Do the rich deserve their wealth?
It should have been political suicide for the GOP to threaten to block all legislation (including an extension of unemployment benefits) until Congress extends the Bush tax cuts to the wealthiest 2 percent of American taxpayers. Or so it seems to those Americans who saw the ultimatum as contrary to basic decency.
Some polls indicate a majority of Americans disagreed with the GOP's stand. But this disagreement doesn't rise to a level of outrage that would deter Sen. Mitch McConnell or Rep. John Boehner.
Why isn't there more outrage? After all, this will worsen an already high degree of income and wealth inequality. The U.S. is the most unequal of all advanced industrial societies.
The statistics are striking: 44 million Americans live below the poverty line. According to a Reuters report last October, "in 2009 inequality was at the highest level since the Census began tracking household income in 1967." In 2007, the latest year for which figures are available from the Federal Reserve Board, the top 1 percent of U.S. households owned 33.8 percent of the nation's private wealth, while the bottom 90 percent owned only 28.5 percent.
This inequality undermines democratic government. An increasingly wealthy ruling class funds the political campaigns of candidates who can be counted on to look after the interests of this class. We're becoming a plutocracy.
Our ruling class can afford private education, private health care and even private security. Their well-being is uncoupled from the welfare of the mass of citizens. They are content to starve the public sector by depriving the government of revenue it needs to fund basic social programs. Welcome to America, an "advanced" capitalist society in which large segments of the population are falling through a weak and tattered social safety net.
One reason for the lack of outrage is many Americans at all income levels feel the wealthy "deserve" their high incomes and that the government has no right to redistribute this wealth to poorer, "less deserving" citizens.
What does the word "deserve" mean in this context? People receive very high incomes due to some combination of talent, hard work and luck. By definition, we don't deserve luck. Do we deserve our talents? No, we get those through a genetic lottery — once again, a matter of luck. Yes, many talents need hard work to develop. That leaves us with hard work, the third component in personal economic success.
Would a wealthy person want to argue that income should be proportioned to effort? The working poor of this country would be glad to hear this, especially those whose work is physically demanding and those who must work at more than one job to support families. But I doubt such a view would be popular among the upper 10 percent of taxpayers.
Any sensible person understands there must be enough income inequality to create incentives for the more talented and energetic members of society to do their utmost. Everyone benefits from such inequality.
But how much inequality can be justified in this way?
Do all citizens or classes benefit from the degree of inequality in the U.S.? When 44 million live in poverty and 17 million children live in households that are insecure in their food supply? When, according to the Economic Policy Institute, the richest 10 percent received nearly two-thirds of total income growth from 1979-2007, while the bottom 20 percent received almost nothing.
Another term for private wealth in this context is private property. What does it mean to call a car or a house my property? What is the difference between something being in my possession (perhaps through a criminal act) and it being my property? The difference is that society, through its government, will protect and uphold my claim to what is my property.
The problem of accelerating economic inequality can be put this way: Why should the members of a democratic society uphold the claims of the top 1 percent? Is a plutocracy to everyone's advantage? If it is not, then there is no good reason for citizens to uphold such claims.