A Critique of Obscene Wealth
BY RICHARD D. WOLFF
DECEMBER 17,
2021
https://www.counterpunch.org/2021/12/17/a-critique-of-obscene-wealth/
Wherever and whenever obscenely rich people existed,
they always protected their wealth and the privileges that come with it from
the majority of non-wealthy people working for them and around them. Emperors,
kings, czars as well as masters of huge slave plantations, lords of big feudal
manors, and major shareholders and top executives of capitalist
megacorporations did so partly by the use of brute force, or through the
exercise of power, and bribery. All of them also used ideological persuasion,
but none more so than capitalists today. And while “the weapon of criticism can
never replace the criticism of weapons,” according to Karl Marx, a critique of
capitalism’s obscene wealth today and its ideological justifications is
arguably much needed.
One attempted justification argues that obscene wealth
is society’s reward for those people making crucial contributions to social
welfare and progress. Billionaire Elon Musk, for example, contributed the
electric car, some would argue; billionaire Jeff Bezos offered the speedy
ordering and delivery of goods. But Musk’s electric car was a late step in a
long evolution of electricity, batteries, and automobiles. Constituting that
evolution were many contributions by many people along the way. Musk’s
contribution was impossible without—and thus dependent on—all those prior
contributions. Rewarding contributions and contributors justly would entail
rewarding them all, not exclusively Musk. Doing the latter is manifestly unjust
and unjustifiable.
The relevant parallel here is a village battling to
escape flooding from a nearby river’s impending overflow. A subset of villagers
gathers to dig sand, acquire sandbags, fill them with sand, and then pass them
forward, from person to person, so that the last person standing closest to the
river, named Elon, can pile bags on the river’s bank. A grateful village
collects $10,000 to reward those responsible for the happy outcome: no flood.
The check for $10,000 is handed to Elon. Rewarding in this way—rather than
sharing the reward among all those who collaborated to produce the outcome—is
more of an incentive to position a single person in a particular place rather
than to work alongside all the fellow villagers who contributed to the outcome.
Indeed, rewarding in that way will likely strike
others as a disincentive to contribute from other positions. If they do not
fill those other positions (thereby losing a chance for reward), Elon would
lose his reward too. If contributors to the anti-flood effort compete for
Elon’s position, disrupting or delaying the effort, such competition itself
risks enabling the flood and thereby depriving everyone of any reward. The
village would do better to distribute the collected $10,000 to reward all
villagers who collaborated in preventing the flood.
Besides being unjust and risky, obscene wealth as an
incentive is completely unnecessary.
In many fields of endeavor across human activity,
inventors and innovators regularly appreciate and welcome rewards that are not
obscene wealth, yet are more than sufficient. Musicians, artists, farmers,
factory workers, teachers, and many others have contributed innovative
solutions to society’s problems large and small. These people were often driven
by social accolades, applause and approval, and rewards and prizes of modest
size. For example, John Maynard Keynes, an economist, developed (1) a critique
of private capitalism’s instability and (2) monetary and fiscal policies to
counter that instability that has been widely deployed since the 1930s. His
work’s contribution to society was immense, yet his financial rewards were very
modest in comparison to the billions gathered by entrepreneurs like Musk and
Bezos. The Nobel Prize (which awards around $1 million to each of its winners)
is as great a reward as most economists can imagine. Likewise, Ludwig van
Beethoven and Wolfgang Amadeus Mozart, Louis Pasteur and Albert Einstein, and
countless other major contributors to modern life were not especially driven by
any prospect of obscene wealth, nor did they obtain it during their lifetimes.
Not only are huge rewards unnecessary for invention,
innovation, and progress, but inventions have also mostly been tangential to
the accumulation of obscene wealth. It is capitalism that enables such wealth
now (as did feudalism and slavery in the past). Often the inventor is ignored,
swindled, or otherwise left far behind by a different person who is driven by
and seeks to gather obscene wealth. That person mobilizes a capitalist
enterprise to monopolize the production or use of what was newly invented for
other reasons. Good connections, family wealth, political influence, bribery,
corruption, and countless other factors combine to enable persons other than
inventors to “capitalize” on someone else’s invention. In capitalism,
monopolizing on an invention offers far better chances to amass obscene wealth
than inventing something ever did or does.
