It is often argued that for a society to be free citizens must be free to exploit their own talents in a free market and that as long as the regulatory & legal frameworks in which this happens is transparent and fair then any resulting inequality in terms of income and life chances is justified. From this it is often extrapolated that in such a society the poor are only poor because they have failed to exploit their talents through ignorance or laziness. In turn this gives rise to the idea that rich people ‘deserve’ to be rich, and that poor people ‘deserve’ to be poor. To what extent can this idea be sustained?
Obviously the first problem with this description of freedom and social justice is that most wealthy people are not wealthy through their own efforts but through inherited wealth. The justification for the concept of inheritance is that if I work hard all my life that upon my death I am entitled to pass that wealth onto my children in my will. This seems intuitively correct to most of us but clearly raises serious issues of social justice when it is applied across generations. The beneficiaries of inherited wealth may themselves be dishonest, feckless and lazy and yet they live a life of luxury and privilege. In what sense can they be said to “deserve’ this lifestyle?
Similarly, once wealth is created in one generation it is often sustained across the generations by “investing” that wealth (capital) in other people’s money-making ventures. Thus the owners of the capital receive income from the innovation, creativity and effort of other less wealthy people. Again to what extent can these idle rich be said to “deserve” their incomes?
This then leaves us with the working rich. This category includes both entrepreneurial businessmen who build their own businesses and talented individuals who sell their skills, knowledge and experience to the highest bidder; this latter group would include footballers, entertainers, celebrities, inventors and corporate executives.
Many people feel that the innovative entrepreneur is the most deserving of the deserving rich. The entrepreneur of the popular imagination is a person of humble origin who through hard work and creativity invents or discovers a new product or service that they efficiently bring to market in such a way as to maximise their profit. It is argued that through the activities of such men & women our society progresses and employment and wealth are provided for the masses.
The idea of the self-made businessman is morally appealing to many of us. And seems to overcome other issues of social justice such as inequality. But does it really? The first thing to say is that the vast majority of self-made businessmen, vastly underestimate the amount of luck involved in their success. They like to emphasise their hard work, courage, determination and flair but there are plenty of hard-working, courageous and determined men & women with flair who don’t get rich – and often the factor that makes the difference is sheer luck.
In almost all tales of self-made business men getting rich, there are crucial moments in the story when events were out of the entrepreneurs control and if they had gone another way would have resulted in bankruptcy rather than success. “You make your own luck”, people might respond but you don’t actually because if you have influence over the outcome by definition it’s not luck! So to what extent can the untold wealth of individuals like Bill Gates or Richard Branson be deserved if key moments in the success of their ventures were largely out of their control – if they got lucky? OK the entrepreneur might reply, fair enough, but you don’t just need luck to succeed you need hard work and talent and this of course would apply not just to entrepreneurs but also to the salaried working rich.
Let’s deal with hard work first. And it won’t take long! For talented people to claim that hard work is what justifies their relative wealth is frankly insulting to all the hard working men & woman in the world who remain poor. Like the immigrants and refugees working 2 or 3 minimum wage jobs at a time to get together enough money to support their families. Or the miners and steel workers killing themselves in appalling conditions, Or the police and soldiers risking their lives to protect the property of the rich. The idea that only the talented work hard enough to earn the type of money they do is frankly ridiculous.
One could even argue that talented people often, usually even, do jobs they enjoy doing, that they have a vocation, and that therefore they should not be compensated so generously; on the contrary those workers doing dirty and degrading work should be the highest paid – to compensate them for the misery of their working life. Indeed, the ruling elite loves to use the vocation argument with regard to public service workers like nurses and teachers but strangely does not seem to think it applies to professional footballers or corporate executives.
Senior executives sometimes claim that it is the responsibility they carry that justifies their wealth. That the stress of having to “make difficult decisions”, decisions, by the way, that usually mean someone else losing their job, is what justifies their extraordinary remuneration packages. And yet most senior corporate executives these days have negotiated severance packages that mean that even if they fail catastrophically in their duties they will be compensated like a Lottery winner. Those of us subject to a less generous regime might wonder where exactly the jeopardy arises.
But, perhaps all is not lost for the working rich, we are still left with the value of an individuals unique talent as the remaining justification for the outlandish wealth of successful entrepreneurs and the salaried rich.
The main argument is that talented people are in high demand thus the market determines their salaries – not fallible or controversial value judgements about whether they deserve the money they are paid.
