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Distributions of Income and Wealth

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Business Ethics from the 19th Century to Today

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Abstract

Many societies have entrenched disparities between rich and poor because of royalty and birth. These people maintain their superior position relative to the masses by inter-marriage and governmental edicts. In America, many of the wealthy initially attained their wealth by providing goods and services people wanted, but some accumulated wealth with the connivance of government officials. What is an optimal distribution of income and wealth? Do the wealthy have ethical duties toward the poor or the poor to the rich? Many industrialists voluntarily donated large sums to various philanthropic causes.

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Notes

  1. 1.

    A clergyman claimed that “The labors of the poor give them health.” In addition, this clergyman claimed that the rich with their dissipations often end up in ill-health (Viner 1972, 101).

  2. 2.

    This is similar to John Maynard Keynes somewhat flippant remark about the desirability of government spending on useless projects, such as pyramid building (Keynes 1936, 220).

  3. 3.

    John Locke also shared this view (Sedlacek 2011, 151). Some of the attitudes toward the disparity between rich and poor sound downright bizarre to twenty-first-century sensibilities, although twenty-first-century sensibilities would undoubtedly strike ancient Greeks, Romans, and Christians as equally bizarre.

  4. 4.

    Lester Little describes the ramifications of the growing use of cash (Little 1969, 283–287; 1971, 37).

  5. 5.

    One might compare Wesley’s choices regarding wealth with modern-day television evangelists.

  6. 6.

    Pope Leo XIII and Aquinas urged disbursing one’s wealth to help the poor, but they added an interesting stipulation: “no one is commanded to distribute to others that which is required for his own needs and those of his household; nor even to give away what is reasonably required to keep up becomingly his condition in life, ‘for no one ought to live other than becomingly,’” before concluding, “It is duty, not of justice, but of Christian charity—a duty not enforced by human law (Pecci 1891, paragraph 22).” These attitudes resembled Wesley’s.

  7. 7.

    For caloric intake, see Floud et al. (2011, 106–116); Fogel (2000, 76–77).

  8. 8.

    Nozick used the example of people paying to see Wilt Chamberlain play basketball (160–164). For barriers to entry, see Rothwell (2017, no page numbers); Kleiner (2014, no page numbers).

  9. 9.

    Historian Richard Tawney disputed that a trade-off existed between redistribution of income and output: “as though production and distribution were irreconcilable alternatives.” He believed that the reduction in social tensions from redistributing income would actually boost output, “since standards of well-being are relative (Tawney [1931] 1964, 120–121).”

  10. 10.

    For a general discussion of happiness, see Fort (2008, 93). Studies lent some support to income’s relationship with happiness (Kahneman [2011] 2013, 397). Ian Mitroff conducted a survey asking what gives employees meaning at work. The top response was “to realize one’s full potential as a human being.” The next two most chosen responses were “to do interesting work” and “to work in an ethical organization.” Ranking fifth was how much money they made (Mitroff 2002, 40).

  11. 11.

    Highly educated people could contribute their mite to redressing skewed income and wealth distributions by marrying a high school dropout, but, of course, no one espouses such a policy.

  12. 12.

    David Caplovitz attributed “compensatory consumption” to Robert Merton.

  13. 13.

    Families that always bought on credit owned more appliances than families that paid only in cash (Caplovitz 1963, 97). Poor money management skills also play a role. A recent article in The Atlantic detailed how a staggeringly high proportion of even upper-middle-class Americans would have trouble meeting an unexpected $400 expense, such as a car repair (Gabler 2016, 52–63).

  14. 14.

    Note: other translations use, “The ransom of the soul of a man is his wealth.”

  15. 15.

    Joannes Andreae rebutted this belief, “Poverty is not a kind of crime (Tierney 1959, 12).”

  16. 16.

    Allan Nevins provided a year-by-year account of Rockefeller’s giving (Nevins 1953, 2:479).

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  1. Department of Economics, University of Northern Iowa, Cedar Falls, IA, USA

    David George Surdam

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Surdam, D.G. (2020). Distributions of Income and Wealth. In: Business Ethics from the 19th Century to Today. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-37169-2_11

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