The Capitalist Case for Eating the Rich

Jean Jacques Rousseau once said: “When the people shall have no more to eat, they will eat the rich.” Though this sentiment was popularized during the French Revolution, Rousseau’s words live on today. People are out in the streets chanting “Eat the Rich!” and I’m starting to worry they’re not kidding. “Eat the Rich” has come to be a mantra of leftists upset by socio-economic inequity, with the implication of a coming revolution. Ominously, income inequality is more prevalent in modern America than it ever was in pre-Revolutionary France.

Fiscal conservatives and boomer-types have long written off such complaints as the ravings of uneducated children. “Just wait until they get to the real world,” they’ve said. “Then they’ll see.” However, they did go out into the real world, and they did not see. Young people understand the pernicious effects that come with excessive wealth inequality, a reality that conservatives have for years ignored. If we continue to ignore these issues, they will only grow worse, and those who defend the excesses of capitalism will be to blame for whatever ensues.

I cannot say that the rise in support for socialism and communism, both of which I hold to be deeply evil ideologies, is unwarranted or undeserved. When young people whose parents or grandparents grew up in the most prosperous and vibrant economy in recorded history are subjected to the relative stagnation of the last 50 years, can we blame them for losing faith in the system that refused them the pursuit of happiness? Left-wing economic systems, even if ineffective, provide the allure of security and equity that is so sorely lacking in our society today.

Wealth inequality is inevitable in any free society and often occurs in a pattern known as the Pareto Distribution, where the square root of the number of individuals in a system are responsible for half of the productivity of that system, or 20 percent of these individuals are responsible for 80 percent of the system’s productivity. This distribution is one of the primary reasons why communism fails wherever it is tried: people are different and have varying capabilities, thereby producing different outcomes. However, American wealth inequality has long since exceeded the Pareto Distribution: in 2016, 77 percent of the country’s wealth was held by the top 10 percent alone.

The widening gap between the rich and the poor has had and continues to have adverse societal impacts. For example, simple poverty can cause property crimes and theft. However, relative poverty, not absolute poverty, can also be responsible for a great bulk of violent crime. Disparities in income among neighborhoods create food deserts, which themselves create disparities in health which correlate with income, exemplified by obesity rates among different socio-economic groups. On the flip side, the wealth highly concentrated in a society has its own negative effects. When one has obtained this much money, they cannot spend it all. Most of it ends up invested in forms of capital such as real estate or stocks, not circulating through the local economy and enriching only its owner. While this capital could stimulate some growth, the investment tends to go to larger corporations and in many cases moves offshore. Additionally, extreme wealth inequality concentrates political influence in the hands of the few, silencing the voices of those who need representation most. An individual can amass such an immense amount of wealth that they can exert substantial control over the government without ever having been voted into office, becoming a threat to the representative government itself.

Our economy, our government, and our society are deeply diseased, and most conservatives don’t want to admit it. American capitalists have fallen victim to the same trap as their left-wing counterparts: they have become too ideologically possessed to recognize the shortcomings of their economic ideals, the symptoms of which are abundantly evident. Just as leftists are quick to scapegoat the wealthy for all of their problems, rightwingers cope with the unfortunate reality of the modern American economy by blaming everything on high taxes. Supply-side economics is fundamentally sound, and its philosophy is one we should carry with us to the future. Lowering taxes, cutting regulations, and allowing the rich to remain rich creates jobs and stimulates economic growth. However, these policies are imperfect, and the compulsive adherence to this framework creates a myriad of negative externalities.

For example, fans of supply-side economics support low taxes because the more money individuals have in their bank accounts, the more they can invest in their business, which in turn creates jobs and gives back to the community in a far more efficient manner than any government spending ever could. However, the wealthy are the most capable of creating jobs, and so this idea taken to its logical extreme calls for the rich to keep as much of their money as possible. This provides the ideological backing for the immense corporate bailouts and tax breaks for the rich for which the government has become notorious.

The obvious solution to all of these issues is a wealth tax, which would increase taxes on those that make more than a certain amount of money. Libertarians will tell you that wealth taxes drive the wealthy from their homes, doing little but lessening the nation’s tax base. However, this is partially untrue. The wealthy are very often willing to tolerate higher taxes in exchange for higher quality of life or simply to avoid the difficulties of moving. Many states, such as Florida or Texas, have no income tax, instead having higher consumption and property taxes. These systems indirectly target those who are wealthier, and by lessening taxes on the poor and middle class, allow them to thrive.

The market has lifted millions upon millions from squalor and has proved itself to be our most effective tool in fighting poverty. The economic liberalization of China turned a destitute communist country into one of the largest and fastest growing economies on the face of the Earth. However, a surge in inequality accompanied this economic boom. This disparity is acceptable so long as it remains under control, lest it tear the social fabric apart. Total income equality, or even any semblance of it, shouldn’t be anyone’s goal, as it is unworkable and leads to countless other negative consequences. Rather, a stable and prosperous nation must ensure high levels of social mobility. Supply-side economics create the vibrant economy necessary for such a society to exist, but they fail to address existing income disparities, often perpetuating differences in wealth and leaving behind those who are less fortunate. We have to be willing to sacrifice some of our tax dollars to ensure that every member of society is provided for and that they are capable of making their way up the ladder of success. After all, if one is in dire need of welfare or healthcare, one cannot reasonably have an equal chance of succeeding in society as someone who already had access to them. If we wish to call ourselves a meritocracy, we must provide at least the most basic of social services to ensure that everyone has a shot at achieving the American Dream.