Thomas Piketty Got This Right!

CapitalLast summer, Thomas Piketty published Capital in the Twenty-First Century (reviewed here), a best-seller that probably few people waded through. One of the things Piketty explores is how capital wealth accumulates far more rapidly than wealth from wages, and tends to be concentrated in an increasingly small percentage of the global population.

This week, we got a startling glimpse of this in a new Oxfam Study that predicts that by 2016 (that is next year, folks) one percent of the world’s population will control more of the world’s wealth than the remaining ninety-nine percent of the world’s population. A mere 80 of the world’s richest individuals control more wealth than the bottom 3.5 billion people in the world.

All but the most ardent capitalists will see these figures and conclude something is wrong. When over 1 billion people live on less that $1.25 a day while 80 people have billions, something is wrong. One of the things this study noted is that not all of this capital came from sheer entrepreneurship. Those invested in health care and pharmaceuticals saw their net worth jump by 47 percent due to lobby efforts for these industries.

By DFID - UK Department for International Development (https://www.flickr.com/photos/dfid/14590135480/) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

By DFID – UK Department for International Development (https://www.flickr.com/photos/dfid/14590135480/) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)%5D, via Wikimedia Commons

The immediate cry of many will be for more taxes on this incredible wealth. Bill Gates himself thinks that this wealth should be taxed unless the wealthy invested their fortunes in philanthropy, as Gates himself is doing. It seems that what may also be needed are greater protections against exorbitant profits subsidized by higher costs that the less fortunate must bear. I do not want to fault wealth gained by honest effort and entrepreneurship, but when wealth benefits from special privilege and is further enlarged by access to power, this seems to be a form of welfare for the rich. At very least, there might be additional taxes levied on lavish consumption.

But far better for the rich to do themselves what may be done less efficiently with taxes, through using the influence and entrepreneurial intelligence they have in philanthropic efforts. There is an old story of the rich man who died and someone asking how much he left behind, and the answer given was “all of it.” I’m reminded of the biblical parable (Luke 16:19-31) of the rich man and Lazarus. The rich man walks by Lazarus every day but doesn’t give him even table scraps. Lazarus dies and rests in the bosom of Abraham. The rich man burns in Hades. Even here, he assumes the privilege of demanding that Lazarus alleviate his thirst. Even here, he assumes he is entitled. And yet in the end he perishes and his name is not known while poor Lazarus at last finds comfort.

I’m not a part of that richest one percent. But I also think of that large group living on $1.25 a day. I don’t think twice about spending more than that on a cup of coffee. Yet like the Gates folks, I’ve discovered that some of the greatest joys of life come around giving–thoughtfully, as well as generously. John Wesley once said, “Earn all you can, save all you can, and give all you can.” Wesley even acknowledges that creating wealth and accumulating capital is not bad if the end for which this is done is generosity. It may be this last part that is the hardest, and yet which makes more sense, to gain joy in the giving while you are living? Or to let someone else, or the tax man dispose of what you’ve left behind?

Wouldn’t it be crazy if a whole generation joined Bill Gates and Warren Buffett and defied Thomas Piketty and the Oxfam folk as well as the folk crying for higher taxes, and invested their wealth with intelligence and generosity–to provide clean water, and economic development, and educational opportunity? What if we did this with our more modest means? This would not by a long shot solve all the world’s problems… but then neither will a bunch of taxes. And it sure could be a lot more fun…

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