This week, Nick and Goldy sit down with ethics professor Ingrid Robeyns to discuss her groundbreaking new book, Limitarianism: The Case Against Extreme Wealth. Robeyns challenges the idea that it’s acceptable to allow extreme wealth concentration and inequality to persist, advocating instead for a hard cap on wealth accumulation. Nick and Goldy navigate the moral and practical implications of wealth limits on society, democracy, and ecological sustainability.
Ingrid Robeyns is a distinguished scholar and Professor of Ethics of Institutions at Utrecht University, and author of the new book, Limitarianism: The Case Against Extreme Wealth. Professor Robeyns’ research in the field of Ethics and Political Philosophy focuses on issues of justice, inequality, well-being, and the ethical dimensions of societal structures and policies.
Twitter: @IngridRobeyns
Limitarianism: The Case Against Extreme Wealth
Website: https://pitchforkeconomics.com
Twitter: @PitchforkEcon
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Nick Hanauer:
The rising inequality and growing political instability that we see today are the direct result of decades of bad economic theory.
Speaker 2:
It’s time to build our economy from the bottom up and from the middle out, not the top down.
Nick Hanauer:
Middle out economics is the answer.
Speaker 2:
Because Wall Street didn’t build this country, great middle class built this country.
Nick Hanauer:
The more the middle class thrives, the better the economy is for everyone, even rich people like me.
Speaker 3:
This is Pitchfork Economics with Nick Hanauer, a podcast about how to build the economy from the middle out. Welcome to the show.
Goldy:
You’ve been spending a lot of time in London the past few years, Nick, haven’t you?
Nick Hanauer:
I have.
Goldy:
Yeah, I don’t know how much British history you’ve studied, but I have a little historical fact for you that you may find surprising.
Nick Hanauer:
Tell me.
Goldy:
Did you know that nearly 70% of the land in the UK is owned by less than 1% of Britons and that the vast majority of that land is owned by descendants of the Normans who invaded over 1,000 years ago and stole that land? That if you are paying rent in Britain, you are paying rent to a descendant of a Norman invader?
Nick Hanauer:
What’s the moral of that story? It pays to invade?
Goldy:
The moral of that story, Nick, is how long inherited fortunes can last. Not just a generation or two, but for a millennium, you can have that extreme inequality. Again, chances are your landlord… Now, I assume you bought your house as opposed to renting it, though I don’t know, maybe you had to rent the land because I don’t know how it works there.
Nick Hanauer:
Yeah, no, no, no, no, no. In fact, you’re right. Most of the places in London are land leases, where you pay again, some aristocratic landlord.
Goldy:
That’s right, an actual Lord. We call them landlords now, but they are Norman lords.
Nick Hanauer:
No, it’s true. All of which is to say that this arrangement would be deeply offensive to our guest on the podcast today, a Dutch professor, Ingrid Robeyns, who is a distinguished scholar and professor of ethics of institutions at Utrecht University, and who has a new book out with the audacious title, Limitarianism, The Case Against Extreme Wealth. I think it’s fair to say that Ingrid goes somewhat farther than I do or we do, when it comes to inequality. She doesn’t want to reduce it, she wants a hard cap, which is a very interesting proposal, obviously.
Goldy:
Speak for yourself about going too far.
Nick Hanauer:
Anyway, I think we should just get right into it. Let’s talk to Ingrid.
Ingrid Robeyns:
So my name is Ingrid Robeyns. I’m a Belgian Dutch philosopher and economist, and I work as a professor of ethics at Utrecht University in the Netherlands, and I wrote a book which was published a couple of months ago called Limitarianism, The Case Against Extreme Wealth.
Goldy:
So should we start, Nick?
Nick Hanauer:
Welcome to Pitchfork Economics.
Ingrid Robeyns:
Thanks.
Goldy:
Yeah, should we start by having her make the case against you and your extreme wealth?
Nick Hanauer:
Yes, yes, ma’am.
Ingrid Robeyns:
Yes, shall I?
Nick Hanauer:
Absolutely.
Goldy:
Yes, give us the thesis.
