Introduction

For as long as there have been poor people needing relief, and richer people potentially able to provide that relief, we have been dogged with the question “who are the deserving poor”?

Perhaps, though, it’s time to to turn that question around, and ask, “who are the deserving rich”?

A narrative encountered so often it is almost a consensus is that the rich are the hard working, talented, brave risk takers who create the jobs and wealth we all enjoy. That’s what makes them deserving: the benefits they bring everyone else.

But what does deserving mean? Normally it means worthy of reward, and we normally consider things worthy of reward if they are “pro-social”, meaning they help our “group” in some way. If we are feeling generous that “group” may extend to all humanity, or even all sentient life. It’s what people do or try to do that makes them deserving, not their innate characteristics. Someone who is, say, very talented but does nothing with their talents, or very wealthy but just hoards, would normally not be considered deserving.

The question is not trite. It contains within it essential questions such as what forms of inequality are morally acceptable, and to what extent, and what forms of wealth generation are moral, and what are the moral uses of wealth?

It also touches upon a fundamental moral challenge: one which, if taken to its logical conclusion, could mean that the phrase “deserving rich” is really a contradiction in terms.

In 1971, the philosopher Peter Singer wrote a now celebrated paper entitled “Famine, Affluence and Morality” (https://www.givingwhatwecan.org/get-involved/videos-books-and-essays/famine-affluence-and-morality-peter-singer), which used the then contemporaneous example of the Bengal Famine to make the following argument:

“The traditional distinction between duty and charity cannot be drawn, or at least, not in the place we normally draw it. Giving money to the Bengal Relief Fund is regarded as an act of charity in our society. The bodies which collect money are known as “charities.” These organizations see themselves in this way – if you send them a check, you will be thanked for your “generosity.” Because giving money is regarded as an act of charity, it is not thought that there is anything wrong with not giving. The charitable man may be praised, but the man who is not charitable is not condemned. People do not feel in any way ashamed or guilty about spending money on new clothes or a new car instead of giving it to famine relief. (Indeed, the alternative does not occur to them.) This way of looking at the matter cannot be justified. When we buy new clothes not to keep ourselves warm but to look “well-dressed” we are not providing for any important need. We would not be sacrificing anything significant if we were to continue to wear our old clothes, and give the money to famine relief. By doing so, we would be preventing another person from starving. It follows from what I have said earlier that we ought to give money away, rather than spend it on clothes which we do not need to keep us warm. To do so is not charitable, or generous. Nor is it the kind of act which philosophers and theologians have called “supererogatory” – an act which it would be good to do, but not wrong not to do. On the contrary, we ought to give the money away, and it is wrong not to do so.”

This would mean according to normally accepted moral principles, that if there is anyone in basic need we should give away all our wealth, beyond that needed to meet our own basic needs, until all their basic needs are also satisfied. Even more challengingly, Singer posits that possibly we should donate “to the point of marginal utility, at which by giving more one would cause oneself and one’s dependents as much suffering as one would prevent in Bengal.”

To this it might be countered that there is more to life than riches. Though that is undoubtedly true, the obvious riposte to such an objection is that it clearly doesn’t apply in a situation where people are starving to death. In fact, if we accept that wealth doesn’t linearly equate with fulfilment, but instead normally equates according to, say, a law of diminishing returns, then the argument against the deserving rich becomes even stronger. It means that, if we adopt any form of morality where maximising fulfilment is important, then sharing wealth to meet the most basic needs first, is the most efficient way to do so.

Mutual aid and reciprocation: the concept of a moral society

To dive deeper into this we need to clarify what we mean by “moral”.

The moral system adopted here (as explored in detail here: https://gezwinstanley.wordpress.com/questions-and-some-answers-how-to-live-with-yourself-and-others/) is a fairly conventional one, based on a version of the moral Golden Rule that means we should respect the wants and needs of others as much as our own. That in of itself, if you think about it for a moment, obligates a string commitment to equality. The moral system then adds reciprocation to that formula, so that it becomes “to respect the wants and needs of others as equal to our own provided that they are willing to return the favour.”

That “returning of the favour” in practice describes a set of mutual obligations from which a “moral society” emerges. As the moral society, is, by definition, a “good”, it should be extended as far as possible. We should all try and grow our “moral societies” and allow our moral societies to combine.

The other fairly conventional upshot of such a moral system is that we should seek to maximise fulfilment but while making the distribution of fulfilment as equal as possible, among those with whom we share these Golden Rule style mutual obligations. In particular, we should never organise our system of relationships with others in way that would make the worst off even worse off than they could be otherwise, even if that means compromising on total overall fulfilment. If we rejected this proposition, and instead made the maximisation of overall fulfilment totally primary, we could end up trapped by the Slave-owner conundrum often levelled against Utilitarianism (the moral system that seeks the “greatest happiness for the greatest number”), where-by slavery could seem justifiable if the happiness that it creates for the slave-owners more than exceeds the suffering of the slaves: something that would be a clear violation of any “Golden Rule” style of morality.

What are the implications of these moral principles to Singer’s argument?

At first it may seem that such a system of morality gives us a sure-fire way to escape the obligations created by Singer’s argument. As Singer used the specific example of the 1971 East Bengal famine, we could claim that our moral society wouldn’t have extended to East Bengal. However, remember that we are also obliged to try and extend our “moral society” as far as possible. If the opportunity to exercise kindness meant we could have extended a sense of mutual obligations to the starving East Bengalis in any way, then we should have tried to do so.

Furthermore, Singer’s use of the East Bengal famine was by way of adopting a then topical crisis to highlight the moral dilemma he was explaining in the most acute way possible. Singer’s argument also applies within communities that are clearly at least meant to function as “moral societies”, and which frequently have to make decisions that relate to the “deserving rich”, such as how to set taxes.

We therefore have to accept Singer’s argument as inescapable. What then does that mean in practice?

Let’s assume that we all give our wealth away to those we feel to be in need. Sometimes, identifying those in need will be uncontroversial. Often, however, and here we are back to the “deserving poor”, it will not. So, who decides who we give our money to, and how much?

We need to combine this concern with another: in practice we do not live in ideal “moral societies”, rather the concept of the moral society is an asymptote to which we should continually drive.

Note further that Singer himself here was critical of “charity”. Instead of our giving being “charity” it should be regarded as an obligatory consequence of living morally. If so, who decides, in the detail that would then be necessary, what those moral obligations are exactly?

If we leave these decisions to individuals we end up with arbitrary giving, and the fate of the needy depending on whim and luck. Can they attract sufficiently wealthy “patrons”, or not? Even worse, giving that we don’t live in ideal moral societies, some individuals could use such acts of arbitrary giving to create dependency, exert social control or even just to whitewash their own public relations. In such a scenario, “charity” just becomes another way the wealthy can exert their power over others. Alternatively, we can consider the fate of those who genuinely give as much as they can with no consideration of self interest. In a non-ideal society, where they are in any way competing with the wealthy and powerful who are not “giving” in such a disinterested way, those altruistic individuals then end up out-competed and marginalised, possibly taking the whole of their society in a steadily more immoral direction. Relying on arbitrary acts of good nature creates a type of “tax on benevolence” that can send a society down a dark path.

There is one way out of this dilemma: to agree, through mutual consent, rules and mechanisms for direct and indirect redistribution that are binding on all of us. The purpose of these rules and mechanisms is to limit inequality. So, how can our societies limit inequality?

Before we move on to that question, we should deal with the moral objection, as exemplified by statements such as “taxes are theft”, that our societies have no right to redistribute wealth in the first place.

Is redistribution theft and a potentially despotic attack on property rights?

An immediate objection here is that we should keep everything that’s “ours”, and that any attempt to remove anything that’s “ours” is theft and an attack on our fundamental “property rights”.

