← Pitchfork Economics with Nick Hanauer
Pitchfork Economics with Nick Hanauer
Should There Be a Limit to Wealth? (with Ingrid Robeyns)
00:46:32
Loading summary
Transcript106 lines
- [00:02]
A
The rising inequality and growing political instability that we see today are the direct result of decades of bad economic theory.
- [00:11]
B
The last five decades of trickle down economics haven't worked. But what's the alternative?
- [00:16]
A
Middle out economics is the answer.
- [00:19]
B
Because the middle class is the source of growth, not its consequence.
- [00:23]
A
That's right.
- [00:29]
C
This is Pitchfork Economics with Nick Hanauer, a podcast about how to build the economy from the middle out.
- [00:37]
B
Welcome to the show.
- [00:44]
D
Hey, Pitchfork listeners. I'm Freddie, producer at Pitchfork Economics. For years, economic policy has focused on building a floor. Minimum wages, safety nets and protections meant to keep people from falling behind. But as inequality reaches historic levels, a new question has entered the chat. Should there also be a ceiling? This week we're revisiting the case against extreme wealth, a conversation with ethics professor Inguid Robbins, who challenges the idea that unlimited wealth accumulation is simply the natural outcome of a healthy economy. She also asks whether extreme wealth can ever be justified in a society committed to fairness and democracy. We spend a lot of time talking about how far people can fall, but this conversation us to think just as seriously about how high wealth should be allowed to rise and what happens when an economy has a floor but no ceiling.
- [01:44]
B
You've been spending a lot of time in London the past few years, Nick, haven't you? I have, yeah. I. I don't know. I know how much British history you've studied, but I have a little history historical fact for you that you may find surprising. Did you know that nearly 70% of the land in the UK is owned by less than 1% of Britons? And that the vast majority of that land is owned by descendants of the Normans who invaded over a thousand years ago and stole that land. That if you are paying rent in Britain, you are paying rent to a descendant of a Norman invader.
- [02:37]
A
What's the moral of that story? It pays to invade.
- [02:43]
B
The moral of that story, Nick, is how long inherited fortunes can last. Not just a generation or two, but for a millennium. You can have that extreme inequality again, chances are. Your landlord now, I assume you bought your house as opposed to renting it, though I don't know, maybe you had to rent the land because I don't know how it works there.
- [03:13]
A
No, no, no, no, no. In fact, you're right. Like, you know most of the places in London are land leases, right, where you pay. Again, some aristocratic landlord.
- [03:26]
B
That's right. An actual lord. We call them landlords now, but they are Norman lords.
- [03:32]
A
No, it's true. All of which is to say that this arrangement would be deeply offensive. To our guest on the podcast today, a Dutch professor, Ingrid Robbins, who's a distinguished scholar and professor of ethics of institutions at Utrecht University and who has a new book with the audacious title, the Case Against Extreme Wealth. I think it's fair to say that Ingrid goes somewhat farther than I do, or we do, when it comes to inequality. She doesn't want to reduce it, she wants a hard cap, which is a very interesting proposal, obviously.
- [04:11]
B
Please yourself about going too far.
- [04:15]
A
Anyway, I think we should just get right into it. Let's talk to Ingrid.
- [04:24]
C
So my name is Ingrid Robaens. I'm a Belgian Dutch philosopher and economist, and I work as a professor of ethics at Utrecht University in the Netherlands. And I wrote a book which was published a couple of months ago, called the Case Against Extreme Wealth.
- [04:42]
B
So, should we start?
- [04:43]
A
Nick, welcome to Pitchfork Economics.
- [04:45]
C
Thanks.
- [04:46]
A
Yeah.
- [04:46]
B
Should we start by having her make the case against you and your extreme wealth?
- [04:51]
A
Yes. Yes, ma'.
- [04:52]
D
Am.
- [04:54]
C
Yes.
- [04:54]
A
Shall I. Yeah, absolutely.
- [04:56]
B
Give us the thesis.
- [04:58]
A
They didn't. Ingrid, you should know. They didn't surprise me with this interview. I knew you were coming.
