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The Politics of Envy

I recently read a report which highlighted the difference between rich and poor in New Zealand. While the situation here is nowhere near as bad as in some other countries, it is still maybe the biggest challenge facing our modern society. Most people accept that there will always be some individuals or groups who will do better financially than others (and some would say the rich deserve their extra wealth), but it is the magnitude of the difference which is of concern.

So how much is this difference? Well, the wealthiest 1% of New Zealand own 20% of the wealth and that is the same as the bottom 30%. Also, the top 10% own over half the wealth, leaving the other 90% with the remainder (obviously).

This is bad enough but it’s nothing compared with the US. There, the top 0.1% have as much as the bottom 90%. By the way, these stats are all from published research and surveys and I can provide links if required. Also some numbers might be a few years out of date and the situation is likely to be even worse now.

As I said, most people accept there should be different levels of wealth depending on the contribution the person makes to the economy. When asked what the difference between the pay for a CEO and a worker should be a US study found that the “average” American estimated that the ratio was 30 to 1, and that ideally it would be 7 to 1. But the reality is that it is 354 to 1. Fifty years ago, it was just 20 to 1.

Note that the numbers above are just for pay and the rich tend to make the majority of their money in other ways, so this is just the tip of the iceberg.

An argument often used to justify these mismatches is to say that anyone could succeed if they really wanted to, simply by working hard enough and learning the required skills.

This point has a certain amount of truth, but only to a very limited extent. I have a cartoon which I think makes the point well. It says “Remember, always follow your passion. And if your passion doesn’t fit into global capitalism, well, then you are a failure at life.”

A survey of work hours reveals two things. First, the top earners don’t work significantly longer hours than anyone else, in fact the top earners aren’t even the hardest working category; and second, working hours have been going up over the last few decades (while real income for most has come down).

So both of the defences of wealth disparities are nonsense. Sure, you can get rich but only if you know how to, or are willing to play the game which leads to wealth (after possibly abandoning your moral standards). And working hard makes no difference. You can work hard and make very little money, or you could do almost nothing and make a lot.

So what does lead to greater wealth, then? Well, as I said above, it is the ability to “play the game”. The game involves being self-centered, ruthless, and sometimes being a border-line sociopath. So pay your workers a s little as you can get away with, stab both your competitors and your colleagues in the back (just metaphorically in most cases) if you get the chance, and dont worry too much about big picture issues which affect others (climate change, pollution, etc).

More positive attributes, like hard work, dedication, and ability can help, of course, but there are far more people with these attributes and very little money than there are with a lot.

Another factor which appears quite often in the history of people who have become rich is luck. Specifically this often involves being in the right place at the right time. For example, a product or service might be ready to be accepted at a particular time when earlier (and often better) ones were rejected because the world wasn’t ready.

Bill Gates and Mark Zuckerberg are two examples of people who were more lucky than anything else. Many people rely on their company’s products now, but that is more a matter of history than superiority. There have always been better alternatives, but they just didn’t get the lucky breaks.

There is a modern trend for the extremely wealthy to engage in philanthropy and I fully support this. Bill Gates is doing some great work here, Larry Ellison contribues to some good causes, Tim Cook (Apple CEO) says he will give away all of his wealth, and many other make some effort to contribute to good (and some not so good) causes.

But there are two problems with this. First, many rich people don’t make much of a philanthropic contribution; and second, they get to choose where the money goes (which is fair enough, because under the current system, it is their money).

So maybe it would be better if they didn’t get that money in the first place. Then it could be distributed in more efficient ways to where it is needed (and yes, I fully realise that the government making that decision is often not much of an improvement).

So let’s summarise what I have said. We have a system which gives certain people lots of money because they are good at making lots of money. They aren’t any more hard-working, and they usually aren’t the most innovative, intelligent, creative, or anything else. They are just people who are good at accumulating money, and are probably also lucky.

Am I envious of them? Well in some ways I am, especially of those who deserve little or no admiration for their actions. But it is really not just simple envy. Along with wealth comes power, so the rich have great influence over the direction society takes, and guess what: they are unlikely to want to change it in a way to make it better for the majority. If they had generous, moral personalities they wouldn’t have become part of the 1% to start with.

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