To redistribute or not to redistribute? That seems to be the question

Transcript

Transcribed by machine from the recording.

Scott Chris, good to see you again, as always, my friend.

Chris Scott, my man. My man. Scott in the house. Scott, have you been a long-term Saturday Night Live watcher?

Scott Oh yeah, John Schneider, man.

Chris Making copies.

Scott Making copies.

Chris Scott Meister. Scottarino.

Scott Scottarino.

Chris It was making copies, right? And then one day the copy machine was taken away to be repaired and you brought it in the coffee maker and it was like, you know, done. Making coffee. I don't know why that was funny.

Scott That was hilarious. Because I think some of it is like, there's that person in a lot of offices that's like that way. So it's like you're kind of, you know, you're like, oh, that's this guy or that's that person, you know.

Chris Yeah, okay, yeah. No, I guess that's true. I just haven't been in an office for a while.

Scott I know, I don't... Trying to remember what that was like. Yeah, I'm the same way. You know, it's interesting, a couple things. It's freezing everywhere here. I mean, it's cold here, but in the Philadelphia area, like, my dogs were, like, even cold walking this morning. But, man, there are places that are, like, colder than in Antarctica in the United States right now.

Chris I suspect that there are a lot of municipal officials in the U.S. right now who are making calls to their colleagues in Canada for advice. So how do you live?

Scott Low expectations.

Chris Yeah. I think the answer is building design. In Canada, a lot of buildings are designed for the coldest day.

Scott Yeah, not so much here. In Minneapolis, there's some of that. I mean, there's certain cities that there's a little of that, but in the United States, it's just not widespread.

Chris So, yeah, so what does that do? How does the rhythm of life must change? I mean, the streets must kind of empty out. It's got to be a difficult time to be in street retail right now.

Scott Yeah, I mean, yeah, a little bit. I mean, but there's still people, you know, I don't know. People are still hustling and bustling. They're still kind of, I mean, they've closed schools and stuff. You know, certain colleges, like colleges even where they're like primarily residential. I have friends that teach at places like that and they've canceled classes for a few days.

Chris Just people let them know. So in Canada, more common like colleges and certainly universities, a lot of them have underground tunnels connecting all the buildings.

Scott Yeah, they have that stuff in Minneapolis. The other thing I wanted to say, so my wife and I's 2008 Volkswagen Jetta kind of needed to go to the shop and the repair cost was going to be more than the car was worth. So we got a new car and I spent entirely too much time in the car dealership and we walked in, I walked in I felt metaphorically like a big luscious grape and I walked out like a drained raisin. But we got a great car, a Kia Niro, which is a hybrid. It gets like, I don't know, it gets like average 48 miles to the gallon or something. It's like the nicest car either of us have ever had. It's like we've never bought a new, it's like we bought a new car together, leased it. And I didn't know this also, Kia is like the most reliable car right now. Like it's amazing. But I listened to our podcast on the stereo system in that car. It sounded so good.

Chris So that's where you were going. Where is Scott going? Is he going to make some kind of allusion to climate change, global warming, and why we should all be driving hybrids? No, it's like, dude, you should listen to our podcast in my new car.

Scott Oh, it's awesome. It sounds so good. Oh, no, there's no climate change because there are places in the United States that this week will experience 100-degree temperature differential feeling. It's going to go from negative 60 with the wind chill or whatever to like 50 degrees. Yeah, no, there's no climate change.

Chris No, no. So there is the silver lining to take from the deep freeze. Well, so, I mean, my family's in sort of Western Canada, where it gets... I mean, you think this is cold? Where it gets cold. And so chatting with them, and I said, you know, I know what it feels like, because here in London, it's like minus one, minus two, it's really cold. I got no sympathy, no sympathy. But it's negative here in London, and that's cold for people here. I mean, Europe in general, but especially the UK, is kind of a country that was built before insulation was discovered. So there's very little to distinguish indoor and outdoor except what side of the wall that you're on.

Scott I'm not into that.

Chris Actually, back in the day, I mean, well, I know it was back in the day at Oxford before my time, and I assume it was probably pretty general. There was coin-operated heating and lighting. Wow. So, like, as a student, like, you'd need a pocketful of coins to get through the cold nights. You'd just keep loading up the machine.

Scott That sounds oppressive.

Chris Yeah, well, it's just backward. No, it's not backwards. It's just, you know, this is a country, and most of Europe is like this, where buildings have been sort of upgraded and retrofitted for centuries, right? It's the same building. It's the same basic building. We've added the electric light. All right. And we've added the electric fire. All right. Yeah. But sometimes it's an awkward – sometimes the past and the present kind of awkwardly coexist.

Scott So let me ask you this. So we've established that the inclement temperature experiences and weather phenomena are not equal in the United States, Canada, or the UK. What about income? Segue to our discussion. Oh, that was an expert segue. Expert segue. There we go. That was a powerful expert. Didn't even notice that we had changed topics. I just used the word powerful like Trump. I mean, Putin made a very powerful – it wasn't a good transition. It was a powerful – so much power in the transition that my lights flickered.