- [05:09]
C
I always, of course, say I'm not talking about particular individuals, so that's not what I'm going to do now either. But I do argue in the book that there is a case against extreme wealth concentration and against extreme wealth inequality, which are two sides of the same coin. And the reasons are that if you look at it statistically, hence at population level, we see that extreme wealth is harmful for society because it undermines democracy and is incompatible with principles of ecological sustainability, that it's wasteful because if wealth were distributed in a different way, it would lead to much more equality of opportunity and flourishing. And that also often there are traces or there are ways in which it was acquired that are not quite moral. So there are problems in the way it's been acquired, the money. And then finally there is some evidence that it doesn't make the super rich happy. So that's in a nutshell, all the different reasons why I think we should move to society with less extreme wealth concentration.
- [06:15]
A
So we're in violent agreement with many of the things that you said.
- [06:20]
B
But I think not that last one, because I can tell you Nick is extremely happy.
- [06:26]
A
That is true. That is true. But for the purpose of this conversation, it seems like it might be useful to. To divide, somewhat arbitrarily, the challenges of extreme inequality into two buckets. Practical considerations and moral considerations.
- [06:44]
C
Yes.
- [06:45]
A
Okay.
- [06:45]
C
Yes.
- [06:46]
A
So let's start with practical considerations. So I think that it is very Very true. Has to be true that highly unequal societies concentrate both advantages and disadvantages. And it is very hard in a highly unequal society for the majority of people to actually be robustly included in it. Like if you want true opportunity, then, you know, it turns out that wages are the way in which we distribute opportunity in most societies. And if people don't have any, they can't flourish. And.
- [07:20]
C
Well, it's not. Yeah, yeah. And I would go just wages. Well, of course it's, I think it's really what happens before you're 18.
- [07:27]
A
Yeah, all the things, all the things. It's, it's, it's wages is just a, a placeholder for the variety of things, things that it takes to be included in a society. But I think that there's an additional factor that you did not mention, although I'm sure you agree, which is that less unequal societies actually grow. Even primitive measures of growth like GDP go up a lot faster because obviously if nobody has any money, who will buy the stuff? Right. Like in a society where you distribute the value generated in a broader way, obviously more people, a higher proportion of people can robustly participate in the economy not just as consumers, but equally as innovators, entrepreneurs, risk takers, et cetera. Right. It is a more direct path to creating that feedback loop between innovation and demand which drives economic progress.
- [08:28]
C
Yes, no, I totally agree. So I also, I actually. You have written about this many years ago, Nick. I know, and I actually cite you and discuss your argument in the book. But I think it's also a response to those who, who criticize my proposal for saying, oh but nobody will no longer want to innovate if you reduce inequality because people want to have that, that possibility to become extremely rich and hence the economy will shrink. That's what they say. But I say no. If you were to give people gen equal opportunity, which right now many people do not have because they are, they never get the opportunity to build their human capital used to use economists language. They may not innovate and make the products and the services that they would otherwise in a fairer society be able to offer to all the consumers. So yes, I think there is definitely a so called business case or an economic case for reducing inequality. I've tried to go for the most part of the book is really trying to go for the most what I would think fundamental moral reasons. But often I respond to objections and then often these objections all have to do with the economy because many of the people who criticize my work seem to assume that having a larger economy is always a good thing. Whereas I as a philosopher would say no, the economy is good to the extent that it enables people to flourish. And that depends on how that economy actually looks like. It depends on the quality of the economy.
- [10:02]
A
Yeah, again, I think Goldie and I would substantially agree with you. You know, the way in which we depart from traditional economics orthodoxy is that we agree with you that the point of the economy is not to produce more gdp, it's to enable human flourishing, it's to maximize human flourishing. But now let's turn to the moral case. So lay that out in more detail.
