I hate the word phrase “wealth creators”.
It seems to come from the Republican Party in America which has created this myth of the “wealth creator”. In this myth, the rich constantly think about improving their businesses, investing in worthwhile projects, looking at ways to create jobs and generally propping up the country against the onslaught of evil socialists, red tape, eco-nuts or whatever it is that might be the enemy of the day.
This myth has transplanted itself into the UK – though thankfully not to the same degree but manifests itself when David Willet’s comments on the 50% tax rate for example, words like “immoral” thrown around or talk or “stifling enterprise.”
Despite all this huff and puff, the fact is that the rich in the UK, simply don’t do enough and they haven’t been doing enough for many many years. The problem comes from the fact that the rich no longer feel an obligation to give their money to those that most need it, to sponsor social projects or to support worthy causes.
For all the talk of philanthropy and charity from the “right” – the facts show they don’t do it. Take 2010 as an example year. According to the Coutts Bank Million Pound Donors Report in 2010 which analyses the largest charitable donations made in the UK each year discovered that the total value of the largest donations was around £1.548 billion.
Yet the Sunday Times Rich List for 2010 calculated that the richest 1000 alone were worth around £333.5 billion. So the total value of large donations in 2001 was only around 0.4% of their total worth of the 1000 richest individuals. Hardly impressive. And the figure is unlikely to be any higher if the 50% rate was got rid of.
These days, like many parts of our society, the rich avoid responsibilities if they can do so. If you don’t tax them, they won’t invest in new jobs (at least directly), donate to charity or support social improvement – they’ll avoid it. They don’t see why they should give their “hard earned” money up for anything and they have no loyalty to either the society that has enabled them to get that wealth in the first place or a moral belief in helping the less fortunate.
Defenders may point to the amount they pay in tax, but again that is money that we force them to pay. They cannot receive moral support for an act which they have been forced to do. It would like applauding a driver who paid a parking fine – we expect people to fulfil their legal obligations.
I respect the work of our entrepreneurs and business owners (many of whom aren’t particularly rich), and the Conservative Party is right to champion hard work, creativity and innovation.
But the richest also owe responsibilities, and so far they are failing to meet them.
So, it is about time that instead of always leaping to the defence of the rich that we started to put more pressure on them to give more, to become “social capitalists” as well as “wealth creators”. We need to build a new moral norm that says that the richest have an obligation to give up as much as they can for the betterment of general well-being and not to just accumulate large amounts of wealth – and that we’ll hold them to account (socially) if they do not.
They have their chance through social impact bonds, investing in social enterprises or donating more to charity. I hope that they take it, and I hope that if they don’t, instead of keeping quiet the “right wing” blogosphere will hit them hard.
Related posts:
New blogpost: Stopping the knee-jerk defence of the rich http://t.co/Q5SfpD2 #fb
A blog from @eddycoleridge “@PlatformTen: Stopping the knee-jerk defence of the rich http://t.co/cy8A43d "
Very well said Edward
Chris Dillow had a thought provoking piece up yesterday about why the mega rich are calling to pay more tax in France and other places, but not in the UK.
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2011/08/taxes-legitimation.html
A big problem is that since about 1981 more of our country’s wealth has been concentrated in the hands of fewer people. And age is a big issue here: younger people on even relatively high incomes are asset poor compared to those older than them. Is the answer not more taxation on land and wealth?
Well I am always divided on the issue of more tax on land and wealth.
The problem is that given the way that these things seem to work, higher taxes generally does not raise the revenue that one expects – as the richest can either move their money around, hire very expensive accountants to get around regulations, set up shadow businesses, trusts etc.
The long term solution – and my preferred solution from an ethical perspective also, is to change the social rules around wealth. If the newspapers didn’t suck up to them all the time, if people shunned them, if they were openly attacked by politicians, celebrities, press and people for not meeting their responsibilities – I think it would have more of an effect. Most of the richest want to be loved, they want to be well connected and respected – if you take that respect, love and social connectedness away from them, it might make them do more.
