Category: Economics

Years ago, one-time `presidential candidate Mitt Romney was criticized for saying corporations are people. The guy who beat him, Obama, called corporation that used inversion unpatriotic. One might argue that criticizing corporations for being unpatriotic is to accept that they are people.

In the United States, corporations are legally persons—and the Supreme Court is devoted to granting them all the advantageous and convenient rights of actual people. The court, because it is not constrained by logic, ignores that it is illegal to own persons in the United States. I have argued elsewhere that corporations are not people and should not have that legal status—so I will not repeat those arguments here. However, I will address the issue of whether a corporation can be called unpatriotic without being committed corporate personhood.

On the side of corporate personhood, it could be argued that being unpatriotic (or patriotic) requires the intentional and emotional mental states that only a person could possess. As such, if a corporation is unpatriotic, then it is a person.

This sort of language argument has been used by philosophers such as Socrates and John Locke. In arguing for universals, Socrates (or Plato) would proceed from how one talks to accept an ontological commitment. In discussing personal identity, Locke took the fact that people use expressions such as a person not being themselves as evidence that someone in a normal state of mind can be a different person from someone in an abnormal state: “human laws not punishing the mad man for the sober man’s actions, nor the sober man for what the mad man did, thereby making them two persons: which is somewhat explained by our way of speaking in English, when we say such an one is not himself, or is beside himself; in which phrases it is insinuated, as if those who now, or at least first used them, thought that self was changed, the selfsame person was no longer in that man….”

One counter is that when someone refers to a corporation as being unpatriotic (or patriotic), they need not commit to the corporation itself being a person. Rather, the person can be taken as using a shorthand expression in place of asserting that the people who decide to implement corporate policy and make it happen are acting in what is seen as an unpatriotic way. To use an analogy, if someone claims a sports team is enthusiastic, the she is not committed to the team being a person—an entity over and above the players, coaches, etc. Rather, she is just using conversational shorthand to refer to the members of the team.  If such conversational shorthand expressed a commitment to personhood, then people would be routinely expressing commitments to a vast number of entities—thus dramatically swelling the ontology of persons. This seems both odd and unnecessary. Given the injunction of Occam’s razor, due care should be used when moving from how people speak to an ontological commitment. In the case of corporations and other groups, it would seem to suffice to attribute the mental states to the people that make them up rather than adding another entity to the matter. As such, the appeal to language argument for corporate personhood fails.

Thus, someone can claim that a corporation is unpatriotic (or patriotic) without being committed to corporate personhood. Just like a person can talk about team spirit without being committed to team personhood.

 

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In my previous essays I wrote about the sharing economy, focusing on regulations and taxes. In this essay I will cover resources (human and other). The new sharing economy is exemplified by companies such as Uber and Airbnb that organize transactions between individuals. In the case of Uber, people can sell rides in their own cars—without (as of this writing) all the usual costs and regulations of operating a cab. In the case of Airbnb, people can rent out property and (as of this writing) generally avoid the usual regulations associated with running a hotel.

For the people providing goods and services, the new sharing economy  is supposed to make it easier to earn money. In general, the new sharing economy involves three parties. The first is the person who provides the actual good (apartment, for example) or service (a ride to the airport, for example). The second is the person who uses the service and the third is the company that provides the organizing service. While this is an old model (people have long offered services and goods via things like newspaper ads), technology changed the scale of this once informal economy. It has also served to blur the traditional roles. Those who provide the goods and services are, it is often argued, not  employees of the organizing services and those using the goods and services are not exactly customers of the services. There are some advantages and some disadvantages to this.

In the case of those providing the services and goods, one obvious advantages is that they can make money. While they could do this without the organizing service, the service is supposed to make this easier and provides other advantages.

One of the advantages of not actually being an employee of the organizing services is that the provider has a degree of autonomy usually absent in the traditional employee-employer relationship. The provider can (within the constraints of economic need) work as little as desired and is free to stop at will. This autonomy appeals to some people—especially those looking for a more traditional job while making money to pay the bills. In some ways, the situation is somewhat like being a temp worker.

Of course, there are many disadvantages to being a provider. One is that there are typically no benefits and no job security. Also, the risks and costs all fall heavily on the provider. For example, if someone crashes into the company truck Sally is driving, then the company handles the matter. But, if Sally is driving for Uber and her car is hit, this is most likely going to work exactly as it would if Sally was just driving to Starbucks for a latte—that is, it is on her.

Another point of concern is that the organizer might be in the position to set rates or impose other limits—much like a traditional boss can. For example, Uber can set what drivers are paid.

But this is nothing new—people who do freelance work or are self-employed in the usual sense face all these problems. After all, being a worker in America always puts one at a disadvantage and being what amounts to a temp or freelancer can be even less optimal in terms of security and pay.

