The discussion about yesterday’s post regarding how much economic inequality is acceptable in an at least minimally just society got largely sidetracked into an argument about whether it was OK to criticize Bob Dylan for selling the rights to his music for $300 million.
This was partially my fault, since I used the occasion of that sale to frame a much larger and more important question, but it’s unfortunate that this sort of framing almost always devolves into arguments about whether this particular extremely rich person has “earned” the right to have a gazillion times more money than than most people. (Spoiler alert: the answer to that question is always no, because as another now extremely rich person pointed out, you didn’t build that).
So let’s forget about Uncle Bob for the moment and talk more directly about that larger question.
A few very general points:
(1) An under-appreciated fact about the the modern economic world is that it actually is in economic terms a radically different place than all the other societies that existed in the thousands of years of recorded history before it. Prior to about 300 years ago human societies featured very little in the way of sustained economic growth, over even extremely long periods of time.
A major irony of the study of economics is that just at the moment Thomas Malthus was developing his theory that surplus wealth generated by a society would simply be eaten up by the higher population growth rates it engendered — the famous Malthusian trap — that theory was in the early stages of ceasing to be true. (Today Malthus is mainly remembered as a kind of byword for an unwarranted pessimism, but his theory was in fact largely correct as an empirical matter up until the very point that he formulated it).
The point here is that the entire cultural history of humanity until very recently took place in a context which severe scarcity was an unchanging feature of society. (“The poor will always be with you” was true in the most literal terms). At some deep level of cognitive framing I don’t think many if any societies have adjusted to the fact that the modern world isn’t like that.
The notion that there simply isn’t enough stuff to go around was built up over thousands of years of recorded history, in a world in which “stuff” meant, above all, enough food. This is what Keynes called “the economic problem,” that is, the problem of finding ways to generate enough output to take care of what everybody would agree are basic human needs.
It was the central economic and political problem of all human societies for so long that we just haven’t adjusted to the fact that it isn’t any more, certainly not in the developed world, and increasingly not even in most of the developing world.
In a country like the United States, poverty is in no way an economic problem, if by an economic problem one means figuring out how to create a society that generates enough output so that everyone’s basic needs are taken care of. It’s rather a problem of the politics of distribution, not of output. Again, I don’t think it can be emphasized enough that culturally we still haven’t adjusted at all to the creation of post-scarcity societies.
Consider that, to the extent such things can be measured, it appears that the per person economic output of the United States today is nearly sixty times greater than it was when George Washington became president. How rapid this change has been in historical terms is illustrated by the fact that John Tyler, the tenth US president, was born in the year Washington became the first president, and still has a living grandchild. I’m pretty confident that if you had told George Washington that 230 years hence Americans would on average be sixty times wealthier than they were at the moment, he would have imagined that nobody in that society would be poor. Yet here we are.
(2) Another cognitive difficulty we face is that the human mind isn’t very good at grasping exponents. This is a thought experiment that I find useful: If an ATM machine is spitting out exactly one dollar per second, you need to stand in front of it for eleven and half days to become a millionaire. Meanwhile you would need to stand in front of it for nearly 32 years to become a billionaire, The gap between eleven and a half days and 32 years seems far far greater than our sense of the gap between a million and a billion. And here’s the kicker: you would have to stand in front of that machine for 1,743 years to become as rich as Mike Bloomberg, and 5,833 years to become as rich as Jeff Bezos.
In other words, we really have no idea how rich extremely rich people are in the contemporary world — in fact I doubt they themselves have any real grasp of this, or at least I hope they don’t, because if they do then their behavior in the face of these circumstances becomes even more disturbing than it already is.
That we live in a country in which one man has not merely an almost imaginably vast fortune, but the equivalent of thousands upon thousands of unimaginably vast fortunes, while millions of people have essentially no income (let alone any wealth) whatsoever, and must struggle desperately to keep themselves and their children from literally starving, or freezing to death under bridges, is a fact that should astound us much more than it does. (I like to think that a glimpse of the 21st century would have utterly astounded the political thinkers of the 18th and 19th centuries, when they first began to try to imagine what a world featuring anything like our present abundance would look like).
(3) One terrible consequence of this is what I’m going to call the Neal Katyal effect. Neal Katyal spends his life prostituting his considerable legal talents for money, even though he’s already rich and has been for a long time. Exactly how rich he is I don’t know and don’t really care, but since we’re talking legal academia here let’s just make up some numbers and call it good: Neal Katyal, let’s assume, has a net worth of fifteen million dollars (I bet it’s higher but I’m being nice). This estimate is based on the fact that he’s been raking in upwards of a million dollars a year now for some time, what with holding the partnership at the big law firm and the chaired professorship at the almost elite law school at one and the same time.
So why does he spend his time committing unnatural intellectual acts in the service of amoral corporations, when he’s already loaded? I’ll tell you why: because he doesn’t think of himself as rich. He thinks of himself as “upper middle class.” Because being “worth” $15 million means you end up circulating in social circles where there are people who are “worth” ten and one hundred and one thousand and ten thousand times more than you are (Do the math). And that means you just can’t afford a lot of the finer things, when the finer things include things like a 250-foot yacht with an IMAX theater and two helipads (This guy is actually one of Katyal’s neighbors, roughly speaking).
Now what to do about all this is another series of big questions, but before we get to that I think it’s important to recognize how incredibly immoral all this really is, as opposed to being the natural and inevitable workings of the Market or the rightful blessings bestowed on God’s elect, or whatever other handy rationale gets deployed to naturalize and justify it.
“All this” is something very new in historical terms, because until very recently human societies never produced anything even remotely comparable to the wealth modern societies generate. And again, I think it’s crucial to recognize that we really haven’t begun to adjust to this fact about the modern world, psychologically, culturally, and most of all politically.