The growing state of inequality in the distribution of wealth since 1980s in the United States has now come to be widely discussed in the economic and social fronts. Is it ethical for the government to dictate or create ways to redistribute wealth?
[jwplayer config=”speaking” file=”http://www.youtube.com/watch?v=QPKKQnijnsM” width=”420″ height=”340″]The finding of a recent study by the Center on Budget and Policy Priorities brings to surface that US citizens are more unequal as a nation during these times than any time in the past. The data of the analytical study entitled “The State of Working America” released by The Economic Policy Institute (EPI) gives the following observations. Between 1983 and 2010, the total share of the top 5 percent of income earners raised to 74.2 percent while the bottom 60 percent found their percentage of national income significantly decreased.
Records show that as a sharp contrast to the situation noted over the past 32 years, the distribution of income was much better between 1935 and 1975 when the country was a more equal nation. This did not mean that the rich were in a disadvantageous position. The implication was that they grew richer nearly in equal proportion to the remaining people in the country. The important thing here was that there were several governmental policies in place during those days that created a more level playing field. The income tax of those days was sharply progressive in nature. The money was spent in a way to safeguard the interests of the strong middleclass. Those times witnessed the development of the world’s largest public higher-education system, the subsidizing of education for millions of people, and an increasing tendency among corporate to invest in America. In 1965, CEOs were drawing salaries only 20.1 times more than the average workers as against the current day’s 231 times.
Since the times of Aristotle, ethicists have been stressing on the concept called redistributive justice. In a broader sense, redistribution of wealth means shifting wealth from the richer to the poorer members of the society using the authority of the state. The question here is how far this is just and to what extent it is practical and feasible. Experiments of this sort by the socialist regimes in various countries in the past drifted towards more unhealthy scenarios. In the process of redistribution of wealth, the power of the states grew for no good. Jouvenel observed, “The more one considers the matter, the clearer it becomes that redistribution is in effect far less a redistribution of free income from the richer to the poorer, as we imagined, than a redistribution of power from the individual to the State”
Many would argue that ethics would dictate that though redistribution of wealth is good in most senses, it has to be attempted in a way to significantly raise the income level of the masses from the bottom level towards upwards simultaneously without impinging on the interests of the people in any top segments (After all, when everyone should agree to improve the conditions of their brethren, who will ever be willing to sacrifice their personal interests for this?). Only this can yield lasting and more fruitful results. This is possible only through sound economic policies that will take into consideration a complete redefining of the concept of economic growth. The outcome should be favorable to all segments of the society. As the guardian of the State, the government has the responsibility to improve the condition of all the citizens. It is therefore ethical for the government to work for the redistribution of wealth not by dictates, but by creating ways to achieve this. How this can be done is a question for law makers and economists to work on. Therefore, we need to look at this issue in a totally newer perspective for more productive results.
Resource Links:
http://www.amazon.com/Ethics-Redistribution-Bertrand-Jouvenel/dp/0865970858
http://www.disinfo.com/2012/09/there-is-no-such-thing-as-redistribution/
Chuck, the extent of the government’s role in improving the condition of its citizens is, to me, more of a philosophical discussion. The moral application of that position is an ethical issue.
There is nothing in the United States Declaration of Independence or Bill of Rights that guarantees the government has any responsibility to improve the condition of all the citizens.
The U.S. Constitution talks of promoting the general welfare and the government’s rights to levy and collect taxes in a uniform manner to do this.
If you are equating promoting general welfare to improving the condition of all the citizens, then income redistribution is the tool not the goal. And, it is possible for ethical people to disagree on the best tool while being committed to the same goal. This seems to be more a difference in values and approach more than a case where one side is more or less ethical than another.
The government’s responsibility to promote the general welfare has evolved over the generations as well. Today’s interpretation and implementation are certainly different than in past generations. This appears to be more about evolving thought than unethical behavior.
It is not ethical for governments to have a policy of redistribution of wealth. That is why the North was correct to take action to free the slaves of the South. That is why it was correct for the Federal government to force “civil rights” on the states. That is why it will be correct to break up the current practice of massive corporate welfare. All of these practices were and are a redistribution of wealth from the poor to the rich. We currently have a system where by the wealthiest have special income benefits from the governments. This redistribution of wealth is not ethical.
The first requirement on a government is physical protection of its people. The second requirement is that of justice. As Scripture in Isaiah and James clearly states, the lack of justice is more a cause of wealth inequity than a lack of opportunity. If we focus on providing justice for all, the poor will have the way to work their way out of poverty far faster than any welfare program can provide.
David, I don’t disagree that wealth should not be re-distributed from the poor to the rich through unfair tax breaks. Are you also arguing that rich and poor should pay comparable tax rates? Is a graduated income tax structure a redistribution of wealth from your view?
And I would differ with you on your perspectives regarding slavery and civil rights. Those were not, in my view, issues of wealth distribution but morality under the princple that all men and women are created equal with the inalienable rights of life, liberty, and the pursuit of happiness. Same outcome just a different rationale.
Chuck, while the video is certainly convincing about how poorly skewed the nation’s wealth has become, it only shows us the resulting conditions. It suggests that these results are unfair and somehow must be brought back into balance, thus supporting Obama’s incessant drumbeat to “tax the rich for fairness”.
What is missing from the video is the “how and why” of how the nation got to this point. It fails to mention the reasons why some folks got extremely wealthy and why others managed to get “progressively” poor (pun intended).
Most of the wealth created during the last 30 years (1980’s to present) was due primarily to investments in the massive number of innovative industries developed by the tech boom (computers, phones, microchips, its impact on general electronics, and the vast spin off technologies) of the 1980’s and 1990’s. The Steve Jobs, Bill Gates and Warren Buffets of the world, to name a few certainly got extremely wealthy; but, who would suggest that they earned their money unfairly, illegally or unethically.
In the financial arena, many got wealthy from hedge fund management, and creating new investment products, derivatives, and from general stock market investing, risking their capital in the burgeoning tech industries.
While there are many who derived their wealth honestly and ethically, there certainly were those who gamed the system, while the SEC and other watchdog government agencies were complacent or asleep at the wheel, allowing for a select few to achieve undeserved wealth. All in all, I believe the vast majority of foks who achieved their wealth, acquired it for the investment knowledge they used, and for the investment risk they took.
While it is true that the middle class has shrunk and the lower income classes have increased, creating millions of Americans dependent on goverment welfare; the reasons are not totally unconnected with government’s desire to grow, to control and smother the free market system and capitalism in general.
And to that end, we now have an American President, who looks at these same statistics and sees an opportunity to create class warfare, to promote his political agenda by “redistributing wealth”; an agenda that has failed in every Socialist country throughout Europe, Latin America, Asia and Africa that has attempted it. Think Greece, Italy, Spain, Argentina, France, Venezuela, Cuba, South Africa.
As Randy, above, has noted, the U.S. Constitution talks of “promoting” the general welfare; however, this administration has now changed that to “implementing” the general welfare and has flooded us with Executive Orders to force this result, bypassing Congress and acting unilaterally to “transform” America to it’s Alinsky inspired ideology.
And as a result of the last election, we now have a situation where two wolves and one sheep are being asked to vote on “what’s for lunch”?