Obligations of the Wealthy

It is always instructive and even at times interesting (or even painful) to take a look at ourselves through the eyes of those who live on the other side of the pond. These days one can only shudder to think what the impression must be, but I shall avoid that in order to retain some semblance of my sanity — what is left of it.

In any event, in 1877 British Prime Minister William E. Gladstone took a careful look at what was going on in America — an America that Alexis de Tocqueville had previously examined under the microscope. He did not like what he saw. Considering the fact at the time that Cornelius Vanderbilt had just left his son $100 million Gladstone worried that

“Wealth on so grand a scale ought not to exist accompanied by no ‘obligation to society.'”

Gladstone thought that the government should take great wealth away from the wealthy and redistribute it if the wealthy did not take part in governing the country. That, of course, has not happened. In fact in the nineteenth century we have examples of such worthies as John D. Rockerfeller, Vanderbilt, and Andrew Carnegie who amassed huge wealth and yet never participated in any way in the political arena. It appeared as though the wealthy worried more about their wealth than they did the fate of their nation. That seems to have set the tone for the country in the years that have followed.

What makes this of particular interest, of course, is that as the nation was aborning the Federalists, led by such men as Alexander Hamilton, sought to establish the wealthy at the head of the nation in positions of great power and influence. Some of the Founders, such as Hamilton and even Washington to a degree, regarded the wealthy as the closest thing we had to an aristocracy. The Senate would be peopled by the wealthy as a faint echo of the English House of Lords. They were convinced (as was Plato after seeing what a jury did to his beloved Socrates) that ordinary men and women would run the ship of state aground. The wealthy and the “well born” as Hamilton saw it were in a better position to know what was best for the “general good,” while the rest of the common folk were busy trying to make ends meet. Strange to say, a great many people agreed with Hamilton and the other Federalists — enough at any rate to ratify the Constitution which was written is such a way as to make sure that ordinary folks would be separated as far as possible from the seat of government.

Gladstone’s concern is especially interesting not because his observation flew directly into the face of what the founders had intended — namely, that the wealthy and well educated would rule the nation — but that it proved to be prescient. As things stand today, the very wealthy avoid public office — with a few notable exceptions — while they and their companies maintain a tight grip behind the scenes on the power that politics promises them, the financial avenues those they have chosen to rule open for them. I speak of the corporations which, thanks to the abortive Supreme Court decision regarding “Citizens United,” have considerable influence on who it is who runs the country and which direction it will take.

In a way my concern here dovetails with a more general concern I have voiced from time to time on these pages about the “obligation” the wealthy have to those around them. Some notable exceptions can be allowed, but by and large wealthy individuals tend to worry more about their portfolios than they do about the plight of those around them who, in many cases, do not have enough food to eat or a place to call their home.

But the general point that John Murrin makes in his book Rethinking America — from which my references to Gladstone arise — cannot be ignored and does make us pause:

“In a capitalist society that generates huge extremes of wealth and want, democracy is ever at risk. . . .The pursuit of wealth without regard to the public good not only corrupts individuals. It threatens to destroy independence and the American republic.”

Indeed so. Those who have are obliged to concern themselves with those who have not: the more they have the greater the obligation. And the very wealthy have an obligation to others and to the nation that extends beyond simply promoting those laws that enhance their opportunity to become even more wealthy. Gladstone was right to be concerned.

16 thoughts on “Obligations of the Wealthy

  1. Hugh, the 1950s saw an American juggernaut of an economy with a thriving middle class. Having your own home was not a dream as more Americans could afford one. It also had strong union representation that benefited both union and non-union wages.

    Since the 1980s when the top end tax rate was dramatically cut, the use of equity compensation increased, and more outsourcing, offshoring and downsizing occurred, the discrepancy between the haves and have nots git much wider. Then, further changes to the estate tax laws, further income tax cuts, etc. and the disparity is even more worse.

