How much do the rich owe the poor?

First, read the following excerpt:

It is impossible to imagine Bill Gates’s wealth without Bill Gates’s ingenuity and effort. But it is far easier to imagine Bill Gates’s wealth being produced by someone other than Bill Gates within the institutions of modern American economic society than it is to imagine Bill Gates generating Bill Gates’s wealth in a different time and place – in France in the 1700s, or in the Central African Republic today – in which society was or is less tolerant of entrepreneurial capitalism and the accumulation of personal billions, and where the community of engineers that gave rise to and became America’s tech sector is absent. Indeed, at some point in Microsoft’s history it was Microsoft the information-processing organism that was more critical to Bill Gates’s wealth accumulation than Bill Gates himself. People, essentially, do not create their own fortunes. They inherit them, come to them through the occupation of some state-protected niche, or, if they are very brilliant and very lucky, through infusing a particular group of men and women with the germ of an idea, which, in time and with just the right environment, allows that group to evolve into an organism suited to the creation of economic value, a very large chunk of which the founder can then capture for himself.

That paragraph can easily be used as some kind of an ideological  Rorschach test.  Upon reading that, one can get pissed off and defend Gates's gazillions, or one might applaud in agreement that Gates has been unfairly hogging it all.

In the essay, by Ryan Avent, from which I had excerpted that paragraph, he makes an argument that will certainly make one sit up:

The wealth of humans is societal. But the distribution of that wealth doesn’t rest on markets or on social perceptions of who deserves what but on the ability of the powerful to use their power to retain whatever of the value society generates that they can.

His follow-up sentence?  "That is not a radical statement."

I want to get back to the example that Avent uses. Bill Gates has made gazillions.

Could Gates have amassed that wealth if he were in the Central African Republic? The answer is easy--he could not have.

Could Gates have made it that big back 200 years ago in France. He could not have.

Which means, there is something special about the very specific time period over which Gates was able to make his gazillions. The question then is how much Gates owes society for the special circumstances in which all these were possible.

Bill Gates, his wife, and Warren Buffett, have all made it abundantly clear--through their interviews and speeches over the years--that they fully recognize how lucky they were to have been in this special circumstances that made possible their gazillionaire status. Buffett refers to even being born in the USA as having won the "ovarian lottery." In addition to their humanitarian views, this is also a reason for them to turn almost all of their wealth over to the foundation that then spends it on various domestic and international projects.

After quoting Adam Smith and the wonderful advantages of trade and specialization, Avent writes:

Secure in the knowledge that societal growth would not reduce redistribution (and could indeed increase the value available for redistribution by increasing global output) the incentive to draw the borders of society tightly would be curtailed. The challenge, of course, is to create the broad social interest in an encompassing redistribution. How to do that?

Isn't that the challenge that I have been struggling with all my adult life!  How do we create the broad social interest in redistribution that is needed along with the open borders, trade, and specialization?  How do we develop a social contract that will include redistribution, which the ideologues from the right hate, while also allowing for free trade that the ideologues from the left hate?

Avent writes that Adam Smith the philosopher wrote about that too.  "The force of human empathy can be made to serve either openness or societal mercantilism."

Here again the problem is that we are far more empathetic to people like us, but not towards others who are completely unlike us.  We conveniently forget that deep down we are all humans, but only view each other through nationalistic or religious or ethnic, or whatever divisive lens we want to use.

There is a better answer available: that to be ‘like us’ is to be human. That to be human is to earn the right to share in the wealth generated by the productive social institutions that have evolved and the knowledge that has been generated, to which someone born in a slum in Dhaka is every bit the rightful heir as someone born to great wealth in Palo Alto or Belgravia. ...
Rich societies can find ways to justify their great wealth relative to others: their members can tell themselves stories about the great things they did that others could not have done that made them wealthy beyond imagination. Alternatively, they could recognize the wild contingency of their wealth, cultivate human empathy, and do what they can to extend the wealth of humans to everyone.

If only we had more empathy.  If only even a couple of million among the 63 million had even a little bit of a respect for the value of empathy!

If only the Tea Party activists ate rice every single day!

Margaret Thatcher famously commented that there is no such thing as society, in her articulation of a political economic thinking that promoted the individual and individual's rights.  Thatcher and Reagan set the world onto reexamining the role of the individual and the individual's contract with others.  As we look around, it is hard not to notice that we are yet to arrive at any definitive version of the contract--in fact, our disagreements appear to be getting more and more intense on the issue of individuals and society (think Obamacare, for instance.)

An anthropology professor notes in the NY Times forum, "The Stone":

modern evolutionary research, anthropology, cognitive psychology and neuroscience have come down on the side of the philosophers who have argued that the basic unit of human social life is not and never has been the selfish, self-serving individual. Contrary to libertarian and Tea Party rhetoric, evolution has made us a powerfully social species, so much so that the essential precondition of human survival is and always has been the individual plus his or her relationships with others.

"Plus" is the operative word there.

The sanctification of the rights of individuals and their liberties today by libertarians and Tea Party conservatives is contrary to our evolved human nature as social animals. There was never a time in history before civil society when we were each totally free to do whatever we elected to do. We have always been social and caring creatures. The thought that it is both rational and natural for each of us to care only for ourselves, our own preservation, and our own achievements is a treacherous fabrication. This is not how we got to be the kind of species we are today.

I don't imagine the patron saint of the Tea Party, Sarah Palin, reading that essay and thinking about the ideas discussed there.  It is a shame that from the intellectual weights of a Jefferson and Franklin and more we have now arrived at the likes of Palin as powerful leaders.  This surely cannot be evolution! ;)

So, why the rice, you ask?  There is a reason, dear reader.  Keep in mind that this blogger does not simply rant like how Palin does!

Here is what a report in the Scientific American notes:

research from the U.S. and China indicates that northern Chinese may have a mind-set closer to individualistic Americans than their southern compatriots. And the reason is rice.

Got your interest there?

Farmers north of the Yangtze predominantly grow wheat, and those to the south grow rice. Cultivating rice is very labor- and water-intensive, and it therefore requires sharing resources. Communities have to cooperate to plant and irrigate. Growing wheat requires half the labor and depends more on rainfall patterns, so it can be managed with much less reliance on one's neighbors.

Sets up well for the question, which is:

[University of Virginia doctoral candidate Thomas Talhelm] wondered if agricultural practices could help explain the more individualistic, or Western, mind-set he found in the north compared with the more holistic, or Eastern, way of thinking in the south.

Aren't you dying to know what Talhelm found?

As expected, the researchers found that holistic thought and loyalty were higher in provinces with rice cultivation and that individualism was more common in wheat-farming areas. To see if the rice theory applied beyond students, the researchers also looked at provincial divorce rates, another indicator of individualism. “Wheat regions had a 50 percent higher divorce rate than rice regions,” Talhelm says.

Aha!  There is more:

The rice theory jibes with other cultural research into how agriculture influences thinking, explains Richard Nisbett, a professor of psychology at the University of Michigan, who was not involved in the study. For example, Nisbett found that in Turkey, farmers (an interdependent occupation) were much more holistic than herders (an independent occupation).

If only Sarah Palin and the Tea Party nutcases would do some serious reading and thinking before they opened their mouths, and if only people across the political spectrum engaged in reading and thinking!

Yep, from the New Yorker ;)