Like a law of physics, corrupt politics, unshared national wealth and uncontrolled greed combine to produce economic inequality and delusional prosperity. Now comes a book that should have been titled Stolen Wealth. This would have been more consistent with its long subtitle: How the Rich Are Taking Our Common Inheritance and Why We Should Take It Back.
In today’s world of economic crashes and calamity it comes to this: Should there be higher taxes on the richest people in society? Gar Alperovitz and Lew Daly make a very sound case that considerable research demonstrates that a huge fraction of the success of the wealthiest people results from inherited knowledge that society at large owns. The incredible economic inequality we see today, therefore, is morally unacceptable.
If President-elect Obama and his many economic advisors buy into the intellectual arguments presented in this book, which is very likely, then we can expect a strong push for higher rates of federal taxation on the highest incomes and capital gains, as well as on accumulated wealth by higher inheritance taxes. This book presents the central argument for such public policies, namely the incredible importance of inherited knowledge accumulated over long periods that forms the basis for financial success by some individuals. Their smartness, creativity and hard work cannot explain their disproportionate wealth. It largely results from inherited, accumulated knowledge from the past.
According to this understanding, it is not so much about redistribution of wealth from the richest people to everyone else, it is more about the morally correct and necessary action to rectify the unjust and immoral ownership of wealth that a relatively small fraction of the population has improperly (though legally) attained.
What Americans need to be told by politicians is that “ever-increasing knowledge, accumulating across the generations, is central to the creation of all wealth,” according to the authors. Therefore the proper role of government is to ensure that many more people get some of this wealth. And the practical way to do this is through higher taxation of the unjust deserts now enjoyed by the Upper Class.
Looking at this another way: the economic decline of the middle class and the expansion of the working poor result from all these unjust deserts. All the unshared wealth that has resulted from inherited knowledge that a few people have managed to unfairly benefit from. This has produced rising economic inequality and increased economic suffering by so many Americans.
This is not the easiest book to read because it is written in an academic rather than a populist style. Nevertheless, for anyone that wants better justification for “taxing the rich” public policies it is essential reading. Another good title for the book would have been: Battling Economic Injustice.