The Stakeholder Society

“The Stakeholder Society,” by Bruce Ackerman and Anne Alstott.
7 May 1999

The Stakeholder Society and Private charity as a Reason for Banning Public Charity

In an outstanding new book called the Stake holder society, Bruce Ackerman and Anne Alstott propose having the government give every American $80,000 in their early twenties. This would be funded by a two percent tax on wealth above $80,000. They also suggest a privilege tax on those who have had financially privileged childhoods. These proposals are carefully thought out and well motivated by the idea of giving some substance to our common empty talk of “equality of opportunity.”

Ackerman and Alstott dismiss a number of other approaches, such as funding education better or raising minimum wages as too small and/or actually harmful and/or politically difficult. Unhappily, I’m inclined to think that their proposals are just as politically difficult.

And I have a quibble with the digs scattered through this book against “utilitarians,” who are never named. As in all American ethical arguments, the example used is that of Nazi Germany, where Jews were one percent of the population. “[I]s it so clear,” the authors ask, “that the average Jew suffered NINETY-NINE times as much as the average Aryan gained from his feelings of racial superiority?”

One response to this is that feelings like those often involve hatred, which, being unpleasant, is not a gain at all. But, even accepting that there was a gain for many racists, the trade-off is not necessary. The racists could have felt superior without killing anyone, an action which, if completed, would have deprived them of the allegedly beneficial presence of people they perceived as inferiors.

More importantly, these numbers (one and ninety-nine units of pleasure or suffering) do not mean anything. We could give a vivid description of the concentration camps and then ask “Isn’t it abundantly clear that the average Jew suffered at least ninety-nine times as much as the average Aryan gained from his feelings of racial superiority?” The case for this “calculation” is exactly as good as for its opposite.

The value of utilitarianism lies not in calculations (calculations which Ackerman and Alstott accept while trying to dismiss) but in placing the well-being of people above adherence to any rule. Utilitarianism ought to be an ally of anyone who recognizes the harm done by devotion to certain rights and freedoms, such as the freedom to engage in unfair and cruel labor practices, the “right to work”, and the faith that people have what they “deserve.”

And don’t get me started on the way readers of Foucault tend to characterize Bentham…

I’ve encountered two arguments against the Stake holder society. The first, which is well addressed in the book, is that some people would waste their $80,000. I agree with the authors that relatively few would waste their money, and that many would be much better off than they are now. I find that people who make this criticism are not themselves suggesting an alternative remedy to the drastic disparity in wealth in America, and are not even aware of it. In many cases, they profess a belief that there is no hunger in this country, that people only suffer if they don’t work, and that everyone has a chance to make it.

The second argument I’ve encountered is that charity must be done “privately,” that is, without the government. In some cases, advocates of private charity support huge organizations known for as much corruption and inefficiency as any government, real or imagined. In other cases, they support only one-on-one charity without any intervening (or skilled, organized, or powerful) agency. Often in supporting these charities, government -haters make clear that they do know that hunger exists in America, if not that people working 60 hours a week can qualify for food stamps (temporarily, of course).

Sometimes supporters of private charity argue that the way to help is to teach entrepreneurism, apparently oblivious to the pertinent absence of capital. Other times they argue for simply giving fish instead of fishing skills. After all, this is good for the giver, and the poor will always be with us.

Why do private and public charity need to be in conflict? I give some tiny amounts to organizations and to people I meet on the street, and I simultaneously argue for living wage laws, campaign finance reform, an end to corporate welfare and waste on weapons, spies, highways, and subsidies for cutters of national forests. I will now argue for a Stake holder society without feeling any conflict with dropping some canned food in a basket or helping build Habitat for Humanity houses.

If private charity were doing the job, no one would propose government charity (and vice versa). And a lot of what is proposed amounts to government neutrality. Many of our taxes are regressive. Our services are unevenly distributed, notably in education. And we have the money. Just yesterday (May 6, 1999) we threw an extra $13 billion at the Pentagon. That kind of money could end many debates over education by providing better schools in poor counties and cities. Our cities routinely give huge tax-breaks to companies that move to certain areas promising jobs that no one ever bothers to make sure are actually provided. These funds could be better spent.

And isn’t it important that the top one percent of wealthy people in the U.S. could end poverty and still live like emperors? Need I be selfish and hypocritical and out-of-line to mention this fact. I don’t think so. I cannot myself reach into my pocket and end poverty. I would if I could. By all means, let’s have lots of private charity and local assistance. But let’s think bigger than that too.

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