How much do we deserve?
How much inequality can a democracy experience and survive? What is economic justice?
Yet at the deepest levels of our being, we who take pleasure in our unparalleled prosperity are vaguely anxious that millions of others in our midst are living in poverty. So, are we the deserving and they the undeserving? Is the marketplace the measure of all things? How much inequality of any type can a democracy experience and survive? What is economic justice? How much is enough? How much do we deserve?
This is a question of distributive justice, which the Westminster Dictionary of Christian Ethics defines as the "virtue by which goods and burdens of the community are distributed with due proportion among citizens." Is a distributive ethic possible, one that will be fair to all people and at the same time produce abundance to be shared? I believe it is, even though there are people who say the very idea of economic justice is inherently contradictory.
In our specialized world, the study of economics—sometimes called "the dismal science"—seems totally divorced from moral analysis. Economic analysis is in the hands of one group of experts and moral analysis in another, betraying the historical reality that economics arose from the field of moral inquiry. For Aristotle, economics (or oikonomia, "management of the household") was a branch of ethics and addressed the question of whether each person in the household received what is required for a fully human life. The redoubtable economist Adam Smith was actually a moral philosopher who believed that moral sentiment would hold in check the acquisitive human nature that, in turn, drives the economy.
If economic policies are to be just and effective, if we are to make sense of the question of how much we deserve, ethics and economics must be rejoined in a common dialogue. And in that dialogue the economic system should be the servant, not the master, of humanity.
To urge the dialogue along, I propose the following principles as tests for the justice of our economic policies, drawing on principles developed almost 80 years ago in Father John Ryan's landmark book, Distributive Justice. These "canons of distributive justice" strive to balance the lofty requirements of economic ethics and the hard requirements of an efficient economic system.
The canon of need
All human beings have the inherent right to have their basic human needs met before any economic surplus is distributed to others.
Simply stated, the basic needs of the poor transcend the superfluous desires of the rich in moral importance. This principle is affirmed in religious and philosophical traditions from Plato to the Jewish, Christian, and Muslim scriptures. It is based on the idea that all human beings are worthwhile. That is, while some things are to be used for instrumental purposes, human beings are not to be used as means to some higher end: They are ends in themselves.
Further, the canon of need recognizes the individual as a center of freedom, a freedom understood not only as liberation from arbitrary outside restraints, but also as the ability to make real choices. Self-determination requires a minimal economic package, however. So, to meet human needs, a society requires an approximation of equity or fairness in human distributional schemes. Recognizing the roles of fortune, genetic inheritance, and social factors over which persons have little or no control, the canon of need recognizes and respects the dignity of those judged as "losers" by a competitive society.
We are more than mere individuals; we are individuals within a community. We are members of a social, political, and economic entity by virtue of our very humanity. To exclude some members from that community because they have not produced enough is to erode the community's foundation in human solidarity.
Our moral sensitivity is enhanced as we meet the needs of society's weakest members. In our best moments, we know it is right to "do unto the least of these" with compassion, not condescension. A society may be judged by how it treats its poorest, weakest, and most vulnerable people. Meeting needs based on the intrinsic worth of the individual is what sets the civilized society apart from the barbarian society, in which the sacrifice of expendable human lives is the norm. Moreover, it is what sets the democratic society apart from the totalitarian, in which the interests of the individual are totally subsumed in the interests of the state.
Clearly, the concept of need requires definition. Some believe they need luxury goods to live meaningfully. I believe a community has no obligation to provide for that kind of need. But a community is obliged to provide for essential needs that are required for a humane existence. In American society, this humane existence is defined officially by the poverty level, although other definitions at a higher standard of living could be defended as more just. For the ancient Greeks, the difference between freedom and slavery was whether or not a person was caught up in the struggle for mere survival. The free person was not engaged in the "tyranny of survival" but had sufficient means not only to survive but also to pursue the good life. Economic security was the prerequisite for the realization of other values.
