More Than Money
Issue #31

The Everyday Ethics of Wealth

Table of Contents

“Wealth: We Didn't Get Here On Our Own”
– Chuck Collins

By Chuck Collins

Respectful dialogue among people of diverse viewpoints is a hallmark of More Than Money. Because our members vary widely in age, family history, politics, religion, net worth, source of income, geography, and other factors, lively conversation happens whenever members get together—in person or in print. We welcome and encourage thoughtful commentary on topics of interest to our readers. The opinions expressed by the writers of Viewpoint are not necessarily those of More Than Money.

At the heart of ethical considerations about wealth are our beliefs about how wealth is created. How much of my wealth is linked to my own initiative, intelligence, and effort? How much has been the result of good fortune, God's grace, choosing the right womb, other people's labors, and/or society's investment?

As the great grandson of the meatpacker Oscar Mayer, I can look back over my family and personal history and see many examples of both individual initiative and ways in which my family and I got help along the way. When I co-founded Responsible Wealth, I began to work on the emotionally laden issue of taxation—and grew to understand that people's widely divergent attitudes and feelings about paying taxes are rooted in different beliefs about wealth creation. In conversations I have had with wealth holders, I have noticed two distinct perspectives on wealth creation, which I believe have implications for the fundamental ethical question, What does a wealth holder owe society?

The first perspective I call "the great man" theory of wealth creation. It may be characterized by the phrase, "I did it all on my own." The second perspective I call "I got some help along the way." It says, "Yes, I made substantial effort, but I didn't get here on my own." Each worldview leads to a very different set of actions and perceived obligations.

In American culture, the "I did it alone" creed of individual success is dominant. It shows up on talk radio shows and editorial pages. It sounds like: "I built this fortune myself," or "I didn't get any help along the way," or "I'm a self-made man." (There is a characteristically male cast to these claims.)

Lately, American society has witnessed some dramatic examples of the "I did it all myself " view of wealth creation. The financial world has been rocked by scandals that are rooted in the "It's all mine" view of the world. In a 2000 interview in Business Week , a chief executive officer of a global company who recently had been led away in handcuffs was asked to justify his enormous compensation package. He responded, "I created over $37 billion in shareholder value "¦ so I deserve to be greatly rewarded." ( Business Week, "Executive Pay: Special Report," April 17, 2000) The operative word here is "I." There was no mention of the share of wealth created by the company's other 180,000 employees. This "great man" theory of wealth creation has fueled an increasing pay disparity at U.S. corporations. In 1980, the ratio between top corporate managers and average workers was 42 to one; it now exceeds 400 to one ( Business Week , "Executive Pay: Special Report," April 20, 2002).

I have also noticed two more subtle repercussions of the "I did it all myself " individualism. Although perhaps not true in all cases, people who believe they "did it all alone" seem more likely to view others who have less money than they as less capable of earning it, and therefore, not worthy of outside assistance. The reasoning goes: If my success is all of my own doing, then others who haven't attained success must be less striving, intelligent, or motivated than I.

The second implication is: If I got here on my own, I don't have obligations or debt to others, such as to my community, co-workers, institutions, or society. From this creed of individual achievement, it is a short distance to "It's all mine" and "government has no business taking any part of it." If one really believes that "I did it all myself," then ipso facto any form of taxation would be a form of larceny.

In contrast, some people offer a different accounting of their success, noting that they "got significant help along the way." Warren Buffett, the founder of Berkshire Hathaway and the second wealthiest man in America, spoke of the benefit of living in this society when he imagined trying to create wealth in another country. In a 1995 public television interview, Buffett observed that the American system "provides me with enormous rewards for what I bring to this society "¦ I personally think that society is responsible for a very significant percentage of what I've earned. If you stick me down in the middle of Bangladesh or Peru or someplace, you'll find out how much this talent is going to produce in the wrong kind of soil. I will be struggling 30 years later. I work in a market system that happens to reward what I do very well—disproportionately well." ("Warren Buffett Talks Business," Center for Public Television, University of North Carolina, Chapel Hill, 1995, as cited in Warren Buffett Speaks: Wit and Wisdom from the World's Greatest Investor by Janet Lowe, John Wiley and Sons, 1997.)

A similar view was expressed by Martin Rothenberg, a wealthy software designer, in remarks he made at a White House ceremony at which he defended the federal estate tax:

"My wealth is not only a product of my own hard work. It also resulted from a strong economy and lots of public investment in me and in others. I received a good public school education and used free libraries and museums paid for by others. I went to college under the GI Bill. I went to graduate school to study computers and language on a complete government scholarship, paid for by others. While teaching at Syracuse University for 25 years, my research was supported by numerous government grants—again, paid for by others.

"My university research provided the basis for Syracuse Language Systems, a company I formed in 1991 with some graduate students and my son. I sold the company in 1998 and then started a new one, Glottal Enterprises. These companies have benefited from the technology-driven economic expansion—a boom fueled by continual public and private investment." ( Roll Call , March 14, 2001)

For Rothenberg, his experience instilled an obligation to society: "I was able to provide well for my family, and, upon my death, I hope taxes on my estate will help fund the kind of programs that benefited me and others from humble backgrounds —a good education, money for research, and targeted investments in poor communities—to help bring opportunity to all Americans."

Many in the post-World War II generation benefited from low-cost college education and low-interest housing and business loans as tickets onto the wealth-building train. Yet, even for people who have not gained from such explicit or direct investments, our society makes many investments that are largely invisible and that we take for granted. I believe we would all benefit from a more accurate accounting of the public's investment.

For people who have amassed wealth in private enterprise or the stock market, it is important to measure society's contribution to these institutions. Our society has created a framework of property law that enables individuals to own and sell property. We give preferential tax treatment to investment income, just one of a number of important tax breaks given only to asset owners. We have a regulated marketplace. The value of these socially created systems is greatly undervalued in our history as well as in our individual assessments of how people accumulate wealth. As Americans, we benefit enormously from 200 years of property definition and law.

Did I grow up in a community with good schools? Did public investment create a framework for my business start-up? How much of my fortune is dumb luck or winning the lottery at birth? What other people's work contributed directly and indirectly to my good fortune? As I have asked myself these questions, I have found many instances of assistance in my own life. And as I have posed these question to others, I have seen that the more we each identify the role of other people, institutions, and public investment in creating the fertile soil for wealth creation and success, the more we realize that our debt is enormous and our obligations numerous.

Responsible Wealth, an organization of business leaders and high net worth individuals concerned about economic inequality, is conducting interviews with people reflecting on society's role in helping them become wealthy.

Chuck Collins is the co-founder and program director of United for a Fair Economy (www.faireconomy.org) and Responsible Wealth (www.responsiblewealth.org) . He is co-author, with William H. Gates, Sr., of the forthcoming book, Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes (Beacon Press, 2003).


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