There are many advantages to the companies. One is that their workers are usually not considered employees. Another is that the worker, for the most part, also provide the essential resources like vehicles and property. While the companies do incur costs, they are able to avoid (or significantly reducing) the usual costs of running a business. For example, a hotel needs to have hotel employees and an actual hotel. Airbnb does not—the providers provide the services and buildings. As another example, a service that organizes drivers does not need to buy cars, maintain them or insure them—thus resulting in considerable savings relative to a company that must hire drivers as employees and buy vehicles.

In essence, the new sharing economy splits management from what would traditionally be the resources (human or otherwise) of a company. The organizer takes on the role of management while avoiding the need to have traditional human resources (beyond the administrative aspects of the business) and the need to have the material resources (beyond those needed for the administrative aspects).

Some companies do operate in something of a hybrid mode—having workers as well as material resources owned by the company while also having a sharing aspect to the business. This is a variation of the old model of a company hiring temp workers, freelancers and contractors.

This model can, apparently, be profitable—in large part due to matters of scale. After all, getting a slice of thousands of sales can result in a profit. Also, many of these companies benefit from tech inflation—the almost magical overvaluation of companies with business models based on the right sort of tech. That said, Uber famously operated at a loss for years and some suspect that the sharing economy is built to enrich the very few rather than for creating sustainable businesses. Which, to be fair and balanced, is often how the traditional economy operates.

Given the apparent success of companies like Uber and Airbnb, I predicted years ago that there would be a sharing bubble. But we have seemed to have gotten enshitification. While noting that there are some limits on what sort of sharing companies can exist (or example, airlines and heavy manufacturing are not really fit for the sharing economy) I speculated that additional advances in economy might see new areas for the sharing economy. For example, if 3D printers become truly viable, light and specialized manufacturing might become part of the sharing economy. While this might still occur, the new bubble is the AI bubble. But we might see the residue of the AI bubble worked into the sharing economy.

 

 

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As with regulation, some people are opposed to taxes. Other people are fine with taxes—usually with imposing taxes on others. In general, though, people prefer to not pay taxes. As such, it is hardly a surprise that the companies running the sharing economy try to avoid paying taxes. On the face of it, companies like Airbnb and Uber profess they are just providing a way to connect people to pay for goods and services. This can be seen as a more organized version of the old informal sharing economy in which people sublease, rent out property, or get gas money to drive a friend to the airport.

The old informal economy often operates without taxes being paid (although this is not always done legally). For example, if Professor Sally informally rents her house to her grad student Bob while she is in Europe, Professor Sally and Bob will probably not pay taxes for this—although they would if Bob was renting a room at a hotel Sally owns. While there are probably people who would like taxes paid on even informal transactions, the informal nature of such transactions often makes this impractical. The traditional informal sharing economy is small and decentralized so taxing it would probably be cost prohibitive. There is also the legitimate concern that such private transactions can fall outside of the domain of state concern.

However, when a company such as Airbnb gets involved, things change. The once informal economy becomes centralized around companies and there is also an increase in the scale of operations. After all, it is one thing if Professor Sally’s grad student is paying a modest fee to stay in her house while she is in Europe, it is quite another if Professor Sally starts running her house as a hotel. It also becomes a different matter if the number of people renting out property increases significantly. There would seem to be three important changes between the informal sharing economy and the new sharing economy.  The first is centralization. Instead of people reaching informal agreements as individuals (who often know each other), there would be business transactions through a central company. The second would be the character of the process—short-term renting via a company is closer to the hotel model than to the old informal model. The third would be the number of people involved: the sharing economy would presumably be larger than the old informal economy.

From a practical standpoint, having a centralized company and a large operation allows the collection of taxes to become much more practical. This can justify taxing the sharing economy like other businesses.

From a moral standpoint, if it is acceptable for businesses with the same model (such as the traditional hotel) to be taxed in a certain way, then the same would apply to the new sharing economy. So, if Sally would have to handle taxes if she ran a traditional hotel, then she should have to do the same if she ran her sharing economy hotel through a service like Airbnb. Or perhaps Airbnb should be the one to handle the taxes.

Naturally, it might be wondered why taxes should be imposed on the new sharing economy—even if the new sharing economy is similar to the old economy. Of course, the people who make money through sharing rides or apartments do pay taxes for that income. However, there was some controversy over services like Airbnb paying the hotel tax.

One reason for sharing companies to pay taxes and fees like traditional companies is fairness. After all, the free market is not as free if some companies enjoy special breaks. Although, to be fair and balanced, the American economy is built on special breaks.  Another reason is that the taxes and fees are needed to pay the public services and infrastructure that such companies (and their sharers) utilize. It might be contended that this is already covered by the income taxes paid by individuals engaged in sharing. However, by that logic, businesses would also be exempt from taxes and fees on the grounds that their employees pay taxes. Which would certainly appeal to businesses that pay taxes.

 Also, the growth of the sharing economy imposes new costs on the community like having a similar new business. For example, having many Uber drivers is like adding a large cab company. As another example, having Airbnb rentals in a community makes the area more like a hotel zone, with the accompanying burden on the community. As such, if the community (which includes those who are not part of the sharing economy) faces increased costs then it is acceptable to pass these costs on to those who benefit from this new economy.

