Deserve’s got nothing to do with it

Tony Soprano Swimming

 

When politicians propose tax cuts, they often claim that they want people to be able to keep more of what they earn. I agree, with one stipulation: that we distinguish between “earning” and “being in a position to effectively demand.”

To take a baseline case of unambiguous earning, let’s look at the salary of a janitor. The janitor is doing necessary work, the success of which is easily verifiable. Meanwhile, the average salary for a janitor is far from extravagant — if anything, they get paid too little. So we can assume that someone who has been able to retain a job as a janitor for a few months is earning their salary by successfully carrying out socially beneficial work. (For the record, I have worked as a janitor.)

For the sake of argument, we can use the janitor as a unit of earning. I can imagine someone genuinely earning twice as much as a janitor — by doing more socially beneficial and/or demanding work. I could even imagine someone doing ten janitors’ worth of work in the same period. But there are people who get paid 100 or even 1000 times as much as our janitor, and I just cannot imagine what it could possibly mean to do 100 or 1000 janitors worth of work. I will concede that those people are often doing difficult and stressful work, even important and socially necessary work — but it just cannot be worth 100 or 1000 janitors. Unless accidental exposure to gamma radiation is involved, I’m going to call bullshit.

The money that comes to someone above and beyond their actual social contribution is “earned” in the sense that the mobsters on The Sopranos speak of “earning.” To be fair to the mobsters, they arguably do some beneficial work — offering security services, creating betting markets for sporting events, providing liquidity for those without access to traditional banks, etc. Perhaps we can concede that they deserve some compensation for those services. But the money they actually receive is overwhelmingly the result of extortion and violence. Referring to their income as “earning” is a euphemism — in fact, one imagines that it started out as an inside joke among the mobsters themselves.

The CEO or hedge fund manager doesn’t have to use threats and violence as directly as Tony Soprano does, because they have the power of the state to back up their claims. At a time when the state had different priorities, it was able, not simply to take away a good chunk of unearned income, but to make sure that it was never mis-distributed in the first place. The tool it used was a punitive 90% top tax bracket. To use contemporary buzzwords, this set up the incentives so that paying someone above a certain level simply didn’t make sense from the company’s perspective — it would effectively be an indirect donation to the government. Raising taxes back to that level would not be a case of taking away earned income. It would correct the error that allowed people to receive and retain so much unearned income.

We all suffer from the state’s choice to encourage and enforce the accumulation of unearned wealth. Money makes people more powerful, undermining democracy. It allows people to bid up prices for scarce goods, rendering housing in desirable locations like San Francisco or New York City much more expensive than it would otherwise be. And the existence of such disparities in wealth and power offends people’s sense of justice and hence is corrosive to society. Taking away people’s unearned wealth would therefore be a positive good in itself, even if the money collected were literally set on fire on the White House lawn.

2 Responses to “Deserve’s got nothing to do with it”

  1. JoB Says:

    The problem is the narrative of merit (and of meritocracy). Tony Soprano would also consider his status the result of his merit.


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