Whence comes wealth?

Great Debates
1

I think the origins of wealth (property, goods, holdings etc.) lies at the heart of political philosophies. I’ve slowly come around to questioning the propriety of anyone’s wealth, including my own, such as it is, and I think this questioning is the source of my politics. To take my example, I think around 1990, I owned exactly nothing and owed people (primarily my divorce attorney) a lot of money, but two decades later, I had accumulated a decent 401K, so I certainly could claim that I earned every bit of my “wealth” by the sweat of my brow, and I ain’t sharing it with no one.

But I haven’t. I earned that in part by having the education I had, and I got that education in part through my parents’ resources, and by the good fortune to attend an expensive college that awarded academic scholarships, advantages that everyone did not start out with. My point is that if you go back far enough, and no one can except in theory, all advantages stem from luck and force, in that most wealth stems from acts that now we would consider crimes–slave-owning, to be sure, but also from following despotic leaders, who doled out rewards, or simply taking things because one had the strength to do, or by waging war on one’s neighbor’s (I’m talking about caveman days here–no need to get your hackles up from the insult to your noble grandpa.) No one “deserves” his wealth, is what I’m saying, and all attempts to claim that one’s wealth has been earned by oneself is kind of small-minded and self-serving, though I’m not giving up my 401K on that basis, either. I think this realization underpins my inclination to help the disadvantaged, and I also think the rejection of this understanding (if it is a violent enough rejection) underpins the philosophy of those offended by the idea of helping the disadvantaged, which is basically “Why should I?”

In a philosophical sense, do you see any merit in the argument that wealth is ultimately unearned?

2

You’re confusing earning something with owning it. If it is OK to take money from you because you didn’t earn it, then robbery is not a crime.

And the notion that all wealth is the result of luck and/or force is simple nonsense.

Regards,
Shodan

3

n.b.

4

It is utter nonsense to see all wealth as derived from exploitation. A great deal of the accumulated wealth of the 20th century derives not from exploitation (in either a Marxist sense or merely a neutral one) of labour, but rather scientific innovation finding more efficient means of production. That is what has driven the exponential increase in wealth globally. Not mere work in a labour sense.

Of course for any given individual there is no small measure of luck involved in their success or not.

Accumulated wealth as essentially robbery and force probably is a good description of say Rome, but not of the scientific age, in particular as war has gone from being not a bad way for a country to accumulate wealth to utterly ruinous and to be avoided if at all possible.

5

Some is. the great majority of it is not.

Most of the “wealth” in the word, in terms of the physical or monetary property owned by people, was earned through the exchange of labour for money. There’s not really any convincing argument I can think of that makes that wealth unearned.

It is certainly the case that in the PAST, this was not always true. Rome has already been cited, and that’s a good example; Rome’s wealth was to a great extent simply stolen from other civilizations by looting their cities and enslaving their citizens.

6

Cite?

You need to show that most wealth is this rather than, say, through financial markets or the ownership of physical property, which is where I believe most wealth actually originates. If the top 10% of a society has 80% of the wealth, that can’t all be from wages.

7

If you carry your argument all the way out, wealth doesn’t even really exist. At it’s most basic sense, wealth is simply possessing something that somebody else wants. Thus to that extent, all wealth was originally unearned, where one came into power or had access to resources based on luck. However, over a sufficient number of generations, that luck gets sort of spread out.

Consider slavery in the US, for instance. A significant number of people were significantly disadvantaged by that, and one could say that those who benefitted from it didn’t earn it. However, generations later, while there are clearly still some effects, both the negative and positive effects have been spread out over more of the population. Moreso, many people who had some greater advantage than average from those events have squandered their unearned wealth, and many people who had greater disadvantage than average have gained wealth.

Ultimately, I think the problem is that most people seek to maximize their wealth. It’s always easier to trade or coerce one’s way to gaining wealth than to genuinely create more wealth. The problem with this approach is that it doesn’t increase wealth, and yet wealth must continually be spread over more and more people as population increases and as generations level them out. However, those who genuinely create wealth, even if there was some initial unearned wealth invested, are still ultimately adding to the total pool of wealth, and so I would still say that wealth is earned.

8

Right, no one is giving up anything up today, and certainly no one is giving up all his wealth today. But there’s a principle here that people either apply or choose not to apply to the poor–“There but for the grace of God, go I” (or in the case of atheists, “There but for sheer blind dumb luck, go I”). “Even if there was some initial unearned wealth invested” isn’t just a throwaway line–you had some resources to begin with that you inherited, and who can say whether you could have built on that to gain your current wealth? Recognizing that marks you as one type of political, rejecting it marks as another type.