There is also the cost of regulating the industries. As  noted in my previous essay, when the sharing economy becomes comparable to the normal businesses (such as hotels and cab companies), then comparable public good (such as safety) regulations should apply. Naturally, these come with costs, and it makes sense that the costs should be connected to the profits, rather than just be taken from the community. For example, with non-professional drivers acting like cab drivers and people renting out apartments and homes like hotels, there are legitimate concerns about public safety. Cab companies and hotels bear some of the cost of their regulation and so too should the sharing companies.

Naturally, there is the general debate about what is a fair tax or fee and concerns about the impact of taxes on the economy. However, it seems reasonable to believe that the sharing economy is analogous to the non-sharing economy and that it should bear a fair share of costs imposed upon the community.

 

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The success of companies such as Airbnb and Uber created a massive sharing economy. The idea grounding the sharing economy is an old one: people provide goods and services as individuals rather than as employees or businesses. A classic example is paying a neighborhood kid to mow lawns or babysit. Another is paying a friend’s gas money for a ride to the airport. The new version of sharing changes the traditional model, probably in ways that make it sharing in name only. One difference is that the old sharing economy was usually an informal system while the new sharing economy is organized by companies. As an example of the old sharing economy, your neighbor might tell you about the teenager she hired to babysit her kids or mow her lawn. As an example of the new sharing economy, you might use the Uber app to pay a soccer mom to give you a ride to the airport in her mini van. Unlike the old sharing economy in which your neighbor (probably) did not take a cut for connecting you to a sitter or mower, these companies get a cut of the proceeds—which could be justified by the services they provide.

The new sharing economy has been praised and defended based on the claim that it makes it easier for people to make money in challenging economic times. For example, the ideal is that anyone can make extra money by driving for Uber or Grubhub. However, the sharing (or gig) economy has been harshly criticized since its inception.

As might be suspected, early critics of the sharing economy included people whose livelihoods and profits were threatened. For example, Uber’s conflicts with taxi services routinely made the news. Some people dismissed these criticisms as the usual lamentations of obsolete industries while others take them seriously. As the sharing economy has embedded itself deeply over the years, there have been ongoing criticisms.

One point of concern is regulation. In most (if not all) cases, the sharing economy exploits loopholes in the informal economy, which is regulated less than the formal economy. For example, professional cab drivers are subject to many strict regulations while an Uber driver is not. As another example, the hotel industry is regulated while services like Airbnb were largely unregulated, although this has changed over the years. These companies also used the strategy of simply ignoring whatever regulations got in their way.

Some proponents of the free market might praise the limited (or nonexistent) regulation, and this praise might have some merit. After all, it has long been contended that regulation impedes profits. However, there are at least two legitimate concerns here.

One is, obviously enough, fairness. If taxi drivers and hotels are subject to strict regulations that also involve additional costs, then it is obviously not fair that companies like Uber and Airbnb can offer the same services while evading these regulations. One obvious option is to impose them on the sharing economy (which “the left” tends to favor). Another obvious option is to reduce regulations on the traditional economy (which “the right” tends to endorse). In any case, fairness would seem to require comparable regulation for comparable industries.

The second is safety and other concerns relating to the public good. While some regulations might be seen as burdensome, others exist to protect the public. For example, hotels are held to certain standards of cleanliness and safety. Since the new sharing economy puts people at risk in similar ways, it seems reasonable to impose comparable regulations on the sharing economy. After all, whether you are getting a hotel room or going through Airbnb, you should have a reasonable expectation that you will not perish in a fire.

It might be countered that the new sharing economy should still fall under the rules of the old sharing economy. For example, if I ask a friend to take me to the airport and she has an awful car and is a terrible driver, it is not the business of the state to regulate my choice (although the state should address any traffic violations). As another example, if I sleep on a friend’s couch, it is not the business of the state to make sure that the couch is properly cleaned and that the house is suitable (beyond being up to code).

While this does have some appeal, there are two main arguments against it. The first is that the informal economy is largely unregulated because it is informal and hence difficult to regulate because there is no central organizing entity for the state to deal with. Once a company like Uber or Airbnb gets into the picture, the economy is now formal—there is now a company organizing things. This allows a practical means of regulating what is now commercial activity.

The second is scale. When the informal economy is relatively small, the cost and difficulty of regulating for the public good can be prohibitive. For example, regulating neighborhood babysitters or people who give the occasional ride to friends and get gas money would impose a high cost for a little return. However, when part of the informal economy gets organized by a company and greatly expands, then there is more at stake and hence paying the cost of regulating for the public good becomes viable. For example, regulating people occasionally giving friends or associates rides is one thing (a silly thing), but regulating large numbers of people driving vehicles for Uber is different.

