
desiring. (This is a statement of what’s often called the “direction of fit objection”—intuitively, I desire things because they’re good for me, not the other way around). While it’s often true that getting something I desire would be good for me, and would not be good for me if I did not
desire that thing, I think the most plausible cases of that form can be explained by other considerations (for instance, the fact that getting what I want usually brings me enjoyment; see (Parfit and Scheffler 2011, pp. 65–70
) for a series of arguments which can be adapted to support my view).7
But my view is in the minority, so that it will be important to consider which is the most plausible way to flesh out a view on which desires are intrinsically important to our well-being. This turns out to be a complicated question.
We could hold that any time I have a desire and it is satisfied, this is intrinsically good for me. But this isn’t plausible. At the very least, we should say that only things which I desire in themselves, rather than instrumentally, can contribute to my well-being. If I want a hat only because I think it will make me look cool, and I care about looking cool in and of itself, then what matters in itself is only looking cool. (If, for some reason, I can’t get the hat, but I look cool for some other reason, the fact that I didn’t get the hat wouldn’t matter). I also think it is plausible that the only desires which intrinsically matter for me are those which I have and would still have in some suitably idealized condition (e.g., one where I was fully informed about the relevant matters, instrumentally rational, and mentally healthy. Exactly how to spell out the idealized condition in question is controversial, and I won’t attempt to sort it out here). For instance, if I want to marry someone who is cheating on me but I wouldn’t want to if I knew the truth, then it seems plausible to think that fulfilling my goal of marrying that person won’t be intrinsically good for me.
There is also a further question about the scope
of the desires whose satisfaction or frustration might directly affect contribute to my well-being. Parfit (1984, p. 494)
suggests that if I briefly meet a stranger, and altruistically form a desire that the stranger’s disease be cured, it’s implausible that the stranger’s later being cured, unbeknownst to me, is good for me
. The idea here would be that, for a desire to make a difference to my
well-being, it must be about my life
in some important way. However, people sympathetic to this view will often agree that some
desires which are largely
about things other than my own life can affect my well-being. Parfit himself (Parfit 1984, p. 495
) suggests that the desire to be a successful parent is about your life in the relevant way, even though whether the desire is satisfied will depend largely on how the lives of other people (namely, your children) go. Heathwood (2014, p. 215)
suggests that the desire theorist should expand the scope even further, allowing your desire that your favorite sports team win to intrinsically affect your well-being, even though, assuming you don’t play
for the team, this is about your life only in a very tenuous sense. I won’t take a stance on which, exactly, is the most plausible way to draw the line is question. But I do think that, if desires intrinsically affect our well-being, desires such as those that I help, and not harm, my loved ones and my community will do so.
Finally, there are the objective goods. As my remarks have already indicated, I am convinced that there must at least be some objective element
to well-being. Nozick (1974, pp. 42–45)
asks us to imagine the experience machine, a virtual reality device capable of stimulating our brain so as to delude us into thinking that we are accomplishing great deeds, forming blissful relationships, and so on, all while we are really closed up in a machine somewhere. I do not think a life spent entirely in the experience machine would be terrible
for you. (If I wanted to wreak terrible vengeance on my foe, putting him in the experience machine to experience intense but delusional ecstasy would not really be my first choice). But I (and Nozick) think it is clear that an otherwise similar life in which you really
did those great things would be better for you; accordingly, merely having nice subjective experiences is not enough for an ideally fulfilled life. Desire theorists can avoid saying that someone in the experience machine has an ideal life, since many of their desires are actually unfulfilled. (What I desire, presumably, is to do great deeds, form blissful relationships, and so on, not just
like I am doing those things). But Rawls has us imagine a “grass-counter”, whose only intrinsic desire is to “count blades of grass in various geometrically shaped areas such as park squares and well-trimmed lawns” (Rawls 1999, p. 379
) and who then successfully does that a lot. We can say that he holds onto the desires after becoming fully informed, instrumentally rational, free of pathologies, and so on. Rawls is willing to bite the bullet and say that, if he gets to spend lots of time counting grass, the grass-counter’s life is good for him. But I doubt many of us are tempted to envy him; his life seems to me at most
as good as one in the experience machine, depending on how much he enjoys what he’s doing. So merely getting what you desire, even if that is also accompanied by pleasure, is not enough for an ideal life, either. I think examples like these can undermine any purely subjective theory of well-being, showing that it makes a difference whether we are really engaged with things of objective value.