Chris And, you know, the thing is, I wonder, like, sometimes you're using – You're using adverbs that don't mean anything. What is it to powerfully deny? How does that make a difference? I don't know if you've ever watched this YouTube channel, How It Should Have Ended. They poke holes at all the obvious plot holes in films, and they did this one of Harry Potter, How It Should Have Ended, and it kind of shows. Voldemort and Harry Potter facing off against one another in their final duel. And Voldemort says, I'm pointing my wand as hard as I can. It's great. Like, why did they... Anyway, but I kind of feel it's the same way sometimes. I'm pointing the wand very powerfully. My wand is so powerful. Oh, boy. Melania will say something about that. Exactly. Inequality.

Scott Yeah. So you wanted to talk about income inequality. It's great because I think about it. I mean, I suppose everybody thinks about it more, but if you follow, you know, the news and political discussion and cultural discussion, at least in the United States, I mean, this is huge. Like, this is such an issue.

Chris So that's actually what sort of brought it up in my mind is, you know, the kind of The kind of the rhetorical agenda that seems to be coming out of this new class of Democrats in Congress, you know, talking about, you know, top tax brackets of 70%, talking about a Green New Deal. I mean, talking about whether it's a policy failure that billionaires exist. And then getting very, very strong reactions from the right, from conservatives, from Howard Schultz. That kind of thinking, that kind of critique of income and wealth inequality is not just unusual or unfamiliar, but actually un-American.

Scott Howard Schultz, of course, is the Starbucks CEO, self-made billionaire who is now running for president, who, in a 60 Minutes interview, told a story about his dad beating him up in the shower. It was awful, but that was even not that boring. It was kind of boring. I'm like, how can you make a story like that? It's cinematic in a biopic. How can you tell it badly? But he did.

Chris I admit I didn't watch the 60 minutes video. I'm going to wait until it's relevant to pay attention to this man.

Scott But if you have insomnia, it's better than Ambien.

Chris Okay, well, that's saying quite a lot. So actually, I'd be interested just to kind of hear you paint the picture for a couple minutes for me and our listeners, like sort of from where you're planted in the United States. What is this conversation that's happening right now?

Scott Yeah, one of the things that's interesting, I think, that is mildly hopeful is that at least no one, it's not like a climate change where you have so many skeptics about it. I feel like, by and large, most people acknowledge it, like people on the right, the left, people that are for more redistributive kind of political solutions and people that are against them. Most of them don't deny that it's a reality. The question is, what's the cause? And are we sort of better off than other kind of peer nations in the industrialized world? What's the relationship of the 1% and their drastic increase in wealth and the seeming stagnant income growth of the middle and working class? And so, again, there's not generally a sort of denial, even by the most conservative people in the political discussion. And I don't say that most conservative as, oh, that's a terrible thing.

I'm just saying, like, generally, certain kinds of inequality or systemic racial things or gender things, they're often more spurious. But on this, there's not a kind of spurious attitude. The question is all about causes and solutions. And so that's where the, I think, debate rages.

Chris So interesting to hear you say that, because I thought what you would instead say is that the debate rages not around causes and solutions, but is there a problem here? Because I think that what you have on the AOCs of the world who came up with, which I thought was a startlingly provocative statement in the context of American political discourse, that And I forget exactly how she put it, but basically making the argument that the existence of billionaires in society is somehow like a social failure, right? That there shouldn't be those kind of vast accumulations of wealth beyond what one could possibly sort of usefully use it for.

Scott She said in a world where there are people still getting, kids getting ringworm in Alabama, which ringworm is like a fungal thing. I mean, it's not so much... I could think of many, many other systemic things she could have said.

Chris You're saying that the analogy was bad because the worms are fungal?

Scott It's fungal. You go to the gym, it's steamy. This is very interesting. But yeah, that was provocative. And some of these sort of left-of-center proposals around wealth tax or her 70% income tax, these policies are not unpopular in polls. It's interesting, too, that Medicare for All polls over 50% of Republicans think that sounds good. So it is interesting. It's like the swinging populist pendulum, which shows that there's probably a real issue here.

Chris Yeah, this swinging populist pendulum, that's interesting because, I mean, as someone who brings sort of more historical perspective to a lot of our contemporary discourse, you know, I can't help but think back to sort of Margaret Thatcher here in this country, you know, talking about public goods and basically saying that there's no such thing as a public good. There's no such thing as society. There are sort of individuals who live in society. And government and sort of the rules of society are fundamentally for individuals. Now, in that kind of very strong sort of neoliberal way of thinking about the world, and by neoliberal I just mean sort of that economic logics make sense everywhere, that everything should ultimately be thought about as a market and a competitive game, And that competitive game is sort of how to advance human well-being. In that world, wealth inequality, income inequality is kind of irrelevant. It certainly isn't a subject of moral condemnation.

It's just the individual consequences of people playing the game and some people make life choices to develop skills that are more valued in the marketplace than other people and that's our autonomy in operation to kind of step in and reallocate the outcomes of all these autonomous choices we're making. That would actually be harmful to our freedom.

