Does the Wealth Gap Matter?
I used to think it didn’t. I used to ask: So long as the poorest members of society aren’t in desperate straits, what does it matter if there are people at the top whose driveways are paved with gold? Is the “wealth gap crisis” really reflective of anything more than class envy?
I guess you could say that I’ve evolved on this point. I have come to believe that wealth gaps do matter, and that ours probably is sub-optimally large. Further, I think Republicans need to be concerned about this, because our sizable wealth gap is undermining the Republican Party’s efforts to connect with the American public. Particularly if (as seems likely) a large wealth gap is going to be a long-standing feature of American life, we need to think through the social implications.
Let me start by clarifying an important point. It is neither unjust nor unhealthy for a society to have a wealth gap, and even for that gap to be fairly significant. This is a natural function of the freedoms (both economic and otherwise) that conservatives hold dear. To a great extent, disparities in wealth are actually necessary to drive productivity. Wealth can be a reward for hard work, prudent management, beneficial risk-taking and other good things. Of course, no reasonable person believes that wealth consistently follows virtue. Sometimes wealth disparities simply reflect different priorities, as when an intelligent person chooses to write poetry or translate ancient Sumerian texts instead of making millions on Wall Street. But we should also acknowledge that luck is a big factor in worldly success, and that negative traits (unscrupulousness, neglect or avoidance of personal responsibilities) sometimes pay off too. There is no rule, written or otherwise, that the market must reward the worthy.
These reflections lead me to the following conclusion: some level of wealth redistribution probably is consistent with justice, but it’s imprudent to have too much. I don’t really believe that anyone is, per se, entitled to be a multi-millionaire, but I do believe that, all things considered, it’s in society’s best interests that there should be some. I don’t hate rich people, and I believe that there are a great many who have earned their fortunes honestly, through activity that is beneficial to society as a whole. It’s fair to expect them to give something back, since nobody gets fabulously rich without a good measure of fortune and a lot of support from less-well-compensated auxiliaries. But we shouldn’t treat the wealthy like blood-sucking pariahs, because as a group they do an awful lot for society, even before they get around to filing their taxes.
Here’s the problem. Over the past few decades America has had some nice periods of economic growth. To some extent everyone benefits from these, as in the '90s when employment was sky-high. Overwhelmingly, though, the greatest beneficiaries have been the rich. The economic changes of the '80s and '90s left the wealthiest 5% (and especially the wealthiest 1%) of Americans dramatically richer than they were before, while the middle class didn’t move all that much. The benefits they did get (such as cheap computers and smart phones) were largely balanced by some ugly negatives (such as lower job security and higher medical and education costs). The good life got much better, but the okay life was still just okay, and in many ways it was quite a bit less secure than it previously had been.
The reasons for all this are complicated, and I’m not an expert on the subject, but I think one factor is that major companies (thanks to technology) can often operate with a much smaller staff than what they would have needed in 1965. A person with necessary, specialized skills can sometimes be extremely valuable to a company, but solid, loyal, average-intelligence workers are less needed than formerly. Thus, economic growth doesn’t necessarily translate into more jobs or higher wages for the middle class. And everyone knows, of course, that blue collar factory jobs have largely been outsourced at this point. Even if we could turn the economy around, it’s no sure thing that this would lead to more or better jobs for middle-class or blue-collar workers. Since today’s working adults have lived through one or two economic booms already, it’s no surprise that the middle class implicitly assumes that a plan to “heal the economy” is mainly intended to benefit the rich. Isn’t that mainly what has happened in previous periods of economic growth?
This brings me back to wealth gaps and why we should care about them. In order to sell any kind of political message, you need to make your voting population feel that they are participants in a larger effort to build a certain kind of society. I think conservatives have, to a large extent, failed to do this. It isn’t just a result of the media’s relentless efforts to portray us as sexist, racist, anti-science homophobes. It’s also because American society is genuinely fragmented, with a small portion of us doing extremely well while the rest of society continues to struggle. The Republican message really hasn’t addressed that fact, and it leaves many middle-class Americans feeling that Republican politicians are just talking to somebody else when they promise jobs and growth and other such goodies. And it surely isn't lost on them that the rich frequently manage to use their resources to cement a privileged place in society for their children as well as themselves.
There is, indeed, some portion of the electorate that is so mired in dependency that they probably can’t be won back through mere rhetoric. But I don’t believe that that group represents anything like 47% of the population. What we really have is a large segment of the population that needs to be persuaded that the Republicans can do something for them. That they don’t just care about business owners and entrepreneurs. That they understand how hard things have gotten for working-class families and young people who are up to their eyeballs in educational debt. That they have ideas for putting health care and educational expenses back within the budget of normal families.
I think the solution is really threefold. First, Republicans need to put forward some bold proposals for reforming inefficient industries that are over-regulated and over-supported by government. The medical and educational industries are the most obvious candidates. Second, the GOP needs to rebrand itself as the enemy of entrenched interest groups. I’m thinking about union bosses and overpaid academic administrators and corrupt crony capitalists. Help the middle class see that they’re paying through the nose to keep these people in their comfy niches. Why should they have to do that? Third, show that conservatives are willing to tax the rich to the extent that this actually helps improve society, and, more importantly, that we will support spending or tax breaks that actually help the middle class. I’m thinking about child tax credits, support for family-friendly public institutions like parks and rec centers, and giving a boost to affordable online education or credentialing services. Make the middle class believe that we really do want them to have opportunities, and that we care whether they and their families are living good lives. Make them feel that they are included in the society that we want to build.