    Now, we have more folks working part-time, where benefits are not offered. We have more working in gig economies where benefits are not offered. So, yes more people are employed, but are not thriving. The middle class has been squeezed downward where we have more American living paycheck to paycheck or below.

    This disparity cannot last too much longer without some reckoning. Increases in minimum wages are occurring, but if benefits do not come with that, there are too many who are in dire straights if something happens.

    We have poverty problem that has been masked in this country. Doing away with healthcare access and making it harder to get food stamps, Medicaid, etc. is not the answer.

    We have returned to a Robber Baron period, but it is masked somewhat. Until we address the poverty issues, we won’t solve this problem. Keith

  2. Exactly what I’ve said many times. It is an abomination that some have billions and do nothing to help those less fortunate. And yet, those with the billions are promised even more through government policies such as tax cuts that benefit the wealthy and the large corporations. I fully support a substantial increase in income taxes over a certain amount, but also capital gains and inheritance taxes. Why should a handful of people sit on the wealth of the nation, while others live in cars, or under overpasses, or if they’re lucky, in homeless shelters? Why should they sit and watch their investment portfolios grow while many watch their children die because they cannot afford medical treatment, or put their babies to bed hungry at night. Capitalism in the U.S. has run amok, and you’re so right … the wealthy were given the keys to the kingdom with Citizens United. Even one of the Justices who helped pass it said it was one of the worst decisions the Supreme Court had ever made.

    • Hugh, Jill, we also need to add McCutcheon to Citizens United, which allows someone from across the country fund a candidate. In NC right now, a conservative group is funding a commercial in the Democrat US Senate primary race, the person they want GOP Senator Thom Tillis to run against in the fall. They did this several years ago to help an unknown win who got trounced by Lindsey Graham. Sadly, these are true stories. Keith

      • You are so right, Keith … McCutcheon + Citizens United = Plutocracy. I remember when i was a very young child all those years ago being told that America was a country where anybody could get to be president, regardless of how much money they had, if they just worked hard. It may be been true in the 1950s, but it certainly no longer is. Money buys power.

  3. Professor Curtler,

    Another interesting post, for which I thank you.

    The statement that with great wealth comes great obligation is a statement, I believe, that most wealthy persons would accept — excluding, of course, the so-called “libertarians” among us. The issue, of course, is obligation to what end?

    If the wealthy determine entirely what they do with their wealth, should we be surprised when most of them pursue the increase and protection of that wealth by any and all means at their disposal?

    The resolution, I believe, is not to be captivated by discussion of the moral obligations of wealth in the first place. Money does not come with instructions. In capitalism, the only obligation of capital is to increase itself.

    The resolution to problems of the gap between wealth and poverty lies not in the conscience of wealth but rather in the operations of the economy, the law and government policy. The problem is to establish these institutions in such a way that they serve as effective countervailing forces to the centralization of wealth and power in the hands of the same few people.

    This is no small matter, but a strong State is the only institution that has the potential to counterbalance the powers of wealth, yet it will only realize this potential when it operates in a truly democratic and egalitarian manner — which States tend not to do.

    I am not espousing a mythical utopian socialism, I merely observe that it is possible for government to establish sufficient counterweight to the power of wealth to improve the lives of all citizens.at relatively small cost to the wealthy few.

    The nations with the best quality of life are all capitalist societies with strong economies and strong democracies with substantial government investment in the public sector. These societies are not based upon rigid conceptions of economic equality; they are built upon strong commitments to social fairness and the public good. Not coincidentally, they all have strong unions and labor policies.

    These countries are not utopias, but their citizens do live better and longer, on average, and receive an array of benefits we can scarcely imagine. These countries have not done away with the wealthy. Far from it. However, the wealthy do pay higher taxes in these nations despite their best efforts to do otherwise.

    As a practical matter, let us grant that the rich shall always be rich. Let us also grant that the rich shall get richer. This does not mean that the gap between the wealthy and the rest needs to grow intolerably. Nor does it mean that government policy and the law must necessarily be determined solely by the interests, or obligations, of the wealthy.

