Abolish Billionaires?

There are about 2,200 billionaires in the world, about one-fourth of those are U.S. citizens.

Farhad Manjoo recently wrote an opinion piece in the New York Times that engendered more than 1,500 comments. Most simply, he argued, we should abolish billionaires through much higher taxes and related policies.

When it comes to billionaires, I’m of a mixed mind. On the one hand, given rising inequality, I’m surprised more people aren’t agitating against members of the three -comma club. Not just writing commentaries, but taking to the streets Occupy Wall Street style.

On the other hand, as the philosopher Peter Singer points out, some billionaires are giving away the bulk of their wealth to philanthropy. Bill Gates, in particular, plans to give away 99.6% of the cash money I paid him back in the day for successive versions of Microsoft Office.

Of course, as Manjoo points out, we have to analyze whether the billionaires’ charitable giving is having positive effects or not. Anand Giridharadas style. As Manjoo explains, Giridharadas argues that many billionaires approach philanthropy as a kind of branding exercise to maintain a system in which they get to keep their billions. Especially when they put their largess into politics.

“. . . whether it’s Howard Schultz or Michael Bloomberg or Sheldon Adelson, whether it’s for your team or the other — you should see the plan for what it is: an effort to gain some leverage over the political system, a scheme to short-circuit the revolution and blunt the advancing pitchforks.”

Gates might be an outlier, but his giving is so exemplary, I’m less inclined to order a pitchfork from that billionaire with the online superstore.

Think Globally, Yeah Right

I predicted this story about Ethiopia becoming the next China nearly twenty years ago after living there, traveling in other sub-Saharan African countries, and becoming a student of globalization.*

Long story short, the outsourced manufacturing race to the bottom has entered it’s final stage. China’s average manufacturing wage is 3,469 yuan ($560) per month. Pay at Ethiopia’s Huajian shoe factory (18 miles outside of Addis Ababa) ranges from the basic after-tax minimum of $30 a month to about twice that for supervisors.

A paragraph to ponder:

Huajian’s 3,500 workers in Ethiopia produced 2 million pairs of shoes last year. Located in one of the country’s first government-supported industrial zones, the factory began operating in January 2012, only three months after Zhang decided to invest. It became profitable in its first year and now earns $100,000 to $200,000 a month, he said, calling it an insufficient return that will rise as workers become better trained.

Meanwhile, last week, George Mason economist and blogger extraordinaire, Tyler Cowen, wrote in the New York Times about income inequality. The title is the thesis, “Income Inequality is Not Rising Globally. It’s Falling.

Here’s the gist of Cowen’s argument:

We have evolved a political debate where essentially nationalistic concerns have been hiding behind the gentler cloak of egalitarianism. To clear up this confusion, one recommendation would be to preface all discussions of inequality with a reminder that global inequality has been falling and that, in this regard, the world is headed in a fundamentally better direction.

The message from groups like Occupy Wall Street has been that inequality is up and that capitalism is failing us. A more correct and nuanced message is this: Although significant economic problems remain, we have been living in equalizing times for the world — a change that has been largely for the good. That may not make for convincing sloganeering, but it’s the truth.

A common view is that high and rising inequality within nations brings political trouble, maybe through violence or even revolution. So one might argue that a nationalistic perspective is important. But it’s hardly obvious that such predictions of political turmoil are true, especially for aging societies like the United States that are showing falling rates of crime.

I’m positively predisposed to counter-intuitive thinking, but Cowen was hopelessly naive if he thought his NYT readers might concede even some aspects of his argument.

