Why We Can’t Afford the Rich

“Le secret des grandes fortunes sans cause apparente est un crime oublié, parce qu’il a été proprement fait.”  Le Père Goriot (1835) Honoré de Balzac  [“The secret of the great fortunes without apparent cause is a forgotten crime, because it has been properly done.“]

Columbia University sociologist Shamus Khan has observed that rich people think of themselves as “a collection of talented individuals who have unique capacity to navigate our world.”  It is time that we, the rest of the world, took a close look at these claims. 

In his new book – Why We Can’t Afford the Rich (Policy Press) – Andrew Sayer examines the truly wealthy and finds that the higher you go up within the top 1%, in other words moving beyond the top paid professionals into the realm of high and ultra-high net worth individuals, the more likely it is that these people will be involved in the financial and property sectors, and the greater will be their reliance on unearned income from capital gains, dividends, stocks and shares, and other financial assets.  They are also more likely to be predominantly men.

Why We Can’t Afford the Rich is an exploration of how the neo-liberal project has boosted the wealth of the globalised rent-seeking class.  As Sayer notes in the opening chapter ( A Guide to Wealth Extraction):

“. . .some people can get an income by extracting wealth from the economy simply through their control of key resources that others need but lack, and by charging them for their use . . . Access to mechanisms of wealth extraction, rather than wealth creation, is what marks (the rich) out.”

This blogger will be reviewing Why We Can’t Afford the Rich in the next edition of Tax Justice Focus.  This book is a serious enquiry into the inflated claims and self-worth of a tiny elite whose wealth has become grotesquely out of proportion to any contribution they might have made in the past or are making in the present.

The rise and rise of inequality, which threatens to take most societies back to levels of social division not seen since the nineteenth century, is in itself a major cause for global concern, but the social harm caused by rich people is compounded by their extravagantly wasteful and environmentally damaging lifestyles.  Far from being role models for others to aspire to, the lifestyles of rich people should be see as dire warnings of where the planet is headed if we fail to curtail greed and  excessive consumption.

Packed with useful information and insights, this is a useful complement to Thomas Pikkety’s Capital in the Twenty First Century, and makes a serious challenge to the many claims propagated by rich people and their minions.

For now, ahead of publishing a full review of Why We Can’t Afford the Rich, the last word goes to an economist who was very clear in his thinking about how harmful it can be to elevate the status of rich people above the rest of us:

“This disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect, persons of poor and mean condition . . is . . the great and most universal cause of the corruption of our moral sentiments.”  The Theory of Moral Sentiments, Adam Smith (1759)