The Rich Are Hogging Our Common Inheritance -- We Must Take It Back
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Editor's Note: The following is an excerpt from "Unjust Deserts: How the Rich Are Taking Our Common Inheritance and Why We Should Take It Back" by Gar Alperovitz and Lew Daly, published by the New Press, 2008.
Technological progress ... has provided society with what economists call a "free lunch," that is, an increase in output that is not commensurate with the increase in effort and cost necessary to bring it about. -- Joel Mokyr, Lever of Riches: Technological Creativity and Economic Progress (1990)
Warren Buffett, one of the wealthiest men in the nation, is worth over $60 billion. Does he "deserve" all this money? Why? Did he work so much harder than everyone else? Did he create something so extraordinary that no one else could have created? Ask Buffett himself and he will tell you that personally he thinks that "society is responsible for a very significant percentage of what I've earned."
But if this is true, doesn't society deserve a very significant share of what he has received?
Buffett may not know it, but he has put his finger on one of the most explosive issues developing just beneath the surface of public awareness. In recent decades researchers working in a broad range of economic, technological, and other fields have clarified much more precisely than in the past the many ways "society" contributes to the creation of "wealth" -- and, accordingly, how relatively little any one individual can be said to have earned and "deserved." Their research, in turn, raises profound moral -- and ultimately political -- questions that are becoming increasingly difficult to avoid. At the heart of this revolution in understanding is a fundamental reconsideration of the extraordinary role of knowledge in economic growth -- and of how ever-increasing knowledge, accumulating across the generations, is central to the creation of all wealth.
The distribution of income and wealth in the United States is more unequal today than at any time since the 1920s. The following study shares with Buffett a fundamental skepticism toward the belief that the nation's extraordinary inequalities are simply a natural outgrowth of differences in individual effort, skills, and intelligence. "We didn't rely on somebody else to build what we built," banking titan Sanford Weill tells us in a New York Times front-page story on the "New Gilded Age." "I think there are people," insists another executive, "who because of their uniqueness warrant whatever the market will bear."
The new research findings suggest that such views are profoundly wrong -- but for reasons that go well beyond Buffett's general view and, indeed, beyond the understandings that until recently have been common among specialists concerned with these matters. Often in history something dramatic is brewing in the quiet work of scholars -- something the public doesn't know about or understand until much, much later. Einstein's famous E = mc equation meant absolutely nothing to most people when it was first published in 1905 -- but it hit the world literally as a bombshell when atomic weapons exploded in 1945. The sophisticated mathematics Claude Shannon worked out in the 1940s laid theoretical groundwork for the digital communication that today ramifies into every corner of domestic and global life. The structure of DNA was deciphered by scientists in 1953, but the public is only now beginning to realize just how radically genetic engineering may revolutionize medicine, food production, and many other important fields.
"Unjust Deserts" suggests that something at least as portentous as these extraordinary developments is silently emerging among scholars studying the sources of wealth, and that once the implications are fully grasped, it too is likely to have dramatic implications -- in this case for the distribution of income, wealth, and power throughout society. It suggests, moreover, that this new understanding and the steady evolution of the knowledge economy, combined with growing social and economic pain and set against a backdrop of ever-worsening inequality, are likely to contribute to potentially massive political change as the twenty-first century unfolds. Consider the following truth: a person working today the same number of hours as a similar person in 1800 -- and working just as hard (and no harder) -- can obviously produce many, many times the economic output. Recent estimates suggest that national output per capita has increased more than twenty fold since 1800. Output per hour worked has increased an estimated fifteenfold since 1870 alone.