The economy does not distribute wealth perfectly to the smart and hardworking and withhold wealth perfectly from the dumb and lazy. Digby takes a crack at explaining why this unremarkable fact is causing so many twisted knickers among Romney supporters.
Hard and smart work help you hedge your bets, but ultimately luck is very much a non-trivial factor in whether and how much wealth you have. However, acknowledging this fact makes it morally difficult for those who hit the jackpot to make the case that they should retain so much more wealth than others with equal or greater smarts and work ethic but with less fortune.
Personally, I think we want inequality in the system. We want a little randomness, and we want a lot of reward for being clever or hard working. That promotes incentives that complete equality can’t. But, of course, no one is arguing for complete equality. Just a recognition that wealth isn’t entirely a function of moral worth, a recognition that you can still have those incentives even if the jackpot isn’t quite as big, and a system that reduces the upside of good luck a bit in order to soften the blow from the downside of bad luck.
And, in fact, what you should see is that as a country becomes wealthier and smarter about work; the productivity of workers increases and the number of hours worked should decrease as it takes less hours of production to support a comfortable life. See this NBC news report:
Mark Keese, head of OECD’s employment division, told 24/7 Wall St. that the wealth and productivity of a nation plays a large part in the structure of employment in the country. One component of this is the technological sophistication of industry. “Generally, richer countries can and should see reductions in hours worked … basically, you have stronger productivity performance and eventually you’re replacing workers with machines, which allow you to cut back on the number of hours of work.”
I think what we see in the U.S. is that our legal structure is set up so that the wealthy are those who have most successfully appropriated the value produced by others for themselves.
“Personally, I think we want inequality in the system.” Agreed. The corollary of that statement is that “We don’t want (only) what we deserve.” Whether we admit it or not, we want to do better than we can achieve on our own merit, and are afraid of getting only what we are willing to work for.
That’s the funny thing about economic equality- it has a lot to do with perception. One person sees an ‘overpaid athlete’, while another sees someone being ripped off by the owner.
And, while it may not fly to credit all of the wealthy with having the smarts and the hard work, it similarly doesn’t fly to dismiss all laziness or other poor habits with regards to the poor. There’s some of all of that in there.
That’s absolutely true, Mike. I think hard work and smart really help hedge your bets in either direction.
But, aside from perception, I think objective facts bear out that the wealth gap in the U.S. is substantially greater now than it was 50 years ago. I don’t think you’ll be able to show that the wealthier are substantially smarter or harder working than the poor as compared to 50 years ago.
I don’t disagree about the wealth gap. It’s real. As to substantially smarter? Probably not, but having specific technical knowledge? That matters a whole lot more today than it did 100 years ago when a man’s hands & back meant so much. A dropout used to be able to take virtually no skill set into a factory and come out with a decent living. Not so much these days. Hard work can amount to something, but I’d wager the odds are much more against it.
So- what to do about it? We can tax people at the top and hammer them down. That certainly narrows the gap. Doesn’t elevate the poor any. Well, perhaps it does temporarily via assistance, but beyond subsistence, it hasn’t given that person any tools for future success. Teach a man to fish, and all.
The wealth gap in the world is greater than it was 50 years ago, not just the US. That’s a fact that you and other liberal commentators have ignored.
Simply put, the increase in the wealth gap is due to the globalization of the economy. 50 years ago, JK Rowling may have had a best seller in Britain, today her series is a worldwide phenomenon. David Hasselhoff was highly paid in the US not because of his (non) popularity here, but because of his fame in Europe. In 1962, I doubt there would have been a German version of Baywatch.
How many truly multinational corporations did we have in 1962? How many do we have now?
I think it’s probably true that the wealth gap has widened internationally, and it’s reasonable to point to multinational corporations as major players in this trend. But Paul, if you’re suggesting that liberal commentators haven’t linked this trend to the flow of power and wealth into multinational corporations; that does surprise me. I’d say liberal (or more broadly, left leaning) commentators are universal in linking the rise of multinationals to the trend towards a new oligarchy. Personally, I think the issue will never be resolved until we start rethinking the role of humans in our post-industrial workplace. Leaving aside the ethics of the wealth gap — as a practical matter, it’s a powder keg waiting for a spark.
I believe it was the Coleman Report, in the 1960s, that set about to determine whether per-pupil expenditures on public education had an overall effect on a person’s success in life. The results of the study were that two factors determined a person’s overall success: (1) the socioeconomic class into which the person was born and (2) luck. That being said, people should be able to start on an equal minimum basis. Kids should start pre-school with the same minimum resources. That means breakfast and lunch as well as books or computers, teachers, good buildings, etc. That is where we build our infrastructure.
I am, in fact, arguing for complete equality. Since I’m an individualist rather than a capitalism-loving collectivist, I recognize that it’s the only way to create and maintain a free society with the maximum of individual liberty.
Seems to remind me of the “George Jetson” world I read about in magazines back in the early 60’s. Productivity would be such that you’d work about 2 hours a day.
No, what we got was “We can do 40 hour’s work in 10, so let’s make them give us 160 hour’s work in 40, and we only have to PAY them for 40!”
And our Calvinist foundation in this country has a simple solution for idle workers displaced by machines /outsourcing: You no Work? You no Eat.