However this fundamental problem of all modern capitalist societies to some extent. It breaks down a sense of the “common good”, a loyalty to something higher than one’s self and people don’t feel the duty to do the right thing for their community (and the guilt when they don’t do it). This is not going to be solved by more tax or changes to the Government’s economic policy – it is a social problem.
I’ve got a new blogpost on Platform 10 – http://t.co/WdvpvP6 – Stopping the knee-jerk defence of the rich #bigsociety
http://t.co/FzdsVhc – Great @Spectator_CH Article, totally agree see my blog on Platform 10 http://t.co/EYG06uk @PlatformTen #BigSociety
I don’t against what criteria the rich “don’t do enough” apart from some bizarre Guardianesque fantasy that the private sector would be better if enterprises all operated like NGOs. A theory in my experience invariably advanced by people who’ve never been in business – and having been in business and done lots of work for an NGO I know which is more effective at getting results by some margin. Some of the facts in this piece are straightforward nonsense – like the implication rich don’t give to charity (er rubbish —Branson, Alan Sugar, innumerable foundations, lots and lots of regoinal people – go to any literary festival like Winchester or Cheltenham). And indeed the statistics used are highly misleading – how much of that wealth quoted from the Rich List is disposable. In fact if you incentivise people to give – through tax credits or some other mechanism they are much more likely to do so as they do in the USA. We already spend 50% of GDP on the state and relatively we are a highly taxed country unlike the days before New Labour. And for what. Massive waste and poor outcomes. Rather than having “respect” for entrepreneurs (but clearly not understanding their motivation) we need to create a culture of aspiration which usually translates into a better car, house, holiday, career opportunity than the previous generation which gets people to work harder. Yes even the desire to have a life like a pop star. Any social historian would tell you that if you go back to the Roman period and previously people have always looked up to those with richer, usually easier lifestyles. It’s natural. And changing that is as likely as King Canute stopping the waves. The “common good” is much more likely to be generated by moral teaching in schools, respect for authority etc. Conservatives should support aspiration which goes with the grain of our society, lots of entrepreneurs and wealthy people, often self made do great things. And anyone who thinks that higher tax and more state is a better alternative is serously misguided, as anyone whose worked in the government (and I have and been elected to office as well) would, I’m sure, agree.
Hi Bruce,
I appreciate your comments and some of them are quite sound.
On the first bit, regarding the amount that the rich already give. You are right, they do give some – but my point is not nearly enough. Sure they do give some money, of course they do, but given their wealth I don’t think that they give enough in proportion to what they have got.
This is where I think there is some confusion in my figures. Of course I don’t expect the rich to give up all their wealth immediately or that they can do, as you say some assets cannot be disposed (though Warren Buffet, Bill Gates etc. have showed in the US that through giving shares to charity, selling shares to put into trusts, transferring owned property etc. most assets can be used for good causes). I only put the Rich List there to give a sense of proportion. Yes, £1.5 billion in donations is a lot of money – but given that this is a very very very small fraction of what they are actually worth.
On the matter of incentivisation, I agree that there should be incentives. But my point is that most wouldn’t even if they had incentives. Ultimately the main incentive isn’t tax (or it shouldn’t be) it is wanting to do good for the community.
It is interesting that you mention Rome, because one of the key Roman values was called “Pietas” – a sense of duty towards ones community and fellow citizens. Now you can argue how successful that was translated, but that is the kind of value that we need the rich to take up.
I don’t wish to sound like a hippy – but ultimately you can’t take wealth with you to the grave. Ultimately it is about leaving behind legacy’s that help others around you and doing work which is good for you and others. This is where we need to be working – not on more tax or more state incentives, but creating a new sense of social duty for the wealthiest in society.
I am grateful for your comments though and I appreciate that many people would probably more agree with what you have said then what I have said!
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