Nick Hanauer:
Ingrid, you should know they didn’t surprise me with this interview. I knew you were coming.
Ingrid Robeyns:
No, of course. No, I always of course say I’m not talking about particular individuals, so that’s not what I’m going to do now either, but I do argue in the book that there is a case against extreme wealth concentration and against extreme wealth inequality, which are two sides of the same coin. The reasons are that if you look at it statistically, hence at population level, we see that extreme wealth is harmful for society because it undermines democracy and is incompatible with principles of ecological sustainability. That it’s wasteful because if wealth were distributed in a different way, it would lead to much more equality of opportunity and flourishing. That also, often there are traces or there are ways in which it was acquired that are not quite moral. So there are problems in the way it’s been acquired, the money. Then finally, there is some evidence that it doesn’t make the super rich happy. So that’s in a nutshell, all the different reasons why I think we should move to society with less extreme wealth concentration.
Nick Hanauer:
So we are in violent agreement with many of the things that you said, but I think it-
Goldy:
Not that last one, because I can tell you Nick is extremely happy.
Nick Hanauer:
That is true, that is true, but for the purpose of this conversation, it seems like it might be useful to divide somewhat arbitrarily, the challenges of extreme inequality into two buckets, practical considerations and moral considerations.
Ingrid Robeyns:
Yes.
Nick Hanauer:
Okay.
Ingrid Robeyns:
Yes.
Nick Hanauer:
So let’s start with practical considerations. So I think that it is very, very true, has to be true, that a highly unequal societies concentrate both advantages and disadvantages, and it is very hard in a highly unequal society for the majority of people to actually be robustly included in it. If you want true opportunity, then it turns out that wages are the way in which we distribute opportunity in most societies and if people don’t have any, they can’t flourish.
Ingrid Robeyns:
Well, it’s not… yeah.
Nick Hanauer:
I would go-
Ingrid Robeyns:
It’s not just wages.
Nick Hanauer:
Well, of course, it’s-
Ingrid Robeyns:
I think it’s really what happens before you’re 18.
Nick Hanauer:
Yeah, all the things, all the things. Wages is just a placeholder for the variety of things that it takes to be included in a society, but I think that there’s an additional factor that you did not mention, although I’m sure you agree, which is that less unequal societies actually grow, even primitive measures of growth like GDP go up a lot faster because obviously, if nobody has any money who will buy the stuff? Right?
Ingrid Robeyns:
Yes.
Nick Hanauer:
In a society where you distribute the value generated in a broader way, obviously more people, a higher proportion of people, can robustly participate in the economy, not just as consumers, but equally as innovators, entrepreneurs, risk-takers, etc. It is a more direct path to creating that feedback loop between innovation and demand, which drives economic progress.
Ingrid Robeyns:
Yes, no, I totally agree. So I also, actually, you have written about this many years ago, Nick. I know, and I actually cite you and discuss your argument in the book, but I think it’s also a response to those who criticize my proposal for saying, oh, but nobody will no longer want to innovate if you reduce inequality because people want to have that possibility to become extremely rich and hence the economy will shrink. That’s what they say, but I say no. If you were to give people genuine equal opportunity, which right now many people do not have because they never get the opportunity to build their human capital, to use economists language, they may not innovate and make the products and the services that they would otherwise in a fair society be able to offer to all the consumers. So yes, I think there is definitely a so-called business case or an economic case for reducing inequality.
The most part of the book is really trying to go for the most what I would think fundamental moral reasons, but often I respond to objections and then often these objections all have to do with the economy because many of the people who criticized my work seem to assume that having a larger economy is always a good thing, whereas I as a philosopher would say, no, the economy is good to the extent that it enables people to flourish, and that depends on how that economy actually looks like. It depends on the quality of the economy.
Nick Hanauer:
Yeah. Again, I think Goldy and I would substantially agree with you. The way in which we depart from traditional economics orthodoxy is that we agree with you that the point of the economy is not to produce more GDP, it’s to enable human flourishing, it’s to maximize human flourishing. But now let’s turn to the moral case. So lay that out in more detail.