 

 

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A longtime issue in college athletics has been whether college athletes should be paid. I heard debates over this when I was a college athlete and, decades later, I still hear them. One addition to the debate has been over branding deals, such as the use of likenesses in video games.

One classic argument is that in the big money sports (football and basketball) the athletes already receive compensation in the form of scholarships, coaching, medical care, etc. Given the cost of higher education, a full scholarship can be worth $27,000 a year or more.

Even athletes in the other sports (such as track, cross country, field hockey and volleyball) can receive compensation in the form of scholarships, coaching, and medical care—although they usually get much less than the star athletes in the big money sports.

Following this reasoning, it can be claimed that college athletes have always been paid—in that they receive valuable compensation for their contributions. In fact, college athletes have been recognized as being employees with the right to unionize. As such, the dispute is over the amount and nature of the desired compensation, which is a classic employee-employer dispute.

Obviously enough, the NCAA and colleges want to keep player compensation as low as possible, since the less the athletes are paid, the more everyone else gets to keep. However, the fact that they would rather not provide better compensation is not proof that athletes should not receive more. 

While the NCAA and colleges have been on board with specific sorts of compensation (such as scholarships), they have often been very draconian about college athletes receiving other benefits. Based on my own experience at road races, college athletes were forbidden from accepting gift certificates they won. While the NCAA and the college can license the likeness of a player for use in a video game, athletes were not allowed to share in the profits.  Because of these practices, most of the money made in college sports flowed to the NCAA and the colleges, rather than the athletes.

On the face of it, athletes should receive compensation commensurate with their contribution. For example, if a player’s likeness is licensed for use in a video game, they should receive a suitable percentage of that deal. As another example, if selling the TV rights to football games brings in millions of dollars, the players who appear on TV should get a proportional cut. Obviously, the value of what the players receive in terms of other compensation must be factored in as well as part of their pay.

In some cases, the athletes might have been receiving fair compensation. However, the star athletes in the big money sports were probably being exploited.  

Over the years, the main argument advanced by the NCAA and colleges for not providing commensurate compensation is based on the view that a college athlete should be an amateur who competes “for the love of the sport.”

This has some appeal. When I was a college athlete, I competed for that reason—I loved to race. I still do, although I am much slower.  In terms of compensation, I did get some shoe money and boxed lunches when we traveled. I understand the idea of the amateur athlete who is not sullied by crass commerce nor driven by greed.

Of course, the true amateur athlete who is unsullied by greed must also be in an amateur environment driven by the love of the sport. When I was a college athlete, I was in that situation. I competed in cross country and track, both of which are not big money sports. I also went to a division III school—so there were no athletic scholarships. The coaches at the college generally followed the same model that is usually seen at public high schools—they had a primary job at the school and coaching was secondary. For example, my first cross-country coach was also an exercise physiology professor. The football coach also taught classes. So, we were all amateurs competing for the love of the sport—although we did get those boxed lunches and the coaches got some pay.

When everyone is an amateur and the compensation is modest it makes sense to not pay athletes and to hold them to the standards of being an amateur athlete (versus being a paid professional). However, this is not the case with the big money sports at the big schools.

First, the top coaches enjoy truly impressive salaries. The top coaches can make millions each year.  Interestingly, the highest paid public employee in some states is a college football or basketball coach.

Second, college football is a multi-billion-dollar industry and college basketball brings in millions for the colleges and NCAA. While the players did get some of this in the form of scholarships and other compensation, the bulk of it goes to others. A cynical person might note that this is a good lesson for the student athletes: the workers do the work and others reap the profits.

Given the money involved, these college sports are not amateur in any meaningful sense and it is not defined by a love of the game. Rather, this is a big money industry in which those doing most of the work receive very little while very few benefit greatly from their efforts. In short, college sports mirror the larger society. The lie that was long used to avoid justly compensating athletes was that they are amateurs who are supposed to play for the love of the game. Thus, there has been an inconsistency between the reality of the situation and what is expected of the athletes.

There is the option to make the ideal a reality and recreate college sports as amateur sports played for the love of sport. This would require following the model of amateur athletics I mentioned above: minimal compensation for everyone, coaches who are professors (or staff) first, athletes who are students first, no big money deals, and so on. Some schools already follow this ideal, such as the school I attended.

There is also the option to accept that big money sports are professional sports, and they should follow that model: the big money remains, but the athletes are recognized for what they really are—professional athletes.

 

 

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Since education is expensive, it is reasonable for a student to expect a return on their investment (ROI). Given that the taxpayers contribute to the education of students, it makes sense that they also receive a return on their investment.

A practical measure of the ROI for a student is often the salary of the job they get relative to the cost of their education. Roughly put, a student should be able to work out of their school debt and be able to live with the job that education is supposed to get them. In terms of the ROI for the taxpayer, the return is similar: students funded by the taxpayers are supposed to get jobs and repay the investment through the taxes they pay. The student becomes the taxpayer, thus enabling the next generation of students to also become taxpayers. One could also factor in the role of the worker as a consumer and the impact of the very few who become job creators.