We will deal with this objection now, because if society has no morally derivable right to redistribute wealth, or if the measures needed to do so are impractical or dangerous, perhaps threatening tyranny, then we can go no further.

Of course, it could be argued, along the same lines of Singer, that our deepest moral obligations to help others overrides any such rights. Nevertheless, above we have shifted from a notion of individual giving, even if morally obligated, to one where we establish our detailed mutual obligations collectively and bind each other to meet those obligations. We therefore now have to take this objection of “theft” far more seriously than we would if we were still just dealing with the dictates of individual conscience, because now there is a third party involved that could do the “stealing”, as in wider society, where-as previously there was not, so theft would have been impossible.

Firstly let’s note that what is “ours” is a legal concept. Laws have their power, in practice, because they are backed up by the coercive powers of our societies. Therefore we only have what is “ours” in the first place because it is society as a whole that protects, even defines, what is “ours”. To this extent, the concept of property itself is a social construct: without society we have no “property” beyond that which we could directly defend against the depredations of others.

Then there is the notion that wealth itself is also a social construct in the sense that it is the end result of a “team effort”. That’s because, beyond just needing wider society to help protect our wealth, we are also dependent on the social fabric more generally in order to create wealth, such as education and healthcare for ourselves and other workers, transportation infrastructure and other utilities. Much of this social fabric is owned, run, funded or at least regulated collectively, and a lot of it constitutes “public goods”. A “public good” is something that it is difficult to fund on an individual, voluntary, basis, as the benefits cannot be limited to the individual who would be paying, so public goods have to be funded collectively, or everyone ends up attempting to freeload on everyone else and the provision of the public good breaks down altogether, because no one then wants to pay. The oft-cited classic example is street-lighting. These public services in themselves necessitate some form of collective funding, meaning the direct or indirect surrendering of some wealth, which would otherwise accrue to individuals, to wider society.

Therefore, property rights are not moral absolutes. However, we still have to deal with the objection that any attempts at redistribution risk tyranny.

That objection is, in fact, irrelevant, because all societies cannot help but make decisions about the distribution and redistribution of wealth. Such choices are unavoidable. In practice, how far we allow inequalities depends on how we organise our societies. Firstly, we have the extent to which the things people need to live and make a living are owned in common, or at least shared reasonably equally. Equal access to such assets, for example land being open to all rather than privately enclosed, constrains the opportunities for making money purely through owning something, rather than through any form of work. Then we have the issue of how free our collective decision-making is from influence by “wealth”. That degree of “plutocracy” then affects what tax and welfare policies we set, and what legal protections our society grants and to whom, e.g. to workers, consumers, holders of different forms of property, or the environment. Furthermore, there is the question of what services our society provides on a free or subsidised basis. Universal education and healthcare can, for example, have a huge bearing on equality of opportunity. Then there are all the rules about how accumulated wealth can be passed from one generation to the next. Finally, we have to decide how we regulate our markets, for example to prevent monopoly or oligopoly. Even the rules about what is recognised as “money” and who can create it, decides who has “seigniorage”, literally the ability to directly benefit from the creation of money, and who doesn’t. All these decisions act together to set how wealth is distributed. Tragically, protecting and expanding the wealth of already dominant groups has, historically, often been a major driver in the development of our societies.

If wealth depends so much on wider society does that give wider society the right to take away anything it pleases? No it doesn’t, because wider society also has to act according to Golden Rule style morality, which in itself distinguishes moral redistribution from any kind of theft.

So what are the moral constraints on redistribution?

If we are obliged to respect others’ needs and wants as equal to our own, provided they return the favour, and are therefore compelled to work towards equality in life fulfilment across our aspiring “moral society”, and wealth is related to fulfilment, at least to some extent, we might initially assume we should just simply equalise all wealth and income. However, this is not the case.

Firstly, wealth can often only be created at the cost of sacrifices of fulfilment. Some of those sacrifices of fulfilment are in the form of wealth itself, as wealth creation normally requires some input of wealth, something to be “invested”, in the first place, so here we have to be clear that we are talking about people’s net wealth, after any “sacrifices” of wealth are deducted. Then we have to factor in the time, effort, stress and strain, equally “invested” in the creation of wealth. We need to allow for all of this when assessing equality, as otherwise we would not attain equality in terms of actual fulfilment. In particular, inequalities in wealth, to the extent that they result from these sacrifices, are justifiable. If we decided otherwise, we would, for example, allow the indolent to exploit the hard-working. Therefore, respecting inequalities of wealth that result from such sacrifices is one of the moral constraints on redistribution.

However, if we accept that a Golden Rule style morality obliges us to seek equality in fulfilment outcomes, then, just as a maximal interpretation of Singer’s argument would imply, we will need to “pre-distribute” or redistribute to achieve this. “Pre-distribution” means widening direct access to the things people need to live and make a living. We could have more resources owned and run communally, we could make uncreated resources such as land or water or mineral rights common, and we could encourage the formation of co-operatives, where businesses are owned by their own workers, preferably on a reasonably equal basis (for more on this idea see: https://gezwinstanley.wordpress.com/what-is-economic-justice-and-how-can-we-create-it/). Redistribution means collecting money through progressive taxation and then spending it on the basis of need, for example to provide basic services such as healthcare or education, plus a universal “safety net” through, for example, welfare payments. Pre-distribution is about making the initial allocation of wealth equable, especially forms of wealth that themselves generate further wealth, while re-distribution is about correcting inequalities through reallocation of wealth. By both mechanisms those with a potential or actual “surplus” must help out those who otherwise would be left wanting.

Although that is an unavoidable moral imperative it creates an issue of its own: incentives. To have everything we need to have done across our society actually carried out, we need to make the doing of those tasks worthwhile. Reallocate any gains beyond that point and essential activities won’t happen, and everyone ends up worse off.

So, we have to ask, what is the minimum reward necessary to get anyone to do anything, for example to induce the scientist to cure a disease, or the refuse collector to take away the recycling?

First of all, we would need to at least compensate for all the sacrifices in any way involved with carrying out the task, meaning fulfilment lost through time spent, resources foregone, effort, stress and strain “invested” in doing an activity, including any “up-front” costs, for example, not just money invested but years of required training. Any possible after-effects will also need to be taken into account, such as long-term health impacts.

Then we have to factor in risk. Some activities will be associated with a risk of failure and loss, from the monetary to the existential. If anyone is participating in any risk-taking activity, then, if they are being rational, their average rate of gain must exceed their average rate of loss. Any risk-taking associated with activities will therefore increase the gains that are needed to incentivise the doing of those activities.

So, we must at least compensate for sacrifices of fulfilment and unavoidable risks. This all seems uncontroversial: to expect anyone to do anything we must at least ensure that any losses of fulfilment are matched with gains in fulfilment over the longer term.

There is one more thing to factor in: and that is that anyone rationally seeking to maximise their fulfilment returns will, when faced with a choice of a number of ways to do that, choose to carry out the activity with the highest such returns. In other words, to get anyone to do something, we must compensate them for the “opportunity cost” of doing that rather than something else.

It is these opportunity costs that necessitate unequal incentives, as some people and organisations will have far more lucrative opportunities than others. They can earn what we will call “surplus rewards” that significantly exceed the norm. So how do we get a handle of the scale of these surplus rewards, and therefore on the inequalities we need to allow to create incentives?

Also, when we are talking about preventing surplus rewards we do not mean suppressing wealth creation. Rather, this is about fairer, more morally optimal, wealth distribution, along the lines of Singer’s argument and the mutual help required by Golden Rule style morality, without compromising wealth creation and making everyone poorer.

Note that it is easy to fall into the trap of a circular argument as regards surplus rewards. The existence of surplus rewards creates a need for those able to receive such returns to be more highly rewarded to do any task, as otherwise they will do other things instead. Therefore surplus rewards become self justifying. To escape from this circularity, though, all we need to do is prevent the surplus rewards from arising in the first place.

