Wealth

NOMOS LVIII

Jack Knight, Melissa Schwartzberg

• Publisher: NYU Press
• Year: 2017
• ISBN:
  9781479817085
• Topic: Economics
• Subtopic: Economic Policy
• Index: Economics

An in-depth political, legal, and philosophical study into the implications of wealth inequality in modern societies. Wealth, and specifically its distribution, has been a topic of great debate in recent years. Calls for justice against corporations implicated in the 2008 financial crash; populist rallying against “the one percent”; distrust of the influence of wealthy donors on elections and policy—all of these issues have their roots in a larger discussion of how wealth operates in American economic and political life. In Wealth a distinguished interdisciplinary group of scholars in political science, law and philosophy address the complex set of questions that relate to economic wealth and its implications for social and political life in modern societies. The volume thus brings together a range of perspectives on wealth, inequality, capitalism, oligarchy, and democracy. The essays also cover a number of more specific topics including limitarianism, US Constitutional history, the wealth defense industry, slavery, and tax policy. Wealth offers analysis and prescription including original assessment of existing forms of economic wealth and creative policy responses for the negative implications of wealth inequality. Economic wealth and its distribution is a pressing issue and this latest installment in the NOMOS series offers new and thought provoking insights.

1

Having Too Much

Ingrid Robeyns

I. Introduction

Whatever else contemporary theories of distributive justice take a stance on, they always specify a metric of justice and a distributive rule.1 The metric is concerned with the good X whose distribution matters insofar as justice is concerned. Among the most influential metrics are welfare, resources, primary goods, and capabilities. The distributive rule specifies how X should be distributed; prime examples are the principles of priority, sufficiency, equality of outcomes, equality of opportunity, and Rawls’s difference principle.

This chapter articulates and defends a view of distributive justice that I call limitarianism. In a nutshell, limitarianism advocates that it is not morally permissible to have more resources than are needed to fully flourish in life. Limitarianism views having riches or wealth to be the state in which one has more resources than are needed and claims that, in such a case, one has too much, morally speaking.2

Limitarianism is only a partial account of distributive justice, since it can be specified in a way in which it is agnostic regarding what distributive justice requires for those who are not maximally flourishing. It could, for example, be combined with one of the many versions of equality of opportunity below the limitarian threshold. The version of limitarianism that I defend here is not agnostic as to what happens below the line of riches; but, as I will point out in section II, there are several different versions of limitarianism, and different versions may have different views on what morality requires below the line of riches.

In this chapter I defend limitarianism as a non-ideal doctrine. I postpone the question of whether limitarianism could be defended as an ideal theory for future work. Analyzing limitarianism as a non-ideal doctrine requires that we start from the distribution of the possession of income and wealth as it is, rather than asking what a just distribution would be in a world with strong idealized properties, such as for example the absence of inherited wealth and privileges, a world in which everyone’s basic needs are met or where we are in a state of initial property acquisition.3

Social scientists and scholars in the humanities have a long tradition of theorizing and conducting research on the position of the worst-off in society. In theories of justice, this is especially visible in the wide support for sufficientarianism.4 In its dominant understanding, sufficientarianism is the view that distributive justice should be concerned with ensuring that no one falls below a certain minimal threshold, which can be either a poverty threshold or a threshold for living a minimally decent life.5 It shouldn’t be surprising that the study of poverty and disadvantage is so vast, since most people hold the view that these conditions are intrinsically bad.

Given the sizeable philosophical literature on poverty and the position of the worst-off, it is surprising that so little (if any) contemporary theorizing on justice has focused on the upper tail of income and wealth distribution. Obviously, there is a great deal of literature about theories of justice in relation to inequality in general; it may well be that political philosophers assume that it is not necessary to single out the upper tail of the distribution in particular. Still, I think it would be helpful for political philosophers to conduct a normative analysis of the upper tail of the distribution. For one thing, this would make it possible for philosophers to have greater impact on existing debates in society. For a long time normative claims related to the rights, privileges, and duties of rich people have been advanced in public debate. Most countries have some political party that claims that the rich should pay for economic crises, rather than the poor or the middle classes. In recent years several European political parties have proposed introducing an increase in the highest marginal tax rate of the highest income group; similarly, the Occupy movement in the United States has claimed that the “one percent” should be taxed much more heavily. Some citizens have also complained that austerity measures affect the poor and the middle classes disproportionally, rather than affecting the rich in equal measure. What all these normative claims have in common is a focus on the upper tail of the distribution—thereby making a distinction between the middle class and the rich.6

Interestingly, in recent years several economists have developed analyses of the top of the income and wealth distributions. Most famous was Thomas Piketty’s Capital in the Twenty-First Century, along with his earlier collaborative research with other economists, which generated part of the data forming the empirical basis of the later book.7 These studies show that in the decades following the Second World War inequality decreased, yet wealth inequality has again been expanding since the 1980s. Piketty offers a theory for why the postwar period should be regarded as an historical exception, rather than the beginning of a period in which inequality would decrease or stagnate. Piketty argues that this increase in inequality is undesirable, but certainly not all economists share this view. The Harvard economist Greg Mankiw has defended the moral desirability of letting the rich be rich, on the grounds that they deserve their wealth.8 However, as Mankiw himself admits, he is merely engaging in “amateur political philosophy.”9 In fact, few normative claims made by economists about inequality and the rise of top earners are well defended. But this should not necessarily be seen as a criticism, since in the intellectual division of labor, this task falls on other shoulders.