Because the cost of education grew so high, some folks placed their hopes on the free market. The idea was that for-profit schools would provide a high-quality product (education that leads to a job) at a lower cost than the state and traditional private schools. As might be suspected, the ideal turned out very different from the real.

While state schools obviously receive state funds, the for-profit schools received massive federal support. Unfortunately, this money was ill-spent: 20% of the for-profit school students defaulted on student loans within three years of entering the repayment period. About half of all student loan defaulters went to such for-profit schools, although these schools made up only 13% of the student population. The estimate was that about half the loans funneled through students to the for-profit schools were lost to default, which is not a good investment for the taxpayer.

Students most often default on loans due to financial hardship. As might be imagined, not earning an adequate paycheck leads to hardship. While there are over 2,000 programs where the students had loan debt, but whose earnings put they below the poverty line, 90% of these programs were at for-profit schools. As such, these schools were a bad investment for both taxpayers and students. While public and traditional private schools did account for the other 10%, they have been a better investment for taxpayers and students. This is not to say that such schools do not need improvement—but it is to say that the for-profit model was not a solution and probably never will be. For all the obvious reasons you suspect.

There were some attempts, such as in 2011, to impose regulations against the predatory exploitation of students (and taxpayers) by institutions. Not surprisingly, these were countered by the well-paid lobbyists working at the behest of the for-profits. Under the Trump regime, the stated goal is to destroy the Department of Education, so little help for students can be expected from that department.

Interestingly, some states pushed hard for performance-based funding for public institutions. For example, my adopted state of Florida has seen the Republican dominated state legislature micro-managing of education and imposing their professed ideology. In any case, we have been operating under a performance-based model in which funding is linked to achieving goals set by the state. Naturally, for-profit schools do not fall under the same rules as public schools, which could give them an advantage.

Some might suspect the performance-based funding approach is cover for reducing funding even more. This approach also shifts funding towards schools that have more political influence—which is supported by looking at where the money goes.

It might be suspected that performance-based funding was designed to harm public schools and push students towards for-profit schools. These schools often enjoy political connections and would benefit from reduced public education opportunities. Of course, the profits of such schools come largely at the expense of students and taxpayers. They are well-subsidized by the state in a new twist on the old corporate welfare system.  Shockingly enough, there has been little conservative rage at this wasteful socialism and these academic welfare queens.

 

 

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One of my lasting lessons from political science is that every major society has a pyramid structure of wealth and power. The United States is no exception. However, the United States is also supposed to be a democratic society—which seems inconsistent with the pyramid.

While the United States has the mechanisms of democracy, such as voting, it might be wondered whether it is democratic or oligarchic (or plutocratic) in nature. While people might consider how they feel about this, feelings and anecdotes are not proof. So, for example, a leftist who thinks the rich rule the country and who feels oppressed by the plutocracy does not prove their belief by appealing to their feelings or anecdotes about the rich. Likewise, a conservative who thinks that America is a great democracy and feels good about the rich does not prove their belief by appealing to their feelings or anecdotes about the rich.

What is needed is a study to determine how the system works. One obvious way to determine the degree of democracy is to compare the expressed preferences of citizens with the political results. If the political results generally correspond to the preferences of the majority, then this is a reasonable (but not infallible) indicator the system is democratic. If the political results generally favor the rich and powerful while going against the preferences of the less wealthy majority, then this would be a reasonable (but not infallible) indicator that the system is oligarchic (or plutocratic). After all, to the degree that a system is democratic, the majority should have their preferences enacted into law and policy—even when this goes against the wishes of the rich. To the degree that the system is oligarchic, then the minority of elites should get their way—even when this goes against the preferences of the majority.

Some years ago, researchers at Princeton and Northwestern conducted just such a study: “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens”  using data gathered from 1981 to 2002. The researchers examined about 1,800 polices from that time and matched them against the preferences expressed by three classes: the average American (50th income percentile), the affluent American (the 90th percentile of income) and the large special interest groups.

The results were not surprising: “The central point that emerges from our research is that economic elites and organized groups representing business interests have substantial independent impacts on US government policy, while mass-based interest groups and average citizens have little or no independent influence.”

As noted above, a democratic system should result in the preferences of the majority being expressed in policies and laws more often than not. However, “When a majority of citizens disagrees with economic elites and/or with organized interests, they generally lose. Moreover, because of the strong status quo bias built into the US political system, even when fairly large majorities of Americans favor policy change, they generally do not get it.” As such, this study provided evidence that the United States was already an oligarchy before Trump, rather than a democratic state.

It might be contended that this system is fine since, to use a misquote, what is the preference for General Motors is the preference for Americans. That is, it could be claimed that the elites and most Americans have the same or similar preferences.  However, the study found that the interests of the wealthy are not substantially correlated with the preferences of average citizens. The preferences of most Americans do not match the interests of the wealthy, but the wealthy generally get what they want.

