Billionaires and Beggars – is that fair?


People are equal, so they should enjoy equal rights.


Each human being is genetically unique, and each possesses certain abilities in the intellectual or emotional field to a greater or lesser degree than others. This inevitably results in different rights.

Plato and the totalitarian state

The great contradictions of social constitutions result from this paradox. In their extremes, they range from communist fraternity, where people basically share all available goods, to the ant or bee state, where a single individual – the queen – enjoys all rights, while all others only serve or fulfill slave-like functions. Between both extremes we find liberalism which justifies personal self-realization together with the development of different dispositions.

Thesis and antithesis are obviously both correct. People are so similar to each other that a surgeon only needs to know one single specimen of man or woman in order to operate successfully all of them. It is the same with the psychologist. Once he has catalogued the most important mental diseases, he can heal everybody, regardless of whether they are New Zealanders, Bantus, or Russians. But the opposite is equally true, everything depends on the distance from which we view the object of our investigation. As long as we look at blades of grass from a distance, we can hardly distinguish one from the other. But if we take a magnifying glass or even use the electron microscope, each one becomes a unique, unmistakable individual…

The decisive, quite topical and at the same time ancient question is of an altogether different kind. May any social rights be derived from the fact of fundamental equality and relative inequality? Should all people have the same amount of money and social standing because – seen from a distance – they are fundamentally equal, or should there be great differences between them in terms of possessions and social recognition because – seen from close up – they are extremely unequal? The answer to this question, so fundamental for the construction of societies, has caused the greatest conflicts in religions as well as in modern secular ideologies – up to devastating civil wars. Karl Marx had a different answer than Louis XIV or the Church. Hinduism offered a different solution than classical China.

For the philosopher, history holds only one answer to this central political paradox. All the answers that man has found so far necessarily spring from arbitrariness, namely his desire to organize societies more in one direction or the other. If it is true that man is by nature both equal and unequal, then any social system that seeks to enforce only equality, must arouse his resistance, as must any countervailing system that accepts any degree of inequality. The latter, too, can be maintained permanently only by force.

Examples of the instability of the two extremes are legion. We know from recent history that communism under Stalin and Mao Zedong sought to establish equality through the use of state violence – and that it failed. Equally, we know that when neoliberalism pushes social and material inequality to fantastic heights, it faces growing resistance. U.S. society is currently in danger of breaking down as a result.*1*

People have no influence on their own genetic makeup. No one can take as a personal merit that he is more intelligent, stronger-willed, tougher than others. Therefore, there can be no religious, ethical, or scientific justification for rewarding intelligent or stronger-willed people with recognition or material advantages more than their fellows. With equal justification, it could be argued that those disadvantaged by nature should be entitled to greater advantages in the sense of compensatory justice…

The needs of society (or the needs of a ruling class within societies) are decisive for the evaluation of individual achievements and thus the position of individuals. Where physicists, mathematicians and engineers play a decisive role in competition with other societies, while bakers, blacksmiths or postmen can easily be replaced, the former will earn a lot and have a high social status, while the latter will be poorly rewarded and little respected.

I just noted that human freedom ultimately determines in which sense the paradox is resolved. In so-called „primitive“ societies of hunter-gatherers, the earliest we know, the high degree of equality is striking. The great American ethnologist Marvin Harris remarked in an oft-quoted passage: then let me hear no more about our kind’s natural necessity to form hierarchical groups. An observer viewing human life shortly after cultural takeoff would have concluded that our species was destined to be irredeemably egalitarian except for the distinction of sex and age. That someday the world would be divided into aristocrats and commoners, masters and slaves, billionaires, and homeless beggars, would have seemed wholly contrary to human nature as evidenced in the affairs of every human society then on earth.

The fundamental arbitrariness or freedom of man to determine his own social organization must, however, assert itself against the constraints of both the natural and the human environment. In the case of hunter-gatherers, it was an imperative of survival that welded them together into groups of a few dozen members where each had to assume the same duties and was therefore entitled to claim the same rights too. Under such conditions, personal property was not allowed to play a role.*2* In the struggle against a threatening environment, any other social organization would have been suicidal…

History shows, that large societies, which emerged soon after the transition to sedentarism, can realize true equality only under coercion. A temporary approximation to greater social and material equality is achieved only in times of war – again due to external coercion – when the ruling class mobilizes all citizens to fight the enemy. Then greater sacrifices may be demanded from the rich and greater rights promised to the poor. In his classic on the history of human inequality, Walter Scheidel demonstrates that during times of peace inequality is almost always on the increase, while wars turn out to be the greatest equalizers. This is precisely why he named his book The Great Leveler.*3*

Why was equality never achieved in the long run in any large society, even though, as I have pointed out in previous writings, there is a simple theoretical solution that satisfies both the thesis of fundamental equality and the antithesis of concrete diversity? Let us imagine a society that exclusively rewards objectively demonstrable personal achievement both materially and through a corresponding social status. It would logically follow that the children of a man or woman of high social status would lose any privilege if they did not perform accordingly. Such a society allows for inequality, but cancels it out with each generation, because the status of citizens can not be inherited – certainly not through membership in a favored social class. That system would indeed be the ideal embodiment of a „classless society.“ It could claim maximum justice, because everyone would always get only what he or she deserves according to the prevailing social standards – no more and no less. No class would have to be „expropriated“, no class would have to be forcibly expelled from its position, if everyone only gets what he is entitled to on the basis of proven abilities. Since these abilities pass on to other heads with each generation, no man would have a valid reason to quarrel with his fate. In fact, the demand for equal opportunities is found in almost all constitutional texts of modern societies.

