Would putting a limit on extreme wealth solve power imbalances? | The Excerpt

On a special episode (first released on July 17, 2024) of The Excerpt podcast: Forbes maintains a real-time billionaires list. All ten of the richest people on the list have each amassed fortunes greater than $130 billion. While some have pledged to give most of their wealth to charity, that still puts them in an enormous position of undemocratic, unvarnished power. The average CEO now brings in over 300 times the average worker’s pay according to the Economic Policy Institute. All of which begs the question, should this level of unbridled wealth even exist? In her new book, “Limitarianism, The Case against Extreme Wealth," Ingrid Robeyns argues strongly that it shouldn’t. She joins The Excerpt to discuss how more people need to have this conversation about capping extreme wealth.

Hit play on the player below to hear the podcast and follow along with the transcript beneath it. This transcript was automatically generated, and then edited for clarity in its current form. There may be some differences between the audio and the text.

Podcasts: True crime, in-depth interviews and more USA TODAY podcasts right here

Dana Taylor:

Hello and welcome to The Excerpt. I'm Dana Taylor. Today is Wednesday, July 17th, 2024, and this is a special episode of The Excerpt. Forbes maintains a real-time billionaires list. At the top of the list, Elon Musk with an estimated net worth of $215 billion, give or take a few billion. In fact, all 10 of the richest people on the list have each amassed fortunes greater than $130 billion. While some have pledged to give most of their wealth to charity, that still puts them in an enormous position of undemocratic, unvarnished power.

The average CEO now brings in over 300 times the average workers' pay, according to the Economic Policy Institute, all of which begs the question, should this level of unbridled wealth even exist? Ingrid Robeyns argues strongly that it shouldn't. She's the current chair in ethics of institutions at Utrecht University, as well as the author of the book, Limitarianism: The Case Against Extreme Wealth. Thanks for being on The Excerpt, Ingrid.

Ingrid Robeyns:

Thanks for having me.

Dana Taylor:

You started your book with this question, and I'll ask it here, how much is too much? How do you define extreme wealth and what is happening with the gap between the top 1% and the other 99%?

Ingrid Robeyns:

Just asking the question, can there be too much, it's already, I think, an alien question to our culture, I mean culture in western societies. So, that I think is the first thing we need to do, to ask whether that question makes sense at all. I think the question does make sense from a point of view of living standards. Can you have at some point just have so much that it really doesn't add to your quality of life? But also, and I think that's more important, the question, if one has so much, can it undermine certain important values in societies such as political equality, democracy or ecological sustainability? And in my book, I argue that it does.

Dana Taylor:

You've said that no one deserves to be a multimillionaire. What are the ethical justifications for limitarianism and can limiting personal wealth be morally justified in a society that values individual freedom?

Ingrid Robeyns:

So, this is the crucial question. And my book is really all about the reasons we have or morally limiting wealth, to have to do with the harms that wealth concentration, because it translates into political power and into consumer power have on others. And one is via undermining political equality and harming democracy. And the second one is that we see that the very wealthy have such vast negative impact on the planet's ecosystems, that their lifestyles are not compatible with principles of ecological sustainability. So, that's two reasons.

Another one is that often the wealth that has been accumulated is taint in the sense it has traces of processes that should not have happened in the first place. Think of wealth that can be traced back to transatlantic slavery. That's both a concern in Europe, as well as in the US. But also, and I think this is really something where we try to avoid really looking hard enough at the question, whether all the wealth is really not just a matter of being legitimate according to the fiscal rules, but also whether actually those fiscal rules has been shifted over time by the influence of the super rich. So, the distinction that we often draw between tax avoidance, which is legal, and tax evasion, which is illegal, is somewhat problematic in itself because that line has shifted over time. So, those are three reasons.

Dana Taylor:

Will simply capping wealth solve the deeper issues of an imbalance of power and systemic inequalities?

Ingrid Robeyns:

Yes, that is a really great question. So, you could say wealth inequality is the outcome of structural features of real root causes, and we should address those. So, in some sense, it's like trying to do something about symptoms. On the other hand, wealth inequality also and concentration of wealth is the cause of other further issues. So, I think we need to think, go down all the way in the causal mechanism and find the root causes. And then as I described in my book, the root causes are that since the 1980s, we have moved to a version of capitalism. I say a version, because there are many different types of versions that really has been pro-rich.

But it has been happened in a kind of quiet way, because this particular type of capitalism, which we call neoliberal capitalism, has been presented to us as only based on efficiency, inevitable and so on. But what all these policies have done is that they have allowed the very fortunate, the very rich to become even much richer. Whereas, if we had made other choices, we could have lifted many more people out of poverty, created much more equal opportunities, and also done more to protect the planet.

Dana Taylor:

Ingrid, what's the risk that by capping personal wealth we discourage things like entrepreneurship and the pursuit of personal excellence?

Ingrid Robeyns:

I think this is the biggest worry that critics of my view have, that it would kill entrepreneurship and innovation. And I think it's important to look back both historically, but also look at different spheres of life that we currently have. So, historically, we've seen that much of the really crucial innovation came from collaboration between entrepreneurs, but also the government when we still had what the economist, Ariana Matsukata called an entrepreneurial government. For example, the American dream to put a man on the moon has generated a massive amount of innovations across industries that have improved the quality of life of many peoples. But it was the American government that said, "We are going to put a man on the moon."