One objection is that the preferences of the majority are mistaken—that is, the majority wants things that are not in their best interest and what the elites want is what is best. For example, while most Americans might prefer stronger consumer protection laws, it could be claimed that they are in error because what is good for GM is good for the country, even if the many think otherwise. What is in their best interest is less consumer protection, which is what the financial elites want.

The obvious reply is that even if the majority is mistaken and the oligarchs know best, this would be arguing that oligarchy is better than democracy, not that America is not an oligarchy.

Another objection is that the system is democratic in that people vote for elected officials who then pass laws and enact policies. As citizens can vote them out of office, they must be expressing the preferences of the citizens—even though policy and law consistently goes against the expressed preferences of the majority. This is to say that we have democratically created an oligarchy, so it is still a democracy (or at least a republic).

This objection is interesting and raises a question about why people consistently re-elect those who consistently act contrary to their expressed preferences. One possibility is that the choices are very limited—you can vote for anyone you want, but a Democrat or Republican will almost certainly be elected. As such, the voters get to vote, but do not get real choices.

Another possibility is ignorance—people might not realize that what they get does not match what they claim to want. Such ignorance would put the moral blame partially on the citizens—they should be better informed.  Then again, given the abysmal approval rating for congress and President Trump, it seems that people do realize this. This creates an odd scenario: people really dislike them yet re-elect them. 

A third possibility is the power of propaganda engines devoted to convincing people that the laws and policies are good. So, while people prefer one thing, they are persuaded to believe that what is in the interest of the oligarchy is what they should like. People might also be distracted by other matters—for example, people who have been convinced they should fear transgender people and hate DEI will support politicians who appeal to their hate and fear, even if the politician also supports policies contrary to most other things the voter wants. In this case, the moral failing is on the part of the deceivers—they are tricking citizens and corrupting democracy.

Another approach to objecting to the study is to raise questions about the methodology. One question would be whether the 1,800 policies are properly representative of the political system. After all, if the researchers picked ones that favored the wealthy and ignored others that matched public preferences, then the study would be biased. As such, a key question is whether the sample used in the study is large enough and representative enough to adequately support the conclusion. Another question would be whether the study had the preferences of the people correct. After all, to properly claim that the laws and policies do not generally match the preferences of the majority, the claimed preferences would need to be the actual preferences of the majority. These concerns can be addressed by examining the study carefully and objectively, rather than merely dismissing or accepting it based on how one feels about the matter.

Looking back on the study from the perspective of 2026, it is evident that Trump and Congress are simply openly engaging in an oligarchy that has long existed in the United States.

 

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Way back on 4/9/2014 NPR did a report on why there are fewer women than men in business. While the gap has narrowed as of 2026, it persists (especially at the senior level). The difference begins in business school and continues forward. The report presented an interesting hypothesis: men and women differ in their ethics.

While people usually claim lying is immoral, men and woman are more likely to lie to a woman when negotiating. The report also mentioned a test with an ethical issue: the seller of a house does not want it sold to someone who will turn it into a condo, but a potential buyer wants to do just that. Men were more likely than women to lie to sell the house.

It was also found that men tend towards egocentric ethical reasoning in that if the man will be harmed by something, then it is regarded as unethical. If the man benefits, he is more likely to see it as morally grey. So, in the case of the house scenario, a man representing the buyer would tend to see lying to the seller as acceptable because he would make a sale. However, a man representing the seller would be more likely to see being lied to as unethical.

In another test of ethics, people were asked about their willingness to include an inferior ingredient in a product that would hurt people but would generate more profit. Men were more willing than the women to see this as acceptable. In fact, women tended to see this as outrageous.

These results provide two reasons why women would be less likely to be in business than men. The first is that men are less troubled by unethical, but more profitable, decisions.  The idea that having “moral flexibility” provides an advantage,  as Glaucon  argued in Plato’s Republic. If a morally flexible person needs to lie to gain an advantage, he can lie. If a bribe would serve his purpose, he can bribe. If a bribe would not suffice and someone needs to have a tragic “accident”, then he can arrange an accident. A morally flexible person is like a craftsperson that has a broader range of tools, so they are more likely to have the right tool for every occasion. Just as the better equipped craftsperson has an advantage, the morally flexible person has an advantage over those more constrained by ethics. If women are, in general, more constrained by ethics, then they would probably be less likely to remain in business because they would be at a competitive disadvantage. The ethical difference might also explain why women are less likely to go into business—it is a common stereotype that unethical activity is part of doing business. If women are more ethical than men, then they would be more inclined to avoid business.

It could be countered that Glaucon is wrong and that being unethical (while getting away with it) does not provide advantages. Obviously, getting caught and punished for unethical behavior is not advantageous—but it is not the unethical behavior that causes the problem. Rather, it is getting caught and punished. Glaucon is clear that being unjust is only advantageous when one can get away with it. Socrates argues that being ethical is superior to being unethical, but he does not do so by arguing that the ethical person will have greater material success. That is conceded to Glaucon.

