While the example of the three year olds deciding how to split up the marbles shows an interesting human phenomenon, where people are perhaps more willing to share the wealth if equal work is done and more selfish where unequal or no work is done, I believe the example is rather primitive. I believe the example was used for its shock value for people to believe that the average three year old has a better grasp of "fairness" than your average wealthy adult. But we don't live in a world of fairness, or marbles, or a world without consequence. No matter how you break it up, wealth, in itself, is limited. There are only so many dollar bills. This must cover food on the table, prescriptions, school, college, bills, and every other expense. While it is completely obvious that the super wealthy certainly have enough to go around and pay for the necessities to live, who has the right to take that away from them? What about the wealthy people's children? Wouldn't you want to make sure your children are financially sound? Can you force people to be generous? It is for these reasons I feel as though the example given in the article fails to measure up to any real life scenario. While everybody is not super rich, I would like to bring forth an example where you had a large collection of marbles. If someone had less than you, do you owe it to them for the sake of fairness? Equality? "To make sure you don't have that many more marbles that I do"?
I do appreciate the fact the article brings up the fact that there needs to be regulations in place to keep big business out of bed with big government. The author points out that recent laws have made it possible for the ultra rich to keep their wealth and there needs to be a system in place for these sorts of relationships to be broken up. This is where I believe the meat of the article is and I find it important because it shows what must be done to make sure that everyone has at least a fair shot. However, I do not feel as though tax inequality did not lead to the income inequalities that have been mounting over the past 40 years, as the article may be suggesting. Rather, a changing economy that went through globalization as well as a technological boom. While higher taxes may help ease the obligations to citizens such as the baby boomers, I find it odd to believe that taxes were the reason we are in the situation we are today. But, I do find the taxes on the super wealth must be adjusted because I think they are outrageously low.
An example I can think of that jives with the conclusion of this paper is having a friend in a group project who doesn't do any of the work. Because that person is your friend and you value their friendship, you are willing to do their part of the project and let them get a good grade. You don't let the professor know that and in the end, your group gets a good grade, wherein other groups, who perhaps are made up of people who each do the work or refuse to do others work must each put in the honest amount of work to get the good grade. My friend didn't work to get that good grade or deserved to do better than others in the class, but because he knew his friends would help him out, he was able to get through the class with a good grade.( This example lacks the exclusivity of wealth and there really aren't winners and losers in this situation because the teacher can give out as many A's,B's... as he/she wants. Perhaps a better example would be someone who was able to pay off an umpire in a baseball game or fix a lottery).
You may have taken the wrong message from the first part of the piece. It was not advocating equal sharing, as I understand it. It was instead saying something about how we regard whether others are deserving or not. In that regard, we measure that by the contribution they make.
ReplyDeleteOne of the facts not in that piece (it is after all only a commentary in a newspaper) is that labor's share of income in GDP has been declining, which means capital's share in GDP has been rising. Capital is own disproportionately by wealthy people. At the same time capital gains are taxed at a lower rate than earned income. That's the sort of rule of the game that Haidt is referring too.
Let's go a step further because we'll talk about this later in the course. There is an agency problem between owners and management. To address that, CEOs are often compensated with stock or stock options, rather than with salary. Their compensation has been on the rise since the start of the Great Recession. For everyone else, wages have been pretty flat.
Those are the issues that Haidt is talking about indirectly. There may be no ready solutions, and people can get rather emotional about this, thinking one simple approach can address everything. It probably can't.
Perhaps I should have kept a more open mind while reading this piece and tried to see the bigger picture. After reading it again, I see the points and arguments Haidt is making. One interesting question I do have and probably will look into later is how long has capital's share in GDP been on the rise. Have the wealthy always owned more capital, and is this issue a bigger issue now (if it wasn't before) because capital gains is taxed at such a lower rate than other income and income gaps are becoming wider?
DeleteI guess if I wanted to make the scenario with the children and marbles applicable to real life, I'd define the ultra wealthy as the child who in the first scenario received the majority of the marbles, and the poor as the child who received relatively few. In an ideal situation they'd be putting in equal effort (for this case lets call it labor hours) but the spoils of which are not equally distributed. The organization, or on an even bigger scale, the country, could not function without either party (particularly if both are counted as part of the labor force) and thus, as with the two children pulling the string, without both parties doing their part, there are no marbles, no spoils to share. Yes, that is an elementary analysis, but I think it kind of gets at the point the article was trying to make. In his comment above, Professor Arvan makes the point I've heard often about the rate of change in compensation. When effort being put in by workers, managers, and corporate executives is roughly equivalent, rise in compensation should also be roughly the same down the line.
ReplyDeleteDoing a group project with a friend can be a common example of unfair distribution of effort and wealth in college. I think this distribution is a bug in the institutional requirement because people may concern about more than their projects and works. They are influenced by interpersonal relationship and afraid the potential cost of losing a friendship. As a result, they will definitely make up their friends' work without reporting anything. But if the course policy is randomly assigning people to different group, I believe that it will decrease the chance of free-riders in this case.
ReplyDeleteI agree that the unfair taxation will contribute to the gap between the very-rich and other people. Moreover, if the distribution of resource is already unfair in the next generation, the rich gets richer and the poor gets poorer. This is not only in a certain society, but also applicable in a global level. So I think the phenomenon of less taxation on capital than income is unfair because capital is a cumulative tools of gaining wealth.