Spreading the Wealth Around

John Ikerd

During his campaign, President Obama suggested to “Joe the Plummer” that rich folks should “spread the wealth around” by paying higher taxes, He was proposing tax increases on incomes of more than $250,000 per years to fund tax cuts for the middle-class and working poor. The Republicans responded quickly by labeling Obama’s tax proposals as “socialist.” Joe Biden had made a similar statement only a few weeks earlier by suggesting that it would be patriotic for the wealthy to pay more taxes. Sarah Palin quickly responded, “To the rest of America, that's not patriotism. Raising taxes is about killing jobs and hurting small businesses and making things worse." Is it really un-American to expect the rich to pay higher taxes?

The basic purpose of government, according to the American Declaration of Independence, is to ensure the “unalienable rights” of all people, including “life, liberty, and the pursuit of happiness.” One of the most basic of democratic principles is that all people are “created equal,” and thus, are of equal inherent worth and have equal rights under the law. Americans seem to agree that government is responsible for ensuring the basic political and civil rights encoded in the Constitution: freedom of expression, freedom from discrimination, and freedom to participate in political processes. There is less agreement on government’s responsibilities for ensuring economic rights of individuals: the right of people to meet their basic needs. However, in a recent national survey more than three-fourths of Americans agreed that the U.S. government is responsible for ensuring that citizens can meet their basic needs for food, healthcare, and education – with a solid majority even among Republicans (www.worldpublicopinion.org).

In fact, the U.S. government today functions as if we all have basic rights to at least some measure of food, clothing, shelter, education, health care, and even environmental health. However, there is no consensus regarding what measure of each represents a basic right, rather than a government handout. When pushed for a direct response, President-elect Obama stated that he believes healthcare is a basic right of all Americans. However, he clearly is not willing to use the power of government to ensure that all have equal access to all levels of health care. President Bush once said that all Americans already have access to healthcare because hospital emergency rooms are required by law to provide treatment for anyone in urgent need. The question of Americans’ right to healthcare is not whether, but in what measure. The same is true for food, clothing, shelter, education, and environmental health.

We are inherently unequal in our ability to meet our basic economic needs because we are inherently unequal in our ability produce or acquire things of economic value. We are born with unequal abilities, inculcated with unequal aptitudes, and endowed with unequal wealth. Certainly, we can influence our economic achievements through our own initiatives. However, there is never been a society in which all people could meet their basic needs without help from society as a whole. Promoting the general welfare is a necessary, constitutional function of government. Those who have wealth, or the ability and aptitude to acquire wealth, must be willing to share with those who are unable to acquire an equal measure of those things to which they have equal rights – including some measure of food, clothing, shelter, healthcare, and environmental protection.

Government economists, conservatives and neoliberals alike, have promoted economic development as the means by which the basic economic needs of all will be met. A rising economic tide is purported to lift all boats. Since the early 1980s, government regulation of private enterprises have been systematically weakened and dismantled, removing constraints to economic growth and employment. Taxes have been slashed, particularly for corporations and wealthy investors, with the promise that increased investment would create more jobs. Free trade has been promoted as a means of making the world’s economic resources accessible to more investors. The government’s responsibility to ensure the economic rights of its people has been largely reduced to providing economic incentives for the wealthy to create employment opportunities for the poor. It hasn’t worked.

The private economy employs potential workers only in relation to their ability to produce things of economic value. Rather than employ the less economically valuable in the U.S., corporations moved their operations to other countries where desperate people were willing to work longer hours for lower wages. Wages and salaries of even the more productive U.S. workers were depressed toward poverty levels. The meager benefits that trickled down from economic growth trickled down to entrepreneurs and workers in other nations. Economists should not have been surprised at these consequences. To rely on the economy to ensure economic rights, is to deny the existence of such rights.

If “spreading the wealth around” is socialism, then Adam Smith was a socialist. In Wealth of Nations he wrote, “What improves the circumstances of the greater part can never be regarded as an inconvenience of the whole. No society can surely be flourishing and happy, of which the greater part of the members are poor and miserable.” Smith clearly understood the necessary role of government in a capitalist economy. For example, he considered public education to be a basic right of the poor and responsibility of government, without regard to any benefit to the economy. He understood that people had an inherent right to meet their basic economic needs and that those needs would not be met by a capitalist economy.

Ensuring economic rights requires money, taxes that otherwise could be used to pursue individual economic interests. It seems reasonable to ask those who have benefitted most from the economy to bear the cost of ensuring the economic rights of those who have benefitted least. Some will be undeserving, just as some are undeserving of their political and civil rights. There are legitimate questions regarding how much wealth should be “spread around,” but there is no greater responsibility of government than to ensure the basic rights of its people.