The problem with ‘great wealth’

The focus is on creating a more egalitarian society. For Piketty, what propels progress is the struggle for equality and education. Ownership of property is just temporary.

Sep 27, 2019

By Anil Netto
The young man said to him, ‘I have kept all these. What more do I need to do?’ Jesus said, ‘If you wish to be perfect, go and sell your possessions and give the money to the poor, and you will have treasure in heaven; then come, follow me.’

But when the young man heard these words he went away sad, for he was a man of great wealth. (Matthew 10:20-22)

When we read these Gospels, our eyes sometimes glaze over the words and we think to ourselves: Surely Jesus didn’t mean that literally.

Perhaps he was trying to make a point that we shouldn’t be too attached to wealth. After all, it is impossible to serve two Masters – God and Money – especially when we are trying to build a kingdom of justice and compassion.

But was that all Jesus was trying to tell us in this Gospel passage? Clearly, for Jesus it was problematic having “a man of great wealth” in the kingdom of God that he was heralding. So he expected the young man to sell everything and give it to the poor. What exactly was the problem there?

Along comes French economist Thomas Piketty with a new heavyweight book Capital and Ideology, analysing the concentration of wealth and income inequality and proposing some measures to tackle it.

It is a sequel to his earlier book Capital in the 21st Century, which explained that those with capital had found their wealth growing faster because the rate of return of capital had surpassed the rate of economic growth over time. Such wide inequalities did not happen out of nothing – nor is it something natural or preordained by God.

In his new 1,232-page book, Piketty explains that wide inequalities have come about due to politics and ideological orientation. Piketty reportedly proposes several key mentions to narrow gaping wealth inequality:

-- no shareholder should control more than 10 per cent of voting rights in a firm — even if they have a bigger stake  -- workers should be represented in half the seats on company boards 
-- much higher taxes on property, ranging all the way up to 90 per cent for the largest estates 
-- a lump sum golden payout of US$132,000 (in France) to everyone when they reach 25 
-- an individualised carbon tax calculated based on an individual’s contribution to global warming, tracked by a personalised card

The focus is on creating a more egalitarian society. For Piketty, what propels progress is the struggle for equality and education. Ownership of property is just temporary.

“The system I propose makes it possible to own several million euros, or even tens of millions, at least for a while … but those with several hundred million euros, or several billion, will have to share power.”

He envisions a more participatory form of government that would come up with peoplefriendly policies to promote equality, social property, education and the sharing of knowledge and power.

His ideas have been taken up in the US by presidential candidate Senator Elizabeth Warren, who together with economists, has crafted a proposed wealth tax aimed at the richest 1 per cent.

Not all billionaires think that more taxes for the richest are a bad idea. After all, Bill Gates  and Warren Buffett themselves have said billionaires like them should pay higher taxes.

Higher taxes are not just needed to finance social spending. They could go to funding the restoration of the ecology, especially growing more forests.

In many cases, the actual process of generating great wealth has harmed the environment through the release of greenhouse gases, air and sea pollution and the cutting of forests and hills.

We are only now waking up to the real extent of the ecological damage inflicted on the planet in the pursuit of great wealth for a small minority.

At the time of writing, we are not even out of the smog, which has hit us hard. Plantation companies have cleared land through burning, resulting in hot spots that have emitted enough smoke to blanket the region. Meanwhile, in the Amazon, more fires have blazed, as unbridled greed destroys the rainforests. These fires are happening at a time when much of the world is anxious about climate change.

For activist George Monbiot, it is not just about the super-rich and how their wealth is generated. The lavish spending and consumer habits of the wealthy are also harming the environment.

The more money individuals have, the more likely they are to spend it on an unsustainable lifestyle, which will hurt the planet, he points out. Think of the oil-guzzling private jets, superyachts and luxury limousines that the super rich use to move around.

Research among 2, 500 Swedish households found that net income was the most important factor influencing greenhouse gas emissions.

In other words, the higher a person’s income, the greater the impact on climate change, especially when it comes to choice of transport. This is true even if that person may be environmentally friendly in his or her attitudes, for example practising recycling, adopting a plant-based diet and not using plastic straws.

What has a huge impact is how much transport fuel we use, how much of our home energy we consume and the other materials we consume.

Not only that, other research has shown that higher incomes and wealth give individuals a sense of power, making them less compassionate and less able to empathise with the vulnerable and suffering in society.

Perhaps there is a case for capping the incomes of elected representatives to ensure they don’t lose touch with the Rakyat. In Sweden, elected representatives do not get much in the way of luxuries or perks.

On the contrary, they earn less than three times the pay of a primary school teacher. They commute in trains and buses just like everyone else. In this way they are more attuned to any shortcomings in public transport and can experience what ordinary people are going through. Swedish MPs also live in small apartments and reportedly even have to do their own laundry in public laundries. No private secretaries to wait on them.

And yet Sweden is ranked seventh in the world in the human development index rankings. Clearly, they are on to something there.

In hindsight, Jesus too had great foresight in anticipating the serious problems that the ownership of great wealth would have for the planet – and the incompatibility of the values behind such astounding wealth with the values of the kingdom of God.

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