Mind's Eye What to do about the rich?

We must make our choice. We may have democracy, or we may have wealth
concentrated in the hands of a few, but we can't have both. (Justice
Louis Brandeis)
The rich are independent of the rest of us. Obviously they are
materially independent so long as their property rights remain
recognized. They can achieve what they want by themselves, that is by
buying it from others or paying someone else to do it for them. But
this power of command also generates a social distance from society
that allows them to become 'ethically independent'. Since they don't
depend on the goodwill of others to succeed - for example, few of them
have recognisable jobs - they may become less concerned in general
about whether they deserve goodwill.
That means that the rich don't have the same political interests as
the rest of us. They aren't worried about crime (their gated
communities come with private security) or the quality of public
education (their kids go to the fanciest schools money can buy) or
affordable accessible health care, job security, public parks, gas
prices, environmental quality, or most of the other issues that the
rest of us have no choice but to care about, and to care about
politically since they are outside of our individual powers to fix.
The political concerns of the rich do not lie in the provision of
public goods, but in furthering their private interests, whether their
personal wealth and power or their political whimsies. This is why
Adam Smith warned us so vehemently to be suspicious of their self-
serving rhetoric (e.g. WN I.11.264).
It is sometimes thought that the rich are necessary to the flourishing
of a free market economy, that because they have more wealth than they
need for their own consumption it is their investment of capital that
makes the economy spin around and create jobs. Thus the claim that
there is a trade-off between democracy and material prosperity. But
that 'job creator' thesis is out of date and back to front.
First, while in Adam Smith's time it might have been true that
economic development required capitalists to reinvest their profits
this was because everyone else was too poor. But these days the
economies of democratic societies are characterized by a broad middle-
class whose savings are quite sufficient for funding business
development and expansion (such as through the share-ownership of our
pension funds or the bank loans backed by our deposits).

Second, the greater the wealth inequality, the worse we may expect the
economy to perform. A flourishing economy requires customers as well
as investors. If the gains of economic productivity are overwhelmingly
transferred to some small group (as profits) that means that they
don't go to ordinary people (as wages). (For example, since 1979 all
the productivity gains of America's economy have gone to the richest
1%.) The implications are, first, that economic growth does not
increase national prosperity because it does not increase the economic
command of ordinary people to satisfy our wants (which is how Smith
defined the wealth of nations). And, second, economic growth itself
will eventually suffer since high inequality limits the extent of the
market (fewer customers) and thus the scope for innovation.
Hence my modest proposal. We should first identify with some precision
the category of what it seems reasonable to call the rich i.e. those
people whose capabilities for independence from and command over the
rest of us crosses the threshold between enviable affluence and
aristocratic privilege. Then, when anyone in our society lands in the
category of the problematic rich we should say, as at the end of a
cheesy TV game show, "Congratulations, you won the economy game! Well
done." And then we should offer them a choice: give it away (hold a
potlatch, give it to Oxfam, their favourite art museum foundation, or
whatever) or cash out their winnings and depart our society forever,
leaving their citizenship at the door on their way out. Since the rich
are, um, rich, they have all the means they need to make a new life
for themselves elsewhere, and perhaps even inveigle their way into
citizenship in a country that is less picky than we are. So I'm sure
they'll do just fine. Still, we can let them back in to visit family
and friends a few days a year - there's no need to be vindictive.

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