Morally, providing economic freedom is contingent on first meeting the basic human needs of all persons in the economic order. The problem in a purely market-based economy is that essentials such as food, clothing, and shelter compete in the same market with luxury goods. Productive resources tend to be allocated in such a way as to produce greater profits, which may simply force up the prices of essential goods. For instance, it is the high profit margins on large automobiles like sport utility vehicles that drain productive resources from manufacturing low-cost cars with narrower profit margins. All prices then tend to rise. A variation of this over-reliance on the market is the urban phenomenon of closing nonprofitable food stores in low-income areas and opening them in more lucrative settings. This is the dictate of the market, but it deprives some of the opportunity to meet basic human needs in a convenient way. Thus, the "just deserts" of one person may have to be sacrificed for the urgent need of another.
Justice according to need must have priority over other claims; otherwise, there will be no basis for community and no stable context for individual self-actualization. The goods of the earth are the common property of all; we are merely human stewards of this largesse, which we have done nothing to deserve. As human beings, we do not own anything. Goods are merely loaned to us for our use.
One historical perspective on this issue comes from the 1917 "Declaration of Social Principles" of the Universalist Church of America. The statement advocates "An Economic Order which shall give to every human being an equal share in the common gifts of God, and in addition all that he [sic] shall earn by his own labor." This kind of moral guarantee is not part of modern American mores. I would affirm the principle simply and powerfully enunciated by the Roman Catholic bishops of Canada in their "Ethical Reflections on the Economic Crisis" that "the needs of the poor have priority over the wants of the rich." In liberation theology, this has been called "the preferential option for the poor."
But can this understanding be objectified? A number of authors have proposed establishing an income floor between 50 percent and 70 percent of the median income—with 50 percent providing the minimum for meeting bare physiological needs and 70 percent providing a so-called civilizing surplus. Establishing this income floor would provide an equality of results at the lowest income levels. It would require allocating differential amounts, however, as even people's most basic needs vary. For instance, persons with disabilities, physical or mental, would require more resources than others. Thus, this formula would not mean equal shares for everyone.
What would absolutely equal shares mean in the United States? According to a September 2000 report from the U.S. Census Bureau, per capita personal income in the United States in real terms was $21,181. This income level clearly cannot be the goal of redistribution, but it indicates that there is sufficient income and wealth in our nation to meet the basic needs of all people. The canon of need argues for public and private policies and practices that will guarantee a basic income for everyone as a matter of right, a citizen's wage.
The canon of proportional equality
Every human being should be limited in his or her consumption of income and wealth by the principle of sufficiency. This is an ethic of limits, a floor based on need and a ceiling based on proportionality, as articulated in Plato's Laws.
Robert Reich, writing in The American Prospect, points out that the annual average pay of a chief executive in the United States rose 18 percent in 1999 to $12 million. He then offers these examples of people at the other end of the pay spectrum:
Four hundred janitors in Los Angeles protesting wages of less than $16,000 a year;
More than 2 million Americans who earn between $7 and $8 an hour working in nursing homes, "bathing and feeding frail elderly people, cleaning their bedsores, lifting them out of bed and into wheelchairs, and changing their diapers";
Some 700,000 home health care aides who earn $8 to $10 an hour.
The median wage of 2.3 million child care providers, meanwhile, is only $6.60 an hour, while pest controllers earn a median $10.60 an hour. By comparison, Reich says, many law firms pay first-year associates $120,000 plus a signing bonus, and Wall Street investment banks pay more than $75,000 a year for financial analysts. Then, with undisguised irritation, he writes, "Setting a new example for college students across America, the president of Brown University, not content with a meager $300,000 salary, just jumped ship after only a year and a half for another university that offered three times as much." Reich indicates that the policy of the Federal Reserve Board, which raises interest rates to check inflation, makes life harder for the people on the bottom rungs of the ladder, who end up paying more for first mortgages, car loans, and other borrowing. "This year the richest 2.7 million Americans, comprising the top 1 percent, will have as many after-tax dollars to spend as the bottom 100 million put together, and they'll have 40 percent of the nation's wealth," Reich states.