- [10:26]
C
Yes, so the moral case comes in different strands. I think the one that is most, that I think most people could agree with is that what liberals call the non harm principle should not be violated. So that means whatever you do, you should not harm others. And there we see that if you look at it population wise, and of course I know there are many exceptions, I call them the activist billionaires who try to really counter these negative effects. But we see that wealth concentration undermines democracy. And principle of political equality is I think a fundamental one for our societies. And the other one is that it is that the super rich have lifestyles but also investment patterns, patterns that are incompatible with principle of ecological sustainability, which means that they are harming the prospects of other human beings and actually also other species to live good lives on this planet and also all the people who will live in the future. So the problem is that basically wealth concentration has all these negative effects on other people. And that is I think a very important moral case. It's a type of argument where you can come up with counter examples. So you can say, oh yes, but here is this one person that really does all these fantastic things or that has a negative carbon footprint. These people exist. But if you look at the statistics, this is what comes out of the empirical work. So that's the first kind of moral argument which is related to harm. And then the other one I think is more problematic for people to accept because it is based on our view of human nature. So the view of human nature I defend in a book and which is based on how I read signs to do with human development and so forth, is that luck plays a really, really big role in what people can do with their lives. So there are different types of luck. There is, you could call it genetic luck, biological luck, your strength with which you were born, your talents, whether you are a very quick and energetic person or whether you have possibly impairments or illnesses, all of that is pure luck. If you are a strong person who is creative or smart, I mean, this creates a possibility to generate economic prosperity as an individual and also for society. But it, it is a matter of luck that you are talented. That's one. But the other one is also social luck. And social luck is basically just an aspect to do with what is the society, the class or the social group in which you were born. And there we see that people have massively different opportunities in life to get ahead. And then there's also this thing called market luck, where, where the way markets are formed, the way things develop beyond your control as an entrepreneur or as a somebody who offers their labor on the market, can have a big influence of where you end up. So what I want to do in that chapter, which I think is the most fundamental and philosophical chapter in the book, is to displace the view that we now have in economics, which is to attribute both our successes and our failures to the individual to say, wait, there's so much of it due to luck. And if we were to embrace that in how we understand ourselves, we would be much more, I think, generous in sharing what we're able to acquire, because we just see it's also just a matter of things that are beyond our control. And that's a very different way of looking at human beings than the one that are dominant in our cultures.
- [14:10]
B
And you frame this luck as a moral argument, but we know when it comes to what you call market luck, that argument is empirically supported. It's just, it's just plain math. The market is a non ergodic system and therefore is driven by luck, path dependence and compounding. And while merit plays a role, it's more noise than signal.
- [14:38]
C
Yeah, but you know, that is true. But the moral arguments, at least if they're applied moral arguments like I developed them in the book, they always are based on empirical assumptions. And so also for the case of the natural lottery, so genetic luck, but also for the case of social luck, there's the same empirical evidence.
- [15:01]
A
Yeah, of course, yeah. And in your book you offer up some specific limits. Can you speak about those?
- [15:09]
C
The limit should be determined depending on at what level we really see those two forms of harm kicking in. But at the same time, taking into account that we want to create enough positive financial incentives for people who are motivated mainly or primarily by financial gain in order to innovate or contribute to the, to the economy. So I just, I don't know any research, any empirical research that has estimated where this limit would be I give in the book as a, as a really a ballpark figure and a rough guess. I just say, okay, let's say 10 million. And I also say this is context dependent. It is for a society with a solid welfare state. So it's basically the societies that I know, which is continental Europe, a solid welfare state, free, high quality public education, healthcare system. I think if you have all these kind of security levels, then if you want to make sure that people will still really contribute and be incentivized to contribute to the economy, I think allowing them to earn up to 10 million seems to me the way we should organize society per year.
- [16:25]
A
You mean 10 million per year.
