Chapter 10 : Political Philosophy
Inequality
The topics involved with Social and Political Philosophy are far from being uninteresting or unimportant. The theories of philosophers who discuss such topics are far from being of no concern to that of society. The ideas of philosophers on these matters have led directly or indirectly to revolutions and legislation and many social and political activities in all nations of the world. In the coming years there will be more attention given to and perhaps some activity to address the issue of the increasing inequality in wealth and in income between those who have a great deal and the many who have very little. There is perhaps no greater example of the conflict between the interests of the many or the whole of society and the interests of the few individuals who currently enjoy a vastly greater amount of wealth and the influence over social reforms than the vastly larger number of people who have far less wealth and little or no influence over the the agencies of social and economic reform. While many people in the USA indicate that they would prefer a much greater and more equal distribution of goods, services and wealth at the same time they tend to greatly underestimate the degree of the current inequality in both wealth and income. This is true no matter what the political affiliation or leanings. This lack of awareness or ignorance proves to be a major obstacle to meaningful discussions and potential reforms.
By "wealth" what is meant would be the total value of all that a person possesses which would include the value of homes and automobiles, boats, personal possessions, businesses and any savings or stocks and bonds or any other such investments. Wealth is usually not used for daily expenditures or factored into household budgets, but combined with income it comprises the family's total opportunity "to secure a desired stature and standard of living, or pass their class status along to one's children".[ Moreover, "wealth provides for both short- and long-term financial security, bestows social prestige, and contributes to political power, and can be used to produce more wealth." Hence, wealth possesses a psychological element that awards people the feeling of agency, or the ability to act. The accumulation of wealth grants more options and eliminates restrictions about how one can live life.
USA
You can learn of the Wealth Inequality in the USA in many places including here:
In 2014 the top 1% of the USA population (@330,000,000) possessed 40% of all the wealth in the USA. That would be 3 million people who have as much as 120 million people. The bottom 80% own just 7% of the whole. By 2015 reports indicated that the top 1% own more than the bottom 90%. That would be 3 million people who have as much as 290 million people. The gap is growing each year. That gap between the top 10% and those in the middle is more than 1,000% and the gap between the top 1% and the middle class is 2000%.
Dennis Gilbert asserts that the standard of living of the working and middle classes is dependent upon income and wages, while the rich tend to rely on wealth, distinguishing them from the vast majority of Americans.
Workers in the USA need to labor for a month in order to earn what the typical CEO earns in one hour. Inequality in wealth is not the same as inequality in income but they are related and similar in many ways. In Inequality for All—a 2013 documentary with Robert Reich in which he argued that income inequality is the defining issue for the United States—Reich states that 95% of economic gains went to the top 1% net worth (HNWI) since 2009 when the recovery allegedly started.
The disparity grows greater each year and the economic structures support that continuing. In a special report in the New York Times " By Molding Tax System, Wealthiest Save Billions" by NOAM SCHEIBER and PATRICIA COHEN December 29, 2015 it is reported that "The very wealthiest families are able to quietly shape tax policy that will allow them to shield their income using maneuvers available only to several thousand Americans"
You can read commentary on the inequality in New York City in a column by Paul Krugman, "Inequality and the City". You can read about how the tremendous accumulation has changed the skyline in New York City "As a New High Society Climbs in Manhattan, It's a Race to the Top"
Segregation by Wealth in the USA
In How the Other Fifth Lives by Thomas B. Edsall The New York Times April 27, 2016 there is quotation from “The Continuing Increase in Income Segregation,” a March 2016 paper by Sean F. Reardon, a professor of education at Stanford, and Kendra Bischoff, a professor of sociology at Cornell. They write: Segregation of affluence not only concentrates income and wealth in a small number of communities, but also consecrates social capital and political power. As a result, any self-interested investment the rich make in their own communities has little chance of “spilling over” to benefit middle‐ and low-income families. In addition, it is increasingly unlikely that high‐income families interact with middle‐ and low‐income families, eroding some of the social empathy that might lead to support for broader public investment in social programs to help the poor and middle class.
And quotes from Timothy Smeeding, a professor of public affairs and economics at the University of Wisconsin,
The well-to-do are isolated from the day to day struggles of the middle class and below to provide these key services (health, education, job search, and other opportunities) to aid the upward mobility of their children. But the upper middle class are happy to take advantage of tax subsidies for their own housing, preschool for their kids, and saving for college which benefit them.
When considering the large gap realize that for many African-Americans, the wealth gap means that even a small financial setback can be devastating. See further: Debt and the Racial Wealth Gap By Paul Kiel. NY TIMES 1-3-16
GRAPHICS: There are nine charts about wealth inequality in the USA located here:
 |
 |
 |
A very important and fundamental question: Is Vast Inequality Necessary? is answered by Paul Krugman NY TIMES January 15, 2016
"Of course not, despite what many of its beneficiaries believe. How rich do we need the rich to be?"