    A modern form of democratic socialism is the only option I see that could, in principle, achieve effective democracy and egalitarian public programs in the context of a capitalist society.

    Principle is not the same as practice, but practical models of possible solutions to problems of health care, education, child care, family leave, labor rights, political participation, and environmental policies are readily available.

    The alternative to democratic socialism is the society we see before us — a society where wealthy and powerful people tear down the remaining facades of democracy and openly use the government for the promotion and protection of their own wealth, power, and racial privileges.

    If the wealthy were truly beneficent, if they felt a collective obligation proportionate to their private wealth, then we would not have the society we live in. That much seems clear.

    Perhaps it is possible that a discussion of the obligations of government will be more fruitful than a conversation about the obligations of the wealthy — or so it seems to me.

    For what it is worth…

    Regards and respects,

    Jerry Stark

    • Have no quarrel with the psychology you tend to focus on. Those with wealth want more. I understand that. But I am advancing a moral argument: those with great wealth have a duty to others. We all do, but the duty increases with the growth of wealth — especially surplus wealth (if you will).
      And I thought the happiest countries were the Scandanavian countries which all espouse democratic socialism. No?

      • Professor Curtler,

        You are on to something here, as always.

        Western European, Scandanavian countries and Canada have the best quality of life and overall happiness; New Zealand, as well. Each of these countries are substantially democratic-socialist in the public policies — regardless of the political party affiliation of their leaders and administrations at any given time.

        (I tend not to ficus too much on happiness surveys, per se, because the prospect of people walking around with smiles on their faces most of the time is simply creepy, given the state of the world we occupy. Odd at best and Orwellian at worst.)

        Rather than looking to international comparisons of happiness indicators, which are not irrelevant because they largely reflect a sense of personal and familial security and future prospects, I tend to focus on differentials in life experiences and outcomes between the top and the bottom of a society.

        In the late 1960’s, I believe, Sweden became the first country in the world where a child born to the lowest level of society had precisely the same health outcomes, statistically speaking, as a child born to the uppermost level of society.

        This historical achievement was not accomplished by an obligation to the public good on the part of the wealthy. It was not charity that accomplished this. It was public policy driven by democratic socialist political parties and leaders.

        One might argue that the wealthy, as a class, already donate more to charity than any other group, as a class. This is true, but one mustn’t forget the significant tax advantages that accrue to such donations. Furthermore, for every Bill Gates there are several (at least) Jamie Dimons and Donald Trumps.

        It is also true that most of the wealthy contribute minimal amounts to charity. The average and median contributions are greatly enhanced by the out-sized charitable contributions of a relatively few exceedingly wealthy donors. Thus, the tendency toward supporting the public good is not equally distributed among the wealthy. Like wealth itself, it appears to be concentrated in the hearts of but a few.

        Furthermore, the many laudable efforts by some of the wealthy to sustain the public good through charitable donations appear not to have had much impact at the national level on matters of poverty, health care, structural inequality, child care, education, labor displacement, inadequate minimum wages, and the like.

        Unlike Timothy, I do not contend that “… the love of money is the root of all evil.” I simply presume that the wealthy will do as all others do almost all the time, that is, pursue their own interests as they see them.

        For most of the wealthy throughout history, that interest has been to promote and protect their wealth. I find this completely understandable and I do not presume that I would necessarily proceed differently were I to be a wealthy person.

        I think the moral argument you make is a good one. I believe we need government policies guided by that argument.

        Regards and respects,

        Jerry Stark

      • Your comments always give me pause. But, as I said, I have no quarrel with the psychological argument — I am aware that we are all motivated by self-interest, to one degree or another. But I still maintain that there is an over-riding obligation to help those in need and the wealthy have an even stronger obligation than the rest of us because they are in a position to do so much good.

      • Dr. Curtler,

        For better or worse, I always tend to look at moral arguments as attached to moral agents in practical situations. As George Wills once said, I am inclined to “commit sociology”. Guilty as charged.

