Deborah Coddington argues against the implied redistributionism behind the thesis of The Spirit Level, a book (a) championed by the left as it argues that great wealth inequality causes terrible social problems, and (b) that I’m confident Coddington has not actually read:
If the gaps are really to be closed, spirit-levellers would have to go further and place handicaps on successful people to ensure they don’t find ways to break the mould.
Clever brains like Sam Morgan’s, for instance, which enabled him to come up with Trade Me, would have to be dulled with drugs.
Fashion designers like Denise L’Estrange Corbet, who sees beauty where I see bolts of cloth, would have to be blinded. Cut out Kiri Te Kanawa’s voice box – I think you get my drift.
I’m not a fan of the saying, “celebrate our differences”, but in this context it seems appropriate to trot it out. And why can’t we aspire to something higher than the middle common denominator?
It’s about time someone started championing the rich and successful in this country – they’re a persecuted minority.
There’s an assumption in there that the rich deserve their privilege, and that the distribution of wealth in our free market system is fundamentally moral, and I find it hard to get past the fact that Coddington became incredibly rich by marrying a very rich elderly man. But anyway . . .
Let’s look at Sam Morgan. He’s one of the comparatively few successful businessmen in New Zealand who made his wealth through genuine wealth creation, instead of looting the state or otherwise transferring the wealth of others to himself, and I think, contra Coddington, that there is a huge amount of admiration for people like him that isn’t felt for our wider, parasitical business elite.
Coddington asserts that Morgan is brilliant for coming up with the idea of TradeMe. Actually he just copied the idea off eBay, but let’s assume that Morgan is very smart and very hardworking. Does that explain his extraordinary success and wealth? After all, lots of people in our society are very smart and very hardworking and none of them are worth a quarter of a billion dollars.
So maybe Morgan is exceptionally smart. That would explain it. But if we look at his background we see that he was also exceptionally privileged. His father is a very wealthy, very successful fund manager who financed Morgan’s business and gave him business advice. So in addition to being smart and hard-working, Morgan is also very privileged and very lucky.
There’s nothing moral about the market allocating more wealth to people who are privileged and lucky. This is mostly what the free market does, and it’s a message the left has failed to communicate to the wider public who tend to buy into the myth of the meritocratic level playing-field. So while it would be immoral to drug Morgan so he can’t think of ideas any more, there’s nothing immoral about redistributing a portion of his wealth in the form of healthcare, welfare and education, so that other smart, hardworking people have a chance to compete with members of his class on a slightly more equal footing.
Thank you. You have said what I wanted to say when I read Coddington’s intellectually sloppy, inaacurate and vindictive diatribe a few minutes ago.
Comment by southernrata — February 13, 2011 @ 8:25 am
You assume and extrapolate upon that assumption and you read the SST – shame.
Comment by leon — February 13, 2011 @ 8:36 am
How is it that people like Coddington seem to get such a disproportionately large amount of column inches?
Anyway, Coddington’s arguments against full blown socialism are pretty weak. And not very informative, since few are arguing for full blown socialism. Just marginal taxation and other minorly redistributive policies which fall a long way short of having the effect of “…drag[ing] the successful down to the level of the lowest.” These policies would not disincentivise most “successful” people from being “successful” (I suspect that Sam Morgan does not wake up every morning regretting that he ever founded Trademe due to the evils of such policies).
Comment by DT — February 13, 2011 @ 9:03 am
“His father is a very wealthy, very successful fund manager who financed Morgan’s business and gave him business advice. So in addition to being smart and hard-working, Morgan is also very privileged and very lucky.”
But why should money Morgan has earned be taken from him and given to people who have not earned it? Can I take your couch and put it on Trade Me and use the money to pay my bills?
You don’t have to go very far to find the children of fantastically wealthy people who have ended up addicted to drugs or down and out degerates.
There are a lot of people who are born into such “luck” but blow it. Sam Morgan didn’t, and I don’t think that is “luck” as much as it’s something else.
Comment by radar — February 13, 2011 @ 9:11 am
But why should money Morgan has earned be taken from him and given to people who have not earned it?
My point is that a portion of Morgan’s wealth is due to the circumstances of his birth. Did he ‘earn’ that privilege? Do people that are born into poverty somehow fail to earn their own lack of privilege and opportunity?
Sure, some people are born into wealth and become poor. Some people are born poor and become rich. But they tend to be statistical outliers and you can’t structure your political economy around the existence of outliers.
If you read Wolf Hall, it’s about Thomas Cromwell, who rose from poverty to become the most powerful aristocrat in England, and I’m sure some aristocrats died poor. Does that mean the aristocratic system was fair, or meritocratic?
