Dogma Premise # 33

Wealth disparities largely reflect individual choices to prefer leisure over industry, or vice versa.

The popular board game "Monopoly" presents a useful allegory. All Monopoly players start out on the same square ("Start") and with the same amount of money ($1,500). The game ends when someone, through a combination of luck and shrewd dealing, manages to financially destroy all of the other players.

Monopoly would be a very different game, though, if some players started out impoverished, some started well-positioned to land on the best properties, and some started out owning several properties and with enough money to purchase and fully develop anything they encountered.

The latter game wouldn't feel sporting and wouldn't be fun, but that's the game we are in fact playing in real life. The purpose of Dogma Premise 33 is to explain why that is ok.

The basic idea is this. At any given time, I can decide to be productive or idle. If I am productive, I convert my time into money by selling goods or services, and I become wealthier. If I am idle, I convert my time into pleasure, and gain happiness, but no wealth.

According to the theory, the only way to get wealthy in a Capitalist system is to give people what they want (see Dogma Premise 17). So wealth is always earned, and those in poverty were compensated in pleasure since they chose not to work hard and become wealthy. Therefore, the unequal positions at any time in the game result from people's choices, for which they were adequately compensated.

It is only a slight complication for capitalist theorists that some people are born into their wealth or poverty, because in each child the outcome is a natural consequence of the free decisions of the prior generation. It is inconceivable to the Capitalist that among their many freedoms would not be the freedom to help their children. Indeed, the wealthy capitalist would rightly insist that given the chance, the impoverished parent would help their child just as much. Therefore, even wealth inequalities are morally justified, even when the result in unequal starting npositions.

This story of justice in wealth inequalities is false in several ways.

First, from the standpoint of a baby in a crib, being born into affluence or poverty has nothing to do with the baby's choice, and so nothing that happens specifically as a result of that poverty can be attributed to that person's choices. There may or may not be moral justice in visiting upon children the sins of their ancestors, but it is simply inaccurate to say that people's positions result solely from their choices. And to the extent that starting positions matter immensely, which all the evidence says they do, it is not even accurate to say that people's positions mostly result from their choices.

Second, many economic transactions that result in wealth inequalities are not the product of free choice. Some bank robbers and tax dodgers are caught, but some are not. And many economic arrangements are intrinsically coercive, such as the great steel and railroad monopolies from history, or the modern cartels involving petroleum, diamonds, and banking.  And then there are the endless petty coercions that are buried in most of today's consumer economic activity, such as exhorbitant bank fees, unfair adhesion contracts ("fine print"), unjustified and indefinitely extended intellectual property protections, exhorbitant rent, and the kind of difficult terms that are routinely forced upon poor and unsophisticated consumers. (behind every great fortune lies a great crime -- see e.g., Matt Taibi Rolling Stone January 13, 2012, Story About Wall Street). The myth of voluntary interactions is inapplicable to vast parts of our commercial life.

Third, some of today's wealth inequalities have their roots in unjust transactions from centuries past. For example, significant wealth concentrations and other economic and social inequalities resulted from slavery in the United States and subsequent racial discrimination. The inferior economic and social position of blacks and some other minorities today reveals the long-term effects of that original inequality, which involved economic exchanges that were in no way voluntary. Before that came massive land grants to private individuals from government that were not in exchange for valuable services rendered, and were not equally available to all citizens. And yet the value of that land has nurtured some families and not others for many generations. There was no original starting place of relative equality, not for today's children or for their ancestors.

Fourth, some concentrations of wealth result from process that involve more luck than skill, such as with lottery winners, speculators, and entrepreneurs who happened to be in the right place at the right time. There is nothing immoral about good fortune, and no need to banish good luck from our lives, but it is important to understand that some large fortunes only represent good fortune, and do not imply a greater moral right to the wealth than someone else who might have attempted the same thing but simply been less lucky. If two people buy a lottery ticket and one of them wins, there is no reasonable way to characterize one of them as having been chosen to be wealthy and the other to have chosen to be poor.

Fifth, some social institutions magnify the effect of wealth disparities. Perhaps two youths have slightly different wealth accumulations because one has worked harder for a brief time. That slight advantage in wealth might allow the one to purchase a better education, which in turn might lead to a better wage, and then better tools, and then more money to invest with better terms, and finally the ability to afford a healthier lifestyle and better medical care, so that some decades later the poorer one has lived a worse life and died earlier. Capitalists will find this scenario entirely justifiable, and advise young people to be especially industrious. Maybe yes, maybe no, but for the purposes of challenging Dogma Premise 33, however, it is enough to note that the drastic variation in outcomes cannot fairly be characterized as "voluntarily chosen" by the two parties. It is unlikely that they were fully aware of the potential consequences, and indeed if they were young might not have reasonably been able to evaluate the situation.

From this angle, the Capitalist position seems right: Viewing a single transaction up close, if on one day you and I each have $200, and then I work all day and you play all day so that the next day I have $300 and you have $100, it may fairly be said that the resulting wealth inequality resulted from our free choices.

However, it is an entirely different claim to say that after the effect of patronage and land-grants, fraud and deceit, inheritance and disinheritance, exploitation and philanthropy, played out across the centuries, today's or tomorrow's distribution of wealth primarily reflects individual choices. Instead, it reflects a thousand factors that have nothing to do with the choices of the children who are born into situations that significantly determine their fate.

The proper inquiry is not whether voluntary exchanges are possible within the economy, but what is the opportunity for social mobility. If the rich get richer and the poor stay poor, as the statistics show, then wealth disparities do not reflect choice, but, rather, simply reflect the perpetuation of historical wealth disparities, and their effect is in no way deserved or voluntary.

Dogma Premise 34

All Dogma Premises