We therefore need to distinguish between surplus rewards that are avoidable, and those that are unavoidable, and to recognise that surplus rewards will be avoidable if, at root, those rewards are only justified by the possibility of other, also ultimately avoidable, surplus rewards.

The concept of avoidable surplus rewards here is broadly similar to that known to economists as “economic rent”, meaning “an amount of money earned that exceeds that which is economically or socially necessary” (https://www.investopedia.com/terms/e/economicrent.asp). Of course, “exceeds that which is economically or socially necessary” needs to be unpacked. In the context of this discussion, an avoidable surplus reward means any reallocatable surplus reward that could actually be reallocated in a way that would improve the lot of the worst off . Not also, that by “reallocation” here we don’t just mean taking the surplus reward and sharing it, but also the “pre-distribution” discussed above, meaning changing the way resources are owned and controlled so that the surplus reward does not get generated in the first place, meaning that the reward is in effect redistributed because other people pay less for what they need, or avoid being underpaid for their own outputs.

So if rewards that exceed what is economically or socially necessary are economic rent, are there any, in that sense, necessary surplus rewards?

The short answer is “yes”. For example, “surplus rewards” might be sensible to resolve a genuine shortage as quickly as possible. Indeed, we can generalise the concept of “genuine shortage” to mean any situation where there is a critical unmet need. For example, “prizes” are likely to be justifiable for finding the cures to deadly diseases. A necessary surplus reward is an incentive that, if removed, would make the lot of the worst off even worse off.

Notice that the above implies that many, perhaps most, necessary surplus rewards are time limited, even one-offs. Society should redistribute or pre-distribute surplus rewards where-ever it can, meaning where doing so would make the worse off better off.

Now, one of the key advantages of pre-distribution is that it limits the extent to which a minority of people controlling critical resources, such as land or houses, or owning the only major factory on town, can extract economic rent, such as actual rent or artificially low wages, from everyone else. Thus pre-distribution operates to suppress avoidable surplus rewards. As such it is preferable to redistribution, which will tend to crudely reallocate a proportion of surplus rewards above certain thresholds, and therefore could accidentally suppress unavoidable as well as avoidable rewards, there-by reducing incentives, potentially ultimately to the point where economic activity is so hampered that the worse off end up still worse off.

In practice though, some redistribution will be necessary, not only because pre-distribution will usually not eliminate all avoidable surplus rewards with total efficiency, but because of the need to pay for universal services, such as security or healthcare. Any such service funded progressively, so that the richest pay more, and then delivered equally to all purely on the basis of need, will be redistributive in its effects, as compared to a situation where say security and healthcare are provided according to the ability to pay, and not funded from progressive taxation.

The problem is that the level and extent of unavoidable surplus rewards seems impossible to calculate, meaning that all societies can do realistically is to dampen income inequalities empirically, by trial and error. For example, most obviously, we could increase marginal tax rates or wealth taxes to see how much we can redistribute before we reach the point where we can improve the lot of the worst off in society no further, because the disincentivizing effects of redistribution start to reduce the total wealth that can then be redistributed, so potentially making whoever would then get to be the worst off in society even worse off.

Always remember that the size of these surplus rewards depends on how our society, and its economy, is organised in the first place. For example, the more efficient we make our markets, meaning the more closely we match demand and supply, the less we allow the prices for anything to be in any way “rigged”, the more we distribute ownership and control of critical resources and the better we disseminate accurate information about the things people might buy, then the lower the chances of anyone extracting “surplus rewards” from anyone else for their goods or services.

In other words, we can organise society to minimise surplus rewards, and thereby allow incentivization without needing to accept huge inequalities, because we will have eliminated self-justifying surplus rewards. Of course, many people would lose those surplus returns but they, and everyone else, would also have to pay less for many of the things they need.

Let’s clarify this through an example of surplus rewards. Imagine a situation where there is shortage of workers with specific skills, so there is a threat that your own society will lose these people to other societies who can pay them more. If the societies luring them away are no more moral than the one they are leaving, and if these workers’ lives are reasonably fulfilling within their current society, including at least their basic needs being met and being free of discrimination, then abandoning their own society, just to earn a bit more, is immoral. We might consider an immediate intervention involving simply preventing such people leaving, but that means establishing a potentially harmful precedent of limiting everyone’s autonomy by increasing collective power over the individual. On balance we might decide that the least harmful option, even to the fulfilment of the least well off in our society in the longer term, is therefore just to allow these workers their surplus rewards, so that we can retain their services. However, that still means that these people are, in effect, holding the other members of their society to ransom. Our society should work to change the economic and social conditions to remove the potential for these surplus rewards, for example by investing in training more people with this specific skill set.

Another oft-cited “practical” justification for inequality is the need to attract and retain investment. Now, we are not talking here about small investors; more the idea that we have to organise our societies to maximise the return of the very wealthy because we need the resources they control and can acquire.

Firstly, we need to recognise that this argument is circular: it is an instance of self-justifying surplus returns. Why do we need rich people? Because we need them to invest those riches, those resources. How can we incentivise them to do that? By allowing them to get even richer through their investments. That then sets up a vicious circle, increasing our need for the richer people’s riches even further. It’s a “dependency on rich investors” trap, which allows those “surplus rewards”, and the ability of rich investors to demand extra concessions from our society, to spiral entirely out of control. We need rich people to invest in our economy because of the resources they control, which increases the resources they control and our need for them still further.

To break this circularity we need to question the validity of the wealth of these very rich investors in the first place. We need to organise our societies in a way that redistributes their wealth. If they leave, who cares, provided their assets stay here. Once you have created a reasonable level of equality everyone becomes an investor, and dependency on rich investors is eliminated.

Creating a dependency on very rich investors who are external to our society is also unwise, as their interests are unlikely to be aligned with that of our own people, because they don’t live here and don’t share our mutual obligations to each other.

Sometimes the argument is made that we need these very risk investors for the entrepreneurial skills that made them extremely wealthy in the first place. In reality, though, it seems much more likely that, the majority of the time, the success of the most prominent entrepreneurs was a matter of luck as much, or more, than any socially desirable personal attributes. A major element of such “luck” is often a privileged upbringing, including inherited wealth. Also, for every such obviously successful entrepreneur, many, equally talented, would have failed, but have done so in obscurity. The “talents” society needs here are unlikely to be in short supply.

Occasionally, the least harmful short term option is to pay an extortioner, but that doesn’t remove the obligation to try and stop the extortion in the first place. Our societies are morally obliged to reduce such opportunities for surplus rewards. Morally, all avoidable surplus rewards should be redistributed, ideally pre-distributed, plus, where doing so would make the worse off better off, we should continually reorganise our societies to minimise otherwise unavoidable surplus rewards. Although it is a target we are never likely to entirely attain, we should aim for equal reward for equal sacrificed fulfilment.

If we did the above, eliminating avoidable surplus rewards and, where it makes the worse off better off, continually reorganising our society to limit the scope of unavoidable surplus rewards, it is likely we could incentivise economic activity without requiring massive inequalities.

One of the primary ways opportunities for surplus rewards can be reduced is through encouraging equality of opportunity, as it is inequalities of opportunity that allow some individuals privileges that then generate surplus rewards, such as access to superior educational opportunities, networks of contacts and elite “cultural capital”.

Equality of opportunity and limitations on reducing inequalities of opportunity

So far all of this has focussed on equality of outcomes, after factoring in any deductions to fulfilment resulting from the stress, strain, lost time or resources sacrificed as outlay or investment. Equality of opportunity has not been considered, yet it is obvious that if we follow the Golden Rule principle of respecting the wants and needs of others as equal to our own, provided the favour is returned, then, as inequality of opportunity will result, over time and in general, in inequality of fulfilment, that equality of opportunity should also be upheld.

