January 30, 2024
How much is enough?
There is something about private wealth that restricts the debate about how much is enough and the extent to which it should be possible to limit any individual’s right to have colossal amounts of it. Whether it’s a hangover from when ‘trickle down’ economics still held some sway, or the fear of being accused of the politics of envy, it continues to be a rarity for politician in a position of power who agrees that wealth beyond a certain point is bad for society – despite all the evidence that it is. Important to keep this debate alive.
In an intriguing study about to be published, the Dutch political philosopher Ingrid Robeyns poses a question that very rarely gets asked in mainstream politics. When it comes to the personal income and assets of the super-rich, how much is too much? The answer, she suggests in Limitarianism: The Case Against Extreme Wealth, should be anything above €10m. At that point, taxation should intervene, redeploying the surplus for the common good.
Ms Robeyns is not naive. She thinks of her €10m figure as a guiding ideal to be striven for, but one that is unlikely ever to become a reality given the current way of the world. Quite. Nevertheless, her provocative intervention is valuable, because it draws attention to a curious disjunction: as the wealthy have got steadily richer in recent times, soaking up the benefits of free capital movement, share price surges and rising asset values, political talk about wealth taxes has diminished to a barely audible murmur.
In pre-election Britain, the Labour party has flatly refused to contemplate “mansion” taxes on property, an increase to capital gains tax, or higher top rates of income tax. Across the rest of Europe, there has been a similar reluctance to address an asset wealth boom comprehensively analysed in Thomas Piketty’s influential work, Capital in the Twenty-First Century. Meanwhile, cash-strapped governments – and the European Union as a collective entity – struggle to find resources to deal with colossal challenges relating to the green transition and reviving moribund economies.
This ugly combination of undertaxed private wealth and public austerity not only gets in the way of necessary and broad-based economic renewal. It is an active source of social divisions, resentment and corrosive conspiracy theories – to an extent that is endangering the health of democracies. This should hardly come as a revelation. Writing in the 4th century BC, Plato prescribed that in the interests of political stability, richer citizens should have no more than four times the property of the poorest. In our own time, the far right is successfully piggy-backing on eroding faith in politics to prosecute its own authoritarian agenda.
Ms Robeyns is not alone in sounding the alarm. In another new book, the Labour MP and former Treasury minister Liam Byrne makes similar points about our age’s normalisation of an “absurd affluence”. Last week, a report published by Oxfam found that, while the wages of more than 800 million workers have failed to keep pace with inflation, the wealth of billionaires has grown three times as fast since 2020. The damning statistics are all out there. But still the sun never seems to set on the vacuous trickle-down theory of economics first popularised by Ronald Reagan.
The prospect of any version of “limitarianism” finding its way into a manifesto is therefore remote. But it is past time for social democratic parties, in particular, to show less deference towards the interests of the very wealthy in ever more unequal societies. Backed by Mr Piketty among others, two social democrat MEPs have launched a citizens’ petition calling for a European wealth tax to help finance the green transition. A million signatures would mean the European Commission had to listen. But when it comes to questions of “how much is too much?”, it should not be left to individual citizens to force the pace.