Civilization and Inequality

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If the United States divested the wealth of the 100,000 wealthiest Americans, but allowed each divested person to keep one million dollars to sustain themselves, what could it do with the money?

This is a serious question worth thinking about.

The answer may surprise people. Some say the United States could completely pay off the national debt of 17.4 trillion dollars and run the government at current spending levels (5.6 trillion dollars per year) for the next five years.  Taxes on everyone, including the wealthy could be completely eliminated for half a decade—until 2020.

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Tools of a typical tax accountant: calculator; complicated forms; toy blocks.

As a practical matter, the United States can’t divest 100,000 of its wealthiest citizens—not without crashing the economy. And, sadly, information about wealth and its distribution is frustratingly opaque. Economists can’t trust what they think they know.

Nevertheless, the United States can put in place tax policies that lift the burdens of filing and paying taxes from the backs of the vast majority of citizens. It can easily pay for things like education, health care, research and retirement while stimulating economic investment and growth. And it can protect our freedoms and egalitarian way of life from individuals who have sequestered an unreasonable share of our resources. (Read Capitalism and Income Inequality elsewhere on this site.)

invisible hand
This is the visible hand.

The wealthy, and those who support them, tell us that the closer a civilization resembles the natural order of things—that is, a state with the least amount of government possible—the better off that civilization will be. The invisible hand of free markets will enhance the destinies of all. Free markets, fewer taxes, fewer regulations—policies like these take the brakes off the economy and improve everyone’s lives.

Since we all plan to be wealthy someday, what could possibly be wrong with reasoning like that?

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Bullies rule on unregulated playgrounds.

Well, for one thing, it ignores why folks create civilizations in the first place. In the eons before civilization, humans made little progress. Think of an unregulated school yard or imagine a jungle with no rules. What always happens? Bullies and predators end up running everything. The meek and the fragile have to hide or be eaten. Whatever ideas or contributions they might make to enhance the quality of life get lost.

It’s been like this in jungles and on playgrounds for as long as jungles and playgrounds have existed. It’s never going to change. It’s why folks need playground teachers and yes, civilization. With civilization we can organize ourselves. We can make rules to protect the weak and improve the lives of both predators and prey.

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For Genghis Kahn, civilization was all about him.

We know from history, it’s the powerful who create civilizations to protect their advantages. For thousands of years bullies in expensive garb have run the show on every continent on earth.

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Our nation’s founders said that all people were created equal before God.

Two-hundred-and-forty years ago something new came along. Our ancestors won a revolution. They organized a civilization that would eventually empower the powerless and give voice to the weak.

Yes, they codified slavery, because what else could they do? Africans had been slaves in America for a hundred years already. For a hundred-and-fifty years two-thirds of whites had come to America as indentured servants, a temporary form of slavery that ended, typically, after seven years of servitude.

The habits of history weighed heavily on our founders, and being unsure of their steps, they gave-in to the pressures of greed to better form the consensus that would permit the birth of something new in the world. And guess what? Our new-born civilization grew up, matured and ninety years later ended slavery in the United States of America.

Earth needed a new way—a way based on the dignity of people, their rights before God, their need to be free from humiliation by others more powerful and crafty than themselves. They needed a new kind of civilization, and our founders found a way to build it, blemished and imperfect as it was.

It took time; it didn’t happen overnight. I was twenty years old before black folks got the right to shop freely; to buy a soda in a drugstore; to buy a house; to get a loan. Maybe two-hundred years seems like a long time for a constitutional republic to get serious about freedom for individuals and families. It is a long time. We might as well admit it.

American flag
The flag should stand for what is right, just and fair. It is the symbol of our civilization.

Today, as the civilization we built slides into the shadows of an unregulated jungle, people need to stand up and shout, No! This can’t be right.  In a civilization built by hundreds of millions, we can’t let a few thousand of the most clever humans sequester twenty-five percent of the wealth. It’s an unreasonable reward for cleverness, and it’s unfair.

Why did our ancestors build the civilization we call America? Why did they take hundreds of years to shape and change our way of governance? 

It’s because they intended to make America succeed for everybody. I’d like to believe that they didn’t want it looted and plundered by the powerful. They didn’t intend for average people to be “gated” out of the desirable places to live, or for the disadvantaged poor to be locked away to rot deep inside our inner cities.

We still have work to do. The work falls on each generation to make the world a fairer, safer, more loving place for every person who lives and breathes.  

Thomas Piketty
Thomas Piketty was an instructor of economics at MIT during the 1990s; he is the founder, Paris School of Economics; Director, Department of Social Sciences, Ecole Normale Supérieure; and Director of Studies, École des Hautes Études en Sciences Sociales.

Fortunately, America has allies around the world ready and able to help do what’s right, if we only listen. One is Thomas Piketty, the French economist.

In March, 2014 he published in America his critically acclaimed Capital in the Twenty-First Century. It is a sweeping account of the rising inequality in our world, according to New Yorker Magazine’s John Cassidy.

I’m excited about this book. Many reviewers say it’s important. It is the culmination of years of research by a brilliant scholar. It presents, I’m told, a paradigm shift in thinking about the problems economies have delivering fairness to average people.

If Piketty’s book strengthens the courage of economists in the United States to speak openly about the touchy subject of inequality, he will have done our country and its people an enormous favor.

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Gold jewelry and coins held in an overseas bank.

The United States, though proud of its wealth, seems to go to great lengths to under-report it. It’s primary focus is to collect taxes, I guess.

Assets not subject to taxation hold little interest for government accountants. The Feds limit their count to households and tell us that our total wealth is 54 trillion dollars. Other economists say it is higher—maybe as much as 188 trillion; they include in their tally many assets not normally taxed.

The subject of how wealthy America really is—who holds the wealth and in what amounts—is murky at best. According to John Cassidy, Thomas Piketty’s call for households to declare their net worth and be taxed on it will provide the reliable statistics needed to un-muddy the waters and enable policy makers to fashion the sound and fair tax policies required to protect the benefits of civilization for everyone.

Billy Lee

Post Script: Billy Lee believes a standard of maximum personal-incomes and estate-sizes should be established by the United Nations for each country as pegged-ratios of that country’s minimum wage. Violations would be treated as felonies by international courts. Billy Lee’s proposal and some of its economic and moral advantages are described in the article, Capitalism and Income Inequality.  The Editorial Board

One Reply to “Civilization and Inequality”

  1. Its only a serious question for a serious socialist. The more relevant question is: how do we educate the people that they, the individuals, not the government, have a responsibility to feed the hungry clothe the poor and heal the sick? We are suppose to be our brothers keepers, are we not?

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