If The 1% Had Less, Would The 99% Be Better Off?

December 3, 2011

Political economy


The “Occupy  Wall Street” people are right about the sins of the financial system and right about the evil of government supporting and subsidizing this misbehavior. It’s not fair that 1 percent of Americans are rolling in dough while the rest of us are scrimping to pay for our rents and cell phone plans.

But I think the occupiers are wrong about something much more important. They believe in the Zero Sum Fallacy –the idea that there is a fixed amount of the good things in life–meaning that anything I get, I’m taking from you. For example if I have too many slices of pizza, you won’t get anything but the empty pizza box. This would imply that every time we want good things we have to fight with each other to get them. Instead of that, we could join our skills and abilities in order to make more pizza — and more of anything–for all of us. The good things in life are remarkably expandable and it’s mostly done by ordinary people, look at China or India.

The Zero Sum Fallacy is just that, a fallacy. Economic history since the Industrial Revolution proves that many ordinary people can achieve good things in life. The only difference to rich people is that most of the success doesn’t fall into our laps. We can only achieve this with our knowledge, skills and hard work. The only requirement we need for this is, as Rawls pointed out, equal opportunities. But the fact that others achieve more than us, shouldn’t bother us. Actually it should make us feel more comfortable, knowing that there are people out there who have better abilities and skills and who are capable of achieving higher goals then we can. As long as these people give the benefits back to the society.

The only thing we have to ensure is that social and economic inequalities are to be to the greatest benefit of the less advantaged  m embers of society. Or as Rawls thinks :”……to the least advantaged members of society”. Either way, the power of the rich among us should be used to make us all better off. This also  includes rich people themselves. We can achieve this by motivating rich people to do more for the society -especially more to the poorer ones among us- but also give them the feeling of having done something good. They should think and feel that they are giving something back to the society that made them rich in the first place.

Instead of protesting against the 1% -which by the way makes more and more people upset about the protesters- we should organize more charity events or other kind of events, giving rich people the opportunity to donate money or to do other charitable things.

I also think that everybody should reconsider the advantages they have, before protesting that everything is unfair. Most of us are lucky enough to be born in America, probably to families who are comparatively well off and to be studying at the U of M.

What do you guys think? Aren’t we all a little bit trapped in the Zero Sum Fallacy?

 

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7 Comments on “If The 1% Had Less, Would The 99% Be Better Off?”

  1. Brandon Baxter Says:

    The idea that the economy is a zero-sum game is absolutely false. The economy is fundamentally designed in the United States to directly benefit the 1%. In a successful economy the 1% and the 99% will win simultaneously. An example of this is most visible in Detroit in the years after World War II when employment was extremely low and incomes were increasing steadily from the very top to the very bottom. Detroit saw its golden age in the 1950’s and everyone bought what they produced. It was a win-win situation.

    Recently, however, the economy has doubled in size and pay increases have been attributed to inflation. All gains and benefits have gone directly to the 1%. The 99% no longer has the purchasing power to keep the economy turning, and that is why we are occupying.

    Elizabeth Warren explained the situation perfectly:

    “I hear all this, oh this is class warfare, no! There is nobody in this country who got rich on his own. Nobody. You built a factory out there — good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that maurauding bands would come and seize everything at your factory… Now look. You built a factory and it turned into something terrific or a great idea — God Bless! Keep a Big Hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”

    The 99% provided for the 1% to live the rich and comfortable life they now enjoy. The 99% includes teachers, professors, doctors, construction workers, paramedics, librarians, manufacturers, etc. We want to eradicate the Bush tax cuts, place penalty taxes on corporations that move American jobs to other countries, require that all Americans pay the same social security tax on all of their earnings, create a single-payer, free and universal health care system, reduce carbon emissions, end corporate people-hood, fix the electoral system by removing campaign contributions, and a lot more. A charity event is not going to produce any of the changes we need.

    If the 1% had less, the 100% would be better off.

  2. nluongo Says:

    I agree with you about the Zero Sum Fallacy and at points I have been put off by a certain attitude among some OWS protesters that, “you only have what you have because you took it from me.” However, I think there is an equally unrealistic attitude among criticizers of the movement that I will call the Meritocracy Fallacy. In America, we like to think that if someone wants to become rich they need only work hard and the rest will follow. While we do a good job of attempting to actualize this system, I believe that inequalities still exist in the structure of society and the workings of government that give an advantage to the rich. A lot of people think that we do not have the equal opportunity that Rawl’s states is so important. Detractors from OWS like to think that in our society each individual is free to succeed or fail in such a way that is sealed off and unaffected by the rest of society and I think that is a bit disingenuous. This thinking allows them to write off the protesters as lazy and envious just like many supporters demonize the rich as robber barons that suck the life out of the 99%.