This, alone, doesn’t tell us whether we should favor an objective list or hybrid theory of well-being. I am fairly sympathetic to thinking that certain things can harm
us, whether or not we care about them. If you don’t care about the fact that your child hates you, this may well make you worse
, rather than better, off. I’m more sympathetic to the thought that even things of objective value can’t be good
for you if you’re totally cold to them, though I’m uncertain. On the other hand, I do think that pleasure can be good for us, even if it’s taken in something without objective value. For instance, I doubt there is anything objectively valuable about making toy airplanes dogfight, but if I enjoy doing that (which, in fact, I do,) doing that seems good for me. However, while I think pleasure can be good for me even if taken in something without objective value, I also think that the contribution pleasure ultimately makes to my well-being can be affected by the objective value of what the pleasure is taken in. So, for instance, if my pleasure was taken in something of objective value rather than in making the toy planes dogfight, maybe that would be better for me. Meanwhile, malicious pleasure taken in the suffering of some innocent stranger certainly seems less good for me than harmless pleasure taken in playing with the planes, if the former sort of pleasure is even intrinsically good for me at all.8
For similar reasons, I think we should say that the intrinsic contribution to our well-being made by satisfying desires likewise varies with the objective value of the thing desired, if desire satisfaction makes an intrinsic contribution to our well-being.
I will not attempt to come up with any comprehensive list of objective goods; I have no such list. Instead, I will simply note what I think are some plausible candidates, as they become relevant. Of course, that there are objective elements to our well-being does not imply that there is any one, unique way of living which is best for people. Suppose, for instance, that appreciation of beauty isn’t really my thing. There are plenty of other objectively valuable things with which to engage, and the fact that any plausible theory will put some at least some weight on what I desire or enjoy means that pursuing those will probably be better for me. Nonetheless, if something prevents me from fully engaging with a wide range of important objective goods, then it seems plausible that this will reduce my well-being, especially if they are things which people tend to enjoy or care a lot about.
4. Egalitarian Societies
I’ll now consider whether those inclined to live lives of vast wealth would do better under a more egalitarian economic scheme which made it prevented them from doing so harder for them to do so, or at least to do so to the same degree. There are several ways in which they might be harmed. First, if some people actually benefit from living lives of vast wealth, their achieving these benefits might be hampered by egalitarian distributive policies.13
However, the argument of the last section provides two reasons for thinking we shouldn’t be too worried about that. The first is that, if the previous sections are correct, living such a life is usually not good for you. The second is that, as I noted, some of the supposed benefits may result from having more than others, or more than one used to have, or from meeting some socially conditioned standard of wealth, and these benefits (to the extent that they really are benefits) may be left largely intact by egalitarian policies.
Admittedly, there may well be some short-term
subjective harms imposed upon the vastly wealthy by implementing egalitarian societies. They may be made unhappy by the facts of having their taxes raised, or of having less income than they used to have, or of needing to make some lifestyle adjustments; likewise, these things may frustrate some of their desires.14
But I suspect that they would adjust, and that these subjective harms would be relatively short-lived. The top marginal tax rate in the United States in 1963 was ninety-one percent (Shiller 2012
). Implementing a tax rate anywhere near that today would be unthinkable; even if something like that was somehow made law, the backlash would be tremendous. But I don’t see much evidence that wealthy people are all that much happier about paying their taxes now than they were then, or that wealthy Americans are much happier about paying their taxes than are wealthy Europeans who live in countries with much higher tax rates. Given that they will have more than plenty either way, wealthy people seem to adjust to differing economic schemes. (By contrast, the poor do not seem to adapt to poverty (Clark et al. 2013
We might also worry that egalitarian policies would prevent or discourage the vastly wealthy from doing things with their money other than keeping it or spending it on themselves, such as giving it to charity or devoting it to socially valuable forms of entrepreneurship. Insofar as these other things can be meaningful forms of engagement with things outside oneself, using money for these might more plausibly be thought to contribute positively to one’s well-being. Remember that, at the beginning, I said I would take no stand on people who use most of their money for things like this. However, people living lives of vast wealth often use some
of their money for things like this. It might be thought that, the less post-tax income and wealth they have, the greater the marginal cost (in terms of giving up stuff they want, or whatever) they perceive themselves to experience from charitable giving, so that higher tax rates would deter activities like this. If activities like this promote one’s well-being, this might harm them. Further, insofar as these things produce more social value than whatever other people would have done with the money, we would lose out on the added social value these activities provide. However, economic policy can also provide forces which push in the other direction. For instance, if people are allowed to deduct charitable donations or entrepreneurial expenses from their taxes, then higher tax rates may encourage
people to put their money towards these things, since the marginal economic cost of doing so would be lower (due to the attendant tax deductions being higher (see (Shiller 2012
)). Of course, the net result will depend on the specifics of the case and the exact sort of egalitarian policies we have in mind. But the point is just that, even granting the presuppositions of this worry, it may not be as big a problem as it might at first appear.