Ingrid Robeyns:
Yeah, so the moral case comes in different strands. The one that I think most people could agree with is that what liberals call the non-harm principle should not be violated. So that means whatever you do, you should not harm others. There we see that if you look at it population-wise, and of course I know there are many exceptions, I call them the activist billionaires who try to really counter these negative effects, but we see that wealth concentration undermines democracy and principle of political equality is I think a fundamental one for our societies. The other one is that it is that the super-rich have lifestyles, but also investment patterns that are incompatible with principle of ecological sustainability, which means that they are harming the prospects of other human beings and actually also other species to live good lives on this planet, and also all the people who will live in the future. So the problem is that basically wealth concentration has all these negative effects on other people, and that is, I think, a very important moral case.
It’s a type of argument where you can come up with counter examples. So you can say, oh, yes, but here’s this one person that really does all these fantastic things, or that has a negative carbon footprint. These people exist, but if you look at the statistics, this is what comes out of the empirical work. So that’s the first moral argument which is related to harm.
Then the other one I think is more problematic for people to accept because it is based on our view of human nature. So the view of human nature I defend in a book, and which is based on how I read signs to do with human development and so forth, is that luck plays a really, really big role in what people can do with their lives. So there are different types of luck. There is, you could call it genetic luck, biological luck, your strength with which you were born, your talents, whether you are a very quick and energetic person or whether you have possibly impairments or illnesses. All of that is pure luck. If you are a strong person who is creative or smart, I mean, this creates a possibility to generate economic prosperity as an individual and also for society. But it is a matter of luck that you are talented, that’s one.
But the other one is also social luck, and social luck is basically just an aspect to do with, what is the class or the social group in which you were born? There we see that people have massively different opportunities in life to get ahead.
Then there is also this thing called market luck, where the way markets are formed, the way things develop beyond your control as an entrepreneur or as somebody who offers their labor on the market, can have a big influence of where you end up.
So what I want to do in that chapter, which I think is the most fundamental and philosophical chapter in the book, is to displace the few that we now have in economics, which is to attribute both our successes and our failures to the individual to say, wait, there’s so much of it due to luck and if we were to embrace that in how we understand ourselves, we would be much more, I think, generous in sharing what we’re able to acquire because we just see it’s also just a matter of things that are beyond our control. That’s a very different way of looking at human beings than the one that are dominant in our cultures.
Goldy:
You frame this luck as a moral argument, but we know when it comes to what you call market luck, that argument is empirically supported. It’s just plain math. The market is a non-ergodic system, and therefore is driven by luck path dependence and compounding. While merit plays a role, it’s more noise than signal.
Ingrid Robeyns:
Yeah, that is true but the moral arguments, at least if they’re applied moral arguments like I developed them in a book, they always are based on empirical assumptions. So also for the case of the biological, the natural lottery, so genetic luck, but also for the case of social luck, there’s the same empirical evidence.
Nick Hanauer:
Yeah, of course. Yeah, and in your book, you offer up some specific limits. Can you speak about those?
Ingrid Robeyns:
The limit should be determined depending on at what level we really see those two forms of harm kicking in, but at the same time, taking into account that we want to create enough positive financial incentives for people who are motivated mainly or primarily by financial gain in order to innovate or contribute to the economy.
So I don’t know any research, any empirical research that has estimated where this limit would be. I give in the book as really a ballpark figure and a rough guess. I just say, okay, let’s say 10 million.I also say this is context dependent, it is for a society with a solid welfare state. So it’s basically the societies that I know, which is continental Europe, a solid welfare state, free, high quality public education, a healthcare system. I think if you have all these kind of security levels, then if you want to make sure that people will still really contribute and be incentivized to contribute to the economy, I think allowing them to earn up to 10 million seems to me the way we should organize society.
Nick Hanauer:
Per year, you mean? 10 million per year?
Ingrid Robeyns:
No, that is actually wealth. I’m very sorry. It’s very, very low. I know, I know that people in the US find it shockingly low, and I’m very happy to have another number, but the question really is, what is the amount of wealth that people have when you see them having these harmful effects on society? So if you have 10 million in terms of just your assets, and actually pensions are also excluded. That’s again, because we have our pensions are, they are systems whereby we save collectively. So my savings do not include my pensions. So that’s why I say these estimates should be context dependent. But for me, the real question is, when do you have so much wealth that if you were to give it away to do something that undermines democracy, that the opportunity cost of you giving away that wealth becomes almost zero.