In this chapter I want to articulate one particular version of limitarianism and offer a justification. But before doing so, I first want to highlight that there are a variety of limitarian views, and a variety of grounds on which they can be defended. In this sense it is no different from the other distributive doctrines, such as sufficientarianism, prioritarianism, or egalitarianism. In the next section, I spell out a variety of potential strategies for defending the limitarian view. Some offer reasons why being rich is intrinsically bad. In contrast, the reasons that I offer regard limitarianism as derivatively justified. Limitarianism as a distributive view is justified in the world as it is (the non-ideal world), because it is instrumentally necessary for the protection of two intrinsic values: political equality (section III), and the meeting of unmet urgent needs (section IV). After offering these two arguments for limitarianism, I address the question of which notion of wealth or riches the two arguments require (section V), and discuss whether limitarianism should be considered a moral or a political doctrine (section VI). I will also respond to two objections: the objection from unequal opportunities and the incentive objection (section VII). The final section sketches an agenda for future research on limitarianism.

II. Intrinsic versus Non-Intrinsic Limitarianism

In its most general formulation, limitarianism is a claim relating to distributive morality, which entails that it is not morally permissible to be situated above a certain threshold in the distribution of a desirable good. Limitarianism could be defended in various dimensions or domains, and with different theoretical modifications. For example, the case of a personal emissions quota that has been studied in the climate ethics literature is an example of a limitarian institution, whereby the good that is limited is the right to emit greenhouse gases. Breena Holland has argued for the introduction of “capability ceilings” in environmental regulation, which are “limitations on the choice to pursue certain individual actions that are justifiable when those actions can have or significantly contribute to the effect of undermining another person’s minimum threshold of capability provision and protection.”10 For example, if having access to high-quality water and not living in an environment with severely polluted water are capability thresholds, then extracting gas by means of hydro-fracking may not be permitted in case fracking could contaminate the local hydro-ecosystems. Normative arguments for limits could also be provided in other areas of life. For example, one could discuss limitarianism in the context of global population size, and argue that due to environmental concerns, there should be a moral limit of one child per adult.11

In this chapter, the focus is on limitarianism of financial resources. Limitarianism is then the view that it is not morally permissible to be rich. Given that our “metric” is a monetary metric, we can reformulate the limitarian claim. Call surplus money the difference between a rich individual’s financial means and the threshold that distinguishes rich from non-rich people. By definition, only rich people have surplus money. Limitarianism can then be restated as claiming that it is morally bad to have surplus money.

How can limitarianism be justified? That would depend on whether we aim to defend limitarianism as having intrinsic value or instrumental value—a distinction that also applies to egalitarianism.12 Intrinsic limitarianism is the view that being rich is intrinsically bad, whereas according to non-intrinsic limitarianism, riches are morally non-permissible for a reason that refers to some other value.

In this chapter I am concerned only with non-intrinsic limitarianism, and remain agnostic on the question of whether intrinsic limitarianism is a plausible view. To examine the plausibility of intrinsic limitarianism, one could develop an argument based on paternalism, whereby wealth is objectively a burden on rich people and their children, leading them to suffer in the nonmaterial dimensions of a flourishing life. There may be some evidence for this, but in this chapter I will not investigate this argumentative strategy any further.13 Other argumentative strategies for intrinsic limitarianism can be sought in virtue ethics. Several arguments against wealth accumulation, based on virtue ethics and perfectionist theories, can be found in the history of ethics, and have been very important in, for example, the teachings of Aristotle and Thomas Aquinas.

In this chapter, I merely want to note the possibility of defending intrinsic limitarianism, and will remain agnostic on the plausibility of that view and on the soundness of any of its justifications. Instead, I limit myself to developing two reasons for non-intrinsic limitarianism. The first, which I will discuss in the next section, is the democratic argument for limitarianism, which focuses on the claim that wealth undermines the ideal of political equality. Section IV will then present and analyze another argument for limitarianism: the argument from unmet urgent needs.

The distinction between intrinsic and non-intrinsic limitarianism is important, since the two views offer different answers to the question: “What—if anything—is wrong with some people being rich in an ideal world?” Non-intrinsic limitarianism will most likely respond that in such an ideal situation, where all important intrinsic values are secured, riches are not morally objectionable. Non-intrinsic limitarianism will limit its claim that riches are morally objectionable to a world where certain intrinsically important values are not secured, and where limitarianism is instrumentally valuable to securing those ultimate ends. In contrast, intrinsic limitarianism will answer the question affirmatively. Nevertheless, as I mentioned earlier, in this chapter I am agonistic on whether intrinsic limitarianism is a plausible view. My aims here are instead limited to an analysis and defense of non-intrinsic limitarianism.

III. The Democratic Argument for Limitarianism

The first justification for the limitarian doctrine can be found in political philosophy and political science, where there exists a long history of arguments that great inequalities in income and wealth undermine the value of democracy and the ideal of political equality in particular.14 Rich people are able to translate their financial power into political power through a variety of mechanisms. In his article “Money in Politics,” Thomas Christiano discusses four types of mechanisms by which the expenditure of money can influence various aspects of political systems.15 Christiano shows how the wealthy are not only more able but also more likely to spend money on these various mechanisms that translate money into political power. This is due to the decreasing marginal utility of money. Poor people need every single dime or penny to spend on food or basic utilities, and hence, for them, spending 100 dollars or 100 pounds on acquiring political influence would come at a serious loss of utility. In contrast, when the upper-middle class and the rich spend the same amount, they see a much lower drop in utility, that is, the utility cost they pay for the same expenditure is much smaller.

The democratic argument for limitarianism can easily be derived from the mechanisms that Christiano outlines: Because rich people have surplus money, they are both very able and seemingly very likely to use that money to acquire political influence and power. On the account of “the rich” that I will develop in section V, the rich have virtually nothing to lose if they spend their excess money, which is the money that goes beyond what one needs to fully flourish in life. The welfare effect—understood in terms of a certain set of valuable functionings—is more o...