It must be noted that a person could be ethical and have material success while a morally flexible person could be a complete failure. The claim is that ethical flexibility provides a distinct advantage in material success in the context of capitalism.

One could, and should, point out that there are unethical women and ethical men. The obvious reply is that this claim is true—it has not been asserted that all men are unethical or that all women are ethical. Rather, women seem to be generally more ethical than men.

It might be countered that the ethical view assumed in this essay is flawed. For example, it could be countered that what matters is profit and the means to this end are thus justified. As such, using inferior ingredients to make a profit would not be unethical, but laudable. After all, as Hobbes said, profit is the measure of right. As such, women might be avoiding business because they are unethical on this view of ethics.

The second reason is that women are more likely to be lied to in negotiations. If true, this would put women at a disadvantage relative to men. This, of course, assumes that such deceit would be advantageous in negotiations. While there surely are cases in which deceit would be disadvantageous, at deceit can be a very useful technique. While President Trump is but one example, his regime does provide an excellent example of the power of moral flexibility in material success.

If it is believed that having more women in business is desirable (which would not be accepted by everyone), then there seem to be two main options. The first is for women to become more unethical so they can compete with men. The second would be to endeavor to make business more ethical. This would also help address the matter of lying to women.

 

 

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In my first political science class, I learned every large human society has had a pyramid shaped distribution of wealth. Inevitably, the small population of the top controls a disproportionally large amount of wealth while the large population at the bottom owns a disproportionally small amount. This pattern holds whether the society is a monarchy, a dictatorship, a “communist” state or a democracy.

From a moral standpoint, one question is whether an unequal distribution is just. While some might be tempted to see any disproportional distribution as unjust, this would be an error. After all, the justness of a distribution is not only matter of numbers. For example, consider the unequal distribution of running trophies. First, most people who have them are or were runners. Most people will not have even a single running trophy. Second, even among runners there is a disproportionate distribution: there is a small percentage of runners who have a large percentage of the trophies. As such, there is a concentration of running trophies. However, this does not seem unjust: the competition for such trophies is usually open and fair and a trophy is generally earned by running well. The better runners will have more trophies and will be a small percentage of the runner population. Because of the nature of the competition, I have no issue with this. There is, of course, my bias in that I have won a lot of running trophies.

Those who defend the unequal distribution of wealth often claim competition for it is analogous to that of running trophies: the competition is open, the competition is fair, and the reward is justly earned by competing well. While this is a reasonable approach to justifying the massive inequality, the obvious problem is that these claims are simply not true.

Those who start out in a wealthy family might not make their money by inheritance, but they enjoy a significant starting advantage over those born into less affluent families. While it is true that a few people rise from humble origins to great financial success, those stories are so impressive because of the difficulty of doing so and the small number of people who achieve such great success. If people could consistently become wealthy through hard work and talent, these stories would be unremarkable, and the inequality of wealth would be much lower.

There is also the fact that the wealthy use their influence to ensure the political and social system favors them. While their efforts might not be explicitly aimed at keeping other people down, the effect is that the wealthy are favored and defended against attempts to “intrude” into the top of the pyramid. Naturally, people will point to those who succeeded fantastically despite this system. But, once again, these stories are impressive because of the incredible challenges that had to be overcome and because they are incredibly rare.

There is also the doubt about whether those who possess the greatest wealth earned the wealth in a way that justifies it. In the case of running, a person must earn her gold medal in the Olympic marathon by being the best runner and there is (usually) little doubt that the achievement has been properly earned. However, the situation of great wealth is not as clear. If a person arose from humble origins and by hard work, virtue, and talent managed to earn a fortune, then it seems fair to accept the justice of that wealth. However, if someone merely inherits an unearned fortune or engages in misdeeds (like corruption or crime) to acquire the wealth, then that is unjust wealth.

So, to the degree that the competition for wealth is open and fair and to the degree that the earning of wealth is proportional to merit, then the unbalanced distribution could be regarded as just. However, this is obviously not the case.  For example, a quick review of the laws, tax codes, and so on in the United States will show how the system is intended to work.

Suppose for the sake of argument, that the distribution of wealth in the United States is warranted on grounds like the distribution of running trophies. That is, suppose that the competition is open, fair and the rewards are merit based. This still provides grounds for criticism of the radical concentration of wealth.

One obvious point is that the distribution of running trophies has no significant impact. After all, a person can have a good life without any trophies. As such, letting them be divided up by competition is morally acceptable—even if most trophies go to a few people. However, wealth is fundamentally different as it is a necessity for survival. Beyond mere survival, it also determines the material quality of life in terms of health, clothing, housing, education, entertainment, and so on. Roughly put, wealth (loosely taken) is a necessity. To have such a competition when the well-being (and perhaps the survival) of people is at stake seems morally repugnant.

One obvious counter is a version of the survival of the fittest arguments of the past. The idea is that, just like all living things, people must compete to survive. As in nature, some people will not compete as well and will have less and perhaps not survive. Others will do better and a very few will do best of all.

