The poor will always be with us, it is said. But then so will the rich — or will they? Should they?
Not necessarily, if a glance at the shelves at your local bookshop is anything to go by. Three new titles on the place of the rich in society show that the question has always been controversial, but is especially so today amid rapid increases in the fortunes of the super-rich and accelerating inequality. That publishers sense a market in books that aim to expose and even abolish extreme wealth indicates that the super-rich may want to pay attention.
The two “abolition” books are Limitarianism by Ingrid Robeyns, a philosopher at Utrecht University, and Enough by Luke Hildyard, director of the High Pay Centre, a UK think-tank. They cover much the same ground and make similar, often familiar, arguments, although the Robeyns book has more of the leftist academic to it; Hildyard’s is more of the leftist activist.
Enough has the snappier title and the snappier argument. Hildyard is, however, less dogmatic than his subtitle suggests. He is not really in the abolition business. His approach is a pragmatic focus on how much better and fairer our economy would be if fewer resources were controlled by the super-rich.
Robeyns wants to claim more than this. Her book aims to defend an ethical and political principle. The “limitarianism” of the title says that it is ethically wrong for anyone to be — and be able to be — very rich and that society needs to be organised around this principle as a “regulative ideal”. Unlike Hildyard’s dry-but-effective focus on policy details, Robeyns’s book is a critique of the psychological make-up of a society obsessed with accumulation and where not enough of us “see ourselves as activists, organisers, debaters, engaged as neighbours or members of political book clubs, and so on”.
She cites studies showing a broad social consensus around the amounts people identify as the threshold of being “rich”, or having “enough”, although it naturally varies between countries and should be taken as a ballpark figure. In her own Dutch context, she takes about €1mn wealth level (twice the price of the average London flat) as the ethical limit we should personally be satisfied with, and €10mn as the political limit policies should prevent anyone from exceeding. (These are high levels of wealth. In the UK, a couple owning £2mn would just enter the top 5 per cent of households by wealth; £10mn would put them well into the top 1 per cent.)
Paradoxically, this holistic approach leaves her unwilling to commit to an actual policy of a 100 per cent tax rate above certain levels of income or wealth — which I had naively thought was what “limitarianism” entailed. Much of the book instead advocates the more nebulous goal of “dismantling neoliberal ideology”.
On the whole, both books boil down to the same idea: that the super-rich are a waste of space, and that our societies would be much better off if no one could get more than moderately wealthy. Both authors mobilise a barrage of data about just how grotesque wealth distributions are — such as the fact that in rich countries the top 10 per cent of the population own 50-70 per cent of all the wealth. These facts are well-known but bear repeating. So does the observation that the tax systems of rich countries have, during the past 40 years, become more favourable to capital income relative to work, and overall less onerous and more easily avoidable for the richest.
The two books also share many moral arguments: the super-rich generally cannot be said to deserve their riches — even talented writers or athletes are lucky to benefit from well-functioning societies and winner-takes-all economic structures. Beyond them, the sources of many fortunes can range from the dodgy (including the supercharging of returns through tax avoidance) to the criminal. Extreme inequality perpetuates poverty. Conversely, the authors cite research that greater equality can lead to higher productivity. Finally, they point to urgent needs, from public service shortcomings to decarbonisation, that resources currently controlled by the super-rich could fund.
By putting all these together the authors mount a strong moral and economic case for taxing the wealthy more and reshaping economic structures so that ordinary people are paid more and the richest earn less. A strength of both books is to puncture what Hildyard calls our “misplaced deference” and “servility” to the super-rich: they want us to resist being impressed by wealth.
In this regard, the third book under review comes into its own. Guido Alfani’s magisterial As Gods Among Men offers a sweeping and welcome historical perspective on who the super-rich really are and how they got that way, blending data, biographical sketches and sociological observations reaching back to the European Middle Ages.
Through the centuries there have been different paths to riches, writes Alfani, a professor of economic history at Bocconi University. Hereditary nobility was one. Blue bloods were not just born wealthy but got rich through takings, as in the case of Alan Rufus, a warrior kinsman of William the Conqueror who was rewarded with landholdings that may have yielded as much as 7.3 per cent of England’s entire national income. Then there were innovators — first in trade, in the Middle Ages; then in exploitation from the Age of Discovery — and financiers. Financial innovation was always a source of profit: Italian bankers developed bills of exchange to overcome the prohibition of usury.
