Monday, November 14, 2011

Discipline, Hard Work and Obscene Wealth


It’s taken a day for this to settle in, but I find myself to be really embarrassed on Tyler Cowen’s behalf.  Yesterday he published a New York Times op-ed on the subject of why American’s don’t revere the rich, even though riches are usually the result of discipline and hard work.

Put aside his indirect reference to Steve Jobs (“earning money through production for consumers, as Apple has done”).  Rightly or wrongly, Jobs was admired because he brought industrial design values—beauty arising out of function—to high-tech products; he seemed to be as much an artist as an entrepreneur.  Over at Microsoft, Steve Ballmer has a work ethic second to none, and he will die a very rich man, but I doubt there will be much public outpouring of grief.

Let’s get to the core issue.  Assume there are four individuals, A, B, C, and D.  A and B are at the struggling end of the working class, C and D are rich.  A and C have only an average attachment to work and self-discipline; B and D drive themselves to the limit.  Suppose their annual incomes look like this:

A: $20,000
B: $30,000
C: $200,000
D: $2,000,000

If you had a lot of observations like this, and if you could somehow measure “work ethic”, you would find a healthy coefficient on it in an income regression.  But what would this have to do with the popular revulsion against an income distribution so skewed to the top?  The problem is not that there is a return to hard work, but that the return is so obscenely large at the high end and so small at the bottom.  Think of that old Jesse Jackson speech:
I know they work. I'm a witness. They catch the early bus. They work every day. They raise other people's children. They work every day. They clean streets. They work every day. They drive vans with cabs. They work every day. They change the beds you slept in these hotels last night and can't get a union contract. They work every day. No more. They're not lazy. Someone must defend them because it's right, and they cannot speak for themselves. They work in hospitals. I know they do. They wipe the bodies of those who are sick with fever and pain. They empty their bedpans. They clean out their commode. No job is beneath them, and yet when they get sick, they cannot lie in the bed they made up every day. America, that is not right. We are a better nation than that.
What does it mean when someone can see the self-discipline of the millionaire but not the double- and triple-shifts of the working poor?  Like I said, I’m embarrassed for Tyler Cowen.

5 comments:

Don Levit said...

Peter:
What a powerful quote by Jesse Jackson.
A 40 hour work week, ideally, would be enough (80 hours, tops, if married).
We need people to utilize their gifts, talents, and abilities to close to their potential, in and away from the workplace.
Our society will be more sustainable and meaningful as a result.
The problem, at least partially, is that costs have risen far faster than incomes.
Two areas would be college education and health care.
One of the primary reasons for college education's increase is the low cost availability of loans (similar to what used to be true for housing).
One of the primary reasons for health care is overutilization of insurance.
Obamacare with no deductibles for preventive care, and no annual limits, will exacerbate the affordability problem.
One way around this is for people to voluntarily refuse to utilize covered benefits, in lieu of a higher deductible and lower premium.
Don Levit

chrismealy said...

I don't know why anybody takes that creep seriously. It should be obvious that his schtick is to play dumb and just ignore anything that complicates his libertarianism.

Ben Leet said...

Inequality.org has a graph that purports that 1/3 of the annual deaths in the U.S. are due to inequality. If the Gini were lower a third of the deaths would be postponed, the average life-span would increase. We are the highest per capita income in the developed world yet we are the highest incarceration level also. We have not discovered how to live together, obviously. I'm looking at a graph I made of the Social Security Administration payroll income table. One in three workers make less than $15,000 a year, they earn 5% of all payroll income. You can access the SSA report here: http://blogs.reuters.com/david-cay-johnston/2011/10/19/first-look-at-us-pay-data-its-awful/?cp=all -- Great Jackson quote.

Jack said...

Peter,
Your criticism of Cowan's silly essay is far too mild. At no point in the article does Cowan make a case for there being any connection between the wealth that he suggests we should admire and the hard work to which he attributes that wealth. No one would argue with the value of self discipline and hard work, but no one should be foolish enough to assume that wealth is a sign of same.

goth-is-not-emo said...

@Don Levit: NO ONE should have to work 80 hours/week in order to feed, clothe, and shelter his/her family. Ever. That's a good way to die of a heart attack at 35. I'd rather both spouses work than that a "breadwinner" should work himself to death while his wife stays at home. That doesn't support family values--it robs his children of a father and forces a young widow to try to find a job after years of unemployment.