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Can you be too rich?

March 18, 2007|Peter Singer;Russell Roberts; Sam Webb

Current asked a philosopher, an economist and the leader of the Communist Party USA to share their thoughts on the subject of income inequality.

Peter Singer

Peter Singer is a professor of bioethics at Princeton University.

IN A WORLD in which more than a billion people struggle to survive on the purchasing-power equivalent of less than $1 a day, there has to be a serious moral doubt about whether anyone should be a billionaire.

For The Record
Los Angeles Times Sunday March 25, 2007 Home Edition Current Part M Page 2 Editorial Pages Desk 0 inches; 27 words Type of Material: Correction
Inequality: A March 18 article by Russell Roberts said that income equality is growing in the United States. It should have said that income inequality is growing.

Or, to put it another way, what does the fact that our society tolerates, accepts and even admires billionaires say about our belief in the equal dignity and equal worth of all human beings? Can anyone defend spending millions of dollars on luxury cars, yachts and mansions when that money could help poor villages reduce malaria, improve farming, educate children and become self-sufficient?

If you are a highly successful investor, you might be able to invoke the "Buffett defense." Had Warren Buffett given his first $1 million to aid the poor, he would not have been able to turn it into the tens of billions of dollars he has pledged to the Bill & Melinda Gates Foundation, where it will do much more for the poor than that first $1 million could have done. But few of us can expect Buffett's rate of return on our capital, and the rate we are getting needs to be weighed against the multiplier effects of giving people better lives now.

In any case, the Buffett defense, if it works at all, only justifies big investing -- not big spending on oneself. Billionaires should be living as modestly as the rest of us. And come to think of it, we all spend money on luxurious, frivolous or unnecessary items when we could be giving it to organizations such as Oxfam America that will use it to fight global poverty.

What's a luxurious, frivolous or unnecessary item? Start with bottled water -- as long as your tap water is safe to drink -- and move up from there.

It's all part of a continuum that says we don't really value all human beings equally at all. The billionaires are just the tip of a very nasty iceberg that we prefer not to look at or think about.

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Russell Roberts

Russell Roberts is a professor of economics at George Mason University and a research fellow at Stanford University's Hoover Institution.

ECONOMISTS can tell you, using publicly available data, that income equality is growing in the United States. But if the data weren't collected, you'd never know. If anything, the differences between the rich and the rest of us are less intrusive and noticeable than in the past.

In the early part of the 20th century, rich people ate better than the rest of us, had nicer clothes and a few even had cars. Rich people had servants and lived one family to a house. By those measures, the masses fell into the have-not category. No servants. Cramped quarters. Coarser food and clothing. A longer and more physical working day. If you were in the bottom half of income distribution and you encountered someone in the upper half, you knew it.

But steady economic growth over the years has eliminated most of the tangible differences between us.

Today, almost every family owns a car. Most own their own home. Most of us have dishwashers and cellphones and computers and air conditioning, comforts only the richest of the rich had 40 years ago. Rich people work longer hours than poor people today. Neither is likely to encounter much danger on the job. A poor person having a heart attack gets the same treatment as a rich person, and both get better treatment than the richest fat cat received 25 or 50 years ago.

Yes, the rich get richer in America. But so does everyone else. So why should we care that inequality is climbing if we're only aware of it when we read the government data? Deep down, we assume that if the distribution of income is getting less equal, someone must be manipulating it to make it so -- evil politicians, maybe, or greedy multinational corporations.

But no one is. The measured level of inequality is, in fact, the result of the choices that millions of us make individually, decisions to go to school or drop out, decisions to marry or divorce, decisions to emigrate to America or stay in one's home country.

What most of us really care about isn't inequality but opportunity. We're less concerned with getting ahead of the Joneses than with simply getting ahead. Stay in school, finish high school and go on to college and you get ahead in America. Spend less than you earn and you can end up wealthy.

The data is easily manipulated to scare us. We should worry less about inequality and more about opportunity.

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Sam Webb

Sam Webb is national chairman of the Communist Party USA.

I WISH THAT billionaires were a declining breed rather than a growing demographic group.

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