Scott So that, I think, that's kind of like the hegemonic idea that is... I don't know, though, because I think within the... Okay, let's just say also for the purposes of this podcast, like let's do, maybe next week we'll do the kind of critique of neoliberalism and we'll look a little bit maybe at socialism and some of the... But let's just assume like the neoliberal world, like let's assume, you know, kind of arguing from within that framework about inequality for an episode or something. Yeah, no, and maybe like asterisk, I'm not necessarily advocating that view, but I'm trying to paint that I think that's a pretty prevailing view that is being... Well, everybody that's a neoliberal, right, will acknowledge that inequality is... Capitalism needs inequality like a plant needs... Are you the winner, generally? I win a lot. I mean, my wife beats me about 70% of the time, I'd say. But, you know, I'm decent.

Chris We'll have to play. I don't play. Maybe you can get me hooked on it.

Scott Oh, it's fun. It's a great game.

Chris We'll play until I discover if I can beat you. And if I can't, then I'm just going to bow out and find a weaker player.

Scott Yeah, I'm not hyper-competitive, so I play with people that beat me. You have people also like Warren Buffett and others who are clearly beneficiaries, George Soros, all sorts of people. You can think of all these kind of high-profile... You know, Devo's type of people that think that, well, okay, while we can't have equal outcomes, short of a kind of, you know, drastic socialism or Marxist or kind of thing, we can and have a moral obligation to have an equal playing field. And the more we can spread the wealth and share the wealth, the better society we are. So, I mean, I think that there are people—

Thank you for having me. People that, I mean, even Elizabeth Warren said she's a capitalist, right? But the Cortez and more hard left are like, hey, look, capitalism is inevitably unjust and this inequality that's built into the system is, I mean, this is sort of like we were talking about before around democracy, right? Like, you have people that, the neoliberal, whether you're sort of left or right, inequality is a feature of the system, not a bug, where the AOCs of the world that are

Chris And it is so contrary to the logics of the neoliberal agenda around which so many different sectors of society are now being governed by these logics. It's almost Foucauldian. That one imagines that in a kind of pre-social media age, it would be very difficult to have the courage to kind of speak to that hegemonic discourse this alternative and say, no, this is a bug. And no, we've got to overturn these logics and start thinking and valuing very differently about these outcomes and change them. And just imagine how impossible it would be to even get airtime. For these, you know, almost radically contrarian messages from sort of the way most people are thinking. But now it's possible.

Scott Like a guy like Howard Schultz is banking on, well, a couple of things. Like that independent means centrist, which it doesn't in America. I mean, most independents lean to Republican or Democrat. And also that it means moderate. And here's the thing. He's kind of articulating the sort of, I'm socially liberal. Right? And so I'm for diversity and expression of sexuality and for plurality of understanding of family, that sort of thing. But I'm economically, fiscally conservative.

Chris That part of the American... Well, like most Starbucks consumers.

Scott But actually not. It's very interesting. That part of the electorate, some recent polling has shown, is almost non-existent. It's such a small sliver. There are lots of people that are socially liberal and economically liberal. They're okay with higher taxes, more redistribution. Right. The kind of socially liberal kind of economic conservative limousine liberal rock of a Republican, that is an insignificant demographic right now.

Chris Interesting. That's really interesting. I mean, as a Canadian, I hear that and I immediately think back, and this will only make sense to other Canadians who are listening, but I think back to the 1990s. When the Liberal Party, you know, I don't know if you'd even remember the Canadian Prime Minister, his name was Jean Chrétien, this Frenchman from Chewinnigan. Amazing character. But, you know, for about 13, 14 years, they governed with the majority in Canada. And that was very squarely. And even to this day, although they're probably more economically liberal now, where the liberals played and they kind of held the center ground as the natural governing party of Canada by being socially liberal and economically conservative. And kind of the argument is that that's kind of where most Canadians are, you know. And relative to our American cousins to the south of the border, it's probably true that Canadians are, in general, far more socially liberal. I mean, for example, on things like abortion, where it isn't even a subject of law.

In the Canadian context, that's a private matter between women and their doctors, and the law is silent on what to do there. There's just not the same kind of social conservative infrastructure to mobilize for some kind of political or legislative expression. Who's an example of the economically liberal social conservative?

Scott Well, look at most of the populist parties in Europe, right, that are sort of suspicious of immigration, want a kind of more traditional national identity, and yet they're not against increased welfare state spending and things like that. It's just they don't want outsiders to get them. You know, there's a kind of—that kind of populism. Like, Republicans used to poll, like, something like, you know, do we need more government to, you know, like, do more to improve the welfare of the people? You know, all this. And Republicans used to poll, like, under 30% all the time. Like, you know, even younger ones, like, under 40%. Now, everybody, I think, Republican and Democrat, the whole populace in both parties is over 50%. Now, for Democrats, it's much higher, but... Everybody thinks that more government involvement is okay. So that's the thing that makes the kind of political landscape interesting, because if you're the kind of traditional conservative market-driven person, which on

income inequality would mean, hey, the market will fix it. There's more prosperity. Regardless, we could talk in a minute about empirical data on that stuff, but it's just the cultural mood is not that mood. At least the United States.