There is only one exception to this, and it again follows from the general principle of maximising total fulfilment without making the least fulfilled even less fulfilled: that is that we shouldn’t make people less able to compete by taking away an advantage, where that advantage cannot be shared out and the existence of that advantage makes even the least well in society better off then they would be if those individuals did not have that advantage in the first place. The most obvious example of this is anything that gives individuals an innate capability in a given situation. Doing anything to suppress that innate capability, for example “talent”, if the outcomes of that innate capability are generally beneficial, especially to the least well off, would clearly not be morally justifiable.

Beyond that caveat, though, we should organise our societies to create equality of opportunity. One vital aspect of such a programme, that is usually neglected because in practice our societies have often been built in large part by the already rich and powerful, with the express purpose of protecting their own privileges, which generate a wide variety of surplus rewards, is again “pre-distribution”. Inequality of access to resources, including land, meaning space itself, will itself result in huge inequalities of opportunity, sometimes, if that involves, for example, lack of access to clean water or other essentials, even an early demise for those left worst off . Promoting equality of opportunity is another important argument in favour of pre-distribution.

Any society where the things that people need to live and make a living are controlled by the few means a concentration of wealth in the hands of that few, and with that concentrated wealth follows power and influence. That power allows the people who control these essential assets to rig the rules of society still further in their favour, accelerating inequality of opportunity, and creating class structures reinforced by networks of contacts and exclusive elite culture that locks in privilege. “Pre-distribution” is an essential defence against class hierarchies and plutocracy, as economics and politics can never be entirely separated.

Then we have the provision of basic services that are normally regarded as essential for equality of opportunity: such as education, healthcare and affordable housing, especially to give people the best start in life. In later years we have the need for retraining throughout working life.

Maximising equality of opportunity in itself strongly encourages equality of outcomes and means that more blunt interventions, involving redistribution, would not have to be implemented as invasively.

Thrift and savings

A major cause of inequality of opportunity is access to money itself.

The state of the poor can spiral downwards because of their very poverty: for example, they might literally not be able to afford to keep a roof over their heads and then, once destitute, find it impossible to retain or gain steady employment. Poverty can compound poverty. At the same time, the “undeserving” poor, who are the mirror-image of the “deserving rich”, can be seen as victims of their own fate due to their own fecklessness. Why should those who spent “to fix the roof when it was sunny”, or “saved for a rainy day”, be expected to use fruits of their sensible, self-disciplined, behaviour, to save those who were simply too irresponsible to bother?

In this way, with a cruel irony, the lack of access to money that can drive inequality is often portrayed as a sign of the fecklessness that justifies that very inequality.

This brings us to concepts such as postponed satisfaction and “thrift”: deferring some fulfilment in the present in the expectation that this will benefit levels of fulfilment over the longer term. It would violate basic Golden Rule morality to assume that someone who had deferred fulfilment in this way could then have that “saved” fulfilment taken away by someone else later, who could have equally deferred their own fulfilment but chose not to. That would mean a net transfer of fulfilment, over that time period, from the thrifty to the feckless. Furthermore, by incentivizing such behaviour, we would arguably be organising our society in a way that encourages irresponsibility, possibly even “infantilises” people.

Before going any further we should note that it is actually easier to justify being tougher on the “feckless poor” in a society that already has reasonable equality of opportunity, and that attempts to dampen down any inequalities that arise though bad luck, as then we can be more confident that such people could have saved for a rainy day in the first place, and therefore really are “feckless”. Otherwise we can’t readily distinguish between the feckless and non-feckless poor.

Nevertheless, thinking about thrift reveals a moral dilemma. In a situation where the thrifty are confronted by the plight of the feckless, meaning those who had “sunny days”, when they could have saved, but chose not to, what should we do? Should the thrifty be expected to use some of their savings to help these people out, or not? If we say they should help, then we are rewarding antisocial behaviour and discouraging sensible saving. If we say no, then we have to abandon the feckless to their fate. Not only does that mean suffering for the feckless, but it has knock on consequences. The dependents of the feckless may suffer, as may relatives or friends or charities who are instead called on to help. Also the feckless themselves may turn to crime, or place undue demands on other public services, such as healthcare. Then there is the guilt and empathetic distress of those who could have helped the feckless, but chose not to, or were prevented from doing so. Ultimately we risk hardening the heart of the whole of society, to the detriment of those who need help that they could never have “saved” for.

It could even be the case that the suffering of the “feckless” poor would be so great, their predicament so acute, including risk of death or even a fate worse than death, that, even if we transferred the “deferred fulfilment” of the thrifty to the feckless, and took into account the fulfilment the feckless had not deferred but had irresponsibly already enjoyed, then still, over the extended time period in question, if the thrifty help the feckless, that whoever then happens to end up worst off is better off than would have been the case if deferred fulfilment had not been transferred (always remember that the exact individuals or families to be worst off is not constant: it varies context to context depending on how we decide to organize our societies).

To illustrate this with an example, imagine you are with a party of people who have been stranded in the desert. Shortly, within hours, you will make it to civilisation and rescue. You have rationed your water supply, and, though you’ve been thirsty, you have more than enough water for you to make it. One of your associates, though, has guzzled their water supply. They are out of water and won’t last until rescue, unless you share your supply. Avoidance of minor discomfort for you, in the form of a little more thirst, means death for this less responsible colleague. What should you do? Hopefully, the answer is obvious.

The upshot is that, even if a narrow moralistic decision would be to refuse help to the feckless, a wider moralistic decision may be that, given the side-effects of not helping out, and how desperate the plight of the feckless might really be, we are still obliged to do so.

That is a very sub-optimal outcome. A better approach is instead for us to agree to mutually bind each other to a reasonable amount of thrift: meaning that when the “sun is shining” a system of mandatory contribution requires us all to pay into funding “social insurance”. Such contributions have to be progressive in nature as some will be able to save more than others. Social insurance here means a minimum safety net in terms of benefit payments and provision of public services, so that no one lacks basics such as food or water, shelter, clothing, heating or healthcare. Having compelled each other to engage in some thrift, the moral dilemma exposed here can never arise, and the feckless cannot emotionally or morally “blackmail” the thrifty.

Such “social insurance” in itself also prevents the most egregious forms of inequality, going a long way to address the concerns raised in Singer’s argument. Finally, note that mandatory “social insurance” helps to protect those who choose to defer fulfilment from ever having to share that fulfilment with those who choose not to defer.

Savings, investment and capital returns

With social insurance in place we can, indeed should, accept that people keep for themselves savings that reflect deferred fulfilment, indeed deferred fulfilment boosted by a rate to reflect the risk that fulfilment deferred may in fact never be received, for a variety of reasons, including the unexpected death of the deferrer. We are still left, though, with another significant issue, that is, in itself, often the most major, cause of inequality, and that is the normally exponentiating returns on investment.

Basically, in a point perhaps made most famously by Thomas Piketty in “Capitalism on the 21^st Century”, wealth begets wealth. In a money based society the problem of inequality caused by capital accumulation is acute, as it will always have a tendency to spiral out of control.

Firstly, consider that those with higher incomes can afford not only to save more than those on lower incomes but also proportionately more. Let’s do a back-of-the-envelope calculation to demonstrate this. Assuming a reasonably equal society, where the most demanding and impactful job pays only 10 times more than the least. Let’s further assume that the poorest save 0.1 or 10% of their income, because they can’t save any more and still be able to afford the things they need to live. These savings could be anything from saving up to buy a new car to paying down a mortgage on a home.

Now the richest earn 10 times more than the poorest. As the poorest earn enough to live, 0.9, or 90% of the income of the richest is therefore superfluous to what they need to live: actually it’s bit more than that (0.91) as we assumed that the poorest can save 10% of their own income and still afford to live, but this is only a rough calculation so we’ll ignore that. Let’s assume that the richest don’t live frugally, and actually spent 0.5 of their income on a higher standard of living, and therefore only save 0.5 of their income, so less than the 0.9 they could save.