        Still, I find the pursuit of guiding rational principles important, especially for matters of practical agency, and especially when a ‘post-modern’ approach seems so appealing to so many.

        There are a number of ways to ground your argument, I think, but I am curious about which direction you take to this question of the obligations of wealth. It is both an interesting and important argument.

        Would your ground your argument about the obligations of wealth on a principle such as Rawls’s Second Principle of Justice as Fairness (Difference) or something similar?

        Thanks again.

        Regards and respects,

        Jerry Stark

      • I find Rawls attractive in many ways, but the principle in this case is fairly simple: we all have an obligation to those less fortunate than ourselves (out of the respect we owe one another as persons [Kant]). This applies to coming to the assistance of a man being robbed on the street as well as the wealthy giving a portion of their great wealth to help those less fortunate than themselves. It would help if they admitted that their wealth in many cases is a matter of luck — not brilliance on their part!

      • Dr. Curtler,

        One: I gather Kant might argue that each person has an obligation, as a member of civil society. to conduct themselves in a manner that benefits all citizens and not just themselves.

        Perhaps, Kant might further argue that proportionately higher taxes on the wealthy would be supported, at least in principle, by almost all rational citizens acting in a manner to protect and promote civil society itself, and not merely their own interests.

        Two: I suspect the wealthy would counter with Kant’s own argument about (1) individual property rights, which the State has a duty to protect, and (2) fairness as equity, that is, treating all tax payers fairly as equals before the law of civil society. The latter would mean, I gather, that either the tax amount or the tax rate paid by citizens would be the same for all.

        I am at a loss to see a way past this apparent conundrum, given One and Two above.

        Thanks for the response. It got me thinking, as you always do, and it is typically a confusing experience for me.

        Regards and respects,

        Jerry Stark

      • One might also appeal to the Moral Sense school of thought — headed up by Francis Hutchinson, David Hume and Adam Smith. They would argue that all humans share a moral sense and deserve to be treated fairly and with “benevolence.” This would imply that the wealthy have a duty to their fellow humans to share their wealth. Further, in doing so they would evidence the virtue of generosity that would be an example to us all.

      • Dr. Curtler,

        Thank you for your helpful reply.

        The Scottish Moral Philosophers argued for the premise that we are not only fundamentally social but that we are also possessed of a natural moral sentiment toward others. Indeed, this is what makes human beings truly social in the first place.

        Hutcheson’s notion of three of the human senses and “natural affections” intrigues me.The public sense, the moral sense, and the sense of honor reflects this school of thought’s presupposition that humans are essentially social and oriented toward public benevolence. These senses are as innate, for Hutcheson, as the senses of sight, smell, touch, hearing, and taste.

        The contrast with Hobbes could not be more clear. The pre-Kantian critique of Rationalism embedded in this argument is also intriguing. And there is much here that presages the work of George Herbert Mead on the development of the self though social interaction in the early twentieth century. Plenty of grist for the mill!

        I have long found it interesting that, in their celebration of Adam Smith’s The Wealth of Nations, most economists overlook his foundational analysis of the human condition in The Theory of Moral Sentiment. The essence of social order is built upon this “moral sentiment” within which all economies, even so-called “free markets”, necessarily must operate and by which they will be limited.

        All too willing to focus on the “invisible hand” that would guide the market, main-stream economists typically have been unconcerned about the idea that our moral sentiment and sense of public benevolence would set limits to market competition.

        Further, Marx’s exclusive focus on the labor theory of value in his Theories of Surplus Value and Capital sidesteps this aspect of political economy in Adam Smith, unfortunately, in my opinion. Yet Marx’s analysis of capitalism’s inherent tendency toward becoming it’s own self-contained and socially-destructive “ethic” is more than timely.

        I, too, think that one can build arguments for a moral economy and progressive taxation upon the foundations laid by the Scottish philosophers.

        Moreover, the notion that ALL economies are fundamentally moral economies is an insight well worth examination.

        Thanks again for your response.

        Regards and respects,

        Jerry Stark

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s