Alfani shows that when it comes to the “super-rich” there is nothing new under the sun, including most of what appears in the other two books. Even the term itself is has a long lineage: he finds the superabundantes coming in for criticism by Nicolas Oresme, a 14th-century counsellor to Charles V of France, who thought they “exceed and overcome the others regarding their political power so much that it is reasonable to think that they are among the others as God is among men . . . It would be [a just] law establishing that man can not have properties above a certain quantity, due to inheritance or otherwise.” There you have it: “limitarianism”, the 1370 edition.
The rich historical lines drawn by Alfani could fruitfully inform contemporary activist arguments. For example, he writes that America’s founding fathers thought “low taxes, a small bureaucracy and economic laissez-faire would starve the political system of the very resources needed to achieve this kind of inegalitarian redistribution” — in other words, the oligarchic extreme inequality they observed in non-democratic Europe. Neither Robeyns nor Hildyard give enough consideration to the idea that more rather than less capitalism and free-market competition could be needed to reduce extreme inequality, because it would close off the ability to extract profit from the market power by which many super-rich make their fortunes.
Alfani’s work shows that history underpins Hildyard’s and Robeyns’s assertions that we need more power to rein in wealth excesses than we tend to realise. Not because it is easy: indeed Alfani documents an 800-year trend of rising inequality, punctuated only by disasters such as the Black Death and the two world wars, whose destruction also ended up greatly equalising wealth. But because, historically, debates about the rich have always included sharp assessments of their potentially useful social functions.
The moral pressure to justify one’s wealth was clearly strong in the Middle Ages. Some, such as Francis of Assisi and Godric of Finchale, both of great merchant wealth, found they couldn’t and chose to give up their riches. Workable justifications included “magnificence” — accepting a social obligation to fund public goods at scale — and saving to allow the accumulation of productive resources. None of the three authors puts much stock in modern philanthropy, however, which they see as more self-aggrandising than “magnificent” — although Robeyns, in line with her “limitarian” ethic, has a lot of time for the rare “patriotic millionaires” who agitate to be taxed more, and those committed to giving away their wealth.
It strikes this reader that the social functions of the rich became permanently unsettled within living memory (just). Keynesian macroeconomics showed that savings need not automatically produce investments, let alone productive ones. Meanwhile, the post-1945 welfare states cemented the idea that in democratic societies, the state has the primary responsibility for public goods.
Could this entail a secular undermining of the place of the rich? Alfani persuasively argues that society’s tolerance of the rich depended on their acceptance that they have to bankroll common needs. He warns that “in trying to resist taxation . . . they are in fact undermining their social position”. Western culture has historically permitted the rich a place, he writes, not just because of charity or philanthropy but because they accepted to be taxed when necessary.
That, Alfani observes, did not happen in the global financial and eurozone crisis, nor during the pandemic or the energy crisis. He could have added that they have, if anything, tried to separate themselves even further from the fates of ordinary mortals, through anything from cryogenics to stateless “seasteading”. Alfani’s voice practically thunders from the page as he asks of the super-rich: “Are they finally acting as gods among men, wrecking democratic institutions and creating a scenario which some had already imagined in the Middle Ages?”
That warning from history sounds more ominous than anything policy wonkery or philosophico-sociological disquisition can produce. Wealthier readers may want to heed Alfani’s admonishment that “they had better brush up on their classical mythology . . . gods can also fall, [and] when they do, the impact is cataclysmic”.
Limitarianism: The Case Against Extreme Wealth by Ingrid Robeyns Allen Lane £25, 336 pages
As Gods Among Men: A History of the Rich in the West by Guido Alfani Princeton $35/£30, 440 pages
Enough: Why It’s Time to Abolish the Super-Rich by Luke Hildyard Pluto Press £14.99, 160 pages
Martin Sandbu is the FT’s is European economics commentator and writes the Free Lunch newsletter
Join our online book group on Facebook at FT Books Café and subscribe to our podcast Life & Art wherever you listen
