As the saying goes: who needs enemies with such friends?
Let's try to concoct an answer (750 words or less) to this query: Do the wealthy have an obligation to help the poor?
- We think that we can show that this is so in about any context. Yet, we might consider that that there are definitely some limits to what help can, or ought to, be provided.
First, though, we need to look at the concepts of ‘wealthy’ and ‘poor’ and ‘help’ in order to have this discussion. If we take the usual sense of the concepts, where ‘wealthy’ and ‘poor’ are measured in monetary terms, then these two can be considered at the opposite end of an economic spectrum, such as bank account balance. Along that same economic line, the measurement could be other types, such as those related to employment.
For instance, one with a very rewarding career can be considered to be more ‘wealthy’ than someone suffering a long-term period of under-employment. There are many other variations to this theme. We can even switch to other realms, such as health care, where the richer in health, and knowledge, help those who are poorer in health.
You see, health care is a system in which one main goal is the lessening of poorness in health. Or, is it mainly an employment, and enrichment, scheme?
So, let’s bring ‘system’ into the discussion. The concept of ‘system’ is fairly intuitive to everyone; the economy is a system. In any system, which will have members, the overall goodness of the system will be determined by the weakest of the members. If we look for a metaphor, think of a chain and its links.
Using the chain metaphor, we can see the ‘wealthy’ as being the stronger of the links; of course, that means that being in a ‘poor’ state is being a weaker link. Links that are too strong will cause the weaker links (and the chain) to break, eventually.
Would not that breaking then diminish what the stronger links had, or thought that they had? Let’s be economic for a moment. If we look at the state of the economy, do we not see that, for a decade or so, there was a massive accumulation that happened at one end of a spectrum while the rest lost value. That is, the chain of the economy morphed to a few very strong links with a very large set of weak links.
In monetary terms, we got to where a very small fraction (LT 0.5%) held the majority (GT 90%) of the total economic value. That raises this question: is the current predicament partly the result of the wealthy not helping the poor?
Consider that those who are the ‘wealthy’ make the economic decisions about jobs and pay, for instance. The ‘poor’ would be the working folks who, one might say, would include the middle class, too.
Then, ‘help’ could be efforts and attitudes that are oriented to keeping people in the system employed. The commonly used adage from Henry Ford may apply: working people spend their wages and buy products, hence they need sufficient wages. We could easily argue that what we have seen was an opposite of ‘help’ in that the working people were entrapped into a situation of increasingly negative worth through debt accumulation.
Somehow, the economic system warped into a mirror world where ‘helping’ someone, such as allowing too easy credit, was actually making things worse for them. In this case, would not the poor have been better off by not being ‘helped’ by the wealthier who are really only growing richer?
In part, warping was due to the introduction of a ‘global’ system in which the more local (American economy) system was a part. Too, we had the best-and-brightest, as another type of the wealthy set (aptitude), who engineered changes (via finance) into the economic system. These so-called improvements were, in actuality, beefing up the stronger links to the detriment of the weaker links.
The inevitable happened when things broke down. That the wealthy did not help the poor in proper ways is obvious. Perhaps, those who are looking for corrective actions might benefit from using the question of the topic as the conceptual framework.
That is, how do we get ourselves into the proper mindset to view that what is considered the weaker links are more necessary to continued economic growth than are the stronger? One might even propose that excessive accumulation indicates a type of weakness.
12/15/2012 -- Coase, on the subject.
11/01/2010 -- Adam knew the failings of 'free markets' quite well.