- [16:27]
C
That is actually wealth. I'm very sorry, it's very, very low. I know, I know that people in the US find it shockingly low, and I'm very happy to have another number. But the question really is what is the amount of wealth that people have when you see them having these harmful effects on society? So if you have 10 million in terms of just your assets, and actually pensions are also excluded, and that's again because we have. Our pensions are systems whereby we save collectively. So my savings do not include my pensions. So that's why I say these estimates should be context dependent. But for me, the real question is when do you have so much wealth that if you were to give it away to do something that undermines democracy, that the kind of opportunity cost of you giving away that wealth becomes almost zero? So if I were to give, say €10,000 to a political party, I would really make a sacrifice because it would mean I could not do something else with that money, something really valuable for me or my family. But if you have billions, what is €10,000 or $10,000? It's nothing, actually 100,000, even a million is nothing. So I don't think we should get to a point where being able to give a donation to a political party or to hire lobbyists or whatever one can do to influence democracy too heavily comes at no opportunity cost. That is a big question. And the other one is, of course, when we see, when we see that a certain amount of wealth has a negative effect on ecological sustainability. And there, I fear, given current technological setup, the metric the wealth limit would actually be much lower. It would affect many people who are now not just in the 1%, but probably in the next 20%, because we know that the most important determinant of greenhouse gas emissions and other forms of environmental damage is people's affluence. So that is what I call in the book the political limit, which is, you could say an institutional limit, the way we want to organize society, and then there's a second ethical limit. But perhaps you first want to tell me that political limit is crazy.
- [18:48]
A
Yeah, yeah. So, I mean, some thoughts. So most of what you said, I would say we agree with, we're very sympathetic to the view, for example, that people, you know, economic outcomes are, are largely determined by path dependence and luck. And, and when you put in things like race and gender, it gets, it gets even worse than that. That merit, that merit is a component of how well people do in life, but it is a much smaller component than people believe. We are also, you know, of course, I mean, we don't call it pitchfork economics for nothing. We definitely believe that massive concentrations of wealth at the top are bad for societies in practically every way that you can imagine. And I absolutely don't believe that limiting, somewhat limiting the amount of money that you can make will decrease the amount of incentive there is in the economy for people to innovate and build new things. The rate of innovation in the United States did not go up when the capital gains tax was reduced from 28% to 15. Bill Gates did not decide not to start Microsoft when he did because the capital gains tax rate was 28%. Right, absolutely. Yes. And yet at the same time, so I'm not a philosopher, although I did study philosophy as an undergraduate, I will have you know, but we're very much more oriented towards policy and politics. What's practicable. And what strikes me about your proposal is that it's one thing to say to a class of very energetic and very status driven because all money is, is frozen. Status. Right. People don't want money, they want status. That's what we're all competing for. Status. Yeah, beyond a certain point.
- [20:49]
B
But you're the people you hang out,
- [20:51]
A
the class of people I hang out with are driven by a desire to be at the top, at the mountaintop.
- [20:57]
B
And yeah, I know a lot of people who need that money for things like rent, mortgage payments, food.
- [21:03]
A
But we are talking about, you know, wealthy people. They were very determined. It's one thing to say you're going to live in a society where the tax rate is higher, differentially higher. So if you make a billion dollars next year, we're going to take 60% of that or 70% of that and you can keep taxation and you can keep 300. But it's an entirely different proposition to say to that same person, the limit of your income this year will be effectively $200,000, because the differential between $200,000 in income and 300 million net is. That's very large. And as a practical matter, I do not believe that you could ever get the entire planet to all the nations of the earth to agree that we should limit wealth in that way. And again, we often do things like, for example, raise the minimum wage in Washington State before anyone else did, and heard all these cries of all the businesses would leave and all the rich people would leave. And we discounted that because the differential was not great enough to create that incentive. But if we had raised the minimum wage to $100 an hour, it is absolutely the case that everybody probably would have left. And likewise, we just pushed through a 7% tax on capital gains here in Washington State, and we got all the cries of, well, everybody's going to leave and it's all going to collapse. And of course, I don't really believe that, but if the tax in Washington State on capital gains was 90%, I can guarantee you that all of the wealthy people who were capable of generating capital gains would indeed leave, except if
- [22:44]
C
the rest of the world would also have.
- [22:45]
A
No, no, no. But now you're in a collective action problem now.
- [22:49]
C
Absolutely. Yeah.
- [22:50]
A
Yeah.