9

This kind of sounds like you’re assuming a law of “Conservation of Wealth” whereby wealth is never created or destroyed, only taken or transferred from one person to another.

I don’t agree that all or most of my (or anyone else’s) wealth can necessarily be traced back to “crimes.” But I do agree that it is largely a result of advantages that I have had, things that I have been given—by other people (such as my parents) and by nature. So that even the wealth that I have legitimately earned, my ability and opportunity to have earned it are largely thanks to the grace of God / sheer blind dumb luck. So the appropriate response to having the wealth is, it seems to me, thankfulness, and humility, and an obligation to use it, not only for my own benefit, but for that of others (a la “To whom much is given, much will be required” or “With great power comes great responsibility”).

10

It’s comforting to think so, and there’s no way to prove it one or the other, so most people prefer to reject this hypothesis. But given the many generations of ancestors we all have who are completely unknown to us all, I think it’s likely that some of the winners (survivors, who lived to procreate) committed some crimes (by their own standards or by ours) and we ultimately benefit from them, some of us more than others. Which is why I tend to reject the “Why should I? I earned it fair and square” argument. Odds are you or your ancestors had some advantages along the way, some which would probably horrify you, so now that we (?) are approaching civilization, it’s only right to me that we level the playing field a little bit.

11

(Bolding mine.) As long as you use the word “some,” I can agree, though I have no idea what the percentage is (except that it’s probably somewhere between 1% and 99%, if it can even be quantified at all).

Plus, now I’m wondering just how “tainted” (if at all) my wealth is if I obtained it honestly from A through my own efforts, who earned it honestly from B, who earned it from C, who earned it from D, who stole it from E, who stole it from F, who earned it from G…

12

I agree that wealth doesn’t have to be the product of exploitation. But I think we should regard wealth as a gift rather than something we earned solely through our own efforts. Even those things which we did earn were almost always the product of an earlier gift which created the opportunity for us to earn something. Nobody is self-made.

But the myth of being self-made is powerful. People want to believe they’re self-made both for reasons of pride and because it relieves them of any obligation to help others.

13

Let me put it like this: Shaq is rich, but the white man who signs his checks is wealthy.

14

Innovations mostly made by people who gained little from them. The people who make money from scientific innovations are seldom the people who make them. A scientist who creates some process that founds a billion dollar industry is lucky if he gets a small one time bonus to his paycheck.

15

Right, so there’s a degree to which your wealth (your existence, really) is predicated on someone somewhere doing something despicable, evil, scummy, immoral, without which you might not be here, and you would not be as well off as you are. To whatever extent I think that true, and I think it’s closer to 99% true than 1% true, you’re obligated as an evolved member of civilization to pay back some of the victims of that criminal behavior by recognizing the degree to which your wealth is self-generated.

What I’m trying to say is that the inability to see this argument, and the degree to which you take instantaneous offense at the concept, is the degree to which you probably oppose programs to help the disadvantaged, and feel good about that opposition.

16

Depends on who funds the research. If you hire me to develop a process, then you are entitled to ownership of the process, which is what is usually in our contract. But I can also negotiate that you pay me in royalties or in a stock futures. Most people want the money up front, though, to avoid the risk of getting nothing in the future. Here in Silicon Valley, a lot of people get part of their pay as future profits or stock ownership. That’s the way I ended up with a lot of the “wealth” I created on the company’s dime.

17

To follow this line of reasoning A would be as wealthy as G. However in the last 120 years we as a country are 10 times as rich as we were then. If wealth was stolen, rather than created than wealth could not grow. Yet the cavemen had all the natural resources we do now, but were inestimably poorer.
The difference in wealth is added productivity. There is no wealth without productivity. Each person receives the marginal productivity they create. No one can create much on their own but each person’s marginal productivity is different. Technology has created so much of an increase in marginal productivity that almost all of the wealth accumulated by individuals is a result of their own talent and efforts and not on wealth stolen from individuals in the past.

18

Of course any individual human’s wealth isn’t completely earned. Even a guy living by himself stranded on a desert island completely naked was fed, sheltered and educated by his parents as a child. Absent that parental care, every human would die, because human infants are unable to care for themselves.

And so even a guy who gets kicked out of his parent’s house at 18 with the shirt on his back has accumulated over his lifetime a vast store of unearned wealth. 18 years of food and shelter and clothing and public schooling required to bring a person to adulthood is an enormous effort by both parents and society.

And of course, we don’t abandon 18 year old kids naked onto desert islands either. Even a kid who lives in Somalia lives in a functioning community of sorts that’s a lot easier to survive in than a desert island would be. A kid who grows up in America has a much larger store of unearned wealth than a kid who grows up in Somalia.