Chris Yeah, and so, I mean, I guess that's where I think that one of the big questions that at least forms in my mind as I watch what seems to be a much bigger conversation about inequality now taking shape in the United States. And in a way, you know, bigger than... Well, no, this would be interesting to actually think about. Is it bigger than? But in the aftermath of the global financial crisis, and you had the sort of Occupy Wall Street movement, you know, there was a cultural moment there where there was a strong sort of mobilization of voices against the present sort of economic order, which had somehow managed to both create the global financial crisis and yet emerge from it You know, relatively with its legitimacy intact. And then now, so what's the difference between that and now where there seems to be far more just sort of open space or creative space politically to challenge The legitimacy of some pretty strongly held views about how the economic system works and what is acceptable within the system. And yeah, for me, again, it's very kind of clarifying that Howard Schultz, the Starbucks CEO, would Thank you for having me.

Legitimate discourse within this country. And he might just be five years too late, because I feel like five years ago, people would agree with him. Yeah, that's just kind of crazy talk. And so I wonder if... I don't know where I'm going with this, but what I'm seized with is... So I go back to people like Hannah Arendt and Michel Foucault, who talked about neoliberalism. Within a broader set, neoliberalism is an example of how some ideas in society become hegemonic. And he talked about what he called governmentality. It's not like there's any one person who's holding it up, but there are these ideas that are accepted as logics, as truths throughout the whole of society, and they just become stronger and stronger and stronger. Until, you know, they're like the air that we breathe.

Scott The less you talk about them and debate them and the more they're assumed and provide the foundations and undergird the assumptions of debate, then you've got a hegemonic ideology, right?

Chris Okay, yeah, so is, you know, is what was happening in 2016, you know, with Trump's election or with Brexit, is what is happening now in sort of on the political left in the United States and, you know, and rewidening the discourse about inequality and taxes, is this kind of, are these all examples of the same thing, which is a kind of new plasticity? with hegemonic ideas, a new capacity to mobilize responses to the governing logics of society, mobilize them big enough and fast enough that there's enough of an audience that sees them as legitimate to nurture them, protect them, protect them within a coalition of people who are committed to that idea. So that they actually do live to persuade more people and to contest and to rival the logics that are kind of governing society.

Scott Yeah, and maybe, I mean, I think just with the plurality of sources of information, like, you know, there's the water cooler at the office where they're making copies, right? Like, if you said the Washington Post, NBC News, New York Times, PBS, like, okay, it's a fact that these are respectable journalists. They get it wrong sometimes. But now, you have less of a common shared consensus around data sources. So that allows, I think, probably more... It allows for the Overton window can move, right? Like you can put more things in the debate.

Chris Well, everyone's talking about the Overton window a lot these days. I thought I was a total geek when I read about it. So the Overton window, as I understand it, is really just sort of the frame that defines what are the ideas that kind of belong and what are the ideas that... Yeah. Kind of the frame that sets our expectations.

Scott Yeah. Like Bernie Sanders, you know, Medicare for all sounded radical when Bernie Sanders suggested it in 2016. Now, like a Democrat has to say, I'm open to it, at least, you know, because the over to window has moved.

Chris As a condition of running for the Democratic nomination. Yeah. Yeah. So maybe that's a good way to think about it. Is what we're seeing here just more and more evidence that the Overton window, which, you know, probably when it was first articulated as a theoretical concept, was sort of almost seen as something that's fixed within the frame of a house, pretty hard to move. Are we discovering that actually this is like a sliding window, right? It's on tracks and it's actually pretty easy. And maybe the easiest way to move it back and forth is to identify what's an idea that's currently outside the window and talk about that and then get people to pay enough attention to it.

Scott So here's the question, right? I think this is the kind of thing that will, I think, shape political debates all over the place, right? In the developing world. I mean, the developed world. Does rising income inequality... Is it a problem for social mobility? This is something that the United States, kind of part of our founding myth, our ethos is, hey, we're moving away from an aristocratic, fixed social structure because we don't have that and we have a dynamic society that you can, the American dream, you can climb the ladder. Howard Schultz is an example of it. A guy who grew up in the projects in Brooklyn, I think, and now is a self-made billionaire and lives in Seattle. Does rising income inequality mean that people can't get ahead anymore?

Chris So, yeah, let's talk about that for a bit. And then behind that is, I suppose, a broader question of the ethics of income inequality and how big a problem this is for society. And I guess then one clear argument of why this is a problem I suppose, for me the interesting thing to say here is to think about what's happening within higher education. I spend a lot of time in that space. And what you can certainly, I think, say about higher education is that the last 25, 30 years of the globalization of higher education, the transition from thinking about education as a kind of public good or a personal development thing to a much more economic language of investing in your human capital. As the whole of higher education globally, but especially in the developed world, and we'll have to have a separate podcast episode where we talk about the developed versus the developing world, because I think that's another example of conceptual framing that we need to problematize, but set that aside.