The savings rate of the richest is then 0.5 * 10 compared to 0.1 for the poorest, or 50 times greater than the poorest, although the difference in incomes is only 10 times.

If we assume that this really very equal society has no inherited wealth, and that the lifetimes of the richest and poorest are the same, that means that, with only a 10 fold difference income, the richest accumulate 50 times more wealth than the poorest, just by being able to save more.

Of course, it gets worse. If we assume that people are able to generate a real income on their savings then this adds more to the earnings of the richest than the poorest, because the richest have more savings. That increased income allows them to save still more, which further increases their investment earnings and allows them to save yet more, in a process that is exponential. Further, this is assuming that the richest earn the same rate on their savings than the poorest: in practice this won’t be the case as the richest are likely to benefit from higher tiers of interest rates and be able to make riskier investments that, on average in the longer term, despite any short term losses, which the richest can absorb, will pay more.

The richest might also use their wealth to acquire critical assets, such as land and buildings, that generate an even higher rate of return through economic rent extraction.

Then add in the fact that the wealth of the richest will open doors and allow them to build networks of useful connections. Soon that spills over into lobbying and involvement in politics, including buying influence over the media, politicians and political parties: possibly even funding campaigns to run for office in their own right. Capital accumulation then turns into political power, and rule rigging, allowing the richest to acquire still more wealth. Unless our reasonably equal society is very careful, it will not remain reasonably equal for very long.

This also has implications for deferred fulfilment and “thrift”. If the deferred fulfilment of the thrifty takes the form of investment, then that could produce exponentiating capital returns, along the lines described above. Now, to prevent the feckless being able to parasitise on the thrifty and “steal” their fulfilment, we have seen that we are morally obliged to try and organise our societies in such a way that deferred fulfilment is protected, including a little boost to compensate for the fact that some deferred fulfilment is likely to be lost before it can be enjoyed. Superficially, Golden Rule style morality does not oblige us to ensure any return on “deferred fulfilment” beyond that.

There is, however, another problem to solve, and that is one of investment generally. Investment can produce extremely unequal outcomes in terms of fulfilment, partly because, as described above, it can cause the wealth, influence and eventually power of some to spiral out of control, but also because it allows some who could work to avoid obligations to work, and instead use returns on investments to essentially live off the labour of others. Any work such people do is purely out of choice: to make their lives meaningful, rather than the general drudgery imposed by necessity that fills the active hours of the many.

If a society needs an amount of unsatisfying work to be done then ideally the obligation to do those tasks, as they represent a sacrifice of fulfilment on the part of the workers, should be spread as evenly across society as possible. Certainly no one should be forced to do this work out of necessity, while others have complete control of their own time and efforts and can avoid such work entirely, sometimes even down to domestic chores. Should some people voluntarily choose to do the unsatisfying work for the remuneration it generates, while others choose to forgo that remuneration and not do the work, that’s fine, but no one should be compelled by circumstances to do this work while others can live purely off their wealth.

In reality, of course, the situation is usually even worse than this, as the wealthy control critical, limited, resources, such as the land, have the lion’s share of economic and political power and can force the workers to toil for effective remuneration, especially once basic living costs such as housing are deducted, that are far lower than they would be expected if those living off their wealth and the workers were really bidding for access to each others assets or services on an equal basis. In such a, fairly typical, scenario, those marginalised in terms of economic and political power are not only forced to do the unsatisfying work, but to do so at below what would be market rates, so they end up both time-poor as well as materially poor. Those who sacrifice the majority of their life energies to drudgery are the poorest rather than the richest, the very opposite of what should be the case in terms of meaningful equality in life fulfilment. Instead we see a repeating pattern echoing down history of masters and slaves, lords and serfs and owners and wage-slaves.

We might therefore feel compelled to redistribute all investment returns beyond those needed to support “thrift”. Then, however, we have another problem: if we disincentivize investment we damage the economy. Redistribute too far, therefore, and we end up making the lot of whoever would then be the worst off in society worse than they would have been otherwise, because the reduction in available wealth then starts to diminish what can be redistributed.

To guide the decision about when and how to redistribute, i.e. tax, investment returns so as to maximise what can be be redistributed while minimising any economic damage that could make the worst off even worse off, it helps to distinguish between different types of savings and investment. Firstly, we have saving, i.e. storing value. This is equivalent to the thrift we were discussing above, and returns equal to preserving real value, plus a little boost to reflect the fact that sometimes the stored value/deferred fulfilment never actually gets used/“claimed back”, i.e. converted into real resources, is the morally optimal return to support basic “saving for a rainy day”. Then we have what we will term “preserving a stake”, meaning owning, and often using, an essential asset, so that the value of the asset tracks other assets of the same class, This has the upshot that, should people need to change the exact asset they own, they can sell their existing asset, and that should yield what they need to buy a new asset of the same class, essentially allowing them to swap assets. Owning a home is an example of an investment of this type, and it would be immoral to tax any increase in the value of a person’s home, as then, should they need to move home, they may no longer be able to afford to do so. Shelter is a basic need so preserving a stake in a home, as in a sole primary residence, is perfectly acceptable.

Then we have speculation, meaning investing purely in the hope that the value of the assets purchased will increase, in order to generate a monetary return. As this involves “making money” without adding to the supply of resources, speculation is not wealth creation but really a form of redistribution, in this case from those speculators who have gambled and lost to those who have gambled and won, plus from those who have had the prices for whatever they need to buy, directly or indirectly, driven up by speculative activity, to the successful speculators. We will explore the nature of “speculation” a bit more shortly, but for now note that it is arguably morally obligatory to tax away speculative returns that significantly exceed those required just to “store value”.

Discouraging speculation is also likely to encourage the fourth and final type of saving or investment: “genuine investment”, as well as helping avert the emergence of dangerous “asset price bubbles”. Genuine investment is where money is used to buy resources that are then organised in such a way as to generate net extra resources, for example, investing money in the set-up or expansion of a business. This is the type of investment we need to incentivise in order to boost economic activity. However, not all economic activity is equally pro-social. Some activities might have hidden costs to general society, for example harms to the environment, or running down non-replenishable resources. Others might have beneficial side-effects, for example helping to curb greenhouse gas emissions. Rather than taxing all genuine investment returns equally, it is therefore morally preferable to differentiate between different classes of investment: to encourage investment in activities that are actually beneficial, including making whoever will then be worst off better off, while discouraging investment in those that cause hidden costs, by adding to the tax extracted from investment returns the compensation due to wider society.

As with earnings, the tax regimes for different classes of investment cannot be set purely by calculation but also empirically: in a similar way to earnings, we should tax and redistribute such returns up to but not beyond the point where whatever we deem as a society desirable investment targets are met.

As wealth concentrations can spiral out of control it is also important that investment returns are taxed progressively, with higher rates of tax on higher returns. Small investors should be taxed lightly or not at all, richer investors more in order to constrain potentially exponentiating inequalities, and the tendency of the wealthy to just be able to live off the servitude of others. Allowances should be made for moral risk-taking, so that higher risk investments are taxed more lightly if the worse off are better off when this risk taking happens than whoever would then be worse off would be if it didn’t. Examples here could include investing in possible medical treatments, or in new technologies to address the climate emergency. This would contrast with immoral, irresponsible, risk taking, such as “investing” in collateralized subprime mortgages in a way that sparks a global financial crisis.

Should we ever though, while there is still toil to do, tax investment returns more lightly than earnings from work, given that the latter can involve considerable sacrifices in terms of fulfilment due to time and effort expended, where-as investments yielding possibly taxable net returns do not? If we do so, aren’t we facilitating people to try and live off investments rather than doing their share of toil, and there-by reducing equality? As a general “rule of thumb” avoiding this seems inarguable, but it is not possible to declare it an inviolable principle, as there could be activities needing investment where the benefits, especially to whoever would then be worst off, would be huge, such as finding cures for deadly diseases, where very low rates of taxation for those investment classes would be morally justifiable.

