Should Wealth Be Distributed Equally?

Today’s essay is the first of four in a series by James E. Hartley on what literature can teach us about economics.

It’s because of you that anybody possesses
Anything radiant or beautiful or pleasing to mankind.
It’s all from wealth that these things stand.

—Chremylus talking to Plutus, the God of Wealth in Aristophanes’ Plutus (Wealth) 

As a recent symposium at Public Discourse made clear, wealth is a subject on the minds of many. To say that wealth is desirable is about as obvious as a statement can be. As I tell my students if they object, if you have a lot of wealth, you can always give it to your favorite charity (the publisher of Public Discourse, obviously). Yet for something so universally desired, wealth generates a lot of controversy. Why? In this and succeeding essays, we will isolate the aspects of the wealth debate in order to figure this out.

Much of the perennial controversy surrounding wealth is about the way it’s distributed. What is the proper distribution of wealth in a society? Would a random distribution be acceptable? If you casually ask people, there are two popular answers: 1) distribute it equally and 2) distribute it to whoever earned it. Which one is just? It is amazing how quickly discussions of this matter revert to the oft-debated: “Capitalism: Good or Evil?”

But, this discussion of capitalism is a red herring. Aristophanes, the fifth-century-BC comic Greek playwright, devoted an entire play to the matter. This play was written roughly two thousand years before there was anything that anyone would describe as a capitalist economic system, but the issues in the play about just distribution of wealth remain relevant today. Understanding this question of wealth distribution seems essential to building a good society, regardless of how its economy is organized.

Plutus, the God of Wealth

At the start of the play, Chremylus has just left Delphi after asking the oracle how to end his state of perpetual poverty. He is told to follow the first person he meets, who turns out to be a blind man. Chremylus and his servant Cario accost the blind man and discover he is Plutus, the God of Wealth, prompting the following exchange:

Chremylus: But tell me, how did you manage to fall so low?

Plutus: The work of Zeus. He’s envious of mankind.
When I was a kid, I swore I’d only visit the homes
Of respectable, intelligent, honorable people.
Zeus responded by making me blind, so I could never tell
Which were which. It just goes to show
How much he resents decent folk.

Note the moral assumptions undergirding this exchange. It makes good sense that Plutus should distribute wealth to the morally good, the respectable, intelligent, honorable people. When Chremylus asks what he could have done in his life to become wealthy, the answer is that there is nothing at all he could have done. The God of Wealth is blind. Wealth is distributed randomly.

But this is about to change. Inviting Plutus to his home, Chremylus not only becomes wealthy himself, but has the means to distribute the blessings of Plutus to others. He and Cario set out to bring Plutus to the god of healing so that Wealth can regain his eyesight. As his friends gather to hear the announcement that Wealth will soon be coming their way, an old crone enters the gathering, announcing that she is Poverty. Chremylus proudly announces that he will soon be kicking Poverty out of Greece, to which Poverty surprisingly responds:

Kicking me out of Greece?
Poor humanity! Nothing could be worse.
Let’s examine the idea together right now,
And if I can’t prove to you
That I’m the source of every blessing
And that it’s I who sustain you,
Feel free to do with me whatever you like.

A debate commences. Is Wealth or Poverty the source of all good things? On the one side, Chremylus explains that when Plutus can see again, “that’ll make everyone kind and rich/ and godly too—/ Surely something that nothing could match/ or ever outdo.” It is obvious to Chremylus that Wealth is good.

Poverty explains that Chremylus is a fool, arguing that Poverty is much better than Wealth at providing good things.

Because if Wealth does see again
and can begin
To give himself to everyone
equally,
No one will practice the arts and crafts
ever again.
For once these have gone, who’ll be
at all ready
To ply the forge, to build ships,
do tailoring
Make wheels or shoes, do bricklaying,
or come to grips
With washing clothes
or leather tanning?
Who will wish
To plow the earth and gather in
the harvesting
Of Demeter’s generosity
once you can
Succumb to inactivity
and do nothing?

There lies an interesting choice. Chremylus argues that wealth should be freely distributed to everyone who is good. Poverty argues that wealth should go to people who are working hard to avoid being poor. Would you prefer to live in a society where everyone has access to becoming wealthy and idle, and where work and wealth are no longer tied to one another? Or would you opt for a society where people are industrious and active because they fear the cold grip of Poverty? In the wealthy society, who will make all the products that all the idle rich want? But would it be better for everyone to continually live in fear of Poverty and spend their days trying to avoid that old crone?

Poverty is unpersuasive within the play. Plutus regains his sight. The dishonest and corrupt are really unhappy in this new world because wealth and riches are no longer within reach for them. Then Hermes appears to explain that Zeus and the other gods are also upset. Now that everyone has access to wealth, nobody feels any need to make sacrifices to the other gods. The play then ends as Plutus takes his place in the Acropolis.