But as higher education has sort of increasingly put itself in service of economic logics, you've seen a pretty dramatic increase in inequality among universities. So you've got sort of top-tier universities and you've got everyone else. The top-tier universities charge a lot more than they could 25 years ago because there's a kind of unspoken promise that is frequently delivered on that if you get into the top-tier universities, then you're going to get into top-tier employment opportunities, and you're going to end up with kind of a top-tier lifestyle. And if you miss getting into a top-tier university, then maybe you still will. And so, at least from the higher education space, you can see, I think, a pretty clear trend that as inequality increases, as inequality of opportunity increases, so too does inequality of outcome. And I guess that fundamentally we should be pretty worried about that because if what we're doing is building a society where relatively few people have the opportunity to experience some kind of fulfillment, Then surely there's got to be a better social model that extends that sense of fulfillment to more of its members, right? And now we get into sort of Aristotelian questions of like, well, what is the purpose of society and what is all this for?

Unless we've got some robust argument for why some people matter more than others, the best argument is probably about creating opportunities for each individual to develop their excellences, to be all Aristotelian about it. And yeah, so now I'm on a very long ramble again, but my experience from higher education is that access and outcome are pretty closely related things.

Scott Okay, let me just say that I was surprised to find this study, but there's a study by a scholar at Berkeley, Emmanuel Sayes, who wrote a paper recently along with Thomas Piketty, who's like one of the famous, most famous economists And they studied American upward mobility over the 20th century. And the idea is if income inequality hurts social mobility, then you would expect that as inequality rose, social mobility declined. But they found that's not really true. That over the 20th century that the United States mobility rate was remarkably stable. The second thing you would assume is that countries where there was high inequality, higher inequality like the United States compared to most of our European, you know, peers or places like Japan or places like Australia, New Zealand in the world, you would assume that places with higher inequality were pretty high. I think we're maybe the highest in the industrialized world. ...would have a lower mobility rate than our peers. But they found that's not true either. That really, our mobility rates are not lower, despite the fact that we have more inequality. Now, that's not an argument for inequality or addressing it, but it's just... Now, I mean, the counter-argument to that would be, well...

...be the case that your ability to get ahead has declined, that we're just as socially mobile a country in the United States with our income inequality than when in decades previous there was much less inequality, and there's just as much mobility as if you were in Western Europe.

Chris Hmm. Interesting. So, I guess I have two thoughts to that.

Scott I sound like the champion of neoliberalism right now, and that's not my intention. I'm just throwing out data.

Chris No, no, no. I mean, like, so, because, so, I guess that's why I thought, let's spend some time talking about inequality, because I think that it intersects with, you know, so many big questions, kind of the fundamental questions of kind of, like, where... What is the game that we're all playing together and what is society for? And, you know, it's also why I feel that, you know, in some ways tax policy is one of the sexiest sort of public questions to think about, which, you know, like tax, I mean, it's just news, but... But also, it seems like it is this profound, it's like this profound and very explicit choice that a society makes about how much credit does sort of the public, does society take for each of our individual circumstances? And how much responsibility does society take for each of our individual circumstances versus individuals? That profound ethical and moral question gets summarized in what the tax brackets are and who we tax and how much we kind of appropriate for public things. But so specifically on this inequality thing and mobility. So one, I mean, I almost want to pull a Trumpism here and say, like, I think the intelligence people need to go back to school.

Or like a good social scientist, I'm not going to take – I mean that's interesting. That sounds really counterintuitive to me. So I'd want to go into that study myself and understand. So you say that mobility hasn't changed. Like mobility between – so how are we defining mobility? And if it's sort of like movement between different quintiles in the income distribution, then are we talking about movement from the lowest quintile to the next lowest quintile hasn't changed, or from the lowest to the highest hasn't changed? Are we talking about income mobility or are we just talking about that? Are we also talking about wealth mobility? Because a lot of the wealth gains in terms of what is ballooning inequality isn't about income. It's about assets and asset valuations and property and stuff like that. If I wanted to, I could make somebody argue at me for about a week before I would concede the conclusions of that paper that you've read, and I might still have to concede them. But, you know, I think that would be maybe a boring exercise right here.

Scott And that paper does not also deny that, like, you know, there's studies that, you know, kids who are born in poverty, you look at their brains, they're the same as affluent kids, their frontal lobe structure and stuff. And after several years of poverty, the frontal lobe develops differently because of stress. It's not saying that there aren't horrible conditions and that there aren't inequalities that are related to injustices and things like that. It's simply just saying that the income inequality has not made it so that we're in a caste system or a feudal system. There's a dynamism in the economy that allows for people to get ahead. Like the American dream is not dead kind of thing. That would be the argument.

Chris Right. And then sort of more about the question of how broadly accessible should the American dream be?