- [22:50]
C
But no, this is great because now it becomes really kind of interesting between us to have this conversation. So I should say I don't believe libertarianism will ever be implemented. It's not a proposal for. It's not a policy proposal. I have in the last chapter of the book, I say what I think we should do, and some of these things have, are basically, it's like increasing taxes on capital and especially income from capital, but also considering wealth tax. So decreasing taxes, that's actually more for Europe, but decreasing taxes on labor because they are much higher than taxes on. Right. So all these things that, I mean, many, many, many other economists and philosophers and political scientists argue. So you could say, oh, but this is like what many other people are arguing. So why then how's the link with this more radical and absolutist proposal of limitarianism? But limitarianism is what I, what philosophers call a regulative ideal. So it's something that we will never reach, but we have reasons to want to move in that direction. Anybody who says in, in there is a limit to inequality, there is. Inequality is too big, is in effect almost by way of logic saying that means that there is a certain level where if inequality rises, it becomes either harmful or unacceptable or illegitimate. Which means that if you say that inequality can't just be whatever it happens to be, you must think about a certain level to which you want to reduce it. And I think that's a conversation I want to provoke to really make us think, well, how much inequality and how much wealth concentration actually can be justified. And for me, the main point about the book really is the reasons. So it's the ones that I was already talking about. It's a harem argument. It's the luck argument. There's also the argument about how this wealth actually was often how that wealth historically was generated, because, for example, to the extent to which wealth can still be traced back to, say, transatlantic slavery or exportation of labor in the global south, all these wealth concentrations are illegitimate, in debt, and immoral in that respect. And I think I overlap here a lot with what people who just argue more generally about the harms or the bad effects of excessive inequality say. We agree a lot. And I should also say that my colleagues, political philosophers internationally, do not find the arguments I make very radical at all, because the philosophical foundations of it are widely discussed in the academic literature. But the idea that the arguments may actually lead us to the point where, as a matter of principle, we should accept that at some point it's enough, that is just something that is so at odds with, with our culture, with whatever you want to call it, the ideology, but also possibly with the form of capitalism that we have. Because one definition of capitalism is, of course, people. That there will always be people who try to increase profits. And profits are. What then is the. What happens? First you have profits, and then you turn them into personal wealth. So if you say that profits can be endlessly, and if the idea of the economy is that people try to. That entrepreneurs try to maximize profits, then yes, there is a tension with the arguments that I have and what I propose. So I think in the end, I'm really also arguing for reconsidering the type of capitalism that we have. I'm not anti capitalism, but I just think the type of capitalism that we have has become really harmful for human beings and the planet and that the focus on what too big inequality does is one. One example of where we can see this.
- [26:53]
A
Yeah, can I. Can I offer an idea? And this may be anticipated by you, but. So, for example, we have a minimum wage in the United States, which is at the federal level, woefully low in. One of the propositions that. That I've thought would be really interesting is to tie the minimum wage to the income of the top 1%.
- [27:20]
C
In other words, wow, That's a great proposal.
- [27:24]
A
Yeah. In other words, I'm not so much in favor of limiting the top, but in absolutely ensuring via policy that the people at the bottom in the middle do as well as the people at the top. Because I think that that arrangement is more dynamical and less problematic than just saying, hey, there's a hard limit to what you can have.
- [27:50]
B
So this, Nick, would be the. Your a rising yacht lifts the tide?
- [27:57]
A
Yeah, something like that. I don't know. But honestly, you know, if the minimum wage in the United States track the after tax income of the top 1%, and you believe, as I do, that the minimum wage compresses up all other wages, I mean, you know, there are some other things you would have to do. But if you could imagine a society where, I mean, one of the problems, of course, Ingrid, is that the amount of inequality we have in the United States is too much today and should be shrunk. But let's just stipulate that you manage to halve the distance between the top and the bottom and then you tied them together. How do you feel about that?
- [28:37]
C
I think that would. I. I really like. So I am, of course, I like to think out of the box. So I really like this idea, although I think it is almost as. I don't know whether it's much more implementable than many of the proposals I have in my book. But I really, really like the idea because it incentivizes the. The entrepreneurs and the innovators. However, I think it would only work if you couple it with almost complete inheritance taxation. Because the problem is not income. The problem is wealth. If you talk about genuine big economic inequalities.
