The Undeserving Rich
Collectively produced and inherited knowledge and the (re)distribution
of income and wealth.
By Gar Alperovitz and Lew Daly
Warren Buffett, one of the wealthiest men in the nation, is worth nearly
$50 billion. Does he “deserve” all this money? Why? Did he work so much
harder than everyone else? Did he create something so extraordinary that
no one else could have created it? Ask Buffett himself and he will tell
you that he thinks “society is responsible for a very significant
percentage of what I’ve earned.” But if that’s true, doesn’t society
deserve a very significant share of what he has earned?
When asked why he is so successful, Buffett commonly replies that this
is the wrong question. The more important question, he stresses, is why
he has so much to work with compared to other people in the world, or
compared to previous generations of Americans. How much money would I
have “if I were born in Bangladesh,” or “if I was born here in 1700,” he
Buffett may or may not deserve something more than another person
working with what a given historical or collective context provides. As
he observes, however, it is simply not possible to argue in any serious
way that he deserves all of the benefits that are clearly attributable
to living in a highly developed society.
Buffett has put his finger on one of the most explosive issues
developing just beneath the surface of public awareness. Over the last
several decades, economic research has done a great deal of solid work
pinpointing much more precisely than in the past what share of what we
call “wealth” society creates versus what share any individual can be
said to have earned and thus deserved. This research raises profound
moral—and ultimately political—questions.
"Many times a day," wrote Albert Einstein, "I realize how much my outer
and inner life is built upon the labors of my fellow-men, both living
and dead." The genius of an earlier era saw clearly how contemporary
knowledge and technological advance depend to an extraordinary degree on
the efforts of many contributors, not to mention a continuing cultural
investment in science and numerous other areas of human endeavor. In
fact, very little of what we as a society produce today can be said to
derive from the work, risk, and imagination of citizens now living.
Achievements from earlier eras, including fundamental ideas such as
literacy, movable type, simple arithmetic, and algebra, have become so
integrated into our daily lives that we take them for granted. What we
accomplish today stands atop a Gibraltar of technological inheritance.
Seemingly contemporary transformations inevitably build on knowledge
accumulated over generations.
For example, Richard DuBoff, an economic historian at Bryn Mawr College,
observes that "synthesizing organic chemicals...could not have been done
without an understanding of chemical transformations and the arrangement
of atoms in a molecule. After 1880, this led to the production of coal
tar and its derivatives for pharmaceuticals, dyestuffs, explosives,
solvents, fuels, and fertilizers, and later petrochemicals...By the
early 1900's the new chemicals were already becoming an essential input
for metallurgy, petroleum, and paper."
Present-day entrepreneurs such as Bill Gates, one of the world's richest
individuals with a personal fortune estimated at $8 billion and hailed
as a technological genius for inventing software for the personal
computer, should therefore be seen as beneficiaries of this long and
fruitful history as well as of significant public investment.
The personal computer itself--without which Gates's software would not
be possible--owes its development to sustained federal spending during
World War II and the Cold War. "Most of [the] 'great ideas in computer
design' were first explored with considerable government support,"
according to historian Kenneth Flamm in a Brookings Institution study.
Now a specialist in technology policy in the Department of Defense,
Flamm estimates that 18 of the 25 most significant advances in computer
technology between 1950 and 1962 were funded by the federal government,
and that in most of these cases the government was the first buyer of
new technology. For example, Remington Rand Corp. delivered UNIVAC, the
original full-fledged U.S. computer, under contract to the U.S. Census
Bureau in 1951.
The government's shouldering of huge development costs and risks paved
the way for the growth of Digital Equipment Corp., which created its
powerful PDP line of 1960s computers. In turn, Gate's colleague [and now
fellow billionaire] Paul Allen created a simulated PDP-10 chip that
allowed Gates to apply the programming abilities of a mainframe to a
small, homemade computer. Gates used this power to make his most
important technical contribution: rewriting the BASIC language, itself
funded by the National Science Foundation, to run Altair, the first
consumer-scaled computer. And indeed, Micro Instrumentation and
Telemetry Systems, Altair's developer, could never have placed a
microcomputer of any variety on the market without the long preceding
period of technological incubation.
Thousands of links in a chain of development--our shared inheritance-
-were in fact required before Bill Gates could add his contribution. But
if this is so, why do we not reflect more full on why Gates, or any
other wealthy entrepreneur, should personally benefit to such a degree?
If we admit that what any one person, group, generation, or even nation
contributes in one moment of time is minuscule compared with all that
the past bequeaths like a gift from a rich uncle, we are forced to
question the basic principles by which we distribute our technological