Usually though, in the current world, it is very likely that, even following the above guidelines, we could ever redistribute enough to prevent the basic inequity that some people can make wealth simply through already being wealthy, without so disincentivizing investment that we harm our economies to the point where whoever ends up worse off is then even worse off. We find ourselves, as touched upon above, in a “dependency on rich investors” trap. The only way out of that trap is to move toward pre-distribution: to ensure, across the population, reasonably equal shares in ownership and control of the forms of wealth that generate more wealth in the first place. Then we don’t have to pander to ultra-rich investors to secure investors, because everyone is a potential small investor with a pre-existing stakeholding in the means of producing wealth instead.

Ultimately, we could transition, through continuing automation, to a situation where everyone owns enough of the wealth generating capacity of the economy to be supported without any need for toil, with work instead being pursued where it contributes to fulfilment in its own right, as a way of providing life with meaning and not as a necessity. Certainly if we don’t do this, and allow the ultra-rich few to retain control of a then fully automated economy, we end up instead with the mass of the population not just unemployed, but possibly subject to active or passive genocide as dangerous “pests”, in the manner of the Native Americans after the arrival of the Europeans, or as currently being done by the Israelis to the Palestinian people.

As it is self-reinforcing inequalities that are the concern here, there are no issues with shared, mutual forms of capital accumulation in which everyone can participate reasonably equally, e.g. possibly public pension schemes or sovereign wealth funds, and such investments could be tax free.

What this all means for the idea of the “deserving rich” in the real world

Golden Rule style morality, though it implies a strong commitment to ensuring equality of outcomes, does not require absolute equality of outcomes moment to moment. It accepts that respecting fulfilment outcomes, over an extended period, means that we should try and avoid obligating the transfer of deferred fulfilment from those who chose to so defer to those who chose not to, as that could mean a transfer of net fulfilment over that period from the former to the latter, as well as possibly incentivizing irresponsibility. Meanwhile, even though we should aim for equality of outcomes for fulfilment sacrificed as the ideal, the need to incentivize prosocial economic activity means that Golden Rule style morality does not require that equality to be achieved in practice. Even absolute equality of opportunity is not mandated, as we are not required to suppress otherwise non-shareable innate competitive advantages that are likely, if exercised, to benefit the less well off, such as socially useful talents. Therefore, in so far as fulfilment corresponds to access to resources, absolute equality in terms of wealth is not required, though such inequalities must never be allowed to spiral to the point where they reduce the fulfilment of the less fulfilled. Therefore the relatively “rich” can exist. Therefore, to ask “who are the deserving rich” is valid and does not embody a contradiction in terms. The questions become more about how that wealth can be generated and how large those inequalities can be allowed to become, while still being “moral”.

We have established that relative riches, meaning economic inequalities, are justifiable provided those inequalities, by providing incentives to get useful tasks done, act to improve the lot of the less well off, or at least improve the total fulfilment of society without making the situation of whoever then ends up the worst off even worse. Are the ways relative riches are generated in the contemporary world consistent with this, and therefore justifiable?

Firstly, let’s take the observation that a major source of inequality is capital accumulation: wealth begetting wealth. How, if we drill down into a bit more detail, does this process work? The theory, and the possibly generally beneficial aspect of this, though even the generally beneficial aspects will often be offset by hidden costs (“negative externalities” in the economic jargon), such as environmental damage, is that wealth is invested to create even more wealth, for example to build a factory, expand food production or construct a power plant. In practice though, most “investment” does no such thing, and instead is used to buy up assets that are in limited supply and then extract economic rent (e.g. as in houses and landlordism) or to “bet” on the real value of existing assets increasing, i.e. amounts more to speculation than investment. For example, investments in shares do not normally allow a company to expand its own activities: that only happens when a company issues new shares and then spends the money received directly on expanding “production”. Instead shares are usually bought off other existing share-holders purely in the hope that the value of the shares will be more likely to go up than go down. The existence of this “secondary market” in shares may increase real investment a little by boosting the worth of shares when a company actually issues new shares, because those shares will be more easily re-sellable, but, broadly, such share dealing does not create real wealth.

Money is merely a transferable claim on resources: it isn’t the resources themselves. Any activity that “makes money” without creating real new wealth has to be parasitic, in reality merely re-distributing rather than generating wealth, as discussed here: https://gezwinstanley.wordpress.com/tulips-and-cryptocurrencies-is-speculation-theft/ .

Then there are the other questionable sources of wealth: essentially crime and other crimes that are so significant and successful that the powerful perpetrators get to designate them non-crimes.

According to this March 2017 report (“Transnational Crime and the Developing World: ”https://gfintegrity.org/issue/transnational-crime/) from the US think tank “Global Financial Integrity”, globally transnational crime is valued at an average of $1.6 trillion to $2.2 trillion annually. That includes 11 categories of criminal activities: the trafficking of drugs, arms, humans, human organs, and cultural property; counterfeiting, illegal wildlife crime, illegal fishing, illegal logging, illegal mining, and crude oil theft. Counterfeiting ($923 billion to $1.13 trillion) and drug trafficking ($426 billion to $652 billion) have the highest and second-highest values, respectively; illegal logging is the most valuable natural resource crime ($52 billion to $157 billion).

Most of that criminal revenue then needs to be laundered to make it look legitimate. The United Nations Office on Drugs and Crime (UNODC) estimates that between 2% and 5% of global GDP is laundered each year. That’s between EUR 715 billion and 1.87 trillion each year (https://www.europol.europa.eu/crime-areas/economic-crime/money-laundering).

Of course the definition of crime is fluid, and the very most successful “criminals” of all obtain legal cover from states under their own influence. Here we should start with the simple expropriation of wealth by the powerful: kleptocracy ancient and modern. The seizure of Russian assets by oligarchs was estimated to be worth roughly a trillion dollars in 2020 (https://www.atlanticcouncil.org/in-depth-research-reports/report/defending-the-united-states-against-russian-dark-money/ ), an amount of a scale equivalent, as we have seen, to all annual global transnational crime. With a quarter of that wealth being held by Putin and his closest associates, Putin himself may, in reality, be the richest person in the world. It isn’t just Russia either: in 2016, following the publication of the Panama papers it was estimated that “More than $12tn (£8tn) has been siphoned out of Russia, China and other emerging economies into the secretive world of offshore finance”(https://www.theguardian.com/business/2016/may/08/offshore-finance-emerging-countries-russia-david-cameron-summit ).

Also, Putin and his allies are far from being alone as ultra-wealthy kleptocrats. The sum of the assets alleged to have been appropriated by the family of the Egyptian dictator Hosni Mubarek is estimated at more than $700 billion. Moammar Kadafi secretly salted away more than $200 billion in bank accounts, while the Saud family are worth 1.4 trillion (https://wealthpol.web.ox.ac.uk/article/how-rich-are-dictators). Note that these fortunes dwarf those of even the most successful “officially” recognised criminals. The richest of those was the drug lord Pablo Escobar , who was apparently worth a mere $30 billion (https://www.newsweek.com/wealthiest-criminals-ranked-pictures-slideshow-list-el-chapo-escobar-madoff-1046344?slide=49). Humanity’s richest villains have tended to be those who essentially also make the laws.

We could also consider the way more than a third of land in Britain is still owned by the aristocracy and traditional landed gentry (https://www.countrylife.co.uk/articles/who-really-owns-britain-20219), all ultimately the result of land grabs through conquests, the Dissolution of the properties of the Catholic Church, enclosures and “clearances”. In the words of the 18^th Century English protest poem “The Goose and the Common”:

“The law locks up the man or woman
Who steals the goose from off the common
But leaves the greater villain loose
Who steals the common from off the goose.”.