On the other hand, there are a number of ways in which these people might be better off in a more egalitarian society. If I’m correct in thinking that living lives of vast wealth tends to be harmful, an egalitarian scheme would prevent those harms. But an egalitarian society might also promote public goods, or reduce social dysfunction, in ways which benefit everyone, including the very wealthy. The economist Frank (2012c)
suggests a thought experiment:
Let’s say that two societies differ only in their mixes of public and private spending. In one society, lower taxes on the wealthy allow them to drive very fine cars—say, $180,000 Bentleys. The streets and highways in this society, however, are riddled with foot-deep potholes. In the other society, the wealthy pay higher taxes that support well-maintained roads, but drive $120,000 BMWs...
In which society would the wealthy be happier? Because product-quality improvements cost much more to achieve beyond some point, the absolute quality of a $180,000 car may be only slightly higher than one costing $120,000. Additionally, because not even the most sophisticated automotive suspensions can neutralize deep potholes, it’s little wonder that most people think the BMW drivers would be happier, not to mention safer.
In fact, as noted earlier, concrete data shows that material inequality is associated with a wide range of social ills, from worsened health to higher crime (Wilkinson and Pickett 2010, chp. 4–12
), and there is reason to think the relationship is at least partly causal (Wilkinson and Pickett 2010, pp. 190–96
). These problems disproportionately affect the poor, but many also harm the rich, sometimes in surprising ways. For instance, increased material inequality seems to reduce health and life expectancy, not only for the poor, but also for the rich (Wilkinson and Pickett 2010, p. 84
), perhaps for reasons having to do with status anxiety and reduced social trust (Wilkinson and Pickett 2010, chp. 3
). Of course, there is plenty of room for further work here. But in light of these considerations, it seems plausible to me that those living lives of vast wealth would tend to be better off, and perhaps much
better off, under a more egalitarian scheme.
If the argument of the last two sections is correct, then egalitarian economic policies might benefit, not only those at the bottom, but also many of those at the top. There is a further question about whether the government should treat this as a reason to implement the egalitarian economic policies. It might be claimed that this would be objectionably paternalistic, insofar as it would involve interfering, ostensibly for their own good, with what the vastly wealthy want to do. It might be claimed that the job of government is not to make people better off, but rather to (say) protect citizens’ ability to pursue their own conceptions of the good without the government making judgments about whether their conception of the good is correct or whether they are pursuing it in an efficient way. This worry is strengthened by the fact that one of the considerations to which I appealed in explaining how vast wealth might be harmful was religious; if (as we should) we believe in a liberal society, then we believe that promoting religious goods is not a suitable goal for the government, and so believe that any case for paternalistic intervention would need to do without that consideration.
But keep in mind that it may well be that many of the vastly wealthy would largely agree with the value
judgments I made above, and that they continue living lives of vast wealth due to empirical ignorance of the consequences, or failure to see the implications of what they know, or weakness of will. Paternalistic intervention in those cases would represent, not the imposition of an alien conception of the good, but rather an attempt to help the people in question better achieve their own aims. If any kind of paternalism is acceptable, it would be this (for what is probably the best defense of paternalism of this sort, see (Conly 2012
)), though even that sort is extremely controversial (see some of the essays in (Coons and Weber 2013
)). (However, it is worth noting that in our society there is very broad support for many policies which seem to be most naturally interpreted as involving this kind of paternalism, such as seat belt laws). Rawls (1999, p. 218)
himself thought that the parties in the original position would be open to allowing paternalistic interventions which promote the rational preferences of those interfered with (though, as I mentioned earlier, he is primarily concerned about their rational plans of life, not their well-being as such
It is...rational for them to protect themselves against their own irrational inclinations by consenting to a scheme of penalties that may give them a sufficient motive to avoid foolish actions and by accepting certain impositions designed to undo the unfortunate consequences of their imprudent behavior. For these cases the parties adopt principles stipulating when others are authorized to act in their behalf and to override their present wishes if necessary; and this they do recognizing that sometimes their capacity to act rationally for their good may fail, or be lacking altogether. Thus the principles of paternalism are those that the parties would acknowledge in the original position to protect themselves against the weakness and infirmities of their reason and will in society. Others are authorized and sometimes required to act on our behalf and to do what we would do for ourselves if we were rational, this authorization coming into effect only when we cannot look after our own good. Paternalistic decisions are to be guided by the individual’s own settled preferences and interests insofar as they are not irrational, or failing a knowledge of these, by the theory of primary goods.
