If the conservative era now collapsing around us had a reigning idea, it was best expressed by Margaret Thatcher when she declared with Bourbonesque flair that "there is no such thing as society." In their new book Unjust Deserts: How the Rich are Taking our Common Inheritance and Why We Should Take it Back, Gar Alperovitz and Lew Daly turn Thatcher's premise on its head and with it the whole individualistic worldview that ruled our politics for the last three decades. They focus on the role of knowledge in economic growth, arguing that expanding knowledge is a collective source of wealth and, as such, demands a significant social return in the direction of greater equality.
James Lardner: After all the twists and turns of an amazing presidential campaign, the key point of contention in the end was "the redistribution of wealth"—not Barack the Reverend Wright-trained "America-hater" or the San Francisco-style "limousine liberal," but "Barack the redistributor." What do you make of this charge?
Lew Daly: Obama used the phrase "spread the wealth around" when Joe the Plumber asked about his tax plan late in the 2008 presidential campaign, and, of course, the McCain team seized on this "socialist" idea and made it their central critical theme in the final days before the election. As in Father Coughlin's time and Barry Goldwater's, Joe the Plumber's charges of "socialism" didn't carry much weight at the polls. But I actually think this particular plot twist at the end was the most interesting political moment of the entire presidential campaign, because it foreshadows what the Obama years will be about. For the last two decades, the Republican Party ignored distribution while the Democrats changed the subject from distribution to growth, from "dividing the pie" to "enlarging the pie."
It was arguably the Democrats who worked the hardest to sell middle America on this "win-win" idea of putting growth before equality, and both parties hooked us in by loosening credit and creating "wealthy feelings" with two major asset bubbles. Well, that's over now, and the politicians no longer have the luxury of avoiding the real problems of declining household earning power and growing inequality. But what Obama should have done more clearly on the campaign trail, to start this debate off on the right foot, was fire back a very simple point, easily illustrated: he's not trying to "spread the wealth around" so much as put a stop to the massive redistribution that's already going on in America from the middle to the top.
JL: What is this "upward redistribution?"
Gar Alperovitz: The economic facts plainly show this. In the decades after the Second World War, productivity and wages rose together, almost on a one-to-one basis. Beginning in the 1980s, productivity and wages began to diverge, a divergence that sharpened to record levels under George W. Bush. Since 2000, productivity has increased about 20 percent, but the median hourly wage went up only 3 percent. So the question is: Where is the wealth that used to go to wage-earners going today? Scott Lilly of the Center for American Progress gives us a snapshot of where it's going by looking at the Bush "recovery" of 2002-2006. Although this was a particularly extreme period, the relative magnitudes are roughly in line with trends emerging over the last thirty years. Household income increased a total of $863 billion over the period. $626 billion of the total gain went to the top 1 percent of households. The bottom 90 percent got only $41 billion, less than 5 percent of the total gain. Unless Joe the Plumber thinks 90 percent of the people create only 5 percent of the output—this can only be described as upward redistribution. Or as Theodore Roosevelt put it, taking from those "who earn more than they possess" and giving to those "who possess more than they earn."
LD: From this kind of evidence on distribution, we probe deeper to look at the societal and historical contributions that make all of us "social debtors" by Teddy Roosevelt's moral standard (or immoral standard, as it were) of possessing more than we individually earned. The rich are simply more indebted because they necessarily received more from society, and so, logically, they owe more back. Or put another way, the problem with Joe the Plumber's critique of "spreading the wealth around" is that it doesn't take into account the fact that wealth is already highly socialized before we even start talking about taxation. It has already been "spread around" by many kinds of social contributions that add far more value to our labor and investments than what anyone pays in taxes.
JL: You quote Warren Buffett posing this question: "How much money would I have if I were born in Bangladesh, or born here in 1700"? What's his point? Isn't it obvious?
LD: Yes, it is obvious. The problem is we don't take it seriously. He's saying—in fact, these are also his words—that "society is responsible for a very significant percentage of what I've earned."
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