In the West this is undoubtedly true under the current economic system but gets us nowhere in justifying the income of the rich because it simply begs the question; the market is being used to justify high salaries, but we were asking if the high salaries created by the market can be justified. We are asking a moral question about entitlement, ultimately a question about social justice. The market makes no such distinctions; the market simply deals in supply and demand – if goods or services are in short supply they cost more. This is why some exponents of free-market capitalism claim that there is no place for morality in business or markets – because markets are not moral mechanisms. Thus market forces cannot be used to decide if the rich deserve to be rich because market forces are irrelevant to such moral questions.
But the idea that it is not appropriate to ask moral questions of markets is blatant nonsense. For example, there is undoubtedly a massive and very lucrative global market in child pornography but no one other than the most deranged libertarian capitalist would argue that we should let the market manage the supply of child pornography! Similar arguments apply to a range of goods and services including prostitution, adult pornography, class A drugs, pharmacuticals, dangerous chemicals, explosives and guns. So the issue isn’t whether we should regulate markets but how, where & when.
So if the fact that markets value certain skills and talents more than others is not a moralying justifying argument are there any other criteria could we use to discuss this issue of just desert for individual talent? Well, we could for example say that talent and skill are in themselves moral attributes. We could also bring other admired moral attributes into the equation such as, responsibility, honesty, loyalty, honour, generosity, hard-work and courage.
Intuitively most people feel that extraordinary talent deserves financial reward above the norm and that extremely rare talents deserve rewards considerably above the norm.
However, most people with exceptional or rare talents are born with those talents. They may work harder than some others to exploit their talents but the talents themselves, especially in exceptional cases, are usually inherited as part of their genetic make-up. [By the way, there is a strong argument to suggest that the need or desire to work hard is a genetically inherited character trait in itself; that some people inherit a predisposition to work hard. If this is true the predisposition to work hard is itself an inherited talent.]
Take an international footballer who is born with exceptionally good hand/eye coordination and the ability to sprint very fast and is lucky enough to be ‘spotted’ and is able to take direction and work in a team. Under the current system this individual could earn £180,000 a week, £36,000 a day for a 5 day week (Joleon Lescott, Man City 2009). To put this in context the average annual UK wage in August 2009 is approximately £24,000, a nurse’s salary is just over £20,000 a year, a building labourer £13,500 a year.
Can anyone seriously argue that Jolean Lescott’s largely inherited exceptional foot balling talents justify a weekly salary which is 7.5 times the average annual wage, on any criteria other than market forces? How can these simple talents of kicking a football justify this level of reward? Morally there can be no justification; Lescott, or any other footballer, doesn’t deserve this ludicrous level of remuneration, he just got lucky.
But what about moral attributes like compassion, self-sacrifice, responsibility, honesty & courage? Perhaps the working rich display such levels of these attributes that their massive wealth is justified….. Do I really need to pursue this? Is there ANY evidence that the working rich are morally superior to the rest of us? The tabloids and celebrity magazines would suggest the opposite, that the working rich, certainly in sport & entertainment, are often, if not usually, self-centred, narcissistic philanderers!
In business most corporate executives don’t even pretend to any admirable moral attributes; on the contrary they defend their position by a “greed is good”, “dog eat dog” philosophy that even denies the human capacity for moral good. According to this philosophy human beings are fundamentally selfish and self-interested and it is foolish or deluded to pretend otherwise. Thus it is not only legitimate to lie and cheat colleagues and the public it is essential for survival. Yet these same men & women will then complain bitterly of the moral decline of our society if a poor person steals any of their property, or claims undeserved benefit.
So for me it is clear that the markets are disproportionately rewarding the ‘working rich’ and that by all other measures than the market this level of reward is unjust i.e. it is not deserved.
If this is so we, as represented by our democratically elected government, are morally obliged to intervene in the market to prevent or at least moderate, the unjust levels of remuneration received by the working rich. The simplest way of doing this is with a progressive taxation system that taxes the very wealthy very heavily and allows for the redistribution of wealth from both the inherited and working rich to the rest of society and particularly the deserving poor. And this is in fact the social democratic agenda that was generally accepted by all the main political parties in the UK from the end of WWII until 1979. It is not as extraordinary or unthinkable as the current wealthy elite might have you believe and is something we must not be afraid to fight for.
[Note: I pursue this argument from the opposite direction (i.e. perhaps the poor ‘deserve’ to be poor) in the post The Undeserving Poor.]
I Am Not A Number
Political and Philosophical Dispatches From An Individual Living In A Society