Scott And the argument is it's no less accessible empirically now than in the 50s or 60s. It's that as many people still advance socioeconomically roughly as during times when there's not that much of a difference between very equal periods and drastically unequal periods. And also there are studies looking at related data that when the income... In any unequal societies, when the income rises for the 1%, it rises... The working class and middle class see benefits from that. Now the question is, is it unequally distributed? And I think if you were arguing that yes, it is unequally distributed, you look at over the last 40 years, the percentage of profits that come from corporations as a percentage of GDP has gone from 6% to 12%, right? It's doubled. At the same time, this is America. The system is, while there might be just as much mobility, we could have mobility and a lot more quality if certain decisions were made.

The lazy fair person says, well, the consumer decides what is valuable. But the consumer didn't decide, well, let's put all that money into profit and not into raising... There are decisions at the top that people with power make that contribute to the inequality being where it is.

Chris And I guess that's kind of the high level, not even argument, but aspiration that people who want to advocate for just far more redistribution of income and wealth in society... Thank you for having me. These individuals, they don't need the money. And I guess, yes, they could spend it on socially good activities, saving the world from malaria and things like that. But if we had to choose between private individuals sort of exercising some philanthropic motive to make things better off for everyone, and the public political process making those decisions and those choices, That maybe the latter would be better. So what's interesting is it seems that inequality and the discussion about, you know, do we change sort of how much we redistribute in society is kind of, you know, it feels like sometimes there's this philosophical sort of collision of two very different logics. Like one is, well, what have I earned? What is owed to me sort of morally, ethically?

Or at least three. Two is this economic logic around how do we incentivize people to be creative and innovative and to drive useful changes and technologies into society. And then the third is, well, what about the public interest? And what about how would we more efficiently or directly build the good society that we all want to live in? And one of the first things we need to do to build that society is some monetary resources to direct investment. So, you know, shouldn't society as well have just a claim to be able to grab those resources in order to invest them in the things that it wants? So, you know, it's a question that kind of, it brings up everything. It brings up, what am I owed? It brings up, how am I incentivized to do things? And it brings up, you know, what do we all want? What kind of world do we want to live in?

Scott Yeah, it's interesting, too. Like, you look at, look, Bill Gates, Steve Jobs, Sam Walton, they founded some of the biggest corporations, right? You know, Apple, Microsoft, Walmart, you know, that in American history, imagination, you can think of. They all founded those corporations when the tax rates were twice as what they are now. So did they make some kind of cosmic mistake? Did they, oh, the incentives are not here, you know, like they clearly were incentivized, right? Or you look at the, you know, a couple years ago, capital gains taxes went up to 25%. So, theoretically, right, you quarter the incentive, but, you know, innovation and sort of Silicon Valley is increasing, the stock market is going from... 12,000, almost 17,000 points. All this stuff is... Clearly, people are responding to incentives still. So this idea that... I think incentive is more complicated than the sort of laissez-faire neoliberal would tell you. Totally.

Chris It's so much more complicated than it's ever talked about in popular media. And there is actually really good research that's been kind of done about the marginal dollar and what will people do and that people will do so much more to avoid losing a dollar than they will to make another dollar. And, you know, there's a lot of, I don't have it top of my head, but I know it's out there, like, sort of pretty, because it involves money, a lot of money has been spent researching, like, what would optimal tax rates look like if the only thing we're really interested in is kind of incentive effects? And you discover that, yeah, over a few million dollars, you can tax all you want, it's not gonna change people's choices and behavior.

Scott Yeah, there was an op-ed piece, I'll try to find it for the show notes, but a venture capitalist wrote The New York Times a couple years ago during the tax debate, and he said, I've never made a decision, a pretty successful guy, like a billionaire, I've never made a decision based on tax policy. Like, I've never made, you know, like, that's not, and so that's, I mean, that's what's interesting.

Chris Right, because however much the government takes, I'm still gonna get more if I make the choices.

Scott Yeah, and you know what incentivizes Capitalists and venture capitalists and corporations is market size. The more people that have more money, the bigger market, so there's more goods that can be bought and sold. This is the argument against inequality on just a neoliberal grounds is that when you have a big burgeoning middle class, those people spend a lot of money, as opposed to a big burgeoning upper class. The way that money is distributed, it bottlenecks, right? Because you can only buy so many yachts, you can only buy so many $300 steak dinners.

Chris So yeah, we're talking so many high-level concepts, so I'm actually going a few layers down to just talk about economic growth policy. But if we're just talking about what does the research say about economic growth, the evidence base is pretty clear that as income inequality becomes extreme, it actually becomes a drag on economic growth for exactly the reasons that you gave, that once you've got so much money that more is just throwing it on the pile, it doesn't change your consumer behavior really at all. And so this money, in a sense, is stagnating. When what you would like to do is to circulate in the economy. But the other topic, and I'm not nearly as good at making artful segues as you are, so I don't quite know how to do it. It's not artful. Make it powerful. We want powerful. We want to make segues great again. By the way, do you remember when, and I forget the inventor's name, came out with the Segway? Oh, yeah, yeah, yeah, yeah, yeah. And it was going to be, it was going to revolutionize transportation. This sucked, dude. But, you know, what's so interesting is, you know, many years later, what has revolutionized sort of transportation is like kind of the crowd, not the crowd shared, but like the sort of, what do you call that market, like for the... Thank you very much.

