April 6, 2016--With Charity for One

In his Second Inaugural, near the end of America's bitterest and bloodiest war, Abraham Lincoln called for "malice toward none . . . with charity for all."

In more recent years the Koch Brothers called for charity for one. Or two. Them.

Here's how this works thanks to an analysis by Jane Mayer in her important Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right--

Drawing largely on their half-understanding of the work of Austrian School economist Friedrich Hayek and the juvenile pieties and simplicities of novelist Ayn Rand, brother Charles, to justify the Kochs' anti-tax, anti-charity views, also cited the 12th century philosopher, Maimonides, by referring to him as saying, "I agree with Maimonides who defined the highest form of charity as dispensing with charity altogether, by enabling your fellow human beings to have the wherewithal to earn their own living."

In other words, do not allow inclinations or pressures to be charitable to interfere with people's motivation to amass unfettered wealth. Charity if unchecked can interfere with the workings of the Market's "invisible hand."

No matter that this is totally untrue. It fits the Kochs' narrative of what to them and their network of big-money activists constitutes a better world.

They also call for the end of all taxation--federal, state, personal, inheritance, corporate, and capital gains--as it too gets in the way of the freest of enterprise.

Foster Freiss, the Wyoming fund manager and Koch ally since the 1980s asserted this blatantly when quoted in Chrystia Freeland's, Plutocrats: The Rise of the New Global Super-Rich:

He argued that the public benefited more when the wealthy were not taxed because they would use their money to benefit the public more efficiently and effectively than the government. As he put it, left alone and unregulated, they would "self-tax" by contributing to charities.

With a straight face, Freiss wrote--

It's a question--do you believe the government should be taking your money and spending it for you, or do you want to spend it for you? (sic) It's the top 1 percent that probably contributes more to making the world a better place than the 99 percent.

Key to understanding this gibberish is the "probably."

The top 1 percent probably would do so many wonderful things to improve the world. Like fund right-wing think tanks. Like promote the activities of the Tea Party. Like support states in their efforts to gerrymander and suppress voting. Like giving more money to museums that will carve their names in granite than to organizations that are dedicated to assisting the poor.

Have the Kochs ever given anything to God's Love We Deliver, an organization that brings hot meals to the homebound?

Have Freiss and the Kochs contributed any of their cash to rebuild crumbling bridges?

Have they supported any charities that provide healthcare for the indigent?

Is there a homeless shelter named for any of them?

They have not done any of these things.

If they were sincere, rather than merely selfish, to demonstrate that if the government, which they want to phase out, were to eliminate all social programs, including Medicare and Social Security (which they favor) and would eliminate all forms of taxation (which they advocate), to illustrate their generous intentions, if they were allowed to keep all of their money, they would in fact have already done things, again to quote Freiss, "to make the world a better place."

With the exception of some charitable giving to cancer research, I can find few such examples.

Though they have thus far given $64 million to the Metropolitan Museum of Art.

March 20, 2014--The Rich Get Richer, The Poor Get . . .

The intellectual firepower in economic theory that claimed that economic growth over time reduces inequality was provided during the 1950s and 60s by Simon Keznets.

Most starkly, he put forth the Kuznets Curve that graphically illustrated what he argued was a natural curve, a natural cycle that begins with widening inequality while an economy grows but then decreases, again naturally, over time until a "certain average income is attained." In other words, after overall economic growth, inequality, if we are patient, is reduced.

His work was derived by his assembling reams of data primarily from tax returns. He argued that between 1913 when the income tax was introduced in the United States until the end of World War II in 1948, the portion of the national income earned by the richest 10 percent of Americans declined from a little under half that total income to "only" about a third.

In other words, Karl Marx and more benign progressives were wrong--the free market was a self-correcting system and governments should get out of the way and allow economic justice over time to express itself.

Now there is a new, massively data-rich study by Thomas Piketty of the Paris School of Economics, Capital in the 21st Century, that looks at even more data. Much more data. He studied income and wealth disparity over hundreds of years in dozens of countries and comes to very different conclusions than Kuznets.

In brief, Piketty found that the rate of return on capital investment (machinery, real estate, land, financial instruments) is much higher that the rate of economic growth.

This means that wages cannot keep up with capital formation, inequality therefore increases rather than decreases over time, and it is not self-correcting. That is, if markets are left to themselves. But when governments intervene through, say, progressive taxation, the gaps between the haves and have-nots can be narrowed.

From his data Piketty cites numerous examples of how the unfettered market increases inequality but how with shifts in public policy it has been and can be reduced.

He shows that inequality today is reaching and exceeding the upper limits of the Gilded Age. According to a essay in the New York Times from data mined by Piketty, investment profits account for the largest share of national income since the 1930s and as a result, the richest 10 percent of Americans control a larger share of the economic pie than at any time since 1913.

In regard to Kuznets, Piketty demonstrates that the data that underlie the Curve were amassed from an idiosyncratic period in one country's history--the years in the United States when the Depression destroyed a large portion of the richest people's wealth while at the other end of the period Kuznets studied, the economy benefitted disproportionately by the spending and government investments required to arm the country to fight the Second World War.

Ironically, the forces that ultimately led to the end of the Depression and an era in which income equality was reduced were more the result of government taxation and spending policies than the Invisible Hand of the free market.

The free market brought about the Depression while government intervention and a world war were essential to ending it.

Piketty argues that unless we amend current fiscal policy--especially taxation--the concentration of wealth will continue and inequality will worsen. There are no examples in history since the Industrial Revolution that the market will in and of itself make a difference. Not even expanded investments in education, which to many is the best way to proceed.