- [29:15]
A
Yeah, yeah, yeah, of course you still have the corrupting power at the top. You still have the concentration of both wealth and power at the top.
- [29:23]
C
Yeah. So, but if you say, okay, you know, we agree that. So I propose in my book that in terms of inheritance, because I do acknowledge the role that parental love and all these, which are rich, embody values played. So I don't think, in contrast to some of my colleagues, that we should abolish inheritance completely, but I think it should become very, very small. So say you can receive as a person over your lifetime the equivalent of the half the price of the median price of a house, whatever that is in the U.S. i think in my country it would right now be something like €200,000, which is, by the way, much more than most people ever get in terms of inheritance, because most people get almost nothing and then everything else would be completely taxed. And then you would. I mean, what I also propose is actually that we redistribute this money to give to make sure that everybody has a head start when they're 18. But that is different thing. But if you do that, then you really level the playing field, and then you could do something like the proposal you just mentioned. But if we do the proposal you just mentioned in the world as it is, without first equalizing the playing field, then there will still be. There will still be many people who are born with multiple millions and billions, and then what? What does it matter for them? So it would be a way to lift the poor out much more radically. Except, of course, we do also have poor people, the disabled, namely, who do not have wage.
- [31:00]
A
Yeah, of course.
- [31:02]
C
And there's also, of course, the global dimension, because in some of the industries in which billionaires make their fortune, actually it's not so much the workers in the US or in Europe that are at low wages. It's the, say, the people working in the garment industry in Bangladesh or people working in the factories in China in grueling circumstances. So this is, of course, So I think in terms of feasibility, we always run into problems of international cooperation. And that is also why I believe we should really change the ideology. We should change. I mean, you know that we had in the late 70s, we had this shift in how economic theory was perceived. So we had the rise of the influence of people like Hayek and Friedman and all the other neoliberals. And they've not just influenced policy. They've not just put politicians there to execute those policies that were already in all the books, but they have also really changed the culture the way we as people look at ourselves. And I think we should have. So we should not just look at policies, but we should also really think about. Okay, but when do we think we deserve something? When do we think something is ours? And it's to that level of. So I am. I am in a book doing many different things, also endorsing some proposals, but I'm also really trying to unsettle and try to come up with alternatives for how we think about ourselves and also how we think about society.
- [32:37]
B
So can I ask you a question about the word limitarianism?
- [32:42]
C
Yes.
- [32:43]
B
Was that. I don't know how that translates into other languages, but certainly in the US People don't like limits. I don't think that's a popular word. Oh, yeah. What I want are more limits. How intentionally provocative was that?
- [33:00]
C
Yeah. So, you know, it actually Came because this is based of course on scholarly work that I've been doing, been doing in political philosophy and actually partly also in welfare economics going back 10 years. And in both welfare economics and political philosophy, we have of course, these different, we call them principles when we talk about distributive issues and they're called egalitarianism, prioritarianism, sufficientarianism. And I was first of all making a contribution as a scholar color to that academic debate. And that's why I came with this term limitarianism. In academia, nobody cares about whether something is motivating or an aspirational term. And in the end, my trade publishers, Penguin in the UK and Astra House in the US like that term. But I can see that it may be seen as like limiting the freedom of people or not allowing people to really grow. But so I can see that point. But you know, I also just increasingly think perhaps we should also sometimes accept limits because we have limits everywhere in our lives. We have speed limits, we have, I mean, if you drink too much alcohol, you have, you go beyond the limit of what's good for you and good for those around you. And so perhaps it's also this idea that perhaps sometimes we should just accept that embracing limits actually is good for us. And that's also in the chapter that I have on that. It may actually be good for the billionaires themselves with some exceptions, but it works. I mean we have some scholarship that says that it works as an addiction, that accumulating wealth, you always want to have more, more, more.
- [34:49]
A
Correct.
- [34:49]
C
Also because of the status effect.
- [34:51]
A
No, again, again, you have to remember that this is all about status. And in a status contest there is never enough.
