The Limited Moral Case Against Wealth Inequality

Submitted for comment, the below is a portion of a long piece I’ve been working on for some time on the role of government in the modern U.S. economy, including its role in addressing the limited problems with inequality of wealth.  In the first part of the portion below, I sketch the argument in favor of the moral right to property.  In the second part, I explain how certain forms of wealth prevalent in a modern economy do not possess the same moral quality, or at least not to the same degree.

I welcome your thoughts.

In a series of posts earlier this year, I explored whether the concept of positive rights is intelligible in the context of the negative rights framework implicit in American constitutionalism.  Attempting to make the point clear, I posed the following hypothetical:

[I]f we suddenly found ourselves stranded on a desert island with no government or formal laws, do I nonetheless have a right to receive medical services from you similar to your right against my stealing your possessions or causing you physical harm? What if you need my shirt to strain your drinking water—part of your “rights” to basic food, water, and health care? Can negative and positive rights co-exist?

One possible objection to this sort of hypothetical is to contend that a negative-rights-only approach is morally deficient as failing to comply with supererogatory duties (i.e., Good Samaritan-ism).  But this objection seems to me misguided.  This is a religious duty, not a political one, and religious duties do not conveniently translate to legal rights.

Nonetheless, negative rights do arise from developed moral frameworks.  In our desert island hypothetical, the question presented is whether my presumed property right holds as against your situation and your asserted rights to food, water, and health care.  My property right is implicit in the nature of man and the logic of morals: I worked to acquire it, I maintain it in my possession against all others, and I openly advertise my dominion over it.  Thus, no others may take it without justification.  This, then, is the definition of a “right”:  It is a claim whose violation requires an explanation in terms of moral logic.

Does any justification exist here?  Note the vagueness in the hypothetical:  I did not specify how long you had been without food and water, or the nature of your medical needs, or whether drinkable water might be otherwise accessible, even if perhaps less convenient.  The very logic of law and of morals requires the giving of reasons amounting to a justification to defeat the claim.  There are none supplied by the facts given here.

Further still, weighing against any duties I may have to you and your situation are my competing duties to look after the health and welfare of myself and my family, as well as to others who may be in greater need than you.  I am a steward of my possessions, a fiduciary with respect to any moral claims in them.  They are the talents entrusted to me, and it is my duty to wisely and faithfully preserve and invest them.  I must not yield my charge for light and transient causes, or for reasons we cannot be troubled even to articulate.

Property rights, then, have moral significance.  A discussion about inequality involves the serious moral question of whether and under what circumstances an individual should be denied or divested of property rights.  It is often a discussion infused primarily with economic rather than moral significance, and for this reason, the wrong kinds of reasons are often incorrectly deemed to pass muster.  My moral right to the crops I sowed and reaped to feed my family might yield in light of the starving traveler at my door.  But that same moral right will not yield to economic theories about aggregate demand and stabilizing the national price of wheat.  Economic theories and other low arts of prediction are contingent on a variety of highly mutable conditions.  They cannot begin to provide justifications to defeat property rights.

As we can see, not all reasons rise to the level of a justification to deprive another’s moral right to property.  But neither is all property infused with moral significance.  In a subsistence economy, man wrests his possessions from the earth with great toil and protects them with his life against thieves and predators.  Wealth inequality is not an issue here.  An acre of earth will yield the same crop to one farmer as it does to another, save only for the farmers’ natural difference in prowess and efforts in cultivation.  These differences will be slight, and the crop yielded him will be his own by moral right.

In a developed economy such as ours, however, possessions are obtained through very different means.  Most individuals don’t spend their productive energies growing, catching, gathering, or making things.  And when they are, it often is in an atomistic sense that bears little relationship to the whole.  Because our economic activity bears little obvious relation to the ultimate goods and services, it is impossible, for practical purposes, to discern the relationship between our economic activity and our consumption of goods and services obtained from others.  Most people can fathom the conversion from bushels of corn to dozens of eggs, say, but not the conversion from bushels to Subarus.  Not to mention the fact that both things are so highly regulated, subsidized, and tariffed that it would take all sorts of experts in agriculture, engineering, law, political science, accounting, and so on, to even begin assembling a meaningful comparison.

