Slouching Towards Gomorrah
Page 9
It would be possible to argue that the measurement of inequalities used is dubious as a factual matter,4 but it is more to the present point to accept the story’s assertion as true and ask why it is even worth mentioning. The answer is not obvious. We have seen that nobody has less wealth because others have more. What, then, is the problem? Sometimes the egalitarian appeals to an undefined, and undefinable, notion of “social justice.” Thus, our current president justifies higher tax rates on those with higher incomes because they are “not paying their fair share.” He does not, of course, specify how one knows what a fair share would be. Egalitarians never tell you that; they never specify how much reduction of inequality would be enough. They cannot do that since there is no objective criterion to specify the stopping place between the present situation and complete equality. They content themselves with saying that present inequalities are too great, and they will go on saying that so long as any inequality remains. Irving Kristol, as editor of the Public Interest, wrote to professors who had expressed great discontent with inequalities in the distribution of income in the United States, asking them to write articles about what a “fair” distribution would be. He was never able to get that article and has concluded, no doubt correctly, that he will never get it.5 It has often been observed that the more inequalities are reduced, the greater is the resentment of any remaining inequalities.
The primary tool for reducing inequalities of income is redistribution through the progressive income tax. The intellectual case for the fairness of any progressive income tax was fatally undermined years ago by Walter J. Blum and Harry Kalven, Jr., professors at the University of Chicago school of law.6 They examined and found seriously wanting the various theoretical supports for progression. Their discussion of theoretical economic rationales is beside the point here, but they also examine “the possible rationale for desiring to lessen economic inequalities within the confines of a private enterprise and market system.” They begin by asking whether, if the wealth of the society tripled overnight without any changes in the relative distribution among individuals, the issue of inequality would be any less urgent. Since there have been enormous increases in wealth, even among the poorest, and the issue of equality has grown more disturbing, the answer cannot be in the affirmative. Thus: “It initially appears that what is involved is envy, the dissatisfaction produced in men not by what they lack but by what others have.” I think that is what finally appears as well, though it would be impolitic for a supporter of progression to say so. “No proponent of progression has rested his case for doing something about economic inequality on the grounds of mitigating greed and envy”
Two other lines of argument are advanced instead. The first contends that improvements in the general welfare will result from greater economic equality. The second contends that permitting the existing degree of inequality works injustices between individuals. Blum and Kalven found these contentions weak. I find them weaker still.
To the first, the authors advance a technical objection, which is nonetheless important, but then object: “The general welfare is stated in deceptively simple terms.” One may grant the assumption that lessening inequality would produce a net increase in the aggregate happiness of the community. “No matter how the case is put, it is still true that all that has happened is that the welfare of one group in the society has been increased at the expense of the welfare of a different group. Stated this way there is no ‘general’ welfare; there is only the welfare of the two groups and the wealthy receive no counterbalancing benefits for their surrender of income or wealth…. If the wealthy have otherwise valid claims to their income, there is little reason for subordinating those claims to this narrow version of general welfare.”
As for the argument that the government or the less wealthy would spend the money in more desirable ways than the rich, the authors attribute its appeal not to the way the less wealthy are spending the money but to the fact that they, rather than the wealthier, are spending it. Nor does the contention stand up that the workings of democracy are impeded if there is too great a disparity in the wealth of the citizens. There are many avenues to political power and wealth is not the most significant.
In order to address the argument about justice as between individuals, Blum and Kalven examined the claims of the more wealthy to the income that is to be taken from them by progressive taxation. There is, they concede, a large amount of “undeserved” income…due to factors like monopoly, fraud, duress, and chance…but this does not establish a case for redistribution. That would require a correlation between such income and the rates of progression, which would further require that there be some general relationship between total income and undeserved income and that the undeserved component increase more rapidly than total income. They point out that almost nothing is known about the distribution of undeserved income, and guesses about it “seem to be a most precarious base on which to rest the tax structure.” They might have added that, to make progression just, we would have to assume not only these things but that all persons with large incomes had the same proportion of undeserved income. That is extremely improbable.
It would unduly lengthen this discussion to take up all of the arguments for greater economic equality. The authors noted, however, that “it is quite difficult to sponsor progression on the basis of economic equality without calling into question either the meaningfulness of personal responsibility [in achieving success] or the fairness with which the market distributes rewards. Progression, when offered on these grounds, is an unsettling idea.” It will be seen, I believe, that most demands for equality, even those outside the subject of income equality, also involve questioning the meaningfulness of personal responsibility and the fairness with which (non-economic) rewards are distributed.