These examples of extreme inequality attack the democratic egalitarian ideal as well as common-sense standards of decency. The class warfare under way in the United States undermines the principles of proportion and balance one might expect to see in a truly prosperous society.
The canon of proportional equality responds to Thorsten Veblen's theory of conspicuous consumption and the corrupting potential of excessive income and wealth. It is based on an ethic of enough; that is, beyond a certain level, income is not only superfluous but morally and spiritually corrupting.
The advocacy group United for a Fair Economy proposes the "ten times rule" in setting compensation: The highest-paid executive should make no more than ten times the salary of the lowest-paid employee in a company. This rule is spelled out in Sam Pizzigati's book The Maximum Wage. Plato believed that the ratio between the richest and the poorest person in the ideal state was 4 to 1; Aristotle believed it should be 5 to 1; Plutarch wrote, "An imbalance between rich and poor is the oldest and most fatal ailment of republics."
A maximum wage is not merely populist rhetoric or ancient ideal, however. Establishment business guru Peter Drucker thinks a CEO's salary should be capped at 20 times that of the average worker in a large company and 15 times that in a small company. Over a century ago, J.P. Morgan declared that no CEO of any company he controlled would be allowed to earn more than 20 times the wages earned by any other employee in that organization.
The canon of contribution to the common good
Work that serves the community should be valued more highly than work that serves only a few.
The canon of contribution to the common good is a far more subjective measure than the first two canons, yet some rough evaluations can be made. A study by the National Opinion Research Center evaluated 90 occupations in terms of social value and then ranked both their social values and their levels of remuneration. Physicians, who ranked second in social value, and college professors, who ranked seventh, are close in social value and work in professions that require about the same amount of education and training. Yet physicians, on average, earn more than twice as much as professors. Similar comparisons can be made between ministers (ranked 14th) and dentists (17th), welfare workers (46th) and undertakers (47th), and many other anomalous pairs. On the other hand, we find that architects (15th) have approximately the same average income as police officers (55th).
In an intriguing essay entitled "The Economics of Superstars," which appeared in a 1983 issue of The American Scholar, Sherwin Rosen asks if the principle of payment by contribution has been abandoned. He cites Italian economist Vilfredo Pareto, who discovered that while the curve depicting the distribution of intelligence quotients is bell shaped, the curve depicting the distribution of income is not. Specifically, the high-income side falls much more slowly than the equivalent low-income curve. According to Rosen, this means "that the distribution of earnings is far from proportionate to the distribution of ability." Rosen then asks, "How can it be that many a mediocre free agent [in professional sports] earns far more than the Secretary of State and the President of the United States combined?" Yet these income levels are the current allocations of the market. A more deliberate attempt to define one's contribution to the common good could hardly do worse. The average family can hardly afford to attend professional sports' games, which are often held in stadiums built using tax dollars, because the ticket prices are too high.
The controversy over comparable worth/equitable pay provides an opportunity to achieve some sense of proportion. While this effort is intended to wipe out the effects of discrimination against women and ethnic minorities, it is an instructive tool for exploring the problems and possibilities of an intentional system of distributive justice. In looking at the comparable values of various work positions, the worth of a given economic task becomes subject to public debate.
Granted, it is hard to define contributions to the common good, yet it is possible to make a start. I suggest that contributions that can be shared by the citizenry at large should take precedence over those enjoyed by the elite. Thus, creating public parks more aptly suits the common good than building private swimming pools. Human service occupations should have priority over those directed toward luxury consumption. Child care workers should earn more than sanitation workers, teachers more than fashion designers, and social workers more than professional athletes. Providing public transportation should be more important than satisfying private desires to drive big cars. Positions in government should be more highly compensated than comparable positions in the private market.
