The Good, the Bad and the Ugly of Robin Hood Economics

Recent proposals from aspiring 2020 presidential candidates have focused on decreasing the income gap by various forms of taking from the rich and giving to the poor.  One suggestion was a general tax (2%/year) on the wealth of the richest Americans, those whose net worth is over $50 million.  Another proposal is to re-introduce much higher marginal tax rates into the federal income tax, similar to those that we had in the 1950’s. 

The reactions to these proposals were no surprise.  Epithets with ‘socialism’ and ‘communism’ were hurled angrily and all the failed so-called socialist states (Venezuela, Cuba, the Soviet Union, North Korea, etc.) were invoked to dismiss these ideas as horribly misguided if not outright immoral and evil.

But polarizing sound bites aside, what are the virtues, the pitfalls and the cautionary tales for trying to make the income game a bit less extreme?  And why are even many middle to lower middle class people so violently against the concept?

The first question to answer is whether the income gap is indeed a problem that needs solving.  I would argue that it is, because a widening income gap creates a society of distinct classes with less upward mobility and a growing frustration of unrealized potential and expectations in those who are not part of the elite.  And as I have often speculated before, all indications are that middle-class jobs are disappearing, and that automation will only accelerate this process, resulting in even more extreme income disparities.

Taking wealth from the super-rich is a tricky business, because the rich will find myriad ways to foil any attempts to take what they view as rightfully theirs.  But let’s assume, for arguments sake, that there is a fair and effective way to do this. How will this wealth be used?

It is an axiom among conservatives that our government is bloated, bureaucratic and inefficient.  One has only to look at growth in the Washington D.C. area to get the impression that there is some validity in this point of view.  It is a sad truth that most non-competitive entities tend to grow ever larger and become less efficient over time.  It is very difficult to rein in that kind of sprawl.  So it is understandable that the thought of taking large amounts of money from the rich and giving it to the government to spend is anathema to conservatives and even gives pause to many liberals.

But what about a direct transfer of wealth from the rich to the working (or even non-working, but that is another even more polarizing discussion) poor and lower middle class?  This could be achieved by reducing or even totally eliminating taxes for the recipients and giving credits to the lowest income group. 

From a basic economic point of view, one could argue that this wealth would be more rapidly spent on basic goods and services and stimulate the economy, thus having a positive feedback effect of creating more jobs and lifting more people into the middle and upper middle class.  The counter argument would be that the wealth would no longer be available for investment in new enterprises or expansion of existing ones.  But it seems to me that an increase in demand must come before an increase in supply is warranted, and the amount of wealth that is already stockpiled in the coffers of the rich must surely be sufficient to meet the investment needed to balance any increase in demand.

This direct transfer from the super wealthy to the non-wealthy would have to be carefully done to achieve maximum effect, but it would avoid the further bloating of government (other than a modest increase necessary to manage the transfer).

 

Another argument against this method would be that it would have a negative effect on the ambition and work ethic of the recipients, creating more of a welfare mindset.  This is a corollary to the free market theory that wages must be market driven to avoid coddling the working classes and artificially creating inflation or other market damage.  But we may have already reached a state in our economy where ambition and a strong work ethic will no longer guarantee a better job or higher wage, if such guarantees ever really existed in an ideal form.

The low level of wages for most service sector jobs is due partly to the absence of the collective bargaining options that raised wages in the latter stages of the industrial revolution and rescued the manufacturing sector from imminent revolution!  It would be more effective to accomplish this wage increase through a top-level transfer across society than to leave it to the slow machinations of the myriad disparate collective bargaining groups that are currently facing a significant headwind due to the general retreat and poor reputation of unions.

The entrenched myth of the rich ‘deserving’ their grotesque incomes needs to be debunked, as does the quasi-religious mystique of the free market.  One look at the growth of CEO salaries in the past 50 years is enough to convince anyone of the capricious nature of the ‘market’.  We may have learned from the failures of centralized economies that some form of capitalism and the free market is the most efficient system, but that does not mean that we should not continue to smooth its very sharp edges and use our best understanding to make it as humane as possible.

Philanthropy

I have struggled for most of my life with the question of how I should balance my own life and interests with the ‘call’ to do ‘good’.  I will use the term philanthropy as a catchall for this, as its basic definition is ‘the desire to promote the welfare of others’.

The first 26 years of my life were spent in what I would describe as a totally self-indulgent fashion.  I believe I was then, and have always been, a kind person and quite considerate of the feelings of others.  However, in those first 26 years I never performed tasks that specifically benefited others and I never gave any money to charitable causes.

When I left the Navy and entered graduate school, I was suddenly seized by a strong inclination to investigate and/or cultivate a spiritual life and with it, a sense that I should do something philanthropic.  Thus began a new phase of what I would term ‘philanthropic anxiety’ in my odyssey of self-discovery that continues to this day.

During my two years in graduate school I became a Big Brother, mentoring a 9 year old African-American boy from the projects in Boston.  The cultural divide was enormous, but we managed to have a nice relationship.  I have no idea whether I had any real impact on his life.  It could be that my entering and leaving his life in such quick fashion was more detrimental than helpful.  I just don’t know.