Comment by danylmc — February 13, 2011 @ 9:20 am
Absolutely right. Even Sam Morgan himself has pointed out the ridiculousness of him not paying a cent in tax on the enormous capital gain he made from selling Trade Me. The big problem with our income tax system is that it doesn’t tax real income! Most rich people manage, thanks to clever accountants, to stay outside the tax system so avoid paying much tax. Apparently something like 50% of the 100 richest people in the country don’t officially qualify to pay the top tax rate as their ‘incomes’ are too low. Family trusts, loss-making companies, capital gains, claiming personal things as company expenses, and until recently, claiming “losses” on rental properties, allowed wealthy people to appear poor on paper. And now they get a tax cut because apparently they pay too much tax! Ironically people who get hit with the highest real tax are people on ‘officially’ high incomes like university lecturers and government managers, who don’t qualify for deductions, perks, fringe benefits and other top-ups that the private sector offers. These are often Labour voters!
A plethora of state funded organisations, as diverse as health centres and hospitals , arts and educational organisations are expected to ‘pay their way’ to help supplement the often meagre income they receieve from the state. But where’s the financial instution levy or bank levy to help pay for the bail-outs that the government has had to cough up with?
Comment by dave armstrong — February 13, 2011 @ 9:26 am
If I may be so bold Danyl, your fundamental position is that the free market is immoral and the state is moral. Trademe is evil and must be punished by the IRD.
Comment by leon — February 13, 2011 @ 9:34 am
What about John Key? Born into a poor family now worth $50 million.
Comment by Kate — February 13, 2011 @ 9:35 am
I didnt bother reading Coddington’s column, because I know it would be right wing crap, but I have a message for her, and any other right winger who supports her:
If you think I am going to bow and scrape and doff my cap to someone because they have more money than I, or a bigger house, or own more land, or are more famous, of anything, then you can get fucked.
Comment by millsy — February 13, 2011 @ 9:49 am
@leon “Your fundamental position is that the free market is immoral”.
Really? It looks like Coddington’s slipshod reasoning is catching. I don’t believe that Danyl claimed that the free market was immoral, but that there was nothing moral about the outcomes it delivers. There are big differences.
Comment by DT — February 13, 2011 @ 9:57 am
leon,
That’s Danyl’s fundamental position in the same way as yours is that rich people ought to be able to entertain themselves by holding parties at which kidnapped poor people are hunted through the trees by packs of dogs.
Kate,
There is the small matter of the money the State paid to his mother to enable her to provide for her child, along with the house it gave them to live in, plus the extremely good education system it provided to him irrespective of his ability to pay. Oh – and he had a really, really good mum.
But underlying all of this is the basic question – what is the moral weight that luck should carry? Is it something that we collectively ought to correct for through equalising actions (in the same way as, for example, we attempt to correct for the bad luck of disability by providing things like wheelchair ramps, beeping pedestrian crossing lights, and braille numbers on lift buttons), or is it something that we ought to treat as irrelevant to how an individual ought to be treated (in that whatever personal traits a person happens to end up with for whatever reason, the only relevant question is how they use them?) This is one of those insoluble debates – go back and read the arguments between John Rawls and Robert Nozick in the 1970s – that I think trace to your basic world view, and so isn’t really that susceptible to rational argument.
Comment by Andrew Geddis — February 13, 2011 @ 10:00 am
Codswollop sets up a straw man:
Because when most people talk about closing gaps between rich and poor, they want to drag the successful down to the level of the lowest, whereas I’d lift everyone up to the top, if I could. I’ve been poor and I’ve been wealthy, and I know which I prefer.
She claims most people just want to drag everyone down, so in her head she made shit up.
Another gimme on the wish-list of the spirit-levellers is that old chestnut, capital gains tax.
I would like to meet her “most people” and “Spirit levellers”,as I am sure they are nice people. But claiming they want certain things without any evidence to back it up smacks of a hack interviewing ones keyboard about an imaginary group of people she discovered living at the bottom of her garden.
If she bothered to read the book, she would find it entirely different from the one she just made up in her head.
It’s about time someone started championing the rich and successful in this country – they’re a persecuted minority.
She is just about ready to ‘Go Gault’ on us, there. She must be getting hot and bothered after seeing the Atlas Shrugged trailer.
Comment by andy (the other one) — February 13, 2011 @ 10:00 am
I think you have made some very good points (I like these sort of debates). The problem with the left is that we haven’t been able to strongly argue our side of view as effectively as we could have. The right have really dominated these arguments.