If my arguments about the implications of the desire satisfaction theory of well-being are correct, then the “settled preferences” of the vastly wealthy would in fact be promoted by egalitarian economic policies. Accordingly, if my arguments have succeeded, then the remark from Rawls which I quoted in the introduction is misguided: past a certain point, the parties in the original position should perhaps consider denying themselves more primary goods.
But apart from all this, it may be possible to take the arguments of earlier chapters as providing a non-paternalistic
reason to implement egalitarian policies. Here’s why: it may be that some vastly wealthy people would prefer, ceteris paribus
, to live in a more economically egalitarian society, and that they would prefer this for themselves
, not merely for disinterested reasons. Perhaps they feel this way due to some of the considerations mentioned in this paper. (Of course, they could always move
to a society with more economic equality, but the fact that they don’t doesn’t show that they wouldn’t, ceteris paribus
, prefer to live in such a society, since might require them to give up a lot, such as connections to friends, family, and places they’ve grown to love). However, no vastly wealthy person can make our society an economically egalitarian one simply by relinquishing their own vast wealth. If they simply relinquished their own wealth, they would not experience the increased public goods mentioned in Section 4
. Furthermore, recall that there were a number of times in Section 3
when I suggested that certain advantages of being vastly wealthy depended on how wealthy one was relative
to other very wealthy people; any such advantages would be lost if the people in question gave up their vast wealth while others didn’t. These factors mean it may turn out that there are vastly wealthy people who would be better off if all
the vastly wealthy gave up their vast wealth, and who would prefer that they do so, but who will be rendered worse off if they, so to speak, unilaterally disarm. Enacting egalitarian economic policies to help them
would not be paternalistic.16
A rough analogy can be drawn with minimum wage laws. Opponents of such laws sometimes portray them as a kind of paternalism, saying that, if workers want to work for less than the minimum wage, they should be allowed to do so. A response is to say that workers will tend to be better off if all
workers (perhaps because they are required by law) do not work unless they are paid the minimum wage, but that individual workers will suffer if they hold out for the minimum wage and all other workers do not, since they will simply not get jobs. The minimum wage would then not be a paternalistic policy, but a solution to a kind of coordination problem. It may well still hurt some
workers, but the defender of the minimum wage claims that this is an acceptable consequence. In the same way, an egalitarian might defend egalitarian economic policies, not as a kind of paternalism, but in order to help those vastly wealthy who reasonably prefer living in an economically egalitarian society. Of course, this does not, itself, tell us whether implementing an egalitarian economic policy in order to help those people would be justified. (If nothing else, perhaps it could be part of a case which also had other justifications). The point here has just been to point out that, if
we take promoting the well-being of citizens as a proper role of government, there are non-paternalistic ways of taking the arguments of this chapter to support egalitarian economic policies.
But setting all that aside, even if the arguments of this chapter do not provide any kind of justification for implementing egalitarian economic policies, they nonetheless have interesting implications for egalitarian theory and practice. Here’s one. Achieving a stable egalitarian society is not just a matter of working out which laws a just society would pass. It is also a matter of articulating attractive egalitarian norms and promoting those among the members of society. An egalitarian ethos is necessary if egalitarian laws are going to be passed and obeyed, and if people are going to treat one another as equals within the latitude granted by laws. And I think the arguments of the earlier sections can aid in developing and promulgating such an ethos.