Then there are hugely lucrative once state assisted crimes such as mass slavery or the opium trade, the latter involving not just the British but also aspiring US multimillionaires such as John Astor too (https://www.history.com/news/john-jacob-astor-opium-fortune-millionaire). We could go further still and take into account the colonisation of entire continents by European settlers, in the Americas causing a genocide of the indigenous population so great that the effects show up in ice cores (https://eos.org/articles/european-contact-with-the-americas-may-have-triggered-global-cooling). Soon Proudhon declaring “all property is theft” starts to seem quite reasonable.

Other than Putin, and any other holders of “dark” fortunes who wish to remain anonymous, the 10 richest people in the world (https://www.forbes.com/real-time-billionaires/#2a3d80f53d78) are currently all men of generally European heritage, all but one is American (the other is French) and seven out of ten, even by already favourable US standards, had a privileged start in life: Elon Musk’s family were famously in the emerald business, Jeff Bezos received $300 000 from his parents to start Amazon, Bernard Arnault’s first job was in the family firm, rising to be its president seven years after starting, Zuckerberg was educated at the sixth oldest boarding school in the US, Warren Buffett was the son of a congressman, Bill Gates went to private school and his father was a prominent lawyer, while his mother served as a director on the board of the same charity as the chair of IBM, and it was through this link that Gates got his first break, Steve Ballmer was also privately educated, and made his fortune through early association with Bill Gates and Microsoft.

Only Larry Ellison, Larry Page (US) and Sergey Brin have more humble origins, though even Pages’s father was a professor at Michigan State University.

To give a sense of the scale of the fortunes here Elon Musk’s net worth, at the top of that list, was estimated, at the time of writing, at $226.9 billion dollars, and Steve Ballmer’s, at the bottom of the list, at $121.5 billion. All the fortunes on that list, in fact no more than just the top eight, exceed the total wealth of the poorest half of humanity (https://www.oxfam.org/en/press-releases/just-8-men-own-same-wealth-half-world).

In practice those wealth and income inequalities are huge, both within countries and globally. According to the “World Inequality Database” (https://wid.world/), in 2022, the last year with data at the time of writing, the average income among the top 1% of earners in the human population was then 124 times the average income of the bottom 50%. As we would expect, as those earning more can spend a higher proportion of their income on assets and save much more, the wealth disparities are even greater: with those in the top 1% on average owning 1267 times the average wealth of those in the bottom 50%. In the UK the corresponding figures are 25 times (average income among the top 1% as compared to the average income among the bottom 50%) and 224 times (average wealth of the 1% richest as compared to the average wealth of the 50% poorest). The figures for the USA are shocking (and show a clear long term worsening trend in both income and wealth disparities): 100 times for the average income difference for someone in the top 1% compared to someone in the bottom 50%, and 1163 times for the disparity in the average wealth of anyone in the 1% richest as compared to the 50% poorest. As stated by the “Inequality Project” of the US “Institute for Policy Studies” (https://inequality.org/) “Among industrial nations, the United States is by far the most top-heavy, with much greater shares of national wealth and income going to the richest 1 percent than any other country.” Perhaps it is no surprise that the USA is tearing itself apart.

Can these differentials be explained? A lot depends on where you are born and where you live. If you want to be in the richest top ten, then that had best be the USA. If you want to die of starvation, easily preventable disease or violently, then some climate change ravaged conflict zone in the global south would be your best option. For a few decades such global inequality was declining, due to the reduction in extreme poverty in China and India (https://www.sciencedirect.com/S0954349X2400002X). Since COVID, however, the situation may again be changing, with Oxfam making this claim: “Since 2020, the richest five men in the world have doubled their fortunes. During the same period, almost five billion people globally have become poorer (https://www.oxfam.org/en/research/inequality-inc).

Now the reciprocal Golden Rule style arrangements we are exploring here mean that members of a society that is at least purportedly moral have strong obligations to each other. There is, as yet, no cohesive global moral society, though there are the beginnings of one (e.g., the UN and international law) upon which we are morally obliged to build. Right now, though, it could be contended that inequalities between different societies across the world are inevitable, as our reciprocal obligations to each other are weak, and we ought to work to strengthen those obligations and build a global moral society. However, even at this early stage of a worldwide community these differentials look extreme. After all, one of the best ways to evolve a global society is to show each other some compassion.

Within what are meant to be fully functional societies these differentials constitute a fundamental abrogation of what are meant to be mutual obligations. Even in the case of the UK’s income differential, is it really credible that the only way to get people in the top 1% of earners to do whatever it is they do is to pay them 25 times more, on average, than the average worker in the bottom half of earners? It seems much more likely that differential is significantly “powered” by self justifying surplus returns: essentially by forms of privilege. The wealth differential of 224 times is even more cataclysmic, especially as that means some people own multiple houses and estates while many have no permanent, secure home.

The US case, with levels of income and wealth inequality just shy of those for humanity as a whole, even though humanity as a whole lacks a single overarching integrated “society”, paint a picture of US society as basically broken.

What, though, about those top ten “officially” richest people, nine of whom are US citizens? Are they deserving of their riches? In so far as their activities have had beneficial effects, was such vast “surplus returns” really necessary to incentivise their efforts?

In terms of the advantages they have brought to wider humanity let’s give these multi-billionaires the benefit of the doubt. None of the “officially” richest are kleptocrats or overtly criminal. Possibly, when considering who has contributed to improving the lot of humanity, we should discount Bernard Arnault and his luxury goods empire, or Warren Buffet with his fortune based on financial speculation, so in substantial part amounting to making money rather than creating wealth, and therefore being parasitic. The others were instead on the ground floor of tech revolutions, especially those revolutions driven by IT, from the personal computer to self-driving cars, and made major strides in commercialising innovations and making them available to many.

Aside from Google’s original “PageRank” algorithm, which enabled search engines to better score the relevancy of results, but was itself part funded by public money, including from the US Defence Advanced Projects Research Agency (DARPA), these people didn’t invent the fundamental tech behind these tech revolutions. Those that did in fact, didn’t make very much money, plus, again, all had benefited from public investments, from US Government funding towards semiconductor research at Bell Labs contributing to the invention of the transistor through to the World Wide Web being invented at CERN, plus. of course. the originally entirely state funded, at vast expense, development of the technologies to access extraterrestrial space. A lot of this research was motivated by military conflict, actual and potential, from the early development of electronic computers in World War Two through to the famous, again DAPRA led, Cold War inspired, invention of the internet, as a means to keep computer networks running even in the event of disruption by nuclear attack, by the way of lots of ballistic missiles and spy satellites. Even Larry Ellison’s Oracle relational database was initially created for the CIA.

As for the engineers and scientists who created the IT revolution, none amassed vast fortunes. Neither John W. Mauchly and J. Presper Eckert, who designed what was arguably the first true fully programmable computer, nor William Shockley, John Bardeen and Walter Brattain who invented the transistor for Bell Labs, were particularly successful in business. Ted Hoff, who designed the microprocessor, is estimated to be around worth $20 million (https://chillybuzz.com/unearthing-ted-hoffs-mysterious-net-worth-what-was-the-father-of-microprocessors-worth/), while Vint Cerf and Bob Khan, who devised the TCP/IP protocol that is the basis of the internet, come in at around $10 million (https://famouspeopletoday.com/vint-cerf/) and $4 million (https://famouspeopletoday.com/bob-kahn/) respectively. Tim Berners-Lee, who created the ideas behind the world world web, has an estimated worth of $10 million (https://www.celebritynetworth.com/richest-businessmen/tim-berners-lee-net-worth/).

