You are here:   Features > The poor need the rich to always be with us

Self-sacrifice yields a resilient society: “A Pelican Feeding Her Young”, from a Franco-Belgian manuscript, c.1277 (Digital image courtesy of the Getty’s Open Content Program)

A  narrow emphasis on the short-run, personal and hedonistic benefits of economically liberal policies has impeded their uptake and is encouraging growing resistance worldwide. Corbynism is not an isolated phenomenon, but part of a global trend. Addressing this threat does not require new liberal economic theory, the underlying principles of which, though poorly applied, are well understood and known to be robust. What is needed is a change in the psychological framing and language of liberal economic policies.

Specifically, it is futile to deny that the wealth differentials produced by liberal markets are as a matter of fact disadvantageous to worse-off individuals, even in the presence of the rising incomes for all. The worse-off know this to be true, and are contemptuous of arguments to the contrary by liberal economists. The evolved human organism gathers resources to secure reproduction, and in that process it is genetically functional to resent and attempt to prevent competitors acquiring differential levels of available resources.

Bluntly, rich people secure the future of their families more effectively, and this is obvious to all of us. Given that reality, political effort should be concentrated on the equally valid but less manifest truth that individual lifetime wealth differentials and their very real disadvantages are more than offset by the long-run, extra-personal, benefits returned to an individual’s direct and collateral descendants through societies that are resilient to natural disaster and shock due to high aggregate, societal wealth.

Advocates could show that this argument is sincere by recommending policies that facilitate the transfer of wealth between generations and within families, with a particular emphasis on those currently of lower net worth. In order to reconcile ourselves to short-run individual wealth differentials we must be allowed to build families with long term interests.

Resilience in the face of shock, the ability to recover promptly from natural disaster or to resist hostile forces, internal or external, is one of the defining hallmarks of successful societies. In its absence even generally high levels of personal income would be seen as having little value. However, this contrary case, of rich but weak societies, is purely theoretical, since systemic resilience is exhibited only by wealthy societies, that is to say by societies where the mean wealth per capita is high, the total aggregate wealth of all individuals is very substantial, and the wealth is not only maintained but steadily augmented even in the face of swiftly changing circumstances. All the resilient societies of which we know are rich and increasingly rich: all rich and increasingly rich societies are resilient.

However, we know empirically that this wealth need neither be evenly distributed across the population nor held in common, provided that the aggregate is available for use in the face of any threat to the system.

How, then, to obtain greater aggregate wealth? Since these riches are to be used for a common purpose, it is intuitively plausible to suppose that it should be the business of government to oversee this creation in the general interest. However, and naive intuition finds this supremely puzzling, the historical record suggests that collective strength is frequently and most successfully attained by economic systems that permit substantial differences of individual personal wealth to emerge as the result of the free creation and exchange of goods and services. Indeed, the best of these systems are not only permissive in this regard, but actively encourage and even provide legal protection for such differences.
View Full Article
Lawrence James
July 7th, 2018
5:07 PM
'Laws that restrain an individual's adventures' . . . eg the outlawing of the slave trade, the banning of the adulteration of food and legislation which insists upon safety in mines and factories. Victorian laws framed in the knowledge that adventurous capitalists could never be trusted.

Post your comment

This question is for testing whether you are a human visitor and to prevent automated spam submissions.