So if I were to give say, 10,000 euros to a political party, I would really make a sacrifice because it would mean I could not do something else with that money, something really valuable for me or my family. But if you have billions, what is 10,000 euros or $10,000? It’s nothing. Actually 100,000, even a million is nothing. So I don’t think we should get to a point where being able to give a donation to a political party or to hire a lobbyist or whatever one can do to influence democracy too heavily, comes at no opportunity cost. That is a big question.
The other one is of course, when we see that a certain amount of wealth has a negative effect on ecological sustainability. There I fear, given current technological setup, the metric, the wealth limit would actually be much lower. It would affect many people who are now not just in the 1%, but probably in the next 20%, because we know that the most important determinant of greenhouse gas emissions and other forms of environmental damage is people’s affluence. So that is what I call in the book the political limit, which is you could say, an institutional limit, the way we want to organize society. Then there’s a second ethical limit, but perhaps you first want to tell me that the political limit is crazy.
Nick Hanauer:
Yeah, yeah, so I mean, some thoughts. So most of what you said, I would say we agree with. We’re very sympathetic to the view, for example, that economic outcomes are largely determined by path dependence and luck. When you put in things like race and gender, it gets even worse than that. That merit is a component of how well people do in life, but it is a much smaller component than people believe. We are also, we don’t call it Pitchfork Economics for nothing, we definitely believe that massive concentrations of wealth at the top are bad for societies in practically every way that you can imagine. I absolutely don’t believe that limiting, somewhat limiting the amount of money that you can make will decrease the amount of incentive there is in the economy for people to innovate and build new things. The rate of innovation in the United States did not go up when the capital gains tax was reduced from 28% to 15%. Bill Gates did not decide not to start Microsoft when he did because the capital gains tax rate was 28%, right?
Ingrid Robeyns:
Absolutely, yes.
Nick Hanauer:
Yet at the same time, so I’m not a philosopher, although I did study philosophy as an undergraduate, I will have you now, but we are very much more oriented towards policy and politics, what’s practicable. What strikes me about your proposal is that it’s one thing to say to a class of very energetic and very status driven… Because all money is is frozen status. People don’t want money, they want status. That’s what we’re all competing for.
Goldy:
Well, beyond a certain point.
Nick Hanauer:
Yeah, beyond a certain point.
Goldy:
The people you hang out with.
Nick Hanauer:
The class of people I hang out with are driven by a desire to be at the mountaintop, and-
Goldy:
Yeah, I know a lot of people who need that money for things like rent and mortgage payments and food.
Nick Hanauer:
Yeah, correct.
Goldy:
[inaudible 00:20:09].
Nick Hanauer:
But we are talking about wealthy people. They were very determined. It’s one thing to say we, you’re going to live in a society where the tax rate is higher, differentially higher. So if you make a billion dollars next year, we’re going to take 60% of that or 70% of that-
Ingrid Robeyns:
Yeah, progressive taxation.
Nick Hanauer:
… and you can keep 300, but it’s an entirely different proposition to say to that same person, the limit of your income this year will be effectively $200,000 because the differential between $200,000 in income and 300 million net, that’s very large. As a practical matter, I do not believe that you could ever get the entire planet to, all the nations of the earth, to agree that we should limit wealth in that way.
Again, we often do things like, for example, raise the minimum wage in Washington state before anyone else did and heard all these cries of all the businesses would leave and all the rich people would leave. We discounted that because the differential was not great enough to create that incentive. But if we had raised the minimum wage to $100 an hour, it is absolutely the case that everybody probably would’ve left. Likewise, we just pushed through a 7% tax on capital gains here in Washington state, and we got all the cries of, well, everybody’s going to leave and it’s all going to collapse. Of course I don’t really believe that, but if the tax in Washington state on capital gains was 90%, I can guarantee you that all of the wealthy people who were capable of generating capital gains would indeed leave.