While I defend the ethics of this view, I am not so naive as to believe it has a chance of becoming public or private policy. Nonetheless, the issue must be engaged. At the very least, it would prompt a fascinating exercise in values clarification.
The principle here is that those people who work in the service of the community must be rewarded more generously than those who work to further competitive self-aggrandizement. In her book on moral development, In a Different Voice, Carol Gilligan spells out this contrast in terms of the predominantly male ethos of individualistic competition versus the predominantly female ethos of social connection. The U.S. economy is currently based on the perspective that the world is composed of individuals in conflict with one another over claims to resources. This represents the male ethos. The feminist view, however, sees the world as an arena not for conflict resolution so much as for preserving connections. This ethos is grounded in human attachment, the principle of caring.
A distributive ethic needs to factor in this community-building value. Contribution to the common good is an imperfect but necessary consideration in the allocation of resources in a just society—a radical but appropriate consideration in the democratic dialogue about resource allocation in a free society.
The canon of productivity
Compensation should reflect production. That is, you can take out what you put in.
This basic economic concept has been seen by some as a kind of divine dispensation, rooted in the fundamental nature of things. More cautious students of economics deny that distribution based on productivity is necessarily just. For example, how is it possible to justify that the incomes of CEOs and professional sports stars are many times the income of the President of the United States, who arguably has the largest impact on total production of goods and services of the nation? It is clear, however, that any formula for economic reward must consider the importance of productivity as a vital incentive.
My purpose here is not to discard the canon of productivity but to put it in its rightful place as one of several ways to allocate economic resources justly. My practical assumption is that productivity is well established in the American economic and moral psyche and needs mainly to be disestablished as a canon of divine right. It is a useful and important principle of distribution—but not a sacred one. Here's why:
First, to the extent that one's remuneration is based on the skills one has acquired through a lifetime, this canon gives an unfair advantage to those who have backgrounds conducive to acquiring those skills. For example, growing up in a middle-class family provides a wide range of educational, cultural, and occupational opportunities. Thus, we tend to reap what others have sown. Some people are given a head start in the race as well as better training, while others are held back at the start and even handicapped. Economists Samuel Bowles and Herbert Gintis reported in 1997 that children from the wealthiest 10 percent of the population are 27 times as likely as children from the bottom 10 percent to be in the top 10 percent in terms of income.
In addition, natural abilities also affect productivity. Clearly, the economic system is not responsible for the effects of different genetic endowments on people's abilities to succeed. This does not mean that the race should not be run. It does mean, however, that society should seek to ameliorate, not to compound, this natural inequity. Consider the intriguing idea of reversing the current pattern of income distribution to compensate for the fact that unequal endowments have resulted from accidental and unmerited advantages. This is the principle of redress, which is, in effect, the application of affirmative action to even out the odds. Society must therefore give more attention to those persons with fewer natural abilities than to those with more.
"From each according to ability, to each according to need" is an apt moral expression when properly qualified. A just economy will encourage productivity among all its citizens who are able to produce economically. American society stresses incentives for the affluent at the expense of incentives for the poor. The plight of the working poor, the relatively high tax burden on the poor, and the social welfare system, which still tends to discourage people from working by dropping medical and other benefits for those who take jobs—all contribute to a reduction of productivity. A just society will maximize the abilities of its least-advantaged citizens and thereby more effectively meet human need. At the same time, such a society will recognize that people with limited ability, who are thus limited in productivity, nevertheless deserve to have their needs met because they are likewise members of the community.
The canon of effort and sacrifice
Work that is particularly difficult or that involves considerable sacrifice deserves special compensation.
Generally, it seems fair to reward effort, leisure being a form of income. But what about those individuals who, by virtue of genetics or environment, are unable to work? Should they be excluded from the benefits produced by the others' productivity? Should we follow the words of the Apostle Paul, who said, "Let him who does not work, not eat"—an early statement of the Protestant work ethic?