Is this a happy ending? The play is a comedy, and thus Chremylus ends up quite happy: he is now wealthy. But Aristophanes does something subtle here: Chremylus never answered Poverty’s argument about the downsides of acquiring wealth without work. We never see what happens after the play ends. Does everyone live happily ever after? Or does the fact that nobody fears Poverty mean that there is no longer any actual wealth because people no longer make anything?

One thing we learn from Aristophanes here is that a society’s just level of wealth is not merely a matter of finding the right technical redistribution mechanism; rather, any arrangement of wealth distribution involves sets of political, moral, and material tradeoffs, and no single arrangement will be universally acceptable to every society.

The Lingering Problem

The questions raised in this play are no different from the ones with which we wrestle 2,500 years later. Today’s debates are captured in Aristophanes’ Plutus. There are many people who look at the society and say with Cario, “Even the blind could see that in our day/ the secret of success is to make sure you’re rotten to the core.” If you believe that high wealth is currently going to unscrupulous people, then the idea that wealth should be distributed to those who acquire it is fundamentally problematic. We all agree that thieves do not merit the wealth they acquire. But, on the other hand, there are few (if any) people who truly believe that the distribution of wealth should always be perfectly equal. Let’s say we decide to distribute all wealth perfectly evenly in March 2023. By March 2024, you will find radical wealth inequality. Some people will have purchased a house, and some people will have squandered it all on riotous living. Much of our wealth lives and dies by our choices. Would anyone argue that the wealth levels should be equalized again one year later?

Any quick answers to how wealth should be distributed are thus woefully incomplete. People who say they want an equal distribution of wealth really mean “more equal than the current distribution.” Those who say wealth should be distributed to those who earn it really mean “those who earn it by appropriate means.” In other words, it is not as obvious as we might think that the two sides of this debate are as totally irreconcilable as they might seem.

To get at the differences in views on the proper distribution of wealth, it helps to rephrase the question a bit. Consider the following scenario. A country starts with a perfectly equal distribution of wealth in which everyone has exactly $200,000. There are two options for the future:

1. Everyone’s wealth will rise to $250,000.
2. The wealth of 90 percent of the population will rise to $300,000; the wealth of a randomly selected 10 percent of the population will rise to $3,000,000.

(Note for those concerned about inflation: assume all the numbers are in real terms, so this increase in wealth is an actual increase in purchasing power.)

Which option would you choose?

Absolute vs. Relative Wealth

I have asked this question in many different places over the years, and the audience almost invariably is evenly split. Why? It turns out that when we talk about wealth distribution two very different issues get conflated. Is it the absolute level of wealth that matters, or the relative amount of wealth? If I doubled your wealth but tripled the wealth of your neighbors, are you happier?

Those who are concerned with the relative amount of wealth tend to focus on the idea that those on the upper end of the distribution have unjustly appropriated wealth from those on the lower end. There is an implicit belief that in a fairer world, wealth would naturally be more equal. As Aristophanes shows, this idea that wealth is unfairly distributed long predates anything we could call “capitalism.” When some are wealthier than others, those whose primary concern is with relative levels of wealth will object. Some would even accept lower absolute levels of wealth in exchange for more equality.

Those who think the absolute level of wealth is more important tend to focus, like Aristophanes’ Poverty, on the fact that it requires work in order to generate wealth. (Even things that do grow on trees must be harvested in order to generate wealth for an individual.) To these people, the argument for leveling the amount of wealth is tantamount to removing the incentive to generate wealth in the first place. The reward of a less equal wealth distribution is higher wealth for everyone since inequality makes us worker harder and produce more things.

Again, we do not know whether Poverty’s warning about the dire consequences of wealth equality ever materialized. However, to reiterate: what Aristophanes suggests to us is that, like so many political matters, there are tradeoffs involved in the absolute-versus-relative-wealth debate. There is no obvious, universally desirable solution: different societies will tolerate different levels of inequality and might be willing to sacrifice different levels of absolute wealth. Nonetheless, the warning from Aristophanes’ Poverty is clear: absolute equality means absolute destitution.

Fair Play

But despite disagreements over absolute and relative wealth, one thing almost universally agreed upon is that wealth must be acquired by morally appropriate means. If wealth is generated by a tyrannical Pharaoh enslaving the descendants of Jacob, the resulting inequality would be acceptable to almost no one. Is the monopolist who produces a life-saving drug entitled to keep the profits from a government-enforced patent? Is the godfather of a successful gaming and alcohol distribution empire entitled to the fruits of his labors?

In other words, how one acquires wealth matters at least as much as the way wealth is distributed. In the aggregate, a society’s percentage of wealth acquired by immoral means is in many ways a reflection of how unjust that society is.

The question whether a large percentage of wealth has been immorally acquired requires an examination of what counts as moral economic activity and what doesn’t. We will study that matter in a pair of subsequent essays, using Chaucer and Dreiser as our guides.