Ethics and Inequality

This article is part of Occupy the Future, a forum on lessons to be drawn from the Occupy movement.

Consider some facts: the 400 wealthiest Americans have more money than the bottom 50 percent of all Americans combined. Between 1979 and 2007, the incomes of the top 1 percent of the population grew by 275 percent while the incomes of the middle class rose only 40 percent. And according to newly released measures, a staggering one in three Americans, or 100 million people, suffer in poverty or near poverty.

These are startling facts, and the Occupy movement, with its references to “the 1 percent” and “the 99 percent,” has brought them to the fore of public consciousness. In response some critics have argued that the popular protest against inequality is inspired by mere envy, or an effort to inflame class warfare. We disagree. Inequalities can—in this case do—raise ethical concerns, and we think citizens are right to be outraged at the gap between the 1 percent and the 99 percent. We seek here to explain why these inequalities are so troubling.

But first, let us say the obvious: inequality in itself is not always wrong. Some inequalities are both inevitable and desirable. In a market economy, we expect inequalities of income. More generally, a world in which there were no differences between people is hard to imagine: we are unequal in so many ways. Some work harder, some are more talented, some are more comfortable with taking risks. American society has always recognized that there can be legitimate reasons for rewarding people unequally. Therefore it is important to ask what forms of inequality are morally objectionable.

A great diversity of objections to inequality can be raised. Three of them concern opportunity, civic status, and fairness. The United States, and all liberal democracies, need to pay attention to these concerns.

Defending equality is based on the democratic imperative to create a community where every citizen has a fair chance at a decent life.

Vast economic inequalities are incompatible with genuine opportunity and social mobility for all. Yet the idea of equality of opportunity enjoys wide acceptance in the United States. It is the core of the American Dream. But social mobility in America is lower today than a generation ago. The accident of birth is highly predictive of one’s life chances; people increasingly occupy fixed and frozen positions and pass these positions down to their children. In other words, children born into poor families tend to stay poor and children born into wealthy families generally stay rich. By contrast, intergenerational mobility today is greater in Canada, France, Germany, and the Scandinavian countries.

The growing income and wealth gaps also create unequal citizenship, a second source of objection. Very large differentials in income translate into systematic advantages: in political influence, access to jobs and positions of authority, health, personal security, and the opportunity to develop one’s talents. When unequal wealth can systematically purchase advantage in each of these domains, it is difficult to face each other as social equals. As inequality has grown, the fate of the few has become unhinged from the fate of the many, as the wealthy find security in cloistered neighborhoods, send their children to private schools, and attend sporting events in luxury skyboxes. Divided from one another, our unequal lives no longer reflect the fact that society depends on the productive contributions of us all.

We worry about the general effects of massive income and wealth differentials, but we want to call special attention to its effect on politics. In a democracy, equal citizenship is foundational: every citizen has a vote and only one vote. But when money is speech and corporations are persons, and when politicians depend on contributions for election, the 1 percent speak with megaphones and the rest of us with a whisper. It is only when the 99 percent assemble that a people’s microphone is possible.

Finally, the canyon between the 1 percent and the 99 percent is not the result of a fair process, where the rules and rulers of the game are equally responsive to the interests of all persons. Some inequalities are justified by the manner in which they came about. But the inequalities in life prospects of Americans today are the result of laws and institutions that cater to the very rich and have ceased to be responsive to the vast majority. Tax burdens on the wealthy have dropped to the lowest rate in many decades. Loopholes abound so that corporations can post enormous profits but escape taxation altogether. Corporate lobbyists have massive influence on the rules of the game, while the wealthy disproportionately influence the political process and disproportionately win elected office. It is no surprise then that our tax policies and campaign-finance laws are not a product of, and do not reflect, the interests of most Americans.

The result? A society riven by lack of genuine opportunity, unequal civic status, and systematic unfairness. For us, defending equality, and objecting to the outrageous inequalities between the 1 percent and the 99 percent is based on the democratic imperative to create a community where every citizen has a fair chance at a decent life, an equal opportunity to develop their talents, and an equal voice in political decisions. This aspiration for a society of equals finds its taproot not in envy or class resentment but in our country’s founding ideals and in the democratic dreams of peoples everywhere.




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Comments

1 |
Ethics and Inequality
stop looking at what is just long enough to imagine what can be. Lets look at how it can be now, and then take action in whatever form we can along the path of least resistance!!!


st kitts citizenship


— posted 11/29/2011 at 08:40 by st kitts citizenship
2 |
Why Money Trickles Up
For a straightforward explanation of how capitalism naturally generates sizeable disparaties in wealth see the following paper (recently presented at a Loughborough University conference on econophysics):

http://www.econodynamics.org/sitebuildercontent/sitebuilderfiles/bullets.pdf
— posted 11/29/2011 at 12:52 by Geoff Willis
3 |
country differences in inequality
There are many factors that can increase inequality in pre-tax income. But aftermarket policies (e.g. government taxes, transfer payments, social investment, public investment, etc) can reduce that inequality.

An illustrative graph is:

http://g-mond.parisschoolofeconomics.eu/topincomes/

The US had tremendous economic growth in the decades after World War II; but the share of pre-tax income that went to the top 1% was relatively flat until the 1980s, when the top 1% started to gain more and more of the national income. Notice that the same effect didn\'t happen (as much) in other capitalist countries. A little experimentation shows that the greatest increases in inequality have occurred in the US, and the second-greatest have occured in other English-speaking countries.

Another illustrative graph maps share of income alongside union membership rate in the US:

http://thinkprogress.org/special/2011/10/21/350012/income-inequality-decline-of-unions/

Union membership rates did not fall as much in other countries.
— posted 11/30/2011 at 03:10 by Scott Weikart
4 |
America seems to have given up on the civilisation project
But the 99% has been complicit in this. America's current state is not the result of an absence of democratic politics but an excess.

http://www.philosophersbeard.org/2011/02/is-america-civilised-country.html
— posted 11/30/2011 at 14:27 by Philosopher's Beard
5 |
The only thing I would change about this excellent essay is to qualify the phrase "our country's founding ideals" with the adjective "ostensible." These ostensible ideals, although indeed inspiring, are largely rhetoric. From the founding our constitution was designed to protect the wealthy elite (including slaveholders, as we all know) and our culture has favored commerce and industry over less material "pursuits of happiness." A first step to solving our problems is to recognize, without belittling the historic ramifications of the American Revolution, that not only is our nation not really so great and special, it never has been.
— posted 12/06/2011 at 18:25 by Charles Delman
6 |
In a free market economy, people are paid what they are worth
see title
— posted 12/08/2011 at 00:47 by Brad Petersen
7 |
Focus on what matters
1) You are paid what you are worth.

2) What you are worth (particularly in the US but all over the world) is increasingly dependent on a combination of education, capacity for team-based "knowledge work," IT familiarity, and self-discipline.

3) Our nation will fail or succeed in the future based on our ability to help develop these qualities in children.

A final note to those who object to American Exceptionalism - look inward and figure out what it is about yourself that makes you so unwilling to take on the burden of excellence gifted to us by virtue of our American citizenship. We are so blessed to live in this time and place.
— posted 12/09/2011 at 17:13 by William Treseder
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About the Author

Rob Reich is Associate Professor of Political Science at Stanford University and author of Bridging Liberalism and Multiculturalism in American Education.

Debra Satz is Marta Sutton Weeks Professor of Philosophy at Stanford University and author, most recently, of Why Some Things Should Not Be for Sale: The Moral Limits of Markets.

Occupy the Future, a forum on lessons to be drawn from the Occupy movement.


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