The classic study by Walter Scheidel just mentioned does, however, show that the demand for equal opportunities proves to be largely or even completely ineffective – especially in times of peace. In practice, societies develop quite differently from what is promised in their constitutions. Inequality increases with each generation and in some modern states even reaches spectacular proportions. Why does this development occur with such inexorable regularity throughout history that one is almost tempted to speak of a social law?

The cause of this strange phenomenon lies in a biological factor which may well be regarded as a kind of social law, namely, the universal fact that we maintain a closer relationship with our closest relatives – especially with our children and parents – than with any other people. Before rescuing a stranger or any other unknown person in a life-threatening situation, we naturally help our own child. Before one state helps another, it naturally thinks of its own citizens. While we are not dealing with a behavior that is valid in every individual case, it is nevertheless so widespread that we may confidently call it innate. This does, of course, mean that most people strive to pass on the social advantages they have gained for themselves to their own offspring before thinking of others. It is precisely this innate tendency that prevents all societies – even those that have explicitly enshrined equal opportunity in their constitutions – from ever permanently achieving this goal.*4* The „market“ is least capable of doing so.*5*

Plato was one of the few who not only recognized this paradox but also prescribed a radical therapy against it. As is well known, the Greek philosopher wanted to take all children out of the hands of their parents at an early age in order to leave them to the state and its educational organs. Under this – and probably only under this – condition, a society would be conceivable and possible, where social and material status could not be inherited so that only personal knowledge and ability would count. Plato was right. The tendency to growing inequality due to the omnipresent inheritance of status and material wealth could only be abolished in this radical way.

But why do we shudder at Plato’s proposal?*6* The answer is obvious. No mother allows her own child to be taken away from her without extreme resistance – this resistance is so deeply anchored biologically that a society can only overcome it by using violence. True: Plato offers a logically satisfying solution. But we know that only a totalitarian Leviathan is able to put it into practice. And this leads to a final answer to our initial question. We know that all societies, unless hampered by external constraints, oscillate in an eternal circle between equality and inequality.*7* They do so precisely because there is no final resolution of this paradox…

Excerpt from my book “The Perennial Paradoxes of Mind – Why this Incessant War of Conflicting Ideas

*1* Cf Neumann 2022: In America, the number of industrial workers fell from seventeen million to eleven million during the 2000s – a loss of more than one-third… Thomas Piketty argues that, except for the years leading up to the French Revolution, there has been no historical period in which inequality has been greater… When Obama pushed to phase out coal in the early 2010s, it was a kind of declaration of war on traditional „coal states“ like West Virginia, where mines closed by the dozen and once-thriving towns became deserted. Many of the former coal communities found their savior in Donald Trump.

*2*  Cf Joseph Henrich (2020): Social norms dictate that he /the hunter-gatherer/ must share, so his store of goods won’t last for more than a couple of weeks. In short, among the Hadza, one just can’t get too attached to one’s stuff, because soon it will be someone else’s stuff.

*3*  Scheidel 2017: For thousands of years, civilization did not lend itself to peaceful equalization. Across a wide range of societies and different levels of development, stability favored economic inequality. A particularly drastic example of the decline in inequality in times of war is provided by Japan. Japan was once one of the most unequal countries on earth. In 1938, the country’s “1 percent” received 19.9 percent of all reported income before taxes and transfers. Within the next seven years, their share dropped by two-thirds, all the way down to 6.4 percent.

*4* Since a biological quasi-law – the greater love for our closest relatives – is so conducive to the tendency toward growing inequality, it is rather a side issue by which unequality is technically achieved. The oldest and most important instrument is undoubtedly interest levied on tangible goods as well as on money. Following Helmut Creutz, I have dealt extensively in some of my earlier writings with this aspect of the mechanical transfer of wealth from the bottom to the top (Das Ende des Kapitalismus, Wohlstand und Armut, Das Pyramidenspiel). In doing so, I have dealt predominantly with the automatism of parasitic (that is, more or less automatic) wealth accumulation in a few hands, and I underemphasized the positive side of capitalism, investmentism, and its revolutionary consequences for prospe­rity. Authors such as Michael Hudson and David Graeber have studied the global and historical effects of interest (although I would add that credit interest is the real problem in the long run; while debit interest is essential, on the one hand to cushion risks, to finance the work of banks, and to distinguish productive from unproductive investment).

*5*  Cf. David Harvey (2007): The idea that the market is about competition and fairness is increasingly negated by the fact of the extraordinary mono­polization, centralization, and internationalization of corporate and finan­cial power. The startling increase in class and regional inequalities, both within states (such as China, Russia, India, and Southern Africa) and internationally between states, poses a serious political problem that can no longer be swept under the rug as something ‘transitional’ on the way to a perfected neoliberal world.

*6* The horror of Plato’s totalitarian society, which diametrically contradicts the spirit of his teacher Socrates, was famously expressed by Karl Popper in his seminal work The Open Society and its Enemies.

*7* But under the pressure of the economically and politically powerful, decisive countermeasures rarely occur. Lewis Mumford (1970) remarked. Without systematically removing the fundamental disparities that grew out of the private monopoly of land, the inheritance of large fortunes, the monopoly of patents, the only effect of laissez-faire was to supplement the old privileged class with a new one. It is rather rare for a man at the head of the state to openly voice such truths. Franklin Delano Roosevelt … sent a message to Congress on April 29,1938, titled “Recommendations to the Congress to Curb Monopolies and the Concentration of Economic Power”. In it he wrote: the first truth is that the liberty of democracy is not safe if the people tolerate the growth of power to a point where it becomes stronger than the democratic state itself. That, in its essence, is Fascism — ownership of Government by an individual, by a group, or by any other controlling private power. The second truth is that the liberty of a democracy is not safe if its business system does not provide employment and produce and distribute goods in such a way to sustain an acceptable standard of living (quoted from Chris Hedges, 2009).

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