What do the rich owe us?by Don Lacey on Jul. 17, 2012, under AZ Politics, Conservatism vs. Liberalism, Critical Thinking, Economics, Ethics, Freethought, Government, History, Libertarianism, Logic, Middle Class, Question of the Day!, Reason, Responsible Government, That's Life!
Jim Wilson takes a cut at explaining how the elite got there:
“The living that is owed to me I’m never going to get, they’ve
buggered this old world up, up to their necks in debt. They’d give
you a lobotomy for something you ain’t done, they’ll make you an
epitome of everything that’s wrong…
…Do they owe us a living? Of course they do of course they do…”
-Crass, Do They Owe Us a Living?
The very suggestion that the wealthy somehow owe the rest of the population anything is pretty toxic to some of my more conservative and libertarian friends. For some of them there is an underlying assumption that we live something close to a free market and that most of the wealth in it is legitimately earned by our heroic self made benefactors to society and if you question this you are just jealous. Some defend the wealth and privileges of America’s super elite with an almost reactionary fervor. With sheer amount of wealth, the richest Americans control, the questioning the extent to which their wealth and power is legitimately earned is highly important if not a patriotic duty. Among free market types, there is a bit of a double standard at play. When discussing anything positive it is assumed that our economy is close to a free market. Any negative developments are blamed on the fact that we’re NOT operating as a free market economy.
If we accept the typical libertarian assumptions about the desirability of the free market and its effectiveness at efficiently distributing resources, a very good case can be made that many of this country’s wealthiest households have greatly ripped off the American tax payer and owe them—big time. For the sake of argument, assume that any distortion in the market ultimately interferes with people making voluntary transactions that would enrich themselves. Such action robs the general population. Also, assume that such policies redirect resources from what would otherwise be more efficient uses This would support protectionist measures such as tariffs and trade quotas as well as subsidies and product specific taxes.
With those assumptions in place, the wealthy households whose wealth came from industries subsidized by the state, industries protected from competition by the state, contracted by the state (especially those who have made fortunes from the military and war), had research and development paid for by the state, or business protected by the state through corporate law do in fact owe the society something, probably more than what is paid in taxes. We live in a system of crony capitalism in which the government plays a big role enriching certain parts of the elite, for example, the war profiteers of the military-industrial complex.
How much wealth do crony capitalists owe the tax payer? I’m guessing we would find that by granting rather conservative free market assumptions, we would find that a great deal of money is owed to the tax payer. After all it seems unlikely to me that very many people within the super wealthy got that way by resisting government policies or deals that would help their business. Certainly the leadership of these companies listed here: http://en.wikipedia.org/wiki/List_of_United_States_defense_contractors would agree.
Market distortions that have benefited the elite:
- state funded R&D,
- protectionist tariffs & import quotas,
- intellectual property rights,
- corporate limited liability status,
- government contracting,
- state granted monopolies (which privatization seems to often be),
- unfair regulations, and
One last thing to keep in mind even if are able to calculate the money that is lost to the American tax payer through market distortions like the ones I listed above and identify those who benefited from said distortions the feasibility and desirability of extracting this wealth and returning it to the taxpayers would be highly debatable and could certainly have unintended consequences.