  3. jgurwitch Says:

    I personally believe that the Zero Sum Fallacy is very inaccurate. There are so many goods to have today that I do not believe taking some is leaving less for others. The population has continuously grown and the technological advances have skyrocketed. With that being said, I believe that there are more goods being produced than ever and to believe that we are running out of anything is a false recognition of what is actually out there. I understand the Occupy Wall Street people, what they are advocating for, and why they are upset, but they have to also recognize that the 1% is very powerful in helping keep everything in the country running.

    Another thing that you touched up on is the fact that these people are arguing against the 1% but are being selfish in realizing how lucky they still are. There are people in other countries that would kill to be in their position. Just because they are not the best off in the wealthiest country does not mean that they are doing poorly by any means. A lot of these people arguing still probably have stable lives and income. These people should recognize that although there is a huge divide between them and the 1%, there is an even bigger divide between them and some third world countries. It is also false to assume that they are the “99%” because a lot of people would not argue against the top 1% since they are still doing relatively well off in comparison to other people.

    Lastly, although the 1% could be less better off and it could be distributed to the other 99%, the 99% still hold their own. Sure certain jobs deserve more then they are being paid (teachers, cops, etc), there is no doubt about that. But the Zero Sum Fallacy is not accurate and people need to recognize that there are still a plethora of goods to be distributed.

  4. jonkeren Says:

    The Zero Sum fallacy is extremely inaccurate in my opinion. I find it completely ridiculous for people to think that their is a fixed amount of good things in life and the only way to get these good things to to take them from others. There is a plethora of goods that can be distributed in this country, which are by no means only limited to the wealthier Americans. We live in a country that has complete socio-economic mobility. This does not take away from the fact that there are large economic inequalities throughout the country. However; the protestors who consider themselves the “99%” should not be blaming the “1%” for their problems. The rich who are considered the 1% by the protestors are not obligated to distribute their wealth and goods to everyone else. Instead of protesting these people should be either working or trying to find a job.
    Overall I think you did a fine job assessing the current situation and agree that the Zero Sum Fallacy is heavily flawed.

  5. Matthew Vlasic Says:

    I agree with the last person to comment. People who are standing out there and protesting could be using their time searching for jobs, volunteering if they think it would helpful or pursuing more education possibly. Standing out there and protesting against those who have worked their way to the top through diligent work (and also inheritance obviously) most likely will not improve their situation. Yes, the “99%” is worse off, but how can they blame the “1%” for being wealthy? Being wealthy is no crime. I’m sure they would take the wealth too if they had the choice.

    I do strongly agree that the wealthy should distribute a good portion of their fortunes back to society. That is a very valid point. Everyone should feel obligated to give back and they should give back the most. I still think that it is ridiculous to be looking at the “1%” and essentially blaming them for controlling a huge amount of wealth in our country. Don’t protest: go get a job, work hard and secure some financial security and proceed to give back to society as everybody should. The “1%” should have less money because they should donate more to charity and give back to deserving and upstanding institutions, but it is in the hands of the “99%” to earn some of this wealth back and then up to them to donate, just as the others should be actively doing.

  6. phillipschermer Says:

    I think that this debate has been lacking in one key area: people seem to misunderstand Occupy’s core message. Occupy isn’t attempting to be Robin Hood. Their message isn’t to take from the rich and give to the poor. Their message is that the current political system is set up in such a way that one of the key tenets serving as the foundation for the American democracy – equality of opportunity – is being threatened by the existing corporate structure. The argument is that corporate greed is driving the political system into an era when ANY person, regardless of socio-economic class, can no longer achieve success proportional to a person’s work ethic. This drives the Occupy movement, not a mistaken belief in pure economic equality. And for this reason, I believe that many of the people above me are mistaken in their criticisms.

  7. kunalsaxena Says:

    To start off, I think your points are cohesive and from what I am interpreting, you seem to suggest that the rich have done nothing wrong, however, we should encourage them to give back to society. Firstly, I feel that this option would definitely be beneficial, however, I don’t think it’s practical. How much money should the rich ‘give back’ to save unfortunate people? Similarly, who gets what amount of the money? This decision of who receives the money in my opinion will lead to even further arguments and fights. Also, I liked your comparison to other third world countries such as China and India. You mention that we should put ourselves in that perspective, however, it is human nature to always want what you don’t have, and putting this in perspective of unfortunate Indian or Chinese people will prove beyond impossible. Also, you said that we should be happy if other people have more. I completely disagree with this point and this, as I stated, is due to us being humans. Seeing other people get more than you is a feeling that we can’t control, and when push comes to shove, you will do anything to get where they are. You can relate the concepts of Dirty Hands in your individual example, you will feel that my actions are justified for my family and my greater good.

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