Amalgamating diverse small shops into one big store
with “departments” (plus mail-order catalogs) to include an ever-wider number
of commodities enabled economies of scale. This model in turn enabled American
chains of department stores like Sears to profitably lower prices and
accumulate obscene wealth. The Walton family took economies of scale further by
importing China’s low-wage outputs to run an even bigger chain of department
stores (Walmart). Bezos took that model yet another step further via Amazon
becoming a “department store” for nearly everything and delivering products to
customers almost anywhere quickly via the internet. Billions were thus amassed
via a sequence of small steps. None of these ideas or concepts were great new
inventions. All were market monopolies operated long enough to amass billions
before the next step transferred that opportunity to others.
Amassing obscene wealth also clashes with democracy.
There is a reason why calls for equality so often accompany calls for
democracy. Members of communities that tolerate vast inequalities of wealth and
income quickly discover that the rich use their wealth to block, manipulate, or
destroy any democracy that arises. For example, they have always understood
that universal or even widespread suffrage risks a non-wealthy majority voting
to undo society’s wealth inequality. So the rich block democracy, prevent
varying forms of democracy from acquiring any real content, or, when pressed,
subvert even those forms. Fresh from huge increases in U.S. wealth inequality,
the rich nonetheless abet the Republican Party’s anti-democratic electoral
claims and maneuvers, tolerate the party’s restrictions on mass voting, and
fight particularly hard even against the modestly progressive tax dimensions of
President Joe Biden’s Build Back Better proposals.
Elon Musk, Jeff Bezos, and other U.S. billionaires
decide alone and unaccountably how to spend hundreds of billions. The decisions
of a few hundred bring economic development to some regions, industries, and
enterprises and lead to the economic decline of other regions. The many millions
of people affected by those spending decisions are excluded from participating
in making them. Those millions of people lack the economic and social power
wielded by unaccountable, obscenely wealthy tiny minorities. That is the
opposite of democracy.
The obscenely rich have also used the power they yield
from their wealth to successfully undo taxes threatening their obscene wealth
or its dynastic transmission through inheritance. One of many possible examples
is the federal estate tax in the United States. From 1942 to 1976, estates over
$60,000 were subject to an estate tax rate of 77 percent. Nowadays, estates of
up to $23.4 million for married couples are exempt from estate tax while
estates above that are taxed at a 40 percent rate. The obscenely rich have thus
driven the U.S. economy and society further from anything remotely resembling a
“level playing field.” Today, children of the obscenely rich have myriad
advantages compared to all other children. These advantages were secured by how
their rich parents changed the nation’s estate tax system. Their children will
likely use their inherited wealth to perpetuate the system.
The obscenely rich via real estate holdings—such as
Donald Trump—exhibit another remarkable anti-democratic quality. Their wealth
is derived from demography: where growing populations choose to live and
work. If those populations choose to live and work somewhere else, then the
real estate owners in that location can become obscenely rich. They did nothing
to the land they own to become wealthy. Other people’s location decisions did
that in the context of U.S. capitalism’s institutionalization of private
property and markets. The resulting obscene wealth inequality is unwanted by
big majorities, according to recent U.S. polls. That contradiction—between what
capitalism delivers and what most people want—pervades U.S. capitalism more
these days than ever.
Finally, obscene wealth flaunts its disregard for the
law. From Panama to the Pandora Papers, among other sources, we know that
the obscenely wealthy are also active in tax havens hiding their wealth from
tax authorities, law courts, public opinion, and spouses. Their wealth not only
buys the laws and regulations enabling legal tax evasion; it also buys global
tolerance of tax havens (increasingly located inside the United States in
states such as South Dakota, Nevada, and Delaware). Thus, nearly everywhere in
the capitalist world, the non-wealthy pay more in taxes and suffer public
service deficits caused by the tax evasions of the obscenely wealthy.
Unjust, unnecessary, and undemocratic, extreme wealth
must and does strive to secure global capitalism’s support and sustenance. The
considerable success of these means to secure wealth has now led to the
increasing criticism of capitalism. The existing system produces an economic
inequality so extreme that it reacts back to jeopardize both obscene wealth and
the system itself. At that, Georg Wilhelm Friedrich Hegel and Marx would smile.
This article was produced by Economy for All,
a project of the Independent Media Institute.
Richard Wolff is the
author of Capitalism Hits the Fan and Capitalism’s Crisis Deepens. He is the founder of Democracy at Work.