Here’s the comment Cowen’s readers most liked:

You’ve Got to be Kidding

This article is a classic example of a divide and conquer strategy. The gist is that less educated and skilled people in countries like the U.S are suffering but those in other countries are gaining. Hence, the world is equalizing. So, if you complain about the U.S., you are essentially wishing harm on others. In reality, what the “miracle” of capitalism has done is what it always does — it enriches owners of capital and exploits labor. Developing countries are, of course, better off; they started from nothing, and so anything is an improvement. So production is moved to places where people are desperate, and profits rise because of poor wages, no attention to work place safety, no regard for environmental concerns, etc. Yet, we are to celebrate because the workers in the poor countries are no longer earning zero. This logic then absolves companies from any criticism about the horrendous working conditions. After all, global inequality is falling!

The author also glides over the fact that people live in particular societies and their own inequality is most important. It matters for the distribution of political power (Citizens United, anyone?), for health (see, e.g., studies by Richard Wilkinson), for education, for housing and for a host of other things.

Finally, the author predictably criticizes redistribution (what, not unions?) But the real issue is changing the rules of the game so things aren’t rigged for elites. If so, redistribution will be less needed.

The other most highly rated reader responses were similarly critical. Taken together, they illustrate people’s unwillingness to compare themselves to foreign people in distant places. It’s no surprise that economically secure professionals like Cowen and myself choose cosmopolitanism, but for anyone else who lacks economic security, its a luxury they can’t afford.

It’s the same reason the well-to-do, who can afford higher prices elsewhere, brandish “I Don’t Shop at Walmart” bumper stickers. Cowen embraces cosmopolitanism because his university and book publishers and blog sponsors pay him handsomely; and his university provides his health care; and, like me, he has extraordinary job protections as a tenured professor; and he travels the world doing research, lecturing, and teaching.

I don’t begrudge him his professional success, but for him to assume others will embrace cosmopolitanism based upon his logic suggests he’s woefully out-of-touch with those that are struggling to get by.

Cowen might respond to that criticism by insisting that it’s in everyone’s best interests to think more globally, and I’d agree, but it’s going to take far more than abstract New York Times essays to get people to think beyond their household, community, state, and nation.

imgres * Rest assured, normally my predictive skills are nothing special. For example, I was sure Jay-Z and Beyonce would live happily ever after.

Stoic Insights on Materialism

Stoics knew, in Irvine’s words, that luxurious living only whets one’s appetite for even more luxury. Exhibit A, the GalPal and I need hotel upgrades now. Consequently, they practiced poverty or voluntary discomfort—whether fasting, sleeping on the ground, or purposely not dressing warmly for cold weather—to harden themselves against misfortunes that might befall them in the future. They did this to extend their comfort zone, reduce their anxiety about future possible discomforts, and better appreciate what they already had. They also sometimes gave up pleasurable experiences because they knew pleasure seekers lose some self-control and end up serving multiple masters. Having written about this exact thing before reading Irvine means I’m well suited to modern-day Stoicism.

Even ancient Stoics knew that maintaining luxuries takes a lot of time. Musonius argued that luxurious living must be completely avoided, but Seneca said it was okay to acquire wealth as long as one doesn’t harm others to obtain it. He also argued it was acceptable to enjoy wealth as long as one was careful not to cling to it. Most Stoic teachers advocated simultaneously enjoying and being indifferent to the things wealth makes possible. Seneca and Marcus thought it was possible to live in a palace without being corrupted. Similarly, Buddha said, “He that cleaves to wealth had better cast it away than allow his heart to be poisoned by it, but he who does not cleave to wealth, and possessing riches, uses them rightly, will be a blessing unto his fellows.”

Seneca said “life’s necessities are cheap and easily accessible” and “the man who adapts himself to his slender means and makes himself wealthy on a little sum, is the truly rich man.” Socrates said “we should eat to live, not live to eat” and dress to protect our bodies and not impress others. We should favor simple housing and furnishings too.

Seneca, Marcus, and Buddha would have supported the non-consumerist, simple living, social justice orientation of the Occupy Wall Streeters. On the other hand, they would have rejected their knee-jerk antipathy towards the well-to-do.