VIDEO: Wealth Inequality in USA in 2013
WORLD
There are approximately 7 billion people on planet Earth in 2015. The new Oxfam Report indicates that half of all the wealth in the world is held by just 1% of the people.
that would be 70 million people who have as much wealth as 3.5 billion people.
One indication of the consequences of the disparity is the rise in the prices or value attached to various items such as real estate or art. See:
The $179 Million Picasso That Explains Global Inequality By Neil Irvin May 13,2015 NY TIMES
Another indicator is reported in: Billionaires to the Barricades by Alan Feuer July 5, 2015 NY TIMES
"EARLIER this month, when the billionaire merchandising mogul Johann Rupert gave a speech at The Financial Times’s “luxury summit” in Monaco, he sounded more like a Marxist theoretician than someone who made his fortune selling Cartier diamonds and Montblanc pens. Appearing before a crowd of executives from Fendi and Ferrari, Mr. Rupert argued that it wasn’t right — or even good business — for “the 0.1 percent of the 0.1 percent” to raid the world’s spoils. “It’s unfair and it is not sustainable,” he said."
INCOME INEQUALITY
A September 2014 study by Harvard Business School declared that the growing disparity between the very wealthy and the lower and middle classes is no longer sustainable.[11] The disparity has social costs and economic costs that portend political costs as well as people consider the need for fundamental changes in the socio-economic order.
|
Income Inequality Is Costing the U.S. on Social Issues by Eduardo Porter APRIL 28, 2015 NY TIMES
•Thirty-five
years ago, the United States ranked 13th among the 34 industrialized
nations that are today in the Organization for Economic Cooperation
and Development in terms of life expectancy for newborn girls. These
days, it ranks 29th.
•In
1980, the
infant mortality
rate in the United States was about the same as in Germany. Today,
American babies
die at almost twice the rate
of German babies.
•“On
nearly all indicators of mortality, survival and life expectancy,
the United States ranks at or near the bottom among high-income
countries,” says a
report on the nation’s health
by the National Research Council and the Institute of Medicine.
•The
United States has the highest teenage birthrate in the developed
world — about seven times the rate in France, according to the
O.E.C.D. More than one out of every four children lives with one
parent, the largest percentage by far among industrialized nations.
And more than a fifth live in poverty, sixth from the bottom among
O.E.C.D. nations.
•Among
adults,
seven out of every 1,000 are in prison,
more than five times the rate of incarceration in most other rich
democracies and more than three times the rate for the United States
four decades ago.
•As
economists from the University of Chicago, M.I.T. and the University
of Southern California put it in a
recent
research paper,
much of America’s infant mortality deficit is driven by “excess
inequality.”
•American
babies born to white, college-educated, married women survive as
often as those born to advantaged women in Europe. It’s the babies
born to nonwhite, nonmarried, nonprosperous women who die so young.
•Yet
despite the grim prognosis, there is hope. The challenge America
faces is not simply a matter of equity. The bloated incarceration
rates and rock-bottom life expectancy, the unraveling families and
the stagnant college graduation rates amount to an existential
threat to the nation’s future.
•That
is, perhaps, the best reason for hope. The silver lining in these
dismal, if abstract, statistics, is that they portend such a
dysfunctional future that our broken political system might finally
be forced to come together to prevent it.
|
NON-SUSTAINABLE
The number of people who realize that the tremendous and growing inequality is not sustainable is growing. Among them are those with immense wealth.
In Billionaires to the Barricades by Alan Feuer July 5, 2015 NY TIMES
Feuer informs us of William D. Cohan, a former Wall Street banker, who stated that "Most billionaires..are apt to address inequality by donating portions of their fortunes, not by seeking systemic economic change. “Charity? Yes,” Mr. Cohan said. “But leveling the playing field? No.” For some billionaires there is a growing concern and realization of danger in the gross inequality. Billionaire Cartier Owner Sees Wealth Gap Fueling Social Unrest by Thomas MulierAndrew Roberts June 8, 2015 — 8:39 AM EDT "Johann Rupert, the South African who has made billions peddling Cartier jewelry and Chloe fashion, said tension between the rich and poor is set to escalate as robots and artificial intelligence fuel mass unemployment. “We cannot have 0.1 percent of 0.1 percent taking all the spoils,” said Rupert, who has a fortune worth $7.5 billion, according to data compiled by Bloomberg. “It’s unfair and it is not sustainable.” “We’re in for a huge change in society,” he said Monday. “Get used to it. And be prepared.”