Now our governments have no innovative ambitions at all, but so that is a possible alternative. And then the other response to this worry that if you were to cap wealth we would kill all entrepreneurial motivation, is that we have entire sectors in society, and I think science is a very good one, where people are motivated by contributing to the greater good and they don't enrich themselves.

Dana Taylor:

There's no denying the influence of wealthy individuals and corporations on US politics. Is limitarianism a politically feasible policy?

Ingrid Robeyns:

I don't think it's a politically feasible policy, definitely not in the short run. I'm even not sure it is in the long run, because there will always be people who are not convinced by the kind of arguments that I make, who just take a different view on morality. But should we actually want to move into the direction? And of course, if all the citizens say, "No, actually, we prefer massive inequalities, we don't care about democracy, we don't care about the planetary boundaries, we don't care about whether our grandchildren can still live on this planet," then that is what they choose. But I just think we are not having that conversation right now. And so, my aim is to empower citizens to have that conversation.

Dana Taylor:

Philanthropists, MacKenzie Scott, the ex-wife of Amazon founder Jeff Bezos, continues to make headlines by giving away billions, more than 16 billion since 2019. You argue that philanthropy is not the answer to solving the issue of poverty and inequality. Is donating money to organizations that are actively working to level the playing field a bad thing?

Ingrid Robeyns:

No. And actually, I have MacKenzie Scott in my book as I think a way to do it. I think she's an example of how one should do it. So, the name of her organization I think is really clarifying. Her organization is called Yield Giving, and the yield stands for two things. One is to grow, so basically, let something positive grow, but the other is also to yield control. So, she gives to groups that she thinks are at the receiving side of injustices, so people who fight for decent wages, against racism, sexism, homophobia, and so forth. And she empowers them to decide how they want to use that money to defend their causes. So, she's not asking people to come up with a plan or she's not micromanaging them. She's basically saying, "I trust that those people who are fighting for those causes know better than I do what should be done."

I think that is very interesting, the way she does it. And she's also written about that will... she uses the term, "I will return the money from where it was generated. I will return it to society." And in that phrase, she acknowledges that it's not that she and Jeff Bezos made that money, it's the structures in society together with all the workers and the customers of Amazon who created that money. If you have an enterprise, a corporation, and you have a big profit, it's always enabled by so many different factors that I think it is the right attitude to give back.

Dana Taylor:

What are your thoughts on alternative policies, such as universal basic income, in terms of their ability to achieve a similar outcome as limiting individual wealth accumulation?

Ingrid Robeyns:

This is again a great question. And also, I've been doing research on basic income for almost 25 years, so I really like this comparison. So, I think basic income is, we know from studies that in the global south where people are really living in massive poverty, it works fantastically. When I say it works fantastically, it means that there is a virtuous circle of economic activity and of people being lifted out of poverty, being able to send their kids to school and so on. In the global north, the question whether basic income would really deliver, depends on what the measures would be that would be cut out.

So, for example, in Western European welfare states, we have seen all sorts of cutbacks, but still we have all sorts of policies for the disabled, for the unemployed and so forth. If you were to cut all those out and then you would replace it with a basic income that would be much lower, it's not clear that the most vulnerable would be better off. So, the thing about basic income is it all depends on the details. And then the comparison with limitarianism or with the cap is that suppose we were to have a basic income, but we funded with a flat tax, then Jeff Bezos, and Elon Musk, and Bernard Arnault will still have their billions. That means they can still translate that economic power into political power, and they can still have a disproportionate influence on societies.

Dana Taylor:

Economic inequality is a tough issue to tackle on an individual level. What can the average person who's not a billionaire and is not a lawmaker do to close the wealth gap?

Ingrid Robeyns:

So, it depends whether the average person has any financial means or not. So, I think many of us could actually be more generous in how much we give. And then we have to think about where we give to. So, for example, I give my own donations to a UBI, to African women, because I don't have millions to give away. And then UBI, I think is a really good strategy to empower women who can escape from poverty. So, there's the question about what individuals should do when they donate. I think they should think about it. There's not just a question about donations. I think the question is also about our role as citizens. So, what neoliberalism has done to us is it's not just a set of economic politics policies. So, you can say, "Okay, neoliberalism is economic globalization, it's cutting taxes on the rich. It's all these things." That's true.

But it has also had a cultural effect, and that is that we much more tend to look at ourselves as economic subjects. So, we see ourselves as somebody on the labor market. We no longer talk about education as something where you get developed as an all round person, but we talk about human capital. We talk about whether we are investing, we talk about our consumptions, but we are also citizens. That means we together with our fellow citizens, decide on how we build a country. And so, we should, as citizens, take up the, what I think is a citizen's obligation to be critical towards our government, because otherwise we will never go to a world that is more humane and less egalitarian, because in the end the government must play an important role in creating that world for us.

Dana Taylor:

Ingrid, thank you so much for joining us on The Excerpt.

Ingrid Robeyns:

Thank you for having me.

Dana Taylor:

Thanks to our senior producer, Shannon Ray Green, for production assistants. Our executive producer is Laura Beatty. Let us know what you think of this episode by sending a note to [email protected]. Thanks for listening. I'm Dana Taylor. Taylor Wilson will be back tomorrow morning with another episode of The Excerpt.