This position neglects the fact that in any given society, there is a group of citizens who, for very good reasons, are not and cannot be productive. The very young and the very old, for example, are able to contribute relatively little economically, yet they should not be excluded from the community. Likewise, people with disabilities, both mental and physical, are generally thought worthy of compensation, even though they may not be able to work effectively, as general public support for the 1990 Americans with Disabilities Act testifies. Caregivers in the family are not typically compensated for productivity, yet they perform the tasks of maintaining a home and caring for children and elders, the costs of which would be enormously expensive on the open market. Yet workers in these fields are at the low end of the income scale.
Effort can be measured in many ways. The difficulty of some kinds of work—mental or physical—requires different kinds of effort. In addition, some kinds of labor place workers in great danger; others allow people to operate in safe environments. Some work is dirty; some seems like play. In this connection, I think of Gandhi's practice of cleaning latrines as a reminder of how unpleasant some kinds of necessary work can be. Effort should be rewarded, but these practical conditions, not often noted, must be considered.
The canon of scarcity
At any given time, certain kinds of skills are in demand while others are not.
A college professor, for instance, may worry that students' desire to hear her lecture may wane and cause a drop in her income. Does the professor deserve a cut in pay? Is it ethical for income levels to be founded on the shifting sands of technology and taste?
Rewarding the scarcity of a particular talent fails to recognize the joint inputs that mark so many economic endeavors. In professional sports, one superstar may be highly rewarded when the team wins a championship, but in most cases, there is a "kitty" that is shared equally by all team members. The profit-sharing plans of some businesses could be said to follow a similar system of economic reward.
Clearly, people with valuable skills must be rewarded. The work done by the surgeon, the airplane pilot, the business executive, and the national politician cannot and should not be rewarded at the same level as work involving more mundane skills. Moreover, given the realities of human nature, incentives must be included in any realistic economic scheme.
I suggest only that the canon of scarcity find its proper place. Given an affluent society, such as that of the United States, it is quite possible to remunerate people by means of the other canons and still have a surplus from which to reward those who have rare skills.
The optimal plan for a more equitable distribution in the American economy would surely include the following, moving from proximate doable programs to the more difficult long-range solutions:
First, increase the Earned Income Tax Credit to bring the working poor up to the poverty level. Even President Ronald Reagan endorsed this antipoverty program, which was bipartisan until the ultraconservative takeover of Congress in 1994.
Next, transform the minimum wage into a living wage. Living wage campaigns across the nation are successfully moving low-income people up the pay scale without jeopardizing community resources.
Implement welfare reform that ends the cruel arbitrariness of a five-year time limit, putting more emphasis on the "carrot" (programs for education, child care, health coverage, and job training) than on the "stick" (that is, attitudes and actions that regard getting people off welfare roles as more important than getting people out of poverty).
Develop an affirmative action program that stresses class more than race or ethnicity but still recognizes the underlying discrimination in American culture, even after all classism has been screened out.
Create a social policy that is "front loaded," one that recognizes that investing in human resources early on makes far more sense than applying draconian sanctions later. Full funding for Head Start is one example. Others might include children's allowances (like those provided by most other Western nations), an equitable and well-funded public school system at all levels, social services that provide counseling and other support services, public transportation and recreational facilities, and universal health insurance.
Institute tax reform that guarantees true progressivity, seeks to maintain a top-to-bottom quintile ratio of not more than five to one, and makes the payroll tax more progressive by raising the upper limit on which these taxes are paid.
Create more effective taxes on wealth. This would involve maintaining the inheritance tax but indexing it for inflation. A wealth tax that reduces income superfluity and redistributes excess resources more broadly, as is done in the European countries, should be explored.
Finally, legislate a negative income tax, a system of income maintenance for people with the lowest wages, which will provide a floor under all Americans. In addition, low marginal tax rates will provide strong incentives for workers at the lower income levels.
Together, these proposals meet the canons of distributive justice:
The canon of need. There are no holes in this "safety net."
The canon of proportional equality. A rigorously progressive tax system that excludes income at the lower income levels, coordinated with a negative income tax, insures proportional equality.