Ingrid Robeyns:
Except if the rest of the world would also have 90%.
Nick Hanauer:
No, no, no, but now you’re in a collective action problem.
Ingrid Robeyns:
Absolutely. No, this is great because now it becomes really interesting between us to have this conversation. So I should say, I don’t believe limitarianism will ever be implemented. It’s not a policy proposal. I have in the last chapter of the book, I say what I think we should do, and some of these things are, basically it’s like increasing taxes on capital and especially income from capital, but also considering a wealth tax. So decreasing taxes, that’s actually more for Europe, but decreasing taxes on labor because they are much higher that taxes on.
So all these things that, I mean, many, many, many other economists and philosophers and political scientists argue. So you could say, oh, but this is what many other people are arguing. So why then? How’s the link with this more radical and absolutist proposal of limitarianism? But limitarianism is what philosophers call a regulative ideal. So it’s something that we will never reach, but we have reasons to want to move in that direction. Anybody who says there is a limit to inequality, there is inequalities too big, is in effect almost by way of logic saying that means that there is a certain level where if inequality rises, it becomes either harmful or unacceptable or illegitimate, which means that if you say that inequality can’t just be whatever it happens to be, you must think about a certain level to which you want to reduce it. I think that’s a conversation I want to provoke to really make us think, well, how much inequality and how much wealth concentration actually can be justified?
For me, the main point about the book really the reasons, so it’s the ones that I was already talking about, it’s the harm arguments, it’s the luck argument. There’s also the argument about how this wealth actually was often, how that wealth historically was generated. Because for example, to the extent to which wealth can still be traced back to say, transatlantic slavery or exploitation of labor in the global south, all these wealth concentrations are illegitimate in debt and immoral in that respect. I think I overlap here a lot with what people who just argue more generally about the harms or the bad effects of excessive inequality, say, we agree a lot.
I should also say that my colleagues, political philosophers internationally do not find the arguments I make very radical at all because the philosophical foundations of it are widely discussed in the academic literature. But the idea that the arguments may actually lead us to the point where as a matter of principle, we should accept that at some point it’s enough. That is just something that is so at odds with our culture, with whatever you want to call it, the ideology, but also possibly with the form of capitalism that we have because one definition of capitalism is of course, that there will always be people who try to increase profits. Profits are what then is the… what happens first you have profits and then you turn them into personal wealth. So if you say that profits can be endlessly, and if the idea of the economy is that people, that entrepreneurs try to maximize profits, then yes, there is a tension with the arguments that I have and what I propose.
So I think in the end, I’m really also arguing for reconsidering the type of capitalism that we have. I’m not anti-capitalism, but I just think the type of capitalism that we have has become really harmful for human beings and the planet. That the focus on what two big inequality does is one example of where we can see this.
Nick Hanauer:
Can I offer an idea? This may be anticipated by you, but so for example, we have a minimum wage in the United States, which is at the federal level, woefully low. One of the propositions that I’ve thought would be really interesting is to tie the minimum wage to the income of the top 1%. In other words-
Ingrid Robeyns:
Wow, that’s a great proposal.
Nick Hanauer:
Yeah, in other words, I’m not so much in favor of limiting the top, but in absolutely ensuring via policy that the people at the bottom and the middle do as well as the people at the top, because I think that that arrangement is more dynamical and less problematic than just saying, hey, there’s a hard limit to what you can have.
Goldy:
So this, Nick, would be you’re, a rising yacht lifts the tide.
Nick Hanauer:
Yeah, something like that. I don’t know, but honestly, if the minimum wage in the United States tracked the after tax income of the top 1%, and you believe as I do that the minimum wage compresses up all other wages, I mean, there are some other things you would have to do. But if you could imagine a society where, I mean, one of the problems of course Ingrid, is that the amount of inequality we have in the United States is too much today and should be shrunk. But let’s just stipulate that you manage to have the distance between the top and the bottom and then you tied them together. How do you feel about that?