The obvious reply is that this competition makes some sense when resources are so scarce that all cannot survive. To use a fictional example, if people are struggling to survive in a post-apocalyptic wasteland, then the competition for basic survival might be warranted by the reality of the situation. However, when resources are plentiful it is morally repugnant for the few to hyper-concentrate wealth while the many are left with little or nothing. To use the obvious analogy, seeing a glutton stuffing herself with a vast tableful of delicacies while her guards keep starving people away and her minions sell the scraps would strike all but the most callous as horrible. However, replace the glutton with one of the 1% and some are willing to insist that the situation is fair and just.

As a final point, the 1% also need to worry about the inequality of distribution. The social order which keeps the 99% from simply slaughtering the 1% requires that enough of the 99% believe that the situation is working for them. This can be done, to a degree, by coercion (police and military force) and delusion (this is where Fox News comes in). However, coercion and delusion have their limits and society, like all things, has a breaking point. While the rich can often escape a collapse in one country by packing up and heading to another (as dictators occasionally do), until space travel is a viable option the 1% are still stuck on earth with everyone else. Which is one reason why the richest of the rich have been so interested in space ships.

A basic moral challenge is sorting out how people should be treated. This is often formulated in terms of obligations to others, and the usual question is “what, if anything, do we owe other people?” While some would like to exclude economics from ethics, the burden of proof rests on those claiming the realm of money deserves exemption from ethics. While this could be done, it will be assumed that economic matters fall under morality. But there are many approaches to morality.

While I use virtue theory as my personal ethics, I find aspects of Kant’s ethical theory appealing, so let us see what Kant’s theory might entail for economic justice. In terms of how we should treat others, Kant takes as foundational that “rational nature exists as an end in itself.”

Kant supports his view by asserting that “a man necessarily conceives his own existence as such” and this applies to all rational beings. A rational being sees itself as being an end, rather than a thing to be used as a means to an end.  In my own case, I see myself as a person who is an end and not as a thing that exists to serve the ends of others. But some other people might see me differently.

Of course, the fact that I see myself as an end would not seem to require that I extend this to other rational beings (that is, other people). After all, I could see myself as an end and regard others as means to my ends—to be used for my profit as, for example, underpaid workers.

However, Kant claims that I must regard other rational beings as ends as well. The reason is straightforward and is based on an appeal to consistency: if I am an end rather than a means because I am a rational being, then consistency requires I accept that other rational beings are ends. After all, if being a rational being makes me an end, it would do the same for others. Naturally, it could be argued that there is a relevant difference between myself and other rational beings that would warrant me treating them as means and not as ends. People have, obviously enough, long endeavored to justify treating other people as things. Slavery in America provides an example of this, as do many modern economic practices. However, there seems to be no principled way to insist on my own status as an end while denying the same to other rational beings. Which, one might suspect, is why some people wish to claim that other people are not rational beings. Or are otherwise inferior in some way that makes them suitable as means.

From his view of rational nature, Kant derives his practical imperative: “so act as to treat humanity, whether in thine own person or in that of any other, in every case as an end withal, never as means only.” This imperative does not mean that I must never treat a person as a means—that is allowed, provided I do not treat the person as a means only. So, for example, I would be morally forbidden from using people as mere means of revenue. I would, however, not be forbidden from having someone ring up my purchases at the grocery store—provided I treated the person as a person and not a mere means. One obvious challenge is sorting out what it is to treat a person as an end as opposed to just a means to an end. Some cases are obvious, such as enslaving another person. Other cases are more complex, such as hiring a person as a worker.

Many economic relationships seem to clearly violate Kant’s imperative in that they treat people as mere means and not at all as ends. To use an obvious example, if an employer treats her employees merely as means to profit and does not treat them as ends in themselves, then she is acting immorally by Kant’s standard. After all, being an employee does not rob a person of personhood.

One obvious reply is to question my starting assumption, namely that economics is not exempt from ethics. It could be argued that the relationship between employer and employee is purely economic and only economic considerations matter. That is, the workers are to be regarded as means to profit and treated in accord with this—even if doing so means treating them as things rather than people. The challenge is to show that the economic realm grants a special exemption to ethics. Of course, if it does this, then the exemption would be a general one. So, for example, people who decided to take money from the rich at gunpoint would be exempt from ethics as well. After all, if everyone is a means in economics, then the rich are just as much a means as employees and if economic coercion against people is acceptable, then so too is coercion via firearms. As always, the challenge the rich face in ethics is justifying their economic misdeeds while simultaneously condemning similar actions by the poor.

Another reply is to contend that might makes right. That is, the employer has the power and owes nothing to the employees beyond what they can force him to provide. This would make economics like the state of nature—where, as Hobbes said, “profit is the measure of right.” Of course, this leads to the same problem as the previous reply: if economics is a matter of might making right, then workers have the same right to use might against employers and the poor to use it against the rich.