Even Elihu Root was late in observing this progression, which had begun in earnest at least a century earlier.  In The Market Revolution in America, John Lauritz Larson writes that as early as the founding community-based economies were losing their primacy as regional economies and then a national economy assumed the spotlight:

Without anybody wishing it so, the increasing scope of commercial transactions, the specialized divisions of labor, the growing distance between buyers and sellers, the institutionalization of relations, and the proliferation of intermediaries disembedded individual transactions from contexts in which the common welfare or “commonwealth” of whole communities once had seemed self-evident. Not that folks were any more (or less) inclined to abuse their neighbors, but how was one to know who was his neighbor in a complicated nexus of actors and agents he never saw or knew by name, where prices, commissions, and the terms of trade seemed always to be set by somebody else? This was, of course, the genius of the free commercial marketplace: It depersonalized transactions, stripped them of all but economic information, and opened the game to anyone with something to sell or the wherewithal to buy.

Today one cannot even begin to understand the correlation between sitting in front of a computer 40 hours a week and the objects of middle-class consumption:  a mortgage, car payments, health insurance premiums, student loan payments, a vacation once or twice a year, a pension, and so on.  The exchange rates between inputs and outputs are purely theoretical.  And, unless you implicitly accept that market economics fairly determines these exchange rates, it is hardly surprising that many people conclude that standards of living must be set from the top down.

Does the banker who profits from “flash trades” have a moral right to the profit one of his computers made after making an “offer” to another computer?  Does the banker who takes zero-interest loans from the Fed and buys Treasury bonds at three percent have a moral right to the profit gleaned solely by virtue of his industry’s proximity to governmental power?

It is clear that there is a great deal of wealth in this country that is “property” in a legal sense but which appears to have lost its moral significance.  With respect to this wealth, economic reasons may suffice to justify confiscation and redistribution.

Tim Kowal

Tim Kowal is a husband, father, and attorney in Orange County, California, Vice President of the Orange County Federalist Society, commissioner on the OC Human Relations Commission, and Treasurer of Huntington Beach Tomorrow. The views expressed on this blog are his own. You can follow this blog via RSS, Facebook, or Twitter. Email is welcome at timkowal at


  1. This is excellent, Tim. There is no doubt that general material conditions – relative scarcity, relative plenty – change the moral calculus of property under those variations. All “liberal” cases for public provision (as opposed to absolutist socialistic ones) have always made their moral arguments contingent on the context of a situation of extreme plenty in society, where the moral rights in the property in wealth among top wealth holders (and therefore in resulting capital income) were at least clearly open to question, if not transparently dubious. This is an eloquent statement of that particular part of the liberal argument for the possibility of the (political/public) morality of material redistribution.

    • …I should say, the degree of scarcity and the question of whether the wealthholder indeed produced/earned/did whatever is necessary to create a property right in all of his wealth (that question itself being perhaps(!) influenced by the prevailing conditions, as you explore in the desert island example). Basically: yeah, what you said.

  2. “Does the banker who profits from “flash trades” have a moral right to the profit one of his computers made after making an “offer” to another computer?”

    Does the farmer who profits from “growing food” have a moral right to the fruits his bean plants made after simply going through the natural process of growth?

    • Tim kinda spoke to that, DD. That was the distinction he was drawing, in fact. Obviously it’s yours to think yes or no.

    • DensityDuck:

      I develop that idea a little further to give a better idea of what I find troubling about “flash trades.” I should have included it in the OP. Here it is:

      Is it a foregone conclusion that markets will continue to grow ever larger and more complex, requiring ever more pervasive government intervention to safeguard them? Are flash trades, in which computers offer and accept trades within nanoseconds, the inevitable future of high-finance? Will this require the government to deploy regulatory cyber-bots to patrol the internet? Perhaps they will issue citations in real time. In response, banks might deploy their own compliance bots to factor associated penalties to determine whether a transaction is still profitable, thus treating penalties as a mere tax. Computers are not so sloppy and irrational as humans to get hung up on notions of “ethics.”

