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Unjust Deserts

Gar Alperovitz and Lew Daly

In Unjust Deserts, Alperovitz and Daly attack the moral claim that the wealthy have earned—and therefore deserve—their wealth. The key observation they insist and elaborate upon is that most of everyone’s wealth today comes from the efforts of earlier generations, particularly their contributions to knowledge and technology. Even Bill Gates’s rise to fortune depended on the development of electricity, the know-how to fabricate plastics, the invention of wireless communications, the silicon chip, and all the other technologies that Microsoft products presume, not to mention the markets, schools, law, and other institutions that make any large, modern business possible. Most of the difference—almost all of it, probably—between the way Bill Gates lives in 2009 and the way his ancestors lived in 1809 was determined before Bill was even born. In the last two centuries, the per-capita wealth of Americans increased twenty-fold. He and we simply inherited almost all of that increase. Therefore, Alperovitz and Daly argue, neither Bill Gates nor we earned most of our wealth; and thus neither Bill Gates nor we deserve most of our wealth. Cumulative knowledge is “the overwhelming source of all modern wealth [and] comes to us today through no effort of our own. It is the generous and unearned gift of the past.”

If this is so, then most of what we have, and especially most of what the wealthy have, is, in economists’ terms, unearned “rent.” It is income we pocket without having produced it, like the landowner whose property multiplies in value once the state builds a highway nearby. As John Stuart Mill put it, “that increase of wealth which now flows into the coffers of private persons from the mere progress of society” is not morally assignable to that person (emphasis in Unjust Deserts). Who, then, should profit from the increase in wealth that the past has gifted us? Alperovitz and Daly answer: society, which provided that wealth. “Society—all of its members equally—must be the residual claimants to the inherited contributions of past generations;… These contributions are of sufficient magnitude to warrant significant social claims on private wealth.” And thus the authors conclude, we have moral warrant for significant income redistribution.

This is the heart of what the authors call the “knowledge inheritance” argument for equality. Alperovitz and Daly also address topics around that argument. They point out, for example, that new inventions themselves are also largely gifts of the past. Breakthroughs come not from individual strokes of genius, but as the predictable fruit of expanding, collective knowledge. If it had not been Einstein, it would have been someone else pretty soon. They challenge the conservative think-tank canard that more equality of outcomes impairs economic growth. It quite clearly does not: several statistical studies show that there is no meaningful correlation between changes in equality and changes in growth rates. One case in point is post-war America, where an economic boom accompanied decreased wealth disparity. Alperovitz and Daly also review the philosophical arguments over what justifies differences in wealth.

Unjust Deserts has a clear political commitment, but it is well-reasoned, well-documented, well-argued. I am convinced. But would skeptics be?

There are at least a couple of seams in the argument. One is the repeated assertion that the wealthy have “siphoned off” the bounty from “inherited knowledge.” That is not obvious. Over several generations, the poorest in our society have gained on the richest. Differences in life spans have narrowed considerably, as have differences in access to basic goods. Although this equalizing trend stalled in the last generation, history suggests that the “knowledge inheritance” may already have been redistributed—at least somewhat—toward equality.

Another seam opens in the authors’ claim that society should redistribute the unearned rent from the past equally to all. Perhaps it should not be distributed at all, but invested in common goods, like a cleaner environment. Or perhaps it should be distributed in accord with how much each individual today makes of and adds to the commons. Those who best harvest the past and plant for the future should, some could reasonably claim, be richer than others.

The authors note this last objection to their case for redistribution, but too briefly. They answer it mainly by shifting the debate to new grounds: since opportunities in modern America are not equal, they say, those who succeed have not really deserved their greater reward.

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