Ingrid Robeyns:
I think that would, I really like… so I am of course, I like to think out of the box. So I really like this idea, although I think it is almost as… I don’t know whether it’s much more implementable than many of the proposals I have in my book, but I really, really like the idea because it incentivizes the entrepreneurs and the innovators. However, I think it would only work if you couple it with almost complete inheritance taxation because the problem is not income, the problem is wealth, if you talk about genuine big economic inequalities.
Nick Hanauer:
Yeah, yeah, yeah, of course.
Ingrid Robeyns:
If you say [inaudible 00:28:23]-
Nick Hanauer:
You still have the corrupting power at the top, you still have the concentration of both wealth and power at the top.
Ingrid Robeyns:
Yeah, so but if you say, okay, we agree that… So I propose in my book that in terms of inheritance, because I do acknowledge the role that parental love and all these which embody values played. So I don’t think in contrast to some of my colleagues that we should abolish inheritance completely, but I think it should become very, very small.
So say you can receive as a person over your lifetime, the equivalent of the half the price of a, the median price of a house, whatever that is in the US. I think in my country, it would right now be something like 200,000 euros, which is by the way, much more than most people ever get in terms of inheritance, because most people get almost nothing. Then everything else would be completely a text. Then you would really, I mean, what I also propose is actually that we redistribute this money to make sure that everybody has a head start when they’re 18, but that is different thing. But if you do that, then you really level the playing field, and then you could do something like the proposal you just mentioned. But if we do the proposal you just mentioned in the world as it is without first equalizing the playing field, then there will still be many people who are born with multiple millions and billions. Then what does it matter for them? So it would be a way to lift the poor out much more radically, except of course, we do also have poor people, the disabled namely, who do not have wage.
Nick Hanauer:
Yeah, of course.
Ingrid Robeyns:
So I do think that is a… and there’s also of course the global dimension because in some of the industries in which billionaires make their fortune, actually, it’s not so much the workers in the US or in Europe that are at low wages, it’s say, the people working in the garment industry in Bangladesh or people working in the factories in China in grueling circumstances. So this is of course, so I think in terms of feasibility, we always run into problems of international cooperation. That is also why I believe we should really change the ideology.
We should change… I mean, you know that we had in the late ’70s, we had this shift in how economic theory was perceived. So we had the rise of the influence of people and Friedman and all the other neoliberals. They’ve not just influenced policy, they’ve not just put politicians there to execute those policies that were already in all the books, but they have also really changed the culture, the way we as people look at ourselves.
Nick Hanauer:
For sure.
Ingrid Robeyns:
I think we should have… So we should not just look at policies, but we should also really think about, okay, but when do we think we deserve something? When do we think something is ours? It’s to that level of… So I am in a book doing many different things, also endorsing some proposals, but I’m also really trying to unsettle and try to come up with alternatives for how we think about ourselves and also how we think about society.
Goldy:
So, can I ask you a question about the word limitarianism?
Ingrid Robeyns:
Yes.
Goldy:
Was that, I don’t know how that translates into other languages, but certainly in the US, people don’t like limits. I don’t think that’s a popular word. Oh yeah, what I want or more limits. How intentionally provocative was that?
Ingrid Robeyns:
Yeah. So it actually came because this is based of course on scholarly work that I’ve been doing in political philosophy and actually partly also in welfare economics going back 10 years. In both welfare economics and political philosophy, we have of course these different, we call them principles, when we talk about distributive issues, and they’re called egalitarianism, prioritarianism, sufficientarianism. I was first of all, making a contribution as a scholar to that academic debate and that’s why I came with this term, limitarianism. In academia, nobody cares about whether something is motivating or an aspirational term. In the end, my trade publishers Penguin in the UK and Astra House in the US, like that term, but I can see that it may be seen as limiting the freedom of people or not allowing people to really grow.
So I can see that point, but I also just increasingly think perhaps we should also sometimes accept limits because we have limits everywhere in our lives. We have speed limits, we have… I mean, if you drink too much alcohol, you go beyond the limit of what’s good for you and good for those around you. So perhaps it’s also this idea that perhaps sometimes we should just accept that embracing limits actually is good for us. That’s also in the chapter that I have on that it may actually be good for the billionaires themselves with some exceptions, but it works. I mean, we have some scholarship that says that it works as an addiction, that accumulating wealth, you always want to have more, more, more.
