Tuesday, April 1, 2014
Greed and Need
By now we all know the statistics. In the 1950s, the head of a corporation made fifteen to twenty times as much as an average worker in that same company. Now, it’s not unusual for a CEO to make two to three hundred times as much as one of his workers, and be showered with bonuses, stock options, separation pay and other perquisites running into the millions of dollars. Possibly holding the current salary inequality record is Apple’s Tim Cook who in 2011 received six thousand two hundred and fifty-eight times the wage of an average Apple employee.
In a recent issue, The New Yorker magazine cited French economist Thomas Piketty as the co-author of a study on income inequality in the US from 1913 to 1998. The paper “detailed how the share of US national income taken by households at the top of the income distribution had risen sharply during the early decades of the 20th century, then fallen back during and after the Second World War, only to soar again in the nineteen-eighties and nineties.”
With the help of other researchers, Piketty showed how by 2012, the income share of the top one percent of the richest households was 22.5 percent of total income. When dealing with the stratospherically rich, the numbers almost defy description. The richest 85 people in the world--the Buffets, Gates and Waltons, the Kochs and Bloombergs--have “more wealth than the roughly 3.5 billion people who make up the poorest half of the world’s population.” The Waltons--Christy, Jim, Alice and S. Robson--by themselves have an estimated wealth of $135 billion. Yes, many of the über rich give heavily to causes and charity, but the percentage of the wealth they donate is minute compared to that of many far less wealthy Americans who routinely give at church and support a host of organizations in need.
This begs a few questions: How much money does an individual or a family need? Is there a morality issue involved here? Should the wealth of particular families be allowed to dwarf those of entire developing nations? Should we look a bit more closely at how income distribution affects the lives of millions?
The American middle-class is vanishing. Amazon is effectively killing off stores and rendering their employees jobless. Craig’s list has put the want ads out of business and, indirectly, newspapers. This in turn has left a swath of workers ranging from reporters and editors to sales forces and delivery people, without work. iTunes has killed the music distribution industry and the corner record store.
Whenever mentions of income inequalities arise, the shout of “Rich tax” soon follows. But further taxation of the rich and superrich will simply cause them to raise the prices of the wares they sell while freezing the wages of their employees. That, in the long run, won’t help. We’re dealing with greed here, as well as economics, and Friedrich Engels said it best, “From the first day to this, sheer greed was the driving spirit of civilization.” Greed works. Greed gave us Microsoft and PCs and Windows and Apple and Facebook and Amazon and Cisco.
But I can’t help thinking… Imagine, for a moment, the progresses that could have been made in medical research had the ingenuity of these innovators been applied to seeking a solution for cancer, or for Alzheimer’s. Now imagine what their money, properly applied today, could do!