Comment by K2 — February 13, 2011 @ 11:16 am
Coddington’s argument is so terrible, it’s funny. This is the kind of ‘analysis’ and comment we deserve?!
The ‘handicapping’ argument is of course absurd. Coddington sees it as an implication of the ‘spirit level’ argument. That is absurd.
John Rawls had dealt with this argument as early as the 1970s in ‘A Theory of Justice’. See pages 73-76, available on google books, where he discusses how once you have set up just political, economic, and legal institutions, whatever distribution that results from the operation of those institutions must be thought of as just. You don’t have to keep looking at how much talent or wealth people have, trying to perpetually micro-manage everybody’s lives to prevent any unjust inequalities. The inequalities that result from the working of just basic institutions are, in Rawls’ view, themselves just by definition. And those just basic institutions do not include state-run handicapping facilities.
Maybe if Coddington gave ‘the other side”s arguments some thought she would avoid such embarrassing mistakes.
Comment by Mark — February 13, 2011 @ 12:00 pm
Coddington is writing an article about ‘The Spirit Level’ without having read ‘The Spirit Level’. I think expecting her to have read John Rawls is . . . unrealistic.
Comment by danylmc — February 13, 2011 @ 12:03 pm
Maybe someone stuck the dust jacket from The Spirit Level over a copy of Harrison Bergeron and gave it to Coddington for Christmas.
Comment by QoT — February 13, 2011 @ 12:39 pm
ummm… didn’t his idea pre-date Ebay?
if anything they were contemporaneous. Ebay tried here but Sam was offering a better product with lower fees.
pity the fees have now gone and lumbered with an aussie newspaper milking us dry. the fckers.
Comment by che tibby — February 13, 2011 @ 1:02 pm
ummm… didn’t his idea pre-date Ebay?
I believe he wrote business analysis papers on eBay back when he was a technology consultant.
Comment by danylmc — February 13, 2011 @ 1:23 pm
Couldn’t agree more with that last paragraph. Sometimes I think people on “the left” actually do subconsciously buy in to the myth, simply because it’s so hammered into you from a young age…very Gramsci’s-idea-of-hegemony-esque. Also it’s very easy to disregard the influence of upbringing (and obviously not just by parents).
Comment by Zo Zhou — February 13, 2011 @ 6:43 pm
che: eBay was founded 4 years before Trademe, and got a lot of press coverage as one of the majorly successful companies in the dotcom boom.
Comment by derp de derp — February 13, 2011 @ 7:13 pm
From what I remember, eBay was well known internationally a long time before, but didn’t bother seriously trying to get into the New Zealand market until far too late. Maybe eBay did try, but not in a way that made anyone want to use it. Meanwhile Sam got frustrated trying to buy a heater (at least as the story goes), and saw an opportunity to make something that people in New Zealand might actually want to use. If eBay had taken more initiative then Sam may have happily warmed up his flat and done something else with his life.
Comment by MikeM — February 13, 2011 @ 8:08 pm
i stand corrected, apologise, and withdraw
Comment by che tibby — February 13, 2011 @ 8:40 pm
The David Brent Award for humour on this subject has to go to Falafulu Fisi at Kiwiblog, and his oddly endearing, child-like, delusional belief that Prof. Richard Wilkinson and Dr. Kate Pickett didn’t engage in a learned point by point rebuttal of his post in the comments section of an online magazine because they were over-awed by his intellectual prowess.
Well, I LOL’d when I read it.
Comment by Sanctuary — February 13, 2011 @ 10:12 pm
Sam Morgan was privileged and lucky etc but don’t forget there were perhaps half a million people paying him $20 (~?? wild guess) a year. Wealth is a social construct that relies on the agreement and belief of people. Wealthy people didn’t magically generate riches by themselves, wealth is a social contract of sorts and some wealth redistribution seems a reasonable recognition of that fact.
Comment by ropata — February 13, 2011 @ 10:19 pm
I don’t think Sam Morgan had an exceptionally privileged upbringing. He grew up in a rundown house bus roaming the fringes of Wellington while his perpetually broke father struggled heroically to make a career in academia.
Gareth Morgan has continued to struggle: his kiwisaver fund has been the poorest performer since the scheme began. The value of his business advice may have been in the self-belief it fostered in Sam.
Comment by Aztec — February 14, 2011 @ 4:20 am
“So while it would be immoral to drug Morgan so he can’t think of ideas any more, there’s nothing immoral about redistributing a portion of his wealth in the form of healthcare, welfare and education, so that other smart, hardworking people have a chance to compete with members of his class on a slightly more equal footing.”
