With the wealth gap between the richest and poorest in our society growing wider every day, the question of ethics certainly comes into play. As of 2021, there are an estimated 2,755 billionaires. With the top 10 of which controlling around 8.8% of the world's total wealth. Shockingly, just 85 individuals hold the same amount of wealth as the poorest 3.6 billion.
This article will attempt to explore the complicated territory of the implications of an extreme wealth gap, whether or not our society can justify extreme personal wealth, poverty, work-life balance, and some possible solutions to wealth regulation and distribution.
What are the implications of the wealth gap?
There are many well-documented implications that come with an enormous wealth gap and the general inequality in our society.
Lobbying is a substantial and direct problem of wealthy individuals affecting the lives of the working and middle-classes. When those with extreme wealth would like something to happen in their favor, they can back the candidates who are more likely to run policies that help their economic agenda.
Privatization of public services is also tied to lobbying. For example, the elite do not need free or affordable social health care, so they don't care if it's cannibalized. In the United Kingdom, billionaire Richard Branson's organization Virgin Healthcare has received billions of dollars worth of National Health Service contracts, most of which will be fulfilled at a much higher cost than usual in order to turn a profit.
Additionally, while the wealth gap is increasing, those living in poverty are watching the super-rich fund private space tours. These kinds of issues will surely lead to calamity. As well as this, increased crime levels in events by megacorporations such as Black Friday lead to the loss of lives just to push a few more sales.
Sometimes, personal wealth can even affect your chances of getting a job. For example, it is known that some organizations only hire alumni of prestigious schools such as Harvard or Yale, many of which are incredibly expensive and simply inaccessible to many without some kind of financial assistance.
As a final example of the implications of extreme personal wealth, of which there are many more, numerous billionaires have been made in carbon-intensive industries such as the mining and oil industries, directly affecting the livelihoods of millions of people today and threatening hundreds of millions in the future.
Poverty and poor work-life balance
Even though we are in one of the most flourishing economic periods of human history, one where the economic position of the world is in a great place to provide a high-quality lifestyle to all inhabitants of the earth, hundreds of millions still live in extreme poverty, and those who don't often have a terrible work-life balance just to get by.
Poor work-life balance
Of over 5,000 surveyed in the UK, almost a quarter admitted that it was difficult to relax due to stress from their jobs, with 22% feeling exhausted or under excessive pressure.
A whopping 66% from the same survey claimed that they suffered from some kind of work-related health condition in the last 12 months, with sleep issues and anxiety being the most common issues.
Retirement ages are taking a global hit too. Shockingly, even in the world's largest economy, retirement ages are being pushed forward with the excuse that Americans are living longer and therefore can work longer before seeing their Social Security checks in the mail.
Foodbank usage and poverty
It's unfortunate that even in the developed world, where food shortages technically don't exist, millions visit food banks every year and even have to choose between paying for food and medicine or medical care.
In the US, an estimated 37 million Americans are fed through a food bank each year, including 14 million children, an unfortunate number in the country that houses the most billionaires.
It is also estimated that 49.1 million Americans didn't know when or where they will find their next meal.
It's shocking enough in developed nations, but the ugly truth is that these numbers look pretty compared with the developing world, with areas such as South Sudan facing poverty rates of 82.3% and Guatemala 59.3%, even with its relatively close proximity to the US.
The correlation between empathy and wealth
Many studies show that the more wealth, title, and education someone has, the more likely they are to be less empathetic towards those who aren't as well off.
Owners of luxury cars are more likely to cut people off at intersections as well as speed past pedestrians at crossings. A study also examined how social class influences compassion found that those with less were generally more compassionate than those who were more affluent.
Another study found that those with less income and education were more likely to show signs of empathy and discomfort during a video about cancer in children.
But why is this? The researchers who carried out some of the studies above believe that we obtain more independence as we acquire wealth. As a result, our need from those around us and in broader society diminishes, and so do our feelings of care about them.
Another of their theories is that wealthier people are more likely to subconsciously defend their position as wealthy members of society and justify positions of greed.
Can we justify the wealth gap?
While many of the world's billionaires operate in markets that do not directly affect the lives of many of the world's poorest people and those living in the worst poverty, it's still difficult to justify.
The assets of the richest people on the planet vary wildly, even daily, according to how their stocks and assets are valued. Still, the top 10 wealthiest people in the world have an estimated USD 1,153 billion.
Jeffrey Sachs, a leading expert in economic development, suggests that governments could eradicate world poverty with just $175 billion per year for 20 years. That's less than a quarter of the wealth of the top 10 richest people each year to drastically increase the quality of life of around 700 million people living in extreme poverty, with incomes less than $2 per day on average.
So what are the justifications?
Some do justify extreme personal wealth, however. Many see it as a reward for risk-takers who are innovating and dominating their respective industries and stimulating economic growth.
It's no secret that capitalism in the early stages helped lift many out of poverty. China's take on capitalism has seen its nation go from a GDP of around USD 400 million in the 1980s to USD 14.72 trillion in 2020. That's a huge turnaround that probably wouldn't have happened without some sort of capitalism and industrialization.
But those against extreme personal wealth are not against innovation and industrialization of processes; they simply want to see fairer wealth distribution. While money and wealth generation is a motivating factor for many of the world's billionaires, it would be naive to say it's the only factor. The truth is innovation is always happening.
Maybe what we need to look towards is wealth regulation, taxation, and coming up with a solid wealth distribution plan that can actively change the lives of millions of people while reducing the quality of life of many current billionaires only marginally.
One of the leading concepts on wealth regulation is limitarianism, which claims to limit people from having too much wealth for ethical and political reasons.
Limitarianism seeks to distribute wealth in a just manner and find an ideal distributive pattern based on certain constraints. When an individual wealth exceeds these constraints, it will be deemed unjust.
Those who argue in favor of limitarianism suggest that once an individual acquires a certain amount of wealth, additional wealth doesn't substantially affect their quality of life and therefore has little to zero moral weight; meanwhile, the redistribution of the excess wealth of these individuals will help support morally valuable agendas such as fighting poverty, the quest for global equality, solving climate issues and climate adaptation.
There is much debate about the threshold for limitarianism, but one thing is clear; there isn't a set threshold for limitarianism. It would have to be decided by the people.
Who would regulate wealth distribution?
Fair wealth distribution would have to be a global effort. If one country started regulating wealth while the rest of the world continued as usual, many of those with any kind of wealth would simply leave and set up shop in a different nation. The only way to stop that would be through a dictatorship of the likes we see in China or North Korea, a far cry from the democracies we strive to maintain.
So, it is fair to say that distribution, especially in the form of limitarianism, would have to be a joint effort from many of the most influential nations around the world. That way, the poorer nations who would undoubtedly benefit greatly from wealth distribution would likely agree to a plan.