The canon of contribution to the common good. Although difficult to build into legislation, compensating work for its contribution to the common good is a vital social goal. Job comparability, already roughly established in the public sector, can be encouraged in the private sector through legislation as well.
The canon of productivity. The free market remains the basis for economic activity and the rough efficiency of the market still provides rewards for greater productivity.
The canon of effort and sacrifice. Here again, one can hardly rely on government structures, but we must count on the market as being open to persuasion on this point.
The canon of scarcity. The market does a reasonable job here through the law of supply and demand. Distortions exist, but a progressive income tax would help moderate them.
Clearly, there is not a perfect match between the articulated canons of economic justice and the list of proposals I have outlined. But then, ours is a far from perfect world. I can only hope that these canons of distributive justice might inform policies that move in the direction of more equitable distribution. That is only part of the task, however. Before these canons can influence public policy, the United States needs a serious conversation on the value of fairness and equity. It must be more than a conversation about economics; it must be substantially an ethical conversation.
What remains, at this juncture, is what theologian Paul Tillich called "silent interpenetration," in which people committed to more equitable distribution enter the conversation with those who claim that the market settles all the really important economic questions. I hope that the foregoing discussion might make a contribution to what the late Robert Hutchins called the "community of the dialogue," which is democracy at its best.
I submit that poverty in the midst of plenty is a moral scandal; that great disparities in income and wealth cannot be justified morally or economically; that the principles of freedom and trusteeship, equity and efficiency, and community and individualism are decisive economic issues; that both poverty and wealth are morally and spiritually corrupting; and that a program for meeting economic needs in the United States does not require moral compromise. I suspect such ideas will not receive a warm welcome in our society among those who already benefit from the economic order. It has not been my purpose to be popular but to be prophetic in the sense of laying down a plumb line by which we might measure ourselves—in other words, to get a "God's eye view" of our lives and our world.
In my more pessimistic moments, I believe we, as Americans, have ceased to be a nation of citizens and have instead become a self-righteous collection of taxpayers. There is a moral chasm between the two, but in my more hopeful moments, I have faith in the basic decency of the American people.
What might motivate Americans to create policies that reduce inequality and end poverty? One alternative has been described as a "theology of relinquishment." Without question, many if not most of us live more comfortably than nearly all the people in history, not excepting royalty. Many of us Unitarian Universalists live more comfortably than the vast majority of people in our own affluent country. Yet we often feel impoverished—not because we are needy but because our expectations continually outstrip our resources. Enough seems always to be a little more than we have. Reducing inequality and ending poverty will require sacrifice, not only economically but also in terms of social time and political effort.
Ethically, I propose an act of class betrayal. Politically, I must act against my apparent self-interest. That may seem foolish until I realize that my true self-interest lies in creating a just society. As long as I believe self-interest is defined by personal acquisition and as long as a large number of affluent people follow their narrow self-interest, we are in for class warfare, from which no winners will emerge.
Certain signs suggest that this larger view of the common good is upon us. Recently, five CEOs of large American corporations lobbied Congress for full funding for the WIC program, which provides pre- and postnatal care for poor women and children. The positive impact of this program has been demonstrated. But why were these normally conservative, "limited government" businessmen lobbying for social welfare legislation? They knew that the well-being not only of their corporations but also of their nation depended on the good health of the children who will be the citizens and workers of tomorrow. These individuals recognize the national interest (and incidentally, their own) when they see it. Perhaps if enough people are willing to relinquish enough of their affluence, the proverbial "eye of the needle" will become larger or "the camel" will become smaller. If enough people have the courage to commit acts of class betrayal, perhaps we can be needled into the kingdom of heaven.
How much do we deserve? There is no more important social or moral question before us as we move into the new century.
This essay is adapted with permission from How Much Do We Deserve? An Inquiry into Distributive Justice, ©2001 by Richard S. Gilbert (Skinner House Books, 2001).