Income Inequality: Part 4

What sort of society should the rational person want?

Last time, I concluded that wealth inequality does significant harm to an individual’s life, liberty, and mental health, with no additional benefits. The bare existence of inequality within a society does great harm—more harm than poverty alone. This is the first reason I believe we have a moral imperative to alleviate such gross inequality.

The second reason we should alleviate the inequality rampant in our society stems from the Golden Rule: do unto others as you would have them do unto you. I don’t take the Golden Rule to be an actual rule; it doesn’t say explicitly “do not hit your sister” like other moral rules do. Rather, the Golden Rule is a sort of “master rule.” It tells you how to make decisions about what to do.

The Golden Rule gives you a method for clear moral thought. You’re supposed to vividly imagine how you would like others to treat you in various situations. If I’m the sister, then I certainly do not want to be hit. And so, per the Golden Rule, I shouldn’t hit you.

There are two ways to apply the Golden Rule to income inequality. One way comes from John Rawls, and the other comes from the American Dream. Rawls says if I were poor, dumb, and sick, I would want someone to help me, and so, I should take steps to help others less fortunate than me. The American Dream says if I were a millionaire, I wouldn’t want the government to take away my money, and so I shouldn’t take money away from current millionaires.

If I were poor, dumb, and sick, I would want someone to help me, and so, I should take steps to help others less fortunate than me.

Rawls’ view lends itself to creating a “safety net” for those less fortunate by imposing restrictions on those more fortunate. The American Dream lends itself to doing away with nearly all taxation. The Rawlsian position is more amenable to the fiscal liberal, whereas many more fiscal conservatives would be fond of the American Dream mentality.

If I were a millionaire, I wouldn’t want the government to take away my money, and so I shouldn’t take money away from current millionaires.

But which is better?

There is a method taken from Rawls that would be helpful here. He imagines a purely hypothetical “Original Position” wherein free, rational people come together and decide the rules for a just society. By ‘rational’, Rawls means perfectly self-interested. That is, a rational person has true beliefs about what is best for him or her as well as the means necessary to achieve those ends. Imagine these rational people sitting around a table hashing out the ins and outs of their new society—it’s like when you created a new country in middle school.

But there’s a (hypothetical) catch. In Rawls’ thought experiment, none of these free and rational people know anything about who they will be in this new society. They are deciding upon the rules under the “Veil of Ignorance.” They don’t know whether they will be of the majority or minority race, whether they will be male, female, or other, whether they will be intelligent or dumb, whether they will be short or tall, strong or weak, whether they will be rich or poor. They don’t know anything about themselves. These free, rational, self-interested people must create an ideally just society from a place of personal ignorance.

Then he places a bet. He thinks people so situated would choose the following two rules for society:

  1. Each person is to have an equal right to the most extensive basic liberty compatible with a similar liberty for others.
  2. Social and economic inequalities are to be arranged so that they are both (a) reasonably expected to be to everyone’s advantage, and (b) attached to positions and offices open to all.

The first principle is basically the Bill of Rights. We all should have the right to vote, the right to freedom of conscience and assembly, the right to free speech, the right to a trial by jury, the right to life, liberty, and property, etc. As a self-interested, rational person, you would clearly want the right to own property whether you were a man or woman. You’d certainly want the right to vote whether you were a majority or minority race. You’d want the right to assemble peacefully whether you were rich or poor, strong or weak. The free, rational person would want these rights no matter what. The free, rational person would want to be protected if he or she ended up on the bottom of the barrel. Or so Rawls thinks.

As a self-interested, rational person, you would clearly want the right to own property whether you were a man or woman.

The second principle gets to income inequality. Rawls is not necessarily an egalitarian; he doesn’t think everyone should have the same amount of money (or assets or wealth). But—and this is a big BUT—any inequalities must elevate everyone involved. The free, rational, self-interested person would not want to be exploited. She would not want to spend all of her days slaving away, getting nothing, so that others may prosper beyond her wildest dreams. She would not want to be homeless, starving, and naked if she ended up being disabled in some way. A person with all true beliefs about what’s best for her would not want to be left behind, forgotten, spat on just because she was poor.