Soon after that I met and married Karen, who was a ‘giver’ by nature.  Indeed, part of her allure for me was her commitment to good works.  Together, we became super-involved in starting a Habitat for Humanity affiliate in Melbourne, Florida.  This work became a second job for both of us and left little time for other endeavors.

During that time in Melbourne, my fervor for serving humanity reached a climax, and I made a frenzied but short-lived effort to emulate Albert Schweitzer’s late evolution into a medical missionary by studying for and taking the MCATs.  I corresponded with several medical schools to determine how many courses I would have to take to apply as a 31 year old student.

Karen and I ended up going off in a different direction though, temporarily abandoning our careers (we were childless after all!) and moving to Americus, GA to work with founder and charismatic leader Millard Fuller at Habitat for Humanity’s headquarters.  Soon after our arrival I became the head of fundraising and publicity for Habitat International.  This was an exciting time for us, being part of a very dynamic organization and interacting with people like Millard and Jimmy Carter as well as a group of zealous and fascinating volunteers.

During these years in Melbourne and at Habitat for Humanity I became convinced that the only path for me was to commit myself fully to helping others and that any other pursuit was somehow trivial or less noble.  It seemed to me at the time that once one became aware of all the need and brokenness of the world, then the only honorable path was to abandon selfish, worldly pursuits and commit oneself fully to serving humankind.

The exhilaration of working with other idealists in a noble cause was a powerful attraction for Karen and me, and we believed that our life’s work would be focused on ‘good works’.  Our co-workers at HFH were similarly passionate about their commitment and the organization pulsed with idealistic fervor.

Unfortunately, I began to experience a strong recurrence of the respiratory infections that had plagued me intermittently throughout my life and had forced me out of the Navy.  Eventually I made the decision to leave Habitat and pursue a career in academia, which led me to complete a Ph.D. at Georgia Tech and ironically back into industry upon realizing that research wasn’t my passion.

In the interim I began to question some of my assumptions about charitable work, both in terms of my own motivation and the purpose and/or efficacy of the work itself.  When we arrived in Americus, HFH was still a relatively small organization with a small full-time staff and a large number of volunteers who worked for a small stipend and housing.  (The short-term volunteers received their pay as checks made out to the local Piggly Wiggly grocery store and these were truly ‘sty’pends!)

What began to bother me about HFH, and other charitable organizations that I became very familiar with during that time, was that these organizations quickly evolved away from their idealistic roots and took on many of the corporate trappings of traditional businesses.  The mission no longer influenced the nature of the people and organization that was executing it.  And this, in turn, would cause the mission to become less revolutionary and more a part of the general charity ecosystem.

I continued to work with HFH even after I left full time employment.  While a graduate student I served on the Atlanta HFH Board of Directors and spoke at numerous events.  I also helped start up both the Georgia Tech and Emory Campus chapters.

But as time passed, my ardor for philanthropy ebbed.  I found it increasingly difficult to believe that ‘charity’ was likely to be the remedy for the worlds ills and I began to question my own motives.

There are two important questions to be raised about philanthropy.  The first is why do we feel the call to ‘do good’ and how does it impact our lives.  The second is what does philanthropy actually accomplish and how effective is it.

It is a rite of passage for every successful person to eventually succumb to the call of philanthropy.  I recall Ted Turner goading Bill Gates back in the 90’s to ‘do something good’ with his fortune, challenging him to join him in various philanthropic efforts, invoking clichéd bromides of the ‘better to give than receive’ genre.  Since that time Bill Gates has indeed risen to the challenge, establishing a foundation that is very active in several big causes – the eradication of polio being the most well-known.

I am afraid that I cannot revere Turner nor Gates, nor any other tycoon philanthropist for their largesse.  I view foundations and philanthropy with a hefty dose of skepticism, both for their motivation and their efficacy.  Being a recognized philanthropist is the crown of glory that is sought after all the other accolades for wealth, success, fame and business acumen have been collected.  It is the legacy and near-immortality that people with large egos crave. I recognize that my critique is tinged with irony, as I would assuredly be following the same path as Turner and Gates if I had amassed a fortune like theirs.  These are not bad people.  I am not demeaning them, but I am also unwilling to put them on a pedestal.

I acknowledge, on balance, that it is certainly better for these absurdly wealthy individuals to move some of their outrageous treasure to a foundation that is doing ‘good’ than to simply hoard it for themselves and their families.  But in a world that is increasingly polarized between the wealthy and the poor, the philanthropic model is a stark and grotesque reminder of the basic structural and economic imbalances that plague this sad planet.

Henry David Thoreau addressed the topic of philanthropy somewhat dismissively in Walden.  He wrote, “There are a thousand hacking at the branches of evil to one who is striking at the root, and it may be that he who bestows the largest amount of time and money on the needy is doing the most by his mode of life to produce that misery which he strives in vain to relieve. It is the pious slave-breeder devoting the proceeds of every tenth slave to buy a Sunday's liberty for the rest. Some show their kindness to the poor by employing them in their kitchens. Would they not be kinder if they employed themselves there?”