I’m pretty sure he would agree with you. In fact I’m pretty sure almost everyone would agree with you, even those fairly far along on the right – you are simply arguing for equality of opportunity, rather than de-facto equality itself.
The main difference of opinion between the left and the right really is how much of the income distribution is due simply to luck, how much is due to skill, and ALSO how much is reward for taking on risk. You are right that if we explicitly framed the issues this way we may end up with very different policies.
Comment by Matt Nolan — February 14, 2011 @ 10:07 am
For most of Morgan’s childhood, he lived on a house bus, raised by his financially struggling, motorcycle-riding, ‘hippy’ parents (Haines, 2006). To pay the bills, his mother drove busses while his father attempted a get-rich-quick scheme by pouring over horse-racing statistics, hoping to develop a formula to figure out the likely winner in any given race. However, once this idea failed, Morgan’s father became a successful economist, and the family was able to move into a house in Oriental Bay. After High School, Morgan went on to study at Victoria University, but eventually dropped out in 1995. After his failed attempt at further education, Morgan worked as an IT consultant for Deloitte (Simpson, 2008).
http://mpcompanies.blogspot.com/2010/03/sam-morgan-trademe-entrepreneur.html
Its about that ‘equality of opportunity’ thing again. Some have more opportunity than others, providing an unequal and improved chance of success.
Comment by pollywog — February 14, 2011 @ 11:50 am
“If you think I am going to bow and scrape and doff my cap to someone because they have more money than I, or a bigger house, or own more land, or are more famous, of anything, then you can get fucked.”
Unless they are your customer/client/employer and you want some of their money so that you may feed your family, eh, Millsy? Or do you find our welfare system generous enough to be able to go it alone?
Speaking for myself, some of us “right wingers” aren’t against welfare prsay, but concerned about the way that it can trap some and their offspring. My parents are of fairly modest means (my dad was one of 10 raised in the most part without a father) yet with a simple part time job twinned with living at home on modest board, I was
Ropata @ 24 says “Wealthy people didn’t magically generate riches by themselves, wealth is a social contract of sorts and some wealth redistribution seems a reasonable recognition of that fact.”
Unless, like many on the right, you think that the price paid by consumers in a relatively free and fair market was, you know, fair. Thus no more “debt to society” is owed other than the standard rate of tax.
Comment by Clunking Fist — February 14, 2011 @ 3:01 pm
“his kiwisaver fund has been the poorest performer since the scheme began”
damn straight. my funds are returning less than a cash saver…
and re: sam creating value. i thought about this more and isn’t it more that he was in the vanguard of a movement away from print classifieds to online classifieds? what he’s really done is just take money away from big media.
Comment by che tibby — February 14, 2011 @ 3:31 pm
“what he’s really done is just take money away from big media.”
Twice even! Once by stealing their ads, again by selling the site to FFM.
Creating (okay, building) a cheaper, faster, searchable, nation-wide alternative to print classified is the very definition of creating value.
Comment by Clunking Fist — February 14, 2011 @ 5:34 pm
is the very definition of creating value
There’s still a lot that’s wrong with Trademe, most of which is user-driven, that could do with some ‘editorial’ oversight. I especially loathe people who apparently have no understanding of the difference between a reserve price and a starting bid, and that sub-human sub-group of real estate agents that don’t see the problem with listing a $600,000 RV property in the $3-400,000 block.
Comment by Phil — February 14, 2011 @ 6:08 pm
“There’s still a lot that’s wrong with Trademe, that could do with some ‘editorial’ oversight”
Central planning?!
I’ve just been dealing with Yellow about their online White pages: all White Online entries have to be linked to entries in their physical books, and you can imagine what that costs. No wonder they are losing money in this google age: I think I’ll continue to rely on web users who find things with google.
Comment by Clunking Fist — February 14, 2011 @ 6:37 pm
“Creating (okay, building) a cheaper, faster, searchable, nation-wide alternative to print classified is the very definition of creating value.”
OIC.
Comment by Che Tibby — February 14, 2011 @ 9:03 pm
that sub-human sub-group of real estate agents that don’t see the problem with listing a $600,000 RV property in the $3-400,000 block.
Where is my upvote button? I cannot freaking fathom that crap. We’re househunting and limit our search to the $300k-$400k block, and there have literally been $1.2 million properties returned. WTF.
Comment by QoT — February 14, 2011 @ 9:16 pm
Is there anyone worth reading that writes for the Herald?
I am being serious (sorry) but I live a fair way south of the Bombay Hills and stuff
emanating from the Herald often leaves me baffled.
To be fair, Coddington is only one of several Herald writers that are non-plussing.
Comment by peterlepaysan — February 14, 2011 @ 10:52 pm