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  Wealthiest Americans Owe Nation a Dividend
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OPINION:

Wealthiest Americans Owe Nation a Dividend

by Gary Olson
Prof. Singer calculates that if the folks in the top 10 percent gave away between 10 percent to 30 percent of their income, it would raise $404 billion....
"The very rich are different from you and me,'' F. Scott Fitzgerald once observed. Ernest Hemingway's wry reply was, ''Yes, they have more money.'' A less clever but potentially more instructive response might be, ''Why?''

The top 1 percent of Americans are now receiving the largest share of national income since the pre-Great Depression year 1928. The top 10 percent get 48.5 percent of total income, an obscene rate of inequality. According to Princeton University Prof. Peter Singer, the top 0.01 percent of taxpayers, or 14,000 Americans, earn an average of $12.7 million each, with total earnings of $184 billion. The rest of the 0.1 percent, 129,600 individuals, now have an average income of just over $2 million. And the top 0.5, or 575,900, have an average income of $623,000.

Prof. Singer calculates that if the folks in the top 10 percent gave away between 10 percent to 30 percent of their income, it would raise $404 billion, an amount that would eliminate half of global poverty. And they would not be left to scrimp on their sumptous lifestyles. What should we make of these numbers?

I can't quarrel with Adam Smith, the oft-misquoted and misunderstood moral philosopher and economist, who wrote in his monumental book, The Wealth of Nations,' ''Whenever there is great property, there is great inequality. For one very rich man, there must be at least five hundred of the poor, and the affluence of the few supposes the indigence of the many...''

Why not give all the wealth back? Or to be fair and just, give back everything over and above any personal effort expended.
Upon engaging in private philanthropy, some of these plutocrats utter the phrase, ''I just wanted to give something back.'' My reaction: Why not give it all back? Or to be fair and just, give back everything over and above any personal effort expended.

I'm hardly alone in this view. Even robber barons like Andrew Carnegie (eventually) acknowleded that all wealth originates in the community and ''not in the herculean work efforts of lone individuals and hence should be returned to whence it came.'' And, Warren Buffet, the second-richest man in America, concedes that ''If you stuck me down in the middle of Bangladesh or Peru you'll find out how much talent is going to produce in the wrong soil.''

"Societal contribution"—the luck of location—is said to account for at least 90 percent of what people earn in northwest Europe and the United States.
Herbert Simon, a Nobel Prize winner in economics, acknowledges that this societal contribution accounts for at least 90 percent of what people earn in northwest Europe and the United States. Based on this social contribution to wealth, Simon believes that moral grounds exist to warrant a flat income tax of 90 percent. In other words, as Carnegie biographer Steve Fraser urges, if wealth originated as social capital as Carnegie maintained, shouldn't that dictate a public, democratic role on its best use?

But don't the super-rich deserve their fortunes because of their hard work, pluck, and genius? I think not. For example, behind all the modern technology fortunes, one finds taxpayer-funded research and development. Bill Gates wasn't responsible for the crucial technical advances that produced the computer. His ''genius'' was to take advantage of work done at public initiative and expense.

In the case of the Internet, the Pentagon wanted a communications system that could survive a nuclear attack. Private business refused to undertake the risks until public funding guaranteed a ready profit. Even the mouse came from Pentagon-funded research. (A revealing study is Kenneth Flamm's Creating the Computer.)

Chuck Collins, economic expert and heir to the Oscar Mayer fortune, concludes, ''Yet, where would the many wealthy entrepreneurs be today without taxpayer investment in the Internet, transportation, public education, the legal system, the human genome and so on?'' To this, we must add several additional sources for the great fortunes. A partial list includes: piracy, colonial pillage, black African slaves, extermination of first nation peoples, child labor, Chinese and Irish immigrant labor (railroads) indentured servitude, eminent domain, massive (often concealed) taxpayer subsidies, worker massacres, inheritance laws, public land grabs, unfair trade practices, supporting foreign dictatorships to gain cheap labor and resources, tax policy, corporate welfare, and always, underpaid, overworked employees.

Where does this leave us? Personally, I've always been partial to the moral injunction, ''To whom much is given, much is required.'' Today, the ''much'' is rarely given voluntarily while the ''required'' remains an unrequited, vaguely subversive sounding afterthought. I wouldn't presume to improve on scripture but I would suggest a corollary: From whom much is taken, much is owed.

Self-made wealth is a myth. In the words of economic analyst Mike Laphan, ''It takes a village to raise a billionaire. Every taxpayer deserves some credit for the Forbes 400 wealth.'' So, if all production is social, where is society's dividend?


Gary Olson, Ph.D, is chair of the political science department at Moravian College in Bethlehem. His e-mail address is olson@moravian.edu.

This op-ed originally appeared in Allentown, Pa.'s The Morning Call.



Copyright © 2007 The Baltimore Chronicle. All rights reserved.

Republication or redistribution of Baltimore Chronicle content is expressly prohibited without their prior written consent.

This story was published on May 18, 2007.
 

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