So a self-made millionaire’s fortune, like Henry Ford’s, required the efforts of millions of people in the past who created the science and engineering and infrastructure and government that allowed Henry Ford to put together his first factory. Henry Ford on his own on a desert island would be lucky to build a grass hut. Henry Ford in a neolithic village would be able to create more. Henry Ford in a medieval manor would be able to do even more. Henry Ford in an orbiting space habitat in 2357 would be able to accomplish even more.

Did the baby born in the space habitat in 2357 earn his place there? Of course not, neither did the baby born in a neolithic village, and neither did the baby whose parents were eaten by sabertooths and who died a few days later after producing nothing except poop and pee and spitup.

So does that mean, since humans don’t create themselves fully formed from the ether, that since no one earns his own life through his own efforts, that everything a person owns, even his own life, was stolen from others? No of course not, because what did those other people do to deserve their lives? Does it mean the hubris of a Randian superhero is misplaced? Yes, because that superhero was fed and sheltered and educated as a child, and lives in a society where his excess labor isn’t stolen by gangs of men on horseback.

We don’t live under the feudal system anymore, and so we aren’t serfs whose excess labor is accumulated by the mafioso who lives in the castle. But we didn’t earn our non-slave status, it was earned for us by people in the past.

So what next? Does this mean that communal ownership is the only sensible response to this information? That since we didn’t earn our lives by our own efforts, everything we accomplish should not belong to us but rather to everyone else? But this doesn’t follow, because even though we didn’t earn living in America in the 21st century, neither did anyone else earn what we produce. If your wealth is unearned, that doesn’t mean someone else earned it and you stole it. If you want to produce of loaf of bread yourself without any help it would be literally impossible, because wheat itself was discovered and developed by nameless farmers over thousands of years. Yes, you could plant wheat seeds and harvest them and grind them and knead them and bake them and produce a loaf of bread. But you haven’t done it all by yourself.

But then, buying a loaf of bread made by a professional baker for a trivial amount of money doesn’t mean that you’ve somehow stolen the equivalent amount of effort that would be required to produce that loaf of bread yourself. The baker’s professional oven wasn’t stolen either, neither was the bakery’s delivery truck, neither were the baker’s shoes or his house. It would take literally years of effort for one person to make from raw materials one pencil that you can buy for a dime at a discount store. You wouldn’t just make the pencil, you’d have to make all the tools needed to make the pencil, and the tools required to make them.

But of course, this accumulation of wealth whereby we can buy a pencil or a loaf of bread for a trivial effort on our part doesn’t mean we’ve stolen that effort. And just because it is certain that many of our ancestors throughout history were murderers and thieves (go back 20 generations and you’ve got 2^20 ancestors) that doesn’t mean you’ve directly benefitted from their murder and thievery. The fact that your great-great-great grandfather was a murderer and survived to produce a child doesn’t mean that you owe your life to murder.

So the end result is that we should all have a little humility, and be glad we were lucky enough to survive childhood diseases and be fed and educated by our parents instead of starving to death in the gutter. Heck, our neighbors adopted a child who was living on the streets in Thailand. Nobody knows what happened to her parents, or how she ended up in Thailand because she’s ethnically south indian, not Thai. She apparently had a sister at one point but no one knows what happened to her sister. It could easily be that her sister is dead, or is a slave somewhere. Does that mean, that since my neighbor’s adopted daughter didn’t earn this adoption into a middle-class American family that she stole that life from someone else? It’s incoherent to say that this girl doesn’t deserve the life she has, that she doesn’t deserve to even be alive just because other kids in her position are now dead or still in that position.

19

Although you didn’t address it, I think that you’d agree that another source of wealth is natural resources - unlocking or harvesting additional resources can create wealth.

I might not be fully tracking on marginal productivity, because I think that there’s a missing element. Would it be fair to rephrase ‘each person receives the marginal productivity they create’ as ‘to each person’s productivity creates wealth which is distributed to the parties involved.’? An employer typically gains a portion of an employees marginal productivity in accordance with their negotiated agreement (this is why they employ the individual). In some cases an employee may receive more compensation than the value of their productivity (slackers skating by, etc.).

As another side thought, certain activities can destroy wealth. I don’t think price fluctuations are an indication of this, they’re simply reassessing the wealth inherent in your home/stock/whatever based on additional information. However, burning that gallon of gas, eating that food, letting that food spoil, or losing your home to a tornado are instances of destroyed wealth (if the gas is burned to productive purpose, there may be a net gain).

20

Thank you, Chris Rock… But what’s the relevance of that comment to this thread?