- [35:00]
C
That's so one of the things I did not really, I have not developed a proposal in the book, but I think that is really, really interesting is can't we come up with a different way for people to acquire status? So for example, we, we, you know, we have this Forbes billionaire list. Why don't we have something, a list, a public list that tells or gives an estimate of what your contribution to the world has been. I don't know how, what that would be because it's difficult. I mean, of course the, the, the, the not or the, the easy thing about the Forbes list is that it counts money. Whereas if you look at contribution to humanity or to the world, it is of course different. So you get problems of incommensurability. But still, I think we should also really try to come up with, to decouple this status seeking element. Which I think is almost impossible to get rid of because of the way human beings are to some extent to tying it so much to money. And there I don't have a good proposal, so perhaps you do.
- [36:07]
B
Yeah, the Forbes 400 list of top snarky podcast co hosts.
- [36:16]
A
There you go. I love it. That would work for me. So, Ingrid, we've gone over time, but we have a couple of final questions. So the first is the benevolent dictator question. I mean, you've answered to a certain degree, but given if you took all the constraints out, what are the top three things you would do?
- [36:35]
C
So I think if you think about policymaking, I think the first one is really international coordination and especially trying to close tax havens, because as long as we have tax havens, there will be some money that is just beyond the reach of anybody who wants to tax. And then also to have international coordination on having a minimum tax on either wealth or capital gains or something else. But that really focuses on the incomes and the world of the super rich. But I, I, if I were to be able to pick my policies. Of course, we also want something that focuses on the poor. My book focuses on the, on those at the top, because I think we haven't paid enough attention there as, as political philosophers. But of course, ultimately you want to make sure that people do not live in misery. So we must come up with something like either, yeah, just an economy where there are more good jobs for everybody and we have a decent safety net for those who cannot work, or else something like a universal basic income at a high enough level. So one of those things. And then I also just think we need to really reform the economy to make it ecologically sustainable, because anybody who has children should worry about what we're going to leave them.
- [37:52]
A
Yeah. And one final question. Why do you do this work?
- [37:56]
C
Ah, yeah. Why did I do this? So I actually do not have a personal reason to, to do this. I was not born poor and I'm not rich, so it's not related to my personal life. But I've been working on questions of inequality and distributive justice all my life. And it's really at this interface between economics and philosophy, which are the two disciplines in which I was trained, that these kind of questions come together. And I've always had a kind of an unease with what I, what I was taught when I studied economics. I just felt so many things were wrong, if I may say so.
- [38:34]
A
Yeah, that's a pretty good, that's a pretty good choice of words.
- [38:37]
B
Yeah, good Intuition.
- [38:40]
C
And that's actually why I then moved to, you could almost say retrain in philosophy. And I made my career there, but I still feel the economy is way too important to leave just to the economists. And that's why I should. Yeah. And that's. And also the work I want to do, that I started doing now and want to do in the future is really thinking about economic systems and how. Because there are all sorts of proposals about alternative economic systems, but which one really can be now judged as being the best one or a number of really good ones where then the people can decide what they want. So I think we need an alternative for neoliberal capitalism, but it needs to be well thought through, and that's where I hope to devote my energies to in the next decades.
- [39:28]
A
Love it. Well, thank you so much for being with us. It's been a fascinating conversation.
- [39:32]
C
Thanks for having me.
- [39:38]
B
$10 million, Nick, to me, if I had $10 million, that would be a lot of money. To you, not so much. And basically, I'm of two minds on this.
- [39:50]
A
Yeah.
- [39:50]
B
On the one hand, if your wealth was capped at $10 million, I'm pretty sure I wouldn't have a job. That's correct. That is correct. But, Nick, on the other hand, if your wealth and all of your buddies was capped at $10 million, this job wouldn't be necessary.
- [40:13]
A
Yeah, but a job would be necessary.
- [40:15]
B
A job, I'm saying. But the job I do right now, which is we're trying, like Ingrid, to change policy and norms. I mean, that's what this podcast is about. It's about changing the narrative about changing the norms of extreme inequality. We wouldn't have a Pitchfork economics podcast because there would be no need for it, because that problem would be solved.