This idea, and it kind of relates to neoliberalism and the preponderance of sort of respect for economic logics in society today. But this idea that successful business people make good political leaders as well. So Howard Schultz's Starbucks CEO, basically he's making this, I don't know if he made it explicitly, but this implicit argument that I built a successful global corporation, so I'm someone we should be trusting to make good business decisions. Trump made the same argument with far less credibility.

Scott So you have a political science degree, a doctorate from Oxford. I feel like I'm just a good talker, or at least a mediocre talker. I talk very powerfully. But there's a burgeoning Political consulting business. And, you know, telling everybody, be quiet, be quiet. Some people are coming to see daddy right now. And going back in a state and showing them charts how America needs you to run for president. You can make so much money. Like Steve Schultz, who ran McCain's campaign in 2008, is working for, or Steve Schmidt, is working for Howard Schultz. And it's funny because, now, of course, that... They're looking at the same obstacles, right, that everybody else is saying, you know, third-party problems and everything like that. But what do those people do? Well, here's how we'll overcome them. And if you're a guy like Howard Schultz, right, what are you used to doing when you have problems with an acquisition or other market? You hire the experts, bring the lawyers, and you spend enough money and have enough ingenuity, and you just overcome the problem. The electorate is trickier than that.

So it's just some of the sort of thinking that actually allows these consultants to make a pretty healthy living off people like this, the third-party person. Now, Bloomberg was resistant to this. This is why he spent all that money and had the sense to say, well, I can't win. I spent all the money. I ran all that. He's a pragmatist, you know. But, Schultz, I mean, you and I could just be touring the country looking for billionaires to get in the – we could make a pretty good living on that.

Chris I guess that's true. That's true. And it's also playing off the ego. I think that it's also a kind of – it's not just an argument they're making to society. I think it's an argument that they internalize for themselves. If I've been successful – and it's completely unlike this in any other domain. But if I've been successful in this domain, business, then I can be successful in any other domain. And I think that the reason why we have that, and I think it's kind of an unreflected and unearned legitimacy that we kind of, oh yeah, you're probably right, is because nowadays, you know, economic logics operate in so many other domains. But it's very interesting. I want to bring in sort of another angle to this question. And it kind of relates to, you know, are there social harms in the accretion of vast pools of wealth behind sort of individual actors? And one argument you could make, and I've certainly, you know, I've been with people in policy rooms where like they're breathing fire, this argument, because they feel it so strongly. But that when extreme wealth comes to, let's say, the policy table, it displaces and silences other voices that ought to be heard. So, for example, and it usurps other people's political voice and power. So, for example, and this is almost never talked about unless you hang out with people who work in kind of the global health community on development health. But, you know, the Gates Foundation, when it works in developing countries and it says, okay, you know, we're going to work on public health issues in Malawi, well, they've got so much more budget than the public health budget of that country. Thank you very much.

And I'm not saying it's wrong. I mean, it might be the responsible thing to do if we can attract that capital. I mean, where else are we going to get money like that? But this capital never comes in the form of, we're just going to give you, you sort of public health authority of your country, more money. And then you run whatever your domestic political process is to decide for your own people to decide how the money should be spent. It never happens that way. And great wealth is almost never deployed that way, right? I've got my agenda and I want to see it roll out. And so there is something kind of fundamentally anti-democratic about the deployment of enormous wealth. Even when it's being done with philanthropic motives. And so maybe that's a bit of a theoretical argument, but you definitely see it play out in the real world, especially in the developing world. And I wonder to what extent that translates into American life. I mean, how much is society skewed by the kind of gravity?

Scott I can think of just one quick example a couple years ago, right? The energy companies in Texas were just killing the roads with trucks, just the heavy kind of going back and forth with gas and oil and stuff. And there was all these parts of Texas where the road was just shot. And people proposed a tax on the energy companies to pay for repaving roads that, you know, there was empirical data that a lot of the wear was... Well, it got voted down. And so now this is, they put gravel roads, they just put gravel on top of it. And like, here's the thing, we're like, because there's just enough, yeah, I mean, you think of like how labeling things with GMOs gets beat and sort of thing, just because Monsanto and stuff have enough money. It's not saying banning Germanic money, it's just, hey, you can know, like legitimately the label.

So these things, I mean, in the 18th century in the United States, the biggest threat to individual liberty was probably a centralized government. Now, it's multi-national corporations. I mean, at least they're a good competitor, because if you make environmental laws, they pick up and go to another place. There's a lot of power there.