      At what point does government become so complex in keeping step with financial markets that people cease to understand what it is doing? Have we already passed that point? Hillsdale College Dean Larry Arnn is fond of citing James Madison’s Federalist 62: “It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; if they be repealed or revised before they are promulgated, or undergo such incessant changes that no man, who knows what the law is to-day, can guess what it will be to-morrow. Law is defined to be a rule of action; but how can that be a rule, which is little known, and less fixed?” Modern laws, including the income tax code, health care reform, financial reform, and so on, are so complex that literally no ordinary citizen can comprehend them. Moral truths are no less in need of legibility. But it can be difficult to consider the moral questions concerning “flash trades,” for instance, outside the context of the labyrinthine regulations that govern them.

      Financial infrastructure is critical to a developed economy. An underdeveloped financial system limits access to funds. The financiers who control access accordingly become disproportionately powerful by doing very little. Arguably, they owe their wealth to nothing more than having proximity to the source of power. There is no moral right to wealth obtained by rent-seeking.

      • Health care reform is just as easy to understand as the anti-acid-rain legislation.
        “Care to play a game?”

        Arbitrage is a net good to society, and more efficient arbitrage makes a better functioning society. I doubt you can really find much “morality” in such.

        Now, if you want to look at currency trading, and the ability of other countries to essentially collapse an entire economy… Yes, then we can deal with morals! But these are the morals of the big fish in the small pond — and I think we ought to avoid big fish in small ponds.

        Properly speaking, the financial sector determines risk, and prices loans accordingly.

      • See, I’m confused about where you’re trying to go with this. On the one hand, you imply that there’s some kind of moral concern involved in the idea of fast-paced financial trading activity. On the other hand, you say that the regulations to resolve that moral concern would be themselves concerning due to their necessary complexity.

        Why does there have to be a moral concern at all? We do not consider there to be a moral concern in, say, the ability of people to move from place to place at a speed faster than walking. And yet, if someone becomes mad in one place and they can travel quickly to another, they might still be mad when they arrive, and do something bad when they get there; shouldn’t we take steps to limit the speed of travel? After all, if there’s a travel-imposed cooling-off period, then they might no longer be mad when they arrive, and surely society would be more stable as a result.


        And that sets aside the fact that the issues in 2008 were not the result of a lack of regulations, but rather a lack of enforcement. Nobody ever said that it was a good thing for large banks to speculate in commodity markets, and in fact there were regulations against it, but somehow those regulations didn’t get enforced. Nobody ever said that it was a good thing to make large loans to persons with poor credit histories, but we decided that was secret racism. It’s not like people didn’t know these things were bad, or hadn’t taken steps to stop them happening.

          • Congratulations, you understand why the uptick rule existed.

        • DD, I’m concerned about the moral angle because I’m exploring whether there’s anything to all the handwringing over wealth inequality. Maybe the flash trades example doesn’t work. I’ll rethink it. The idea was that if we stipulate that regulations are necessary, then we get into these kinds of problems because people will find ways around the regulations, and you ultimately wind up with a relationship between an industry and regulation that is illegible to anyone on the outside.

          • “you ultimately wind up with a relationship between an industry and regulation that is illegible to anyone on the outside.”

            I agree.

  3. For all this talk of Rights, I see nothing related to Obligation. My vocabulary says Morality is me, Ethics is us. All this talk about Positive and Negative rights must be seen in light of Rights and Obligations.

    The American Constitution is a framework for all the rest of our laws. If it is built around Negative constructions, it would be a trivial matter to rewrite it all in the logical inverse without impacting its meaning in the slightest.

    Desert Island hypotheticals are contemptible. They presume society does not exist, that the concepts of Rights and Obligations are not binding upon us. Nobody lives on desert islands. Furthermore, that Desert Island just might be some billionaire’s property. If his guards came by and ran the lot of you waist-deep into the sea, what then?

    And all this business about “I worked for it” is equally contemptible. Someone gave you money for goods or services. If they are shoddy or fraudulent, is it Caveat Emptor time? Are there no provisions or sanctions for Caveat Vendor? More Desert Island thinking, only now you’re the guard pushing the stranded survivors back into the ocean.

    The fact is, there are no Desert Islands. Hobbes observed the viewpoint of an absolute monarch was probably the only valid one: only the monarch would consider the well-being of his nation as his own well-being. We are not little Hobbesian Kings. Our homes may be our castles but the fate of our neighbours affects us as surely as the weather.

    • Blaise, you raised similar objections the first time I posed this hypothetical, and I’m still at a loss. The hypothetical I posed does not reject the existence of society, or the concepts of rights and obligations. It’s merely a vehicle to get the idea across of the need to offer moral justifications.