In popular political discourse, those concerned about economic inequality are sometimes charged with promoting a “politics of envy”; the claim is that they cater to the unsavory jealousy of some for what the successful have. (For instance, Mitt Romney said as much during the 2012 presidential election (Luhby 2012
)). Egalitarian philosophers such as Dworkin (1980, p. 285)
have sometimes played into this charge by suggesting that the criteria for whether an economic distribution is just is whether it is “envy-free”, in the sense of being such that no one would prefer having someone else’s bundle of resources rather than their own. Elizabeth Anderson has criticized this view, arguing both that it is “embarrassing for egalitarians” (Anderson 1999, p. 287
) and that it is implausible and unattractive:
If much recent academic work defending equality had been secretly penned by conservatives, could the results be any more embarrassing for egalitarians? Consider how much of this work leaves itself open to classic and devastating conservative criticisms. Ronald Dworkin defines equality as an ‘‘envy-free’’ distribution of resources. This feeds the suspicion that the motive behind egalitarian policies is mere envy....
Envy’s thought is ‘‘I want what you have.’’ It is hard to see how such wants can generate obligations on the part of the envied. To even offer one’s own envy as a reason to the envied to satisfy one’s desire is profoundly disrespectful.17
Anderson thinks that, instead of equality of resources of the sort defended by Dworkin, we should care fundamentally about social equality (or, as she calls it, “democratic equality”). And, like Jonathan Wolff, she thinks social equality with a fairly large degree of economic inequality; for instance, she rejects Rawls’ difference principle as too “demanding” (Anderson 1999, p. 326
But if my view is right, the standard-bearers of economic inequality, those living lives of vast wealth, are generally not in an enviable position. The reasonable attitude towards them, whatever it is, will be something complicated; their situation is at least partly their own doing, and has hurt the rest of society, but has also hurt them. If it became widely accepted that there were good arguments for this view, it would have several implications. One is that there would be an answer to the criticism that concern for economic inequality is driven by envy—namely, that, at least in the case of the vastly wealthy, people are not likely to be envious of them anyway, since their position is widely recognized to be unenviable. We could thus respond to the anti-egalitarian argument without compromising our commitment to economic equality. A second is that egalitarian philosophers would not be tempted to make embarrassing pronouncements about eliminating envy, and could instead focus on developing and articulating more plausible and attractive justifications for their views. A third is that, to the extent that ordinary people actually are envious of those living lives of vast wealth, this might help convince them that living such lives is not something desirable. We would successfully combat envy after all, but by showing it to be misguided rather than by catering to it.
A fourth is that this view might help motivate those living lives of vast wealth to support egalitarianism, rather than impeding it in the pursuit of perceived self-interest. We all know that the very wealthy commonly use their wealth and status in order to protect their ability to lead lives of vast wealth. They use donations to curry favor with politicians, obtain favorable results from regulators using the prospects of cushy corporate jobs (the phenomenon known as “regulatory capture”), fund research that supports their agendas, and so on (see (Oreskes and Conway 2010
); (Stiglitz 2012
)). In doing these things, they harm the worst-off, exacerbate economic inequality, and corrode the integrity of our democratic institutions. Certain legal steps (such as campaign finance reform) might be able to alleviate some of these problems, but, in a tragic irony, it’s difficult to get such measures implemented as long as the problem they’re meant to address exists.
However, if a consensus formed that living a life of vast wealth wasn’t really desirable anyway, the wealthy might naturally be less inclined to impede the proper functioning of government so as to promote their ability to live such lives. Roughly this point is made by Robert H. Frank when he writes:
Although big-money donors are a diverse group, many of them want lower tax rates for themselves and less stringent regulations for their businesses—and they’ve been brilliantly effective in getting them. Their success has increased their incomes still further, allowing them to make even larger contributions and to demand even bigger favors. This vicious circle was strengthened considerably by the Supreme Court’s decision in the Citizen’s United Case. And so, each year, the possibility of new laws to curb money’s influence appears to recede…
Reformers castigate wealthy donors for supporting self-serving policies. But instead, the reformers could call attention to the evidence that the donors themselves would fare better, in purely practical terms, without the tax cuts and deregulation they’ve been promoting. You don’t have to be a cynical economist to believe that the second strategy has brighter prospects.
Capitalism has proven extremely effective at harnessing the human inclination to look out for oneself. In doing so it has produced tremendous material prosperity, but also, very often, great economic inequality. However, if the arguments in earlier sections were to become widely endorsed, enlightened self-interest might be harnessed to promote
economic equality, rather than hinder it.18
Disseminating arguments like this might then be a useful component in the egalitarian toolbox. I am substantially less sanguine than Frank appears to be about the prospects of converting the wealthy en masse
. (I’d be happy if we convinced anyone at all). But in an era of increasing inequality, I think we should take what we can get.