Eduardo Poster concludes his article Income Inequality Is Costing the U.S. on Social Issues with: "Yet despite the grim prognosis, there is hope. The challenge America faces is not simply a matter of equity. The bloated incarceration rates and rock-bottom life expectancy, the unraveling families and the stagnant college graduation rates amount to an existential threat to the nation’s future. That is, perhaps, the best reason for hope. The silver lining in these dismal, if abstract, statistics, is that they portend such a dysfunctional future that our broken political system might finally be forced to come together to prevent it."
AWARENESS OF DANGERS
Peter Georgescu is the chairman emeritus of Young & Rubicam, who is at work on a book about the death of the middle class, he has stated in Capitalists, Arise: We Need to Deal With Income Inequality The New York Times: AUG. 7, 2015 that "If we don’t deal with income inequality, we’ll face intolerable taxes or social unrest. I’M scared. The billionaire hedge funder Paul Tudor Jones is scared. My friend Ken Langone, a founder of the Home Depot, is scared. So are many other chief executives. Not of Al Qaeda, or the vicious Islamic State or some other evolving radical group from the Middle East, Africa or Asia. We are afraid where income inequality will lead."
HOW DID THIS HAPPEN?
While capitalism can be credited as part of what led to the high quality of life in the United States there is now a rise in the number of people and politicians willing to identify as holding for the principles of socialism . A from of "democratic Socialism" has developed and is being promoted by politicians. How to account for the rise in number of and attraction to socialism in the United States after 2016? Well one view attributes this to the action of capitalists themselves who distorted the capitalist programs that involved reinvestment in the enterprises that produced wealth for many and focused on individual wealth.
What Are Capitalists Thinking? by Michael Tomasky Contributing Opinion Writer New York Times Aug. 5, 2018
"If they’re worried about what’s driving the growing appeal of socialism, they need to look in the mirror."
"Back in the days when our economy just grew and grew, we had a government and a capitalist class that invested in our people and their future — in the Interstate highways, the community colleges, the scientific research, the generous federal grants for transportation and regional development.
And, funny thing, during all this time, socialism didn’t have much appeal. "FUTURE POSSIBLE RESOLUTIONS
How are the inequalities to be resolved so as to remove the threat of social unrest, revolution or other forms of social actions that may involve or lead to violent actions? Can people simply work harder and earn more and close the gap? Perhaps not. Some think this is not at all a workable solution as it is not physically possible and further studies indicate that wealth success has more to do with the circumstances of family and the economic status at birth than with individual effort? See U.S.A., Land of Limitations? By Nicholas Kristofin "USA:Land of Limitations" From The New York Times: August 9,2015 "The biggest factor for success isn’t hard work but how our lives started. The wealth gap is so large that economists around the world now take it very seriously and it has become a matter of prime concern and object of research."
Economists Take Aim at Wealth Inequality By NELSON D. SCHWARTZ NEW YORK TIMES JAN. 3, 2016
People in the more developed countries and who are enjoying great wealth as well as all others in those nations will need to be thinking seriously of just how the unsustainable inequality is to be resolved. In doing so various notions that are part of social philosophy with the various notions of distributive justice will be involved. Parents will need to be discussing their ideas and their values with their children. Whole families and communities will need to be involved in one form or another in the discussions and resolutions and reforms.
A year after his annual letter to chief executives urged them to run their companies with the social good in mind, the BlackRock chief Larry Fink said they must step into a leadership vacuum.
By Andrew Ross Sorkin Jan. 17, 2019 https://www.nytimes.com/2019/01/17/business/dealbook/blackrock-larry-fink-letter.html
Larry Fink, the investment manager who oversees nearly $6 trillion at BlackRock, set off a yearlong conversation among business leaders and policymakers last January when he wrote a letter to chief executives declaring that companies needed to do more than make profits.
2017 Update
An economy for the 99%
From OXFAM 2017 Report
New estimates show that just eight men own the same wealth as the poorest half of the world. As growth benefits the richest, the rest of society – especially the poorest – suffers. The very design of our economies and the principles of our economics have taken us to this extreme, unsustainable and unjust point.
Our economy must stop excessively rewarding those at the top and start working for all people. Accountable and visionary governments, businesses that work in the interests of workers and producers, a valued environment, women’s rights and a strong system of fair taxation, are central to this more human economy.
So, 8 human beings have wealth = 3,500,000,000 human beings
Bill Gates, Amancio Ortega Gaona (founder of Inditex, which owns Zara), Warren Buffett, Carlos Slim, Jeff Bezos, Mark Zuckerberg, Larry Ellison and Mike Bloomberg. Item in NY TIMES
2017 Forbes list of richest people in world
Here's the top 10 overall:
- Bill Gates: $86 billion
- Warren Buffett: $75.6 billion
- Jeff Bezos: $72.8 billion
- Amancio Ortega: $71.3 billion
- Mark Zuckerberg: $56 billion
- Carlos Slim Helu: $54.5 billion
- Larry Ellison: $52.2 billion
- Charles Koch: $48.3 billion
- David Koch: $48.3 billion
- Michael Bloomberg: $47.5 billion
2017 Forbes list of richest people in USA
Corporations, working for those at the top
Big businesses did well in 2015/16 : profits are high and the world‟s 10 biggest corporationstogether have revenue greater than that of the government revenue of 180 countries combined
So, 10 corporations have revenue = 180 countries in the world.