But if the intellectual case for lessening income inequalities fails, the political appeal of the idea remains. James Q. Wilson has analyzed the concept of fairness, which children understand at a very early age.7 He attributes that to the sociability of children, who want to win approval, initiate play, or maintain contact. The idea of fairness is, then, built into humans as social animals. Wilson says the concept has one or more of three meanings, the relevant one for our present purpose being equity. “In modern equity theory, a division of something between two people is fair if the ratio between the first persons worth (his effort, skill, or deeds) and that person’s gains (his earnings, benefits, or rewards) is the same as the ratio between the second person’s worth and gains.”8 But “severe inequalities [of wealth] distort the evaluation of contributions by both the advantaged and the disadvantaged, leading to outcomes that are unfair as judged by the natural standards of equity that develop in the household.”9 The problem, therefore, is not the inequality itself, but that the severity of the difference makes it difficult to know whether the same ratio of inputs to outputs exists between the advantaged and the disadvantaged. This uncertainty leads, in turn, to a suspicion that the ratio is skewed and hence unfair.
While that is no doubt true, it is inadequate to explain current levels of taxation. (Wilson was not attempting such an explanation.) Progression today sets in for a married couple at an income of $38,000, and the next higher bracket begins at $91,850. Those incomes are certainly not large enough to distort the evaluation of inputs between such couples and couples making $25,000. The difficulty of assessing the ratio between inputs and outputs does not exist. The ratio assessment problem cannot account for even more dramatic examples of progression. A family with a $500,000 income pays $154,000 in taxes while a family with an income of $45,000 pays $3,800. “With eleven times the income, the rich[er] family pays 40 times the taxes.”10 Something besides a suspicion of skewed ratios is obviously in play. Even if a discrepancy in wealth or income were great enough to make ratio assessment difficult, the presumption Wilson describes favors denying that the inputs of the richer person can really be great enough to justify his rewards. Why that presumption? Why not a presumption that the
richer person has in fact merited his wealth? The presumption Wilson describes is not explained by the difficulty of comparing inputs and outputs. If difficulty of assessment does not explain current rates of progression in the tax code, the only remaining explanation seems to be envy. The United States tolerates much greater income disparities than other industrialized democracies. Sweden is the extreme example of taxation for egalitarian purposes. Given the non-existent case for income equalization, it is not that America is odd compared to Sweden, but that Sweden is odd compared to us, and that we are odd compared to a rational, nonenvious view of income distribution.
President Clinton at one point proposed raising taxes on the rich although it did not appear that it would increase the tax revenues received from them. A substantial proportion of the public said they favored higher taxes on high-income earners even if that did not increase the total taxes such people paid. The effect would not be to help anyone else but merely to pull down the better off. The motivation can only be envy, and it is surprising that so many people would admit harboring that emotion. Helmut Schoeck states:
Since the end of the Second World War, however, a new “ethic” has, astonishingly, come into being, according to which the envious man is altogether acceptable. Progressively fewer individuals and groups are ashamed of their envy, but instead make out that its existence in their temperaments axiomatically proves the existence of “social injustice,” which must be eliminated for their benefit. Suddenly it has become possible to say, without loss of public credibility and trust, “I envy you. Give me what you’ve got.” This public self-justification of envy is something entirely new. In this sense it is possible to speak of the age of envy.11
The admission of envy is even more surprising when one considers who “the rich” are and how they got that way. We are not talking about South American plutocrats living on million-acre estates that have been in their families for generations while peasants scrabble for a living on tiny plots of land. In America “the rich” are overwhelmingly people…entrepreneurs, small businessmen, corporate executives, doctors, lawyers, etc.…who have gained their higher incomes through intelligence, imagination, and hard work. The desire to deprive them of the rewards they have earned, with no tangible benefit to oneself, is pure envy, and it is an ugly emotion. Yet it is the basis for progression in our tax system, as it is the basis for much else in our culture and social policies.
Envy is not simply about inequality, however. It is, as Bertrand de Jouvenel points out, about who is unequal: “During the whole range of commercial society, from the end of the Middle Ages to our day, the wealth of the rich merchant has been resented far more than the pomp of rulers. The ungrateful brutality of kings towards the financiers who helped them has always won popular applause…. The film star or the crooner is not grudged the income that is grudged to the oil magnate…. [The people] want to feel that exceptional income is their gift and they demand that beneficiaries thereof shall make a gallant spectacle.”12 Were he writing today, observing many of our entertainers, Jouvenel might want to drop the word “gallant” from the last sentence.
There may, however, be an additional reason why the wealth of merchants and oil magnates, and even that of mid-level doctors and engineers, is resented far more than that of kings or film stars. People accept that they cannot be kings or film stars. But in an increasingly meritocratic society, they are asked to accept as well that there is justice in the standards by which others have outpaced them. The comparison between their incomes and those of the most successful businessmen is thus felt to be invidious. This may be one reason the merit principle, reward according to achievement, is today under attack.
The desire for equality of incomes or wealth is, of course, but one aspect of a more general desire for equality in such matters as social and cultural status. “The essence of the moral idea of socialism,” historian Martin Malia wrote, “is that human equality is the supreme value in life.”13 Socialism is thus merely the manifestation in the field of economic organization of a more general yearning that operates across the entire culture.