I Am the 1%

Not based on my five figure salary, my Kirkland Signature wardrobe, my penchant for water at restaurants, or my municipal golf courses of choice.

I am the “one percent” based upon health, meaningful work, beautiful surroundings, good friends, and a loving family.

Turning fiddy in a few months. My peers are showing varying degrees of wear and tear. Their setbacks help me appreciate how fortunate I am to be able to afford healthy food, to have time to exercise daily, to have access to quality medical care, and to feel younger than I am.

My work matters. How fortunate to get paid to help young people write, teach, and think through what they believe and how they want to live their adult lives. And remarkably, every seven years I get the ultimate gift, time to press pause and read, think, write, rest, renew.

Half the year I get to cycle in unbelievably beautiful mountain settings, swim in an idyllic next-door lake, and run on wooded trails and sleepy residential streets. In the summer it’s almost never hot or humid and there are no bugs that would prevent one from eating outside. There are no hurricanes and hardly any lightening, but I reserve the right to amend this post if I someday survive the overdue Shake.

I often climb the mountains, swim the lake, and run the trails with excellent friends. Fitness fellowship.

My extended family is a blessing. My wife and daughters especially so. Apart from one very bad leg, they’re healthy and happy. My Better Half and I just returned from visiting First Born at Leafy Midwest Liberal Arts College. Most nineteen year-old college students would be semi-embarrassed by visiting parents, but for some reasons ours was off-the-charts warm, inviting, and appreciative the whole time. Even invited her Spanish teaching mom to her Spanish class and took us to great student a cappella and modern dance concerts.

When we first arrived on campus, Spanish teaching mom went to meet her at the Language Building. I read in the “Libe”. At the appointed time I headed across campus to meet up with them. Turned a corner and there she was walking by herself to a piano lesson. Cue the killer off-the-ground hug.

We stayed in a room in this house which a woman left to the college with an unusual condition—that it always be available as a student hang out with the necessary ingredients to bake cookies.

Home Base

The suggested donation for staying there was $30/night. We had twin beds in a smallish room. The first hints of winter crept in through the window next to my bed. I could whizz while simultaneously brushing my teeth in the tiny bathroom.

But looks can be deceiving. No one would suspect that inside this humble house, in one of the modest rooms, a One Percenter slept contentedly.

Stereotyping Occupy Wall Streeters

A conservative Republican friend who I refer to affectionately as a “right wing nutter” is increasingly becoming a conservative Independent. He rails about many of the same things the OWSers (Occupy Wall Streeters) do including the negative influence of lobbyists and the unfair advantage gigantic corporations have over small businesses. Even though his fixes would no doubt differ from theirs, the Nutter and the OWSers diagnosis of our economic problems would overlap a lot.

Add into the mix, a “talking to” he gave his teenage son recently. Synopsis—being a man entails living passionately and standing up for and fighting for things that are important to you.

Connecting those dots, I asked him what he thought of the Wall Street protests.

Knee-jerk derision.

Why? My guess is anti-hippie bias. Can’t get past some of the protesters’ “out there” outward appearance and “in your face” style which he probably associates with liberal symbols from the counter culture movement in the 1960’s. Can’t quite get to the content of their character.

Many jump to negative conclusions about others based upon superficial things like clothing, tatts, piercings, hair coloring, mohawks, purple Converse hightops.

Young 1950’s and 1960’s Civil Rights activists were shrewd to wear their “Sunday best”. Maybe 2011 Occupy Wall Street activists don’t want the support of independents like my friend enough to change their individual, idiosyncratic personal style.

Here’s a 6+ minute film that provides an on-the-ground feel of things. And some stills.

Look pretty Main Street to me

Percussion and face painting, oh my!

Shouldn't there be a law about the mixing of tye-dye, bandanas, and the flag?

Occupy Wall Street protesters wake up and start their day in their encampment in Zucotti Park as people walk to work through the park Tuesday morning.

For the love of God, they're sleeping under tarps.