Putting aside vast riches in various foundations (or worse yet, giving them to bloated educational foundations) creates monuments to the philanthropist, but does it really change the world or bring us any closer to a just and healthy society?

In recent years, much of what we have praised as ‘charitable works’ has been shown to be ill-informed at best, and often downright detrimental to the very people whose lives it hopes to improve.  The movie Poverty Inc traces the explosive growth of NGO’s and an entire poverty ecosystem that appears to have routinely retarded all organic development efforts and worked, however unintended, against the very goals it promotes.

Every successful person is encouraged to ‘give back’, and our civic and religious traditions strongly endorse and even require charitable acts and generosity as a fundamental duty of a moral and ethical life.  Certainly, we cannot stand by while the poor and marginalized suffer a thousand different torments and misfortunes.  But it is also increasingly clear that the traditional model of philanthropy and charity is neither efficient nor healthy, and is probably guilty of perpetuating the ills that it wishes to amend.

The call to philanthropy goes to the very heart of our quest for meaning in life.  What is our purpose? Why do we exist?  We sense that total self-indulgence is not a very healthy or noble pursuit, so we assuage our middle (or upper) class guilt by spending a Sunday morning or two at the soup kitchen, or writing a few checks to charities at years end.  But is philanthropy – i.e. an intentional effort to help those in need or improve the world in some way – something everyone should embrace?  Would it be better, as Thoreau suggests, for us to live a life that promotes an equitable world and avoid the practices that lead to injustice and poverty?  Is our passion for ‘doing good’ just another means to bolster our egos and beat back the guilt of our pampered lives, which we know to be more the result of good fortune and circumstance than the result of our clever actions or hard work.

There is no easy answer to the question of how much one should dedicate oneself to philanthropy.  Contradictions and ironies are everywhere.  Altruism, like humility, is a golden ring that is always out of reach.  Each person must seek his or her own path and find the balance that feels right.

The Paradox of Happiness

It is an axiom of our culture, and indeed enshrined in our founding documents, that a primary goal of life is the pursuit of happiness.  But what is happiness?  How do we measure it?  Do we ever really achieve happiness in any long-term sense, or does it cleverly elude us in the very moment that we seem to have attained it?

Each person may define happiness differently.  For most it seems to involve comfort and physical well-being, as well as some sort of fulfillment in terms of work and activities.  For many, having a good family life seems to be an important component of happiness. 

We generally assume that peace and prosperity are fundamental to happiness and that conflict and deprivation are to be avoided.  We dream of a world where harmony prevails, and people can find a permanent sense of happiness.  We imagine heaven to be such a place, and humans have for eons attempted to ease their earthly suffering with dreams of an afterlife where they will be truly happy.

But are human beings ever continuously happy?  Doesn’t the very first moment of an achieved happiness already have in it the seed of an unsettling disquiet, a desire for something different, a new experience?

One need only regard the lives of the very wealthy, who by all normal measures should lead very happy and fulfilled lives.  Yet they seem mainly to be mired in all forms of unpleasantness and plagued with heavy doses of unhappiness!

Or I think of the idyllic American small-town environment, portrayed as a utopia of friends and neighbors, fulfilling work, a safe and calm environment.  Yet how many stories depict the restless young man or woman, suffering miserably under the suffocating blanket of all this supposed happiness, who yearns to break free and experience changes, challenges and new frontiers.  The American small town has in recent years decayed into a nightmare of opioid addiction, joblessness and reactionary politics – hardly a utopia anymore!  But perhaps it never was.

Does happiness require bouts of unhappiness to define it?  Are the vicissitudes of life necessary if we are to have any real satisfaction?  In moments of despair or despondency we may long for calm and stasis, but as soon as it arrives we are bored and restless once again.

The cycle and co-dependency of happiness and un-happiness is never more vividly depicted than in the case of drug addiction.  The addict is perfectly happy the moment he or she shoots up, but the high rapidly ebbs, leaving in its wake a horrifically devilish need for a new fix.  And the irony is not lost that the most potent addictive drugs are those that conquer pain as well as provide euphoria.  Addiction is the perfect metaphor for our joy/sorrow dialectic, played out at its extreme edge.

The Buddhists seek to evade this mercurial roller coaster ride of pain and pleasure, joy and misery.  This dukkha, a craving which can never truly be satisfied, seems an apt description of our lives.  In my simple assessment of Buddhism, I discern an attempt to get beyond this craving and achieve some sort of blissful state of transcendence, much as mystics in other religions seek to focus on the divine and leave the worldly pain and temptation behind.  But is it really practical or desirable to eliminate this craving?  Isn’t life by its very nature a dynamic, ever-changing process?  Will any enduring transcendence just end up as a numbing of our sensibilities, a true opiate of the masses?

I don’t see any panacea for life or happiness.  It is a battle that we all must confront in good faith, doing our best to exult in the highs and courageously endure the lows.  There may be ways to flatten out the curve, but it is not clear that this will make life any more palatable.