The French scholar Pierre Manent, discussing Tocqueville’s views on equality, remarks that every man naturally wants to believe that he is just as good as anybody else. In a democracy, the law adds its authority, proving his equality by giving him an equal share in the governing of the nation. “But what his heart whispers to him, and the law proclaims, the society around him incessantly denies: certain people are richer, more powerful than he, others are reputed to be wiser or more intelligent. The contradiction between social reality and the combined wishes of his heart and the law, therefore incites and nourishes a devouring passion in everyone: the passion for equality. It will never cease until social reality is made to conform with his and the law’s wishes.”14
The usual strategy for coping with the discomfort of knowing that others are superior in some way is to try to reduce the inequalities by bringing the more fortunate down or by preventing him from being more fortunate. This is the strategy of envy.
The apparent difficulty of requiring equality of wisdom and intelligence was solved in a satirical story by Kurt Vonnegut in 1961, even before the plethora of civil rights laws seeking equality by race, ethnicity, sex, age, disability, and so on and on.15 Americans would achieve perfect equality by forcing persons of superior intelligence to wear mental handicap radios that emit unsettling noises every twenty seconds to keep them from taking unfair advantage of their brains, persons of superior strength or grace were to be burdened with weights, and those of uncommon beauty must wear masks. Thus, social reality can be made to conform with the envious man’s and the law’s wishes.
The unwillingness to admit inherent individual differences is astounding. One night, shortly after I became a federal judge, I spoke informally to a gathering of Yale law school alumni in Washington. Someone asked how I found the quality of briefs and oral arguments, and I replied that some were quite good but a great many were poor, some sadly so. The question was then put, why should that be so? I said that many areas of law and procedure had now become so complex that the gene pool was inadequate to operate the system. Afterwards, my clerks gathered around me and said, urgently: “Never say anything like that again.” They said a shock had run through the audience at the suggestion that talents differed and that the differences might be largely inherited. They did not deny that it was true, but were adamant that it was not a politic thing to say.
The advance of this “cultural socialism” was under way well before the Sixties. Our leveling instincts are so developed that men and women are allowed celebrity, but, outside the realms of entertainment and sports, rarely are they permitted superiority. Great men are no longer admired, unless they learn how to disguise their greatness. Otherwise, they will be faced with the fatal charge of “elitism.” Even to speak of “great men” now has an old-fashioned, even reactionary, sound about it.
The contrast between the popularity of Douglas MacArthur in the First and Second World Wars and of MacArthur and Dwight Eisenhower during World War II illustrates the rise of cultural socialism or radical egalitarianism in the twentieth century. William Manchester writes: “Egalitarianism did not become the triumphant passion of Western society until about the middle of this century…. Veterans of World War I and World War II saw MacArthur very differently. Doughboys were proud to have fought under the General. GIs weren’t; by the 1940s antiauthoritarianism had become dominant.”16
Mid-twentieth century seems to be when envy and egalitarianism became rampant together: “Since about the middle of this century a quite remarkable irresolution and weakness toward the envious have manifested themselves in a significantly greater number of people than hitherto…. The mere expression of envy, whether in a political speech or caricature, or in a satirical song etc., is now enough to convince such people that an objective infringement of justice exists…. [W]e meet with an insufficiently reasoned reaction which accepts all forms of envy as justified in
the light of the idea of equality.”17
One American general noted the contrast between the singing armies of World War I and the wisecracking armies of World War II. That difference reflects a massive cultural shift. A singing army expresses an element of romanticism, of poetry. Such an army would be capable of admiring courage and ability, even distinction, all of which MacArthur displayed. The wisecrack, however, is a leveler, a means of bringing down the person at whom it is directed. The San, African bushmen who foraged widely, were egalitarian out of necessity, but “Culture reinforced necessity: the San engaged in ritual joking designed to deflate any claims to status or prowess.”18
MacArthur’s grand manner aroused intense dislike and made him the butt of countless jokes in World War II. Eisenhower designed a blousy battle jacket that bespoke informality, and he cultivated the troops with a regular-guy manner. There was no doubt who was more popular. The troops spoke affectionately of “Ike,” but referred sarcastically to “Dugout Doug” (who actually took more chances with his life than most of his men did). The change between wars was not in MacArthur but in America.
Why egalitarianism should have become an obsession between the two world wars is difficult to say, but that it did cannot be doubted. The ground was thus prepared for the Sixties generation which grew up in the grip of the “triumphant passion.” The Sixties rebels attacked hierarchies and lines of authority resulting from merit and achievement. They wanted parity with the faculty, an end to grading, admissions on the basis of race, and the right to participate in the governance and alteration of academic institutions they did not understand and would be in for only a few years. Allan Bloom wrote at the time, “[I]t is almost inconceivable to them that there can be a theoretical questioning of the principle of equality, let alone a practical doubt about it…. Student participation is the catchword in all talk of university reform. The goals to be achieved by student participation are never explicitly defined. It is enough to refer to the democratic view: everyone has the right to vote.”19