Not long after I began blogging, in my post “Rich, Poor and Middle-Class,” I wrote:
I am deeply concerned about the poor, because they are truly suffering, even with what safety net exists. Helping them is one of our highest ethical obligations. I am deeply concerned about the honest rich—not so much for themselves, though their welfare counts too—but because they provide goods and services that make our lives better, because they provide jobs, because they help ensure that we can get good returns for our retirement saving, and because we already depend on them so much for tax revenue. But for the middle-class, who count heavily because they make up the bulk of our society, I have a stern message. We are paying too high a price when we tax the middle class in order to give benefits to the middle-class—and taxing the rich to give benefits to the middle-class would only make things worse. The primary job of the government in relation to the middle-class has to be to help them help themselves, through education, through loans, through libertarian paternalism, and by stopping the dishonest rich from preying on the middle-class through deceit and chicanery.
I still feel the same way. I hate bashing of the honest rich. Of course, the dishonest or unworthy rich are a very different matter, as I wrote of in my column “Odious Wealth: The Outrage is Not So Much Over Inequality but All the Dubious Ways the Rich Got Richer.” Whatever arguments one may have for taxing the rich, it is not OK to verbally attack the honest rich. As a society, if we fail to give honor to those who became rich by helping to provide goods and services that we value, then we will have to let them keep more money in order to provide appropriate incentives. On the other hand, the more we honor and tend to the souls of the rich, the more we can tax them and still have adequate incentives. This is the key idea behind these posts and columns:
- Scott Adams’s Finest Hour: How to Tax the Rich
- No Tax Increase Without Recompense
- Yes, There is an Alternative to Austerity Versus Spending: Reinvigorate America’s Nonprofits
- Why You Should Care about Other People’s Children as Much as Your Own
Envy raises complex philosophical issues for utilitarian social welfare maximization, related to issues about respect for the boundaries between people that I discussed in
- John Stuart Mill on Being Offended at Other People’s Opinions or Private Conduct
- John Stuart Mill on Freedom from Religion.
One problem with interfering with conspicuous consumption out of one’s envy is that it has the potential to interfere with the efficient provision of incentives. But envy not only leads to attempts to limit conspicuous consumption, but also often leads to attempts to limit conspicuous excellence. Here is what John Stuart Mill has to say on that, in On Liberty, Chapter IV, “Of the Limits to the Authority of Society over the Individual” paragraph 17:
To imagine another contingency, perhaps more likely to be realized than the one last mentioned. There is confessedly a strong tendency in the modern world towards a democratic constitution of society, accompanied or not by popular political institutions. It is affirmed that in the country where this tendency is most completely realized—where both society and the government are most democratic—the United States—the feeling of the majority, to whom any appearance of a more showy or costly style of living than they can hope to rival is disagreeable, operates as a tolerably effectual sumptuary law, and that in many parts of the Union it is really difficult for a person possessing a very large income, to find any mode of spending it, which will not incur popular disapprobation. Though such statements as these are doubtless much exaggerated as a representation of existing facts, the state of things they describe is not only a conceivable and possible, but a probable result of democratic feeling, combined with the notion that the public has a right to a veto on the manner in which individuals shall spend their incomes. We have only further to suppose a considerable diffusion of Socialist opinions, and it may become infamous in the eyes of the majority to possess more property than some very small amount, or any income not earned by manual labour. Opinions similar in principle to these, already prevail widely among the artizan class, and weigh oppressively on those who are amenable to the opinion chiefly of that class, namely, its own members. It is known that the bad workmen who form the majority of the operatives in many branches of industry, are decidedly of opinion that bad workmen ought to receive the same wages as good, and that no one ought to be allowed, through piecework or otherwise, to earn by superior skill or industry more than others can without it. And they employ a moral police, which occasionally becomes a physical one, to deter skilful workmen from receiving, and employers from giving, a larger remuneration for a more useful service. If the public have any jurisdiction over private concerns, I cannot see that these people are in fault, or that any individual’s particular public can be blamed for asserting the same authority over his individual conduct, which the general public asserts over people in general.