- [40:40]
A
Yeah. So, Goldie, this was a really interesting conversation with Ingrid, and there's a lot, I think, to like about her arguments and her book. Certainly much of her analysis is dead right, that extreme inequality is both morally and practically bad. But the limitarian element of it, I think, honestly, is more of a provocation than a proposal. I think she is absolutely right that we need to surface all of these ideas. For example, and you and I have talked about this, of course, extensively, the role of luck, path dependence and compounding, to say nothing of race and other preferences in how people do in modern market societies and the outsized and actually the relatively small part that merit plays often in where we end up. And she's right. To raise the issues of our culture that, you know, the only form of status that we seem to be able to find is how much money you have, or even more egregiously, you know, how many followers we have on Instagram or some damn thing like that. And surely there are better ways to assess your contribution in society than those things. Of course, one of the really interesting facts about this idea that if you put somebody like me at the very tippy top that my wealth would be limited to $10 million, is that as a practical matter, I suspect that that would create a society where the median wealth would be $5 million, because you can't squish the money around any other way without making most people multimillionaires. And if you could do that, that would obviously be a pretty great society where everybody in it was financially independent and thriving. The question is, as a practical matter, can you get there? And for my own part, I don't think limits are the way. I certainly believe that the tax code should be infinitely more progressive. I'm serious about the proposals of linking the wages at the bottom to the wages at the top. I think that that's a way to tie the fortunes of the society together, I think, in a very, very productive way. You know, I think that we have to find a way, certainly, to contain the political power that accumulates when wealth accumulates. This is, you know, and this is why, you know, Citizen United. And this idea of $1, one vote that replaced one person, one vote in the United States is so egregious. But I'm not sure I can get behind actual libertarianism. How about you?
- [43:30]
B
How about if it was a billion dollars?
- [43:32]
A
Yeah, I'm still not sure that that's the path. Yeah, I just. I'm just not sure this is a thing.
- [43:40]
B
Nick. I understand all the practicalities and look, it's hard just even to pass a progressive income tax in this country, Correct?
- [43:48]
C
Hard.
- [43:48]
B
You know, obviously Piketty is right. We need a global wealth tax, and Ingrid's right. We need to eliminate these tax havens and so forth, because that's where. Because you guys can, like, take your gold bullion and go wherever you want.
- [44:04]
A
Yeah.
- [44:05]
B
All of that practical stuff aside, what I think is really important about books like this and. And that term limitarianism is. Is that it's sparking the conversation.
- [44:15]
A
Yeah, it's a useful provocation because what really.
- [44:19]
B
And we know this from our own practice, we run campaigns out of our office, and we've always had this philosophy that we're using these campaigns, these policy campaigns to change the narrative, and we use the narrative to advance the campaigns. And it is this feedback loop.
- [44:37]
A
Right.
- [44:37]
B
And so when you talk about libertarian policies, it helps raise awareness and change that conversation, get people thinking, you know, yeah, there probably should be some limits. There should be some limits to extreme wealth, to how wealthy and powerful any one individual should be in a democracy.
- [44:57]
A
Yes.
- [44:57]
B
I mean, because clearly democracies, our founders understood this. They wrote a constitution, a as our friend Ganesh Siddarman says, it was a middle class constitution that did not imagine extremes of wealth in the US like there was in Europe. And of course, as Louis Brandeis famously said, or didn't say or said something like it, you know, we can have wealth concentrated in the hands of the few or we can have democracy, but we can't have both. So it's important to raise this conversation and have people accept the fact that there should be limits. In a sense, what exactly these limits are and how they're enforced is less important than just changing the norms about limits in general.
- [45:47]
A
Yeah, well, this may be so.
- [45:55]
D
Pitchfork Economics is produced by Civic Ventures. If you like the show, make sure to follow, rate and review us. Wherever you get your podcasts. Find us on other platforms like Twitter, Facebook, Instagram and threads. Pitchfork Economics Nick's on Twitter and Facebook as well. Ickhanhauer for more content from us, you can subscribe to our weekly newsletter, the Pitch, over on Substack. And for links to everything we just mentioned, plus transcripts and more, Visit our website, Pitchfork economics.com as always from our team at Civic Ventures, thanks for listening. See you next week.