Nick Hanauer:
Correct.
Ingrid Robeyns:
Also because of the status effect.
Nick Hanauer:
No, again, you have to remember that this is all about status. In a status contest, there is never enough.
Ingrid Robeyns:
So one of the things I did not really, I have not developed a proposal in the book, but I think that is really, really interesting is, can’t we come up with a different way for people to acquire status? So for example, we have this Forbes billionaire list. Why don’t we have something, a list, a public list, that tells or gives an estimate of what your contribution to the world has been. I don’t know what that would be because it’s difficult. I mean, of course the easy thing about the Forbes list is that it counts money, whereas if you look at contribution to humanity or to the world, it is of course different. So you get problems of incommensurability. But still, I think we should also really try to come up with, to decouple this status seeking element, which I think is almost impossible to get rid of because of the way human beings are, to some extent, to tying it so much to money. There, I don’t have a good proposal, so perhaps you do.
Goldy:
Yeah, the Forbes 400 list of top snarky podcast co-hosts.
Nick Hanauer:
There you go. I love it, I love it.
Goldy:
That would work for me.
Nick Hanauer:
So Ingrid, we’ve gone over time, but we have a couple of final questions. So the first is the benevolent dictator question. I mean, you’ve answered to a certain degree, but given, if you took all the constraints out, what are the top three things you would do?
Ingrid Robeyns:
So I think if you think about policymaking, I think the first one is really international coordination, and especially trying to close tax havens, because as long as we have tax havens, there will be some money that is just beyond the reach of anybody who wants to tax. Then also to have international coordination on having a minimum tax on either wealth or capital gains or something else, but that really focuses on the incomes and the wealth of the super rich.
But if I were to be able to pick my policies, of course, we also want something that focuses on the poor. My book focuses on those at the top because I think we haven’t paid enough attention there as political philosophers. But of course ultimately, you want to make sure that people do not live in misery. So we must come up with something like either just an economy where there are more good jobs for everybody and we have a decent safety net for those who cannot work, or else something like universal basic income at a high enough level, so one of those things. Then I also just think we need to really reform the economy to make it ecologically sustainable, because anybody who has children should worry about what we are going to leave them.
Nick Hanauer:
Yeah. One final question. Why do you do this work?
Ingrid Robeyns:
Yeah, why did I do this? So I actually do not have a personal reason to do this. I was not born poor, and I’m not rich. So it’s not related to my personal life, but I’ve been working on questions of inequality and distributive justice all my life. It’s really at this interface between economics and philosophy, which are the two disciplines in which I was trained, that these kind of questions come together. I’ve always had a kind of an unease with what I was taught when I studied economics. I just felt so many things were wrong, if I may say so.
Nick Hanauer:
Yeah, that’s a-
Goldy:
Good, good.
Nick Hanauer:
… Pretty good choice of words.
Goldy:
Yeah good intuition.
Ingrid Robeyns:
Yeah, and that’s actually why I then moved to, yeah, you could almost say retrain in philosophy and I made my career there, but I still feel the economy is way too important to leave just to the economists. That’s why
Nick Hanauer:
That’s for sure.
Ingrid Robeyns:
… I think I should… yeah, and also the work I want to do that I started doing now and want to do in the future is really thinking about economic systems and how, because there are all sorts of proposals about alternative economic systems, but which one really can we now judge as being the best one or a number of really good ones, where then the people can decide what they want. So I think we need an alternative for it, neoliberal capitalism, but it needs to be well thought through, and that’s where I hope to devote my energies to in the next decades.
Nick Hanauer:
Love it. Well, thank you so much for being with us. It’s been a fascinating conversation.
Ingrid Robeyns:
Thanks for having me.
Goldy:
$10 million, Nick. To me, if I had $10 million, that would be a lot of money. To you, not so much and-
Nick Hanauer:
Correct.
Goldy:
Basically, I’m of two minds on this. On the one hand, if your wealth was capped at $10 million, I’m pretty sure I wouldn’t have a job.
Nick Hanauer:
That’s correct. That is correct.