Our Broken Economy, in One Simple Chart
World's Wealthiest Became $1 Trillion Richer in 2017 By Tom Metcalf and Jack Witzig December 27, 2017, 12:01 AM EST
2018 Update
Billionaire fortunes grew by $2.5 billion a day last year as poorest saw their wealth fall
"Billionaire fortunes increased by 12 percent last year – or $2.5 billion a day - while the 3.8 billion people who make up the poorest half of humanity saw their wealth decline by 11 percent, reveals a new report from Oxfam today. The report is being launched as political and business leaders gather for the World Economic Forum in Davos, Switzerland."
OXFAM 2018 report Public good or private wealth?
Some children of privilege are taking a moral stand against inequality. They think it immoral to inherit and hold large wealth. April 27, 2018
A Message From the Billionaire's Club: Tax Us - By Patricia Cohen The New York Times June 24, 2019
Enthusiasm for a wealth tax on the country’s thin sliver of multimillionaires and billionaires may be unsurprising — after all, most Americans wouldn’t have to pay it. But now the idea is attracting support from a handful of those who would. A letter published Monday on the website Medium.com calls for “a moderate wealth tax on the fortunes of the richest one-tenth of the richest 1 percent of Americans — on us.” The “us” includes self-made billionaires like the financier George Soros and Chris Hughes, a Facebook co-founder, as well as heirs to dynastic riches like the filmmaker Abigail Disney and Liesel Pritzker Simmons and Ian Simmons, co-founders of the Blue Haven Initiative, an impact investment organization.
2020 Update
OXFAM Report Time to care Summary of report
"Economic inequality is out of control."
The scale of the gap between rich and poor today...
The gap between the super-rich and the rest of society remains unimaginably huge.7
In 2019, the world’s billionaires, only 2,153 people, have more wealth than 4.6 billion people.
The 22 richest men have more wealth than all the women in Africa.
The world’s richest 1% have more than twice as much wealth as 6.9 billion people.
If you saved $10,000 a day since the building of the pyramids in Egypt you would have one-fifth the average fortune of the 5 richest billionaires.
If everyone were to sit on their wealth piled up in $100 bills, most of humanity would be sitting on the floor. A middle-class person in a rich country would be sitting at the height of a chair.
The world’s two richest men would be sitting in outer space.
The monetary value of women’s unpaid care work globally, for women aged 15 and over, is at least $10.8 trillion annually – three times the size of the world’s tech industry.
Taxing an additional 0.5% of the wealth of the richest 1% over the next 10 years is equal to investments needed to create 117 million jobs in education, health and elderly care and other sectors, and to close care deficits.
2020 PANDEMIC ECONOMICS
2021 USA CEOs made 299 times more than their average workers last year
The world’s richest people got a whole lot richer during the COVID-19 crisis. In 2021, billionaires saw the steepest increase in their share of wealth on record, according to The World Inequality Lab’s annual World Inequality Report. The top 0.01% richest individuals—the 520,000 people who have at least $19 million— now hold 11% of the world's wealth, up a full percentage point from 2020, the report found. Meanwhile, the share of global wealth owned by billionaires has grown from 1% in 1995 to 3% in 2021. --News report
VIEW: What is the moral obligation to save the poor? Poverty and our Response to It: Crash Course Philosophy #44
Conclusion:
What are the values that will guide the thinking and judgments as to the notion of distributive justice that will guide individual decisions and collective actions and political change?
However the conversations emerge, they will involve the ideas philosophers have been using and developing over centuries.
What theory of Government? What theory of Social Justice? What principle of Distributive Justice? Will gain popular support and serve as foundation for political actions?
Income Inequality: Too Big to Ignore Economic View
By ROBERT H. FRANK OCT. 16, 2010
Inequality Is Most Extreme in Wealth, Not Income By CATHERINE RAMPELL MARCH 30, 2011
To Reduce Inequality, Tax Wealth, Not Income By DANIEL ALTMAN NOV. 18, 2012
Inequality Is Holding Back the Recovery By JOSEPH E. STIGLITZ JANUARY 19, 2013
A fifth of our kids live in poverty — an aberration among rich nations.
U.S. Household Income Grew 5.2 Percent in 2015, Breaking Pattern of Stagnation By BINYAMIN APPELBAUM SEPTEMBER 13, 2016
End of Chapter.
©
Introduction to Philosophy by Philip A. Pecorino is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.