The free, rational, self-interested person would not want to be exploited.

At the same time, the free, rational person would want the opportunity to make the most of her talents. A smart person should be able to seek advanced education. A fast person should make the Olympic track team. A rich father should be able to give some of his money to his children. Some people may have more than others, and this is necessary for the best possible society. This creates incentive and competition, which benefits everyone.

But incentives and competition may not be enough to elevate the disenfranchised. We would also need taxes. For those who have enough money for 10 lifetimes, we ought to redistribute some of that excess (the part they’re not spending on job creation or in the marketplace) to prevent homelessness, starvation, and nakedness. We ought to tax the rich so that the poor have their needs met (which, for Rawls, would include things like education and healthcare). We ought to ensure that everyone—every single person—truly has the opportunity to succeed.

We need some inequality for there to be more economic growth and prosperity (as shown in my previous post). But when that inequality corrupts the upper class and exploits the lower class, then society is harmed. A free, rational person would obviously want to live in the best possible society. And so, the free, rational person would want some inequalities only if those inequalities serve to elevate all members.

The free, rational person may hope to be smart, rich, fast, and strong, but she knows she must protect herself if she winds up being dumb, poor, slow, and weak.

Sadly, many Americans are not so rational. Many Americans believe the opposite—they oppose taxing the rich because they are protecting them. Your average fiscal conservative would rather ensure the smart, rich, fast, and strong have everything they could possibly want than provide the basic necessities for the dumb, poor, slow, and weak.

Why is this?

The American Dream is not only about becoming a millionaire; it’s about becoming a millionaire through hard work. The dumb, poor, slow, and weak simply don’t work hard enough, and so they are not deserving of the assistance. They’ve made their bed, and now they must sleep in it.

Who deserves what? The Golden Rule says do unto others as you would have them do unto you. Broadly, we might interpret this to mean: I would only want to keep what I deserve, and so I should only let others keep what they deserve.

The problem here is with the antecedent I would only want to keep what I deserve. What self-interested rich person would ever say that? That’s right, none. And so, the American Dream mentality cannot be fully realized under the Golden Rule.

But there’s the lingering question: what is really in my self-interest? In the US today, 3% of households are millionaires (which includes assets, not just income), while 14.5% of American households live below the poverty line. So, it’s far more likely you’ll be poor than a millionaire.

It’s far more likely you’ll be poor than a millionaire.

If you’re under the Veil of Ignorance, you could either protect the interests of 3% of people or 14.5% of people, but not both. Given the greater likelihood of being at the bottom, you rationally ought to provide some assistance for the impoverished.

I conclude that the most reasonable application of the Golden Rule is Rawls’: if I were disadvantaged, I would want to make sure I had many of the same opportunities as the advantaged. And so, I morally should take concrete steps to ensure those less fortunate become more fortunate. This is the fiscal liberal’s position. And given that it directly follows from the Golden Rule, whereas the fiscal conservative’s does not, we morally ought to be fiscal liberals.

The fiscal conservative has a final recourse. She will inevitably argue that while there may be some obligation to help those less fortunate, helping them may not violate anyone else’s rights. If I choose to donate to charity, I am fulfilling my moral obligation without any rights violations. However, if the government steals my cash and gives it to someone else without my permission, then that violates my rights. Taxation is systematic theft.

Next time I’ll argue against this libertarian position. The libertarian argues that we only have negative rights, the right not to be interfered with. And so, when the fiscal liberal steals our money to give to the disenfranchised, she has violated our inalienable rights.

I’ll argue that we also have positive rights to be given certain things. And so, we must weigh these positive rights to be helped against the negative right not to be harmed.

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