Unjust Deserts — Why We Should Take’m Back
|December 28, 2008||Posted by Joel S. Hirschhorn under Book Reviews|
How the Rich Are Taking Our Common Inheritance
We trim, blend, and append three 2008 articles: (1) the book blurb on Unjust Deserts by Gar Alperovitz and Lew Daly; (2) a review by contributor Joel Hirschhorn; and (3) a listing of one of the most influential books in history by Michael Kinsley.
by Alperovitz & Daly and by Hirschhorn and by Kinsley
- Unjust Deserts
Warren Buffett is worth nearly $50 billion. Does he deserve all this money? Buffett himself will tell you that society is responsible for a very significant percentage of what Ive earned.
In an examination of modern economic, technological, and cultural progress, Gar Alperovitz and Lew Daly demonstrate that up to 90 percent (and perhaps more) of current economic output derives not from individual ingenuity, effort, or investment but from our collective inheritance of scientific and technological knowledge: a free lunch.
But should one person inherit that exclusively? Recognizing the source of great fortune leads to a moral case for a different distribution — and to some policies to achieve it.
Gar Alperovitz is the Lionel R. Bauman Professor of Political Economy at the University of Maryland. His previous books include The Decision to Use the Atomic Bomb and America Beyond Capitalism. He lives in Washington, DC. Lew Daly is a senior fellow at Demos and the author of God and the Welfare State. He lives in New York City.
- Book Review
This book should have been titled, Stolen Wealth. This would have been more consistent with its long subtitle: How the Rich Are Taking Our Common Inheritance and Why We Should Take It Back.
Gar Alperovitz and Lew Daly demonstrate that a huge fraction of the financial success of the wealthiest people results not from their smartness, creativity, and hard work. Those factors alone cannot explain disproportionate wealth. Instead, ever-increasing knowledge, accumulating across the generations, is central to the creation of all wealth.
The economic inequality we see today, therefore, is not moral. The decline of the middle class and the expansion of the working poor result from these unjust deserts. This has produced rising economic inequality and increased economic suffering of so many Americans.
One role of government is to ensure that many more people get some of this wealth. A convenient way to do this is through higher taxation of the unjust deserts now enjoyed by the Upper Class. From President-elect Obama and his economic advisors, we can expect a strong push for higher rates on the highest incomes, capital gains, and inheritance.
It is not a matter of redistribution of wealth from the richest people to everyone else but of rectifying the unjust and immoral ownership of wealth that a relatively small fraction of the population has improperly (though legally) attained.
This is not the easiest book to read because it is written in an academic rather than a populist style. Nevertheless, for anyone who wants better justification for taxing the rich it is essential reading. Another good title for the book would have been, Battling Economic Injustice.
Contact Joel S. Hirschhorn through www.delusionaldemocracy.com.
JJS: Taxing the rich may seem sensible. However, it might be unfair, since it punishes even those who like Paul McCartney made a fortune by making millions of people happy. And that tax is surely inefficient.
Taxing downstream instead of upstream is like feeding a baby tapeworm then later trying to squeeze food from a full-grown tapeworm. Better to not feed the tapeworm in the first place. Instead of trying tax downstream, after fortunes have been accumulated, charge full value fees for privilege upstream, when new economic values are still changing hands.
If most wealth does result from knowledge, then charge full value for patents and copyrights. However, even more wealth comes from land, via leases and mortgages. Therefore, raise the fee for deeds to the full annual value of the location.
And use a good portion of the proceeds to pay citizens a dividend. Youll close the wealth gap and wont have any undue rich to envy and try to tax. And by using fees instead of taxes, you can take the moral high road against confiscatory and coercive taxation, relying on quid pro quo user-fees instead.
To understand that argument better, check out this classic.
- Best books
chosen by Michael Kinsley
#4 of 7: Progress and Poverty by Henry George (Cosimo, $15).
Once a famous book by a famous author, now almost forgotten. George was a self-trained economist of the late 19th century. In Progress and Poverty, he explains to his own satisfaction — and pretty much to mine — how all the worlds evils are attributable to real estate. He overstates his case, but he does so with wit and excess that make the book fun to read. And it leaves you thinking.
In The Week, Arts & Leisure section, December 12. Kinsley is a Time magazine columnist and the former editor of Slate.com and The New Republic. His new book, Creative Capitalism, is a conversation with Bill Gates and others about a new way to do business.
Jeffery J. Smith runs the Forum on Geonomics.
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