Goldy:
Now repeat after me. But Nick, on the other hand, if your wealth and all of your buddy’s was capped at $10 million, this job wouldn’t be necessary.
Nick Hanauer:
Yeah, but a job would be necessary.
Goldy:
A job, but I’m saying, but the job I do right now, which is, we’re trying like Ingrid, to change policy and norms. I mean, that’s what this podcast is about, it’s about changing the narrative, about changing the norms of extreme inequality, we wouldn’t have a Pitchfork Economics podcast because there would be no need for it, because that problem would be solved.
Nick Hanauer:
So Goldy, this was a really interesting conversation with Ingrid. There’s a lot I think, to like about her arguments and her book. Certainly, much of her analysis is dead right. That extreme inequality is both morally and practically bad, but the limitarian element of it, I think, honestly, is more of a provocation than a proposal. I think she is absolutely right that we need to surface all of these ideas.
For example, and you and I have talked about this of course extensively, the role of luck, path, dependence and compounding, to say nothing of race and other preferences in how people do in modern market societies and the outsize and actually the relatively small part that merit plays often in where we end up. She’s right to raise the issues of our culture, that the only form of status that we seem to be able to find is how much money you have, or even more egregiously, how many followers we have on Instagram or some damn thing like that. Surely, there are better ways to assess your contribution in society than those things.
Of course, one of the really interesting facts about this idea that if you put somebody like me at the very tippy-top, that my wealth would be limited to $10 million, is that as a practical matter, I suspect that that would create a society where the median wealth would be $5 million because you can’t squish the money around any other way without making people multimillionaires. If you could do that, that would obviously be a pretty great society where everybody in it was financially independent and thriving.
The question is, as a practical matter, can you get there? For my own part, I don’t think limits are the way. I certainly believe that the tax code should be infinitely more progressive. I’m serious about the proposal of linking the wages at the bottom to the wages at the top. I think that that’s a way to tie the fortunes of the society together, I think in a very, very productive way. I think that we have to find a way, certainly to contain the political power that accumulates when wealth accumulates. This is why Citizen United and this idea of $1, one vote, that replaced one person, one vote in the United States is so egregious, but I’m not sure I can get behind actual limitarianism. How about you?
Goldy:
How about if it was a billion dollars?
Nick Hanauer:
Yeah, I’m still not sure that that’s the path.
Goldy:
Really?
Nick Hanauer:
Yeah, I’m just not sure.
Goldy:
This is the thing, Nick. I understand all the practicalities. Look, it’s hard just even to pass a progressive income tax in this country.
Nick Hanauer:
Correct.
Goldy:
It’s hard. Obviously Piketty is right, we need a global wealth tax. Ingrid’s right, we need to eliminate these tax havens and so forth.
Nick Hanauer:
100%. 100%.
Goldy:
Right? Because you guys can take your gold bullion and go wherever you want. All of that practical stuff aside, but I think is really important about books like this and that term limitarianism is that it’s sparking the conversation we have now.
Nick Hanauer:
Yeah, it’s a useful provocation.
Goldy:
Because what really, and we know this from our own practice, we run campaigns out of our office, and we’ve always had this philosophy that we’re using these campaigns, these policy campaigns, to change the narrative. We use the narrative to advance the campaigns and it is this feedback loop.
So when you talk about libertarian policies, it helps raise awareness and change that conversation, get people thinking, well, yeah, there probably should be some limits. There should be some limits to extreme wealth, to how wealthy and powerful any one individual should be in a democracy. I mean, because clearly democracies, our founders understood this, they wrote a constitution. As our friend, Ganesh Sitaraman says, it was a middle class constitution that did not imagine extremes of wealth in the US like there was in Europe. Of course, as Louis Brandeis famously said or didn’t say, or said something like it, we can have wealth concentrated in the hands of the few, or we can have democracy, but we can’t have both. So it’s important to raise this conversation and have people accept the fact that there should be limits in a sense. What exactly these limits are and how they’re enforced is less important than just changing the norms about limits in general.
Nick Hanauer:
Yeah, well, this may be so.
Speaker 6:
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