Who Is 'Productive'?

Ever since Presidential candidate Barack Obama told Samuel Joseph Wurzelbacher (aka "Joe the Plumber") that "I think when you spread the wealth around, it's good for everybody," Obama and other progressives have retreated from that position, terrified of conservative charges that criticism of growing American inequality (the top one percent of Americans earned eight percent of national income in 1980; they earned 23.5 percent in 2008) is "socialism."

But spreading the wealth around, as Richard Wilkinson and Kate Pickett clearly demonstrate in the powerful book, THE SPIRIT LEVEL, is good for everybody: nations and states where equality is greatest perform better on almost every indicator of quality of life than those where inequality is greater--even the wealthy live longer in such countries!

Of course, greater equality does require a greater level of public provision and social insurance, and therefore, some transfer of wealth from richer to poorer. Such redistribution challenges deeply-seated beliefs. There is no doubt that the conservative ideology of personal responsibility resonates deeply with many Americans and remains a fundamental ideological barrier to the expansion of our social safety net and greater economic security.

That philosophy has its intellectual roots in the writings of Ayn Rand, the embittered Russian emigre who argued that a very few creative, productive and ambitious people (symbolized by John Galt, the entrepreneur hero of her best-selling ATLAS SHRUGGED) actually make possible all the good things in life. On the other hand, most people--especially in Rand's view, paid laborers--survive only because the John Galts and other "self-made men" of the world provide work for them. Galt, Rand opines, should be praised, not taxed. If he and other jobs creators stopped working to protest their oppressive taxation, the rabble would starve.

When I read ATLAS SHRUGGED in the 1970s, I found it cold and heartless, full of cardboard characters and intellectually vacuous. But many people, obviously, feel differently. The book, and Rand herself, have actually seen a resurgence in popularity, ironically, just as the "you're on your own" philosophy they represent has triggered the greatest economic crisis since the 1930s. At its core, the ideology was distilled to a few simple words by a conservative student who challenged me during a speech I gave last winter at Georgia Tech:

So what I hear you saying is that you would take money away from the productive people and give it to the unproductive people?

In other words, the student suggested, I would take cash from John Galt and give it to John Lazy.

My response to this charge goes something like this:

Oh, and what I hear you saying, young man, is that those people who grow your food, harvest it in the fields (without even minimum wages) and transport it to the stores, those people who clean your streets and take away your garbage so you don't have to live in filth, those people who will teach your children if you have any, and take care of your infants and toddlers while you do your productive business, those people who build the cars you drive in, who work overtime without pay at big box stores for $18,000 a year, whose backs turn to jelly after years of driving the trucks that carry your products to you, those people whose work benefits you every day of your life--those people who have seen almost zero improvement in their real wages during the past generation of policies favoring John Galt--those are the "unproductive" people whose survival only the Galts make possible.

And meanwhile, those other people, the ones who have seen their incomes mushroom and their taxes wither, those "self-made" people with expensive educations whose brainpower and hard work have created such wonders as exploding derivates and credit default swaps, whose "products" never affect your daily life except when you have to bail out the disasters they create, those "best and brightest" people who earn more in a day than your child-care providers will earn in a year, whose year-end bonuses are often greater than the lifetime earnings of ordinary workers--they are the "productive'' people.

And you, young man, have a problem with taxing those "productive" people to provide a little more security for the ones you consider unproductive. Well, I have news for you. I see no possible moral justification for labeling the first group unproductive and the latter productive--quite the contrary, in fact--unless you automatically assume that Group B is more productive solely because its activities earn more in the market as it presently exists.

Indeed, I believe that in a moral world we would offer greater compensation to those whose labor actually makes life better. In which case, there is absolutely no moral argument at all against greater equalization of incomes. In fact, I find the distribution of earnings in this economy to be morally obscene.

In the misty heights of Randian philosophy, however, what people earn from the market is what they are really worth, and it is the result of their efforts alone. Taxing them in such a situation is a theft of their property. Their efforts alone make the world better--indeed, Ayn Randians suggest that government security measures, not de-regulation, are to blame for the current crises. If only we had left it all to the market, they proclaim, things would now be fine.

The first problem with this argument is that no one is truly self-made--Warren Buffett points out that he would not be a billionaire if he'd been born in Bangla Desh, for example.

Moreover, it is impossible to prove or disprove the claim that if we were true to the market things would be great, since that claim is totally theoretical. It is akin to the radicals of the 60s and 70s who dismissed criticisms of the Soviet Union by saying "Well, that's not real socialism. Under real socialism, you wouldn't have these problems." But, their more conservative critics countered correctly that, "actually existing socialism is all we can truly judge and it is a failure."

Turning that on its head, we have had thirty years of actually existing tax cutting, de-regulating, privatizing government policy--as USA Today points out, American taxes are at their lowest levels since 1950--and we are demonstrably less fair, less secure, less satisfied, more indebted, more stressed, more incarcerated, less healthy and less happy in comparison to people in other countries than we were when Ronald Reagan first drank Ayn Rand's Kool-Aid.

Today, conservatives attack a different "socialism," the social democracies of Western Europe and especially, the Nordic countries. But these actually existing societies, though not perfect, perform better than we do in nearly every quality of life category. Wilkinson and Pickett's data makes this clear as does even a cursory look at Organization for Economic Cooperation and Development (OECD) Factbook.

As progressives, we should not hesitate to state these things or to speak in moral terms. As Paul Krugman makes clear, for thirty five years from FDR to Jimmy Carter, America became more fair and more secure. For the past thirty, beginning with Reagan, fairness and security have unraveled. For that, the Randians should be apologizing, not gloating.