The Politics of Resentment and Envy

In discussions of income disparity and skewed wealth distribution one can be certain that the old trope of class envy and resentment will surface.  Conservatives have dismissed concerns about income disparity for decades based on their belief that a) there will always be income disparity because the more talented and ambitious will work harder and smarter and earn more, and b) the resentment and envy of those earning less is irrelevant as long as ‘all boats are rising’ in the economy.

There is, of course, some truth to the first part of that argument.  There is a wide range of talent and ambition among human beings.  Some people are driven to seek wealth and others are not.  Some people are indolent, some are energetic.  But it is also certainly true that good fortune, both in terms of one’s birthright and place in the world, as well as the vicissitudes of fate as one goes through life, will have a large impact on whether one succeeds and how much income or wealth can be acquired.  The old joke that a conservative is a person who was born on third base and thinks they hit a triple has a very significant kernel of truth.

It is also a simple fact that on balance, the poor get poorer and the rich get richer.  A single small obstacle can derail the fortunes of the poor, while the rich may weather many a trial with no great discomfort.  The fortunes of the wealthy naturally multiply through capital gains and a multitude of other benefits.  The fortunes of the poor are assaulted daily by health costs, transportation costs, shelter costs, childcare costs and a litany of other basic needs that loom as relatively huge obstacles to any accumulation of savings or wealth.  A single unexpected expense can launch a poor person on a nightmare voyage of high interest loans and long term debt.

But let us, for argument’s sake, say that indeed all boats are rising.  Is a growing income disparity justified in such a case?  Well the first question is whether the boats would be rising even faster if the incomes were more evenly distributed.  This question has been at the core of the battle between conservative and progressive economists for many decades, and I am unlikely to answer it here in any new or acceptable way.  My simple economic logic is that money in the hands of the poor and middle class is more likely to be spent directly on goods and services and is therefore more likely to contribute to growth in demand and growth in the economy.

However, leaving aside the question of economic effectiveness, what is the impact of high income and wealth disparity on the social fabric?  One may argue that wealth does not equate to happiness, and this is certainly true.  Indeed, it may be that massive wealth actually leads to a less satisfied life in the long run for many people – one sees this phenomenon often in the lives of celebrities or tycoons.  A modest wealth and lifestyle is probably the best path to happiness.

But the world celebrates wealth and we are constantly forced to compare ourselves with our neighbors and fellow citizens in this regard.  Every place we turn reinforces this fact.  Every advertisement, every mode of entertainment, every party we attend, every post on social media – they all either blatantly or subtly probe this aspect of our lives.  The world tells us not only that money will make us happier, but that it is a measure of our worth, our standing.  We are encouraged to feel inferior to those who have higher incomes.  Intellectually, rationally, we may understand that this is propaganda and a fallacious mode of thought.  But on a gut, reactive level we cannot help but be affected by this incessant indoctrination.  Those who are struggling at the margins, and even those who are reasonably successful but forced to pay homage to the rarified world of the increasingly rich and powerful, will become envious and resentful.  It is simple human nature.

The solution to this very real and very dangerous problem is to return to the extremely high marginal taxes on upper income ranges that were in place during the 1950’s.   The 50’s were, after all, the years when America was great, right?  The tax revenues produced by these higher marginal rates can be used to provide medical care to everyone and to revitalize our infrastructure.

A growing income disparity unravels the social fabric.  The resentment and envy that it creates may not be justified in terms of a true measure of our happiness and worth, but they are there nonetheless and are a cancer that will metastasize and invade every part of society.  No good thing will come of gross income disparity and many a bad thing may be on the horizon.