Chris I suppose the other issue is that if there is a kind of... A government bargain that just allows kind of wealth to accumulate completely freely, which, right or wrong, I'm not saying, but one of the consequences, right or wrong, is it does, it's an enabler for the kind of gold rush phenomenon, right? It's like, oh, they discover gold in California, and so everybody goes to California and pans for gold. From a societal perspective, way more people In a similar way today, there probably is a massive over-allocation of people's lives and dreams into the tech sector and building apps. There is this kind of gold rush enthusiasm to become the next Mark Zuckerberg. And society probably doesn't need so many people running into... Finance is similar here in London. I mean, it's just so many smart people that... You know, I encountered the Oxfords and the Cambridges of this country. And what are you going to do after graduate? Oh, I'm going to go into finance. Well, okay. You know, I mean, do you love it? Because if you love it, that's great. But if you're just chasing, you know, chasing the big paycheck, boy, you know, there are some giant and fascinating challenges in the world today that you could really, you know, sink your teeth into and help with. And we'll hire somebody to do the math for us, you know, or to like figure out the debt financing so that we can do this stuff. So that I think as well is if there isn't at least a really thick social conversation about like, really? Is that all we're chasing?

And really like more and more is better and better? Then there isn't a lot going on in society to kind of problematize, especially for young people, just the choices they're making about where they're going to spend some of the best years of their life. And you get these, I think, like sudden swings and vast over-allocations of, you know, just some of the best potential that we're putting on the earth, you know, chasing after stuff that, at the end of the day, it's just money.

Scott So, like, okay, here's my concluding 500,000 feet above the... Yeah, it's interesting because Weber's Protestant work ethic in the spirit of capitalism, like he's trying to think why does Western Europe, you know, and England, the United States become this dominant economic force when, you know, if you're looking in the 15th century, early 16th century, China is just a good bet. Even certain parts of the Middle East look like a good bet. And he says, look, there's urbanization, but there's urbanization in China too. He looks at Protestantism, which did two things. Luther's doctrine of calling, that God calls the individual Christian, that basically you're not determined primarily by your family. You have this idea, even in China in the 16th century, it's like in the Bible where it says Mary and Joseph had to go back to Bethlehem for the census. So you go back for the census to the place where you're born, right? And Weber thinks there's a kind of process that makes people a little more individual. And the other thing he thinks is that this doctrine of election that you're chosen...

You want to sort of show that you're blessed and chosen as you want to confirm that you're chosen by God. And so it makes you work hard. And yet there's this inner worldly asceticism because if God blesses you, you're the elect if you're productive and successful. But if you're ostentatious with your wealth, then you're showing you're not elect. You're sinful and you're reprobate. So what do you do with it? You either give it away or put it into capital. Now, there are different reasons that people, a lot of theologians and religious people, say, well, he doesn't have the psychology of Protestantism quite right. There's different, we could debate that. But he thinks that this inner-worldly asceticism, and he looks at, actually, no place previous to Protestantism can he find, and he was a great student of world religions and philosophy. No kind of religious or philosophical tradition valorized wealth. Being rich was either neutral or bad, right? Avarice, greed. It was never something moral, right? Catholic Church made saints out of poor people, right? Plato, Aristotle. They don't extol the merchant class.

Chris Okay, so Weber kind of... Latched on that is, you know, is this the variable that explains the difference in outcome?

Scott Right, is there this spirituality and kind of ethos? And, you know, look at John Wesley, the great British Methodist. He's actually an Anglican, but gave birth to the Methodist. He said a Christian should make all the money they can so that they can save all that they can, so that they can give away all that they can. So there's this sense in which the... I think that, like, that sort of valorization of the wealthy, right, of the job creator, of the other, that has a long tradition in the West, going back to the roots of the 16th century, that is worth, in another episode, untangling.

Chris It would be, yeah, so that'll be worth us untangling in another episode. And, you know, in sort of, you know, my wet dreams, I would wish that somehow some of that kind of questioning about, well, how did we come to valorize wealth and what have some of the benefits of that been and also maybe some of the costs? Would somehow enter into public discourse, especially in the US, as it looks like there is now a kind of, as you say, it's almost like, you know, if you're going to run, if you're going to run, you want to stand up for a leadership position within the Democratic Party today, you've now got to recite some kind of allegiance. to the idea of a radically different redistribution of wealth and income in America.

Scott And then you've got to go ask to get money from the corporate people to help exacerbate...

Chris Well, that's right. And so that's something that'll be another... I hope we're keeping a list of these other things we have to talk about. We have to roll up this one. But, you know, this basic paradox of how does anyone ever sort of make systemic change happen because we are all at the same time sort of within the system and we can never step outside of the system in order to make... Thank you very much. That maybe there is something about momentum and scale, if we're going to talk about changing the system, that makes the idea that doesn't belong in the current system nonetheless have a life and a vitality, while other people decide, could this be the new normal? And that kind of new dynamism of systemic changes is actually both terrifying and tremendously exciting, if you think that that might be part of just the new sociological reality that we live in today.

Scott Whatever reality we're living in, I'm driving around in it in the Kia Niro, which I like. Woo!

Chris In stereo. Yeah, man. I can't wait for a speed ride.

Scott Yeah, always good to talk with you, and we'll talk again next week.