Of course, the tech multi-billionaires on the Forbes rich list did bring these technologies to market and roll them out on scale. Does this imply though, that to get those tasks done, they needed to receive surplus rewards so great they are north of $100 billion, tens of thousands of times greater than the fortunes of those who created these technologies, and that when combined amount to more than the wealth of the poorest half of humanity?

It is far more credible that a major chunk of this wealth was derived from what we have called avoidable surplus returns, or, in other words, from forms of “economic rent”. The fact of the matter is, that even in terms of classical or neoclassical economics, it is arguable that billionaires should not exist. In a market where, over a specified period, supply can smoothly track demand, then, in theory, competition between producers should drive down prices to the point where profits only amount to what is necessary to cause those engaged in the profit generating activity to do that rather than something else, or “normal profits” in the jargon.

So how did these individuals get so disproportionately rich? Having the research and development needed to create your products funded by the public is an excellent start, as that is essentially a hidden subsidy. Then being on the ground floor of the resultant technological revolution helps massively: your product is more likely to be protected by patents, so constituting a monopoly, and even if it is only one of whole generations of similar products all embodying the same new technology but produced by multiple suppliers then, if the demand for the new tech is high due to the advantages it brings or even just fad, it will initially exceed supply, allowing all suppliers in the new market to initially make supernormal profits. Exploiting the relative ignorance and gullibility of your consumers can help, as you use media relations and advertising to talk up demand for your products among your growing “fan base”. Then you exploit your buying power to source materials and labour from across the globe at the cheapest possible prices, regardless of the impact on workers or the environment. If you retain a major share-holding, in a company you helped found, you can then vote yourself an unfairly large chunk of those supernormal profits too. Add to that the possibility of using your wealth to fight legal battles and influence politics and you can rig the rules still further in your favour.

Some economists (https://evonomics.com/they-dont-just-hide-their-money-economist-says-billionaire-wealth/.) have tried to estimate the proportion of US billionaire wealth derived from economic rents by comparing “competitive” and “non-competitive” industries, and come up with the figure of 74%, while also noting that it is possible that the figure is an underestimate, because “After all, the perfect competition of economics textbooks rarely exists in reality and there must be many pockets of rents in what I call the ‘competitive industries’ as well.”.

Markets can fail on other ways too. There could, for example, be collusion over price. Though active collusion is difficult to agree and often illegal, passive collusion can emerge quite easily, especially if prices are transparent and there are few suppliers engaged in a market, and each supplier anticipates that any attempt they make to undercut and steal custom from their rivals will be rapidly matched, therefore just driving a mutually destructive price war.. Consider, for example, how banks usually fail to readily pass on interest rate rises to savers, or how much easier it is for a small group of employers, in a certain area and industry, to collude to keep wages low, than it is for the far more numerous workers to collude to defend their wages, unless, of course, the workers are in a union.

These hyper-concentrations of wealth are a problem in their own right. A lot of this wealth amounts to the wealth of poorer being distributed upwards, as economic rents mean the non super-rich have to pay more than is necessary for what they buy while their earnings, such as wages, could also be being suppressed. That wealth should be redistributed and, even better, pre-distributed, so it naturally accumulates across all those involved in wealth creation and not just the top owner-managers. Additionally, enough wealth must be allocated so as to meet real need, especially that of the worst off, as per Singer’s argument.

This maldistribution of wealth has further negative side-effects, such as “government capture” by the extremely wealthy, as they lobby, take-over the media, fund political parties or even run for the highest offices themselves. This process tends to even undermine economic growth, with research indicating that “No, billionaires don’t drive economic growth – and crony billionaires strangle it” (https://www.theguardian.com/billionaires-economic-growth), based on the finding that “ a greater presence of billionaires in a country actually slows down its economic growth”, with “politically connected” billionaires having a negative effect, and “politically unconnected billionaires an effect indistinguishable from zero.” This makes any argument attempting to assert that such extreme inequalities are justifiable because they make everyone better off, including whoever is worst off, nonsensical.

There can be one singular excuse for the extremely wealthy, and that can only be that they are genuinely amassing economic power in order to change the system from within. These are people who would be using their wealth to cancel out the conditions that allowed their extreme wealth in the first place. Are there any such billionaires? Remember that here we don’t just mean mere philanthropy, because of all the issues noted above with charity, especially when bestowed by the already powerful. We mean actively attempting to reform the system so as to avoid these concentrations of wealth in the first place.

Consider, for example, a figure such as George Soros, most infamous for his shorting of the British pound. That is arguably an exploitation of a market advantage in a way that that, if Soros hadn’t done so, someone else would have. Such an action damaged the UK economy and hurt British people: it is only moral if Soros then used these otherwise ill-gotten gains to change the system to make such behaviours less likely in future: to try and restrict the privileges of himself and others in his position.

As of December 2023, Soros was worth $6.7 billion, having given away $32 billion to charitable causes, most notably his network of “Open Society” foundations, with the objective of “opening up closed societies, making open societies more viable, and promoting a critical mode of thinking.”. For Soros an open society is one that avoids all-encompassing dogma and is based upon free, democratic internal debate and decision-making.

Now, Soros’s attitude to the world’s prevailing economic order is complex. In 1997 he wrote the following: “Although I have made a fortune in the financial markets, I now fear that the untrammelled intensification of laissez-faire capitalism and the spread of market values into all areas of life is endangering our open and democratic society. The main enemy of the open society, I believe, is no longer the communist but the capitalist threat.” It should be recognised that much of Soros’s analysis that follows in the same article is tragically prophetic, including “The system of robber capitalism that has taken hold in Russia is so iniquitous that people may well turn to a charismatic leader promising national revival at the cost of civil liberties.”. (All of these George Soros quotes are from: https://www.theatlantic.com/magazine/archive/1997/02/the-capitalist-threat/376773/ ).

While the promotion of democracy is entirely laudable, it nevertheless should be noted that Soros has done little to act on his doubts about capitalism. Though arguably he is among the closest out of the billionaire class to have nearly jumped the high bar of working to revoke the conditions of their own creation, Soros has, sadly, not succeeded in doing so, possibly because of an innate reticence to fully accept that extreme concentrations of wealth such as his own are signs that the system has failed in the first place (in 2018 this resulted in the polite debate between the Guardian newspaper and Soros here: https://www.theguardian.com/the-george-soros-philosophy-and-its-fatal-flaw and https://www.theguardian.com/george-soros-im-a-passionate-critic-of-market-fundamentalism)

Therefore it is hard to identify a multi-billionaire who has actively worked for the dissolution of their own class.

So who are the deserving rich?

We are talking about the relatively rich. Forget the billionaires and multi-billionaires: they should not exist and we should tax them to bits, as well as reorganising things so that wealth initially accumulates where it is generated in the first place.

You are likely to already know the deserving relatively rich. You may even be one yourself. These are, for example, the health professional who has trained hard and works long, stressful hours to serve their patients: perhaps your local GP. They are the local trades person who has also worked every waking hour building up a profitable business honestly providing essential services to their community. They are the person who has avoided luxury expenditure and diligently saved away their earnings for a comfortable retirement. They may even be the person who has worked 24/7 for many years in public service, such as your local political representative, provided they haven’t at the same time taken up lucrative second jobs or accepted money from lobbyists.

Right now, though, we have a world when in 2024, Oxfam, after making the observation above about 5 billion people getting poorer since 2020, then went on to say this “Hardship and hunger are a daily reality for many people worldwide. At current rates, it will take 230 years to end poverty, but we could have our first trillionaire in a decade.”

The global climate crisis will only make this situation even worse. A world where the rich get richer, and the richest notoriously prep for the apocalypse, while the poorest get poorer, is one where, whether we are thinking of Singer’s challenge that at least everyone’s basic needs should be met, or Golden Rule style concerns that we should respect the wants and needs of others as equal to our own, morality, and with it compassion, has been turned on its head.