      • I do not favor the “right to life” of a fetus, who is arguably more morally bound to its mother than a regular stranger (and arguably less, as well, being unable to sustain itself, and thus requiring more resources…).

        But I must find myself at a loss for how we go about enforcing negative rights. You see, it is possible for a man to remove a woman’s autonomy to such an extent that she is unable to express that she does not consent to sex. I might add that under current laws, this is perfectly legal, providing he does it with words and not with drugs.

        And yet, certainly her rights have been violated.

      • Blaise’s objection poses a dilemma for conservative economic libertarians. On the one hand, conservatives are generally in favor of using government mechanisms to enforce social morality. But economic libertarians draw a sharp divide between the state and civil society. So conservative economic libertarianism is inconsistent, and should either forswear morality legislation or recognize the potential legitimacy of economic legislation.

  4. Interesting post, hopefully will make for a good discussion. While a complex economy certainly makes the moral calculus more difficult, I think there are complications even in the simple farmer hypothetical . The fact that I grew more crops than my neighbor could be due to one or more of three sorts of things: (1) increased effort; (2) better ability (strength, wisdom, etc.) or (3) better external circumstances (e.g. better soil, more rain, etc.). Generally speaking, we tend to think that #1 justifies inequality and #3 does not, while #2 is complicated. But even with farming the family plot, it can be difficult to tease apart the extent to which each of these types of causes was involved, and one’s judgments will often depend on one’s own position.

    • I’d say that both 1&2 justify inequality, within reasonable bounds. Leaving the other person starving is just bad for business.

    • kenB, I think you’re touching on the difference between politics and theology. If we each have a plot of land that are otherwise completely equal and your plot gets more rain and sunshine than mine, I can shake my fists at the sky but I have no moral complaint against you. This is where Rawls might come in with veils of ignorance, and to an extent I agree. As a healthy person (knock on wood), there’s no reason I should agree that my health insurance premiums be increased to accommodate a law that prohibits exclusions based on pre-existing conditions. But given my personal value system, I do consent to such a system. I don’t consider it a duty in the legal or political sense of the word. In that sense it’s supererogatory.

      • I guess I’m not understanding your priors — perhaps I’m unfamiliar with the standard literature. Are you starting from a particular defined moral framework when you say that one is morally entitled to the fruits of one’s own physical labor, or are you appealing to a shared understanding? If the latter, then I think that shared understanding starts to break down once external inequality is built into the starting conditions.

        • KenB, I’m not assuming a “particular defined moral framework.” Any framework will suffice that brings agreement on the premises here — i.e., that working to acquire, maintaining possession, holding a thing openly and notoriously yields a moral right to the thing requiring a moral justification before one may take or injure it. If we cannot come to that agreement, then force is the only thing left that can require our common allegiance.

  5. You ask: is the right to healthcare the same as the right to property and self-defense? Presumably, you think not, because the right to property and the right to life and self-defense exists on a deserted island, whereas the right to healthcare does not.

    One thing that strikes me about this scenario and the natural law thinking that underlies it is that the conception of rights being employed reduces to this: the legitimate, justified use of force against another person. You’re arguing that in the scenario, individuals in the “state of a deserted island” can legitimately use force to defend themselves and their property. As you put it: “I worked to acquire it, I maintain it in my possession against all others, and I openly advertise my dominion over it. Thus, no others may take it without justification. This, then, is the definition of a “right”: It is a claim whose violation requires an explanation in terms of moral logic.

    Now, suppose that I’m dying of thirst on this island, and you’ve acquired some refreshing H2O. On your supposition, you have a right to that water because you’ve worked to get it and have publicly pronounced dominion over it, and therefore, no one can forcibly take if from you without justification. I, on the other hand, am dying of thirst, and I have a right to life and self-defense, and you have some refreshing H2O. In advance of any resolution of disputes between conflicting rights, it seems to me that I have a right to water, since I have a right to do whatever is necessary to sustain my own life. So, it seems to me, I’m entirely justified in taking what you have made public pronouncements of dominion over, just so long as that object is necessary for me to sustain myself.

    Now, this is clearly a case of conflicting rights, it seems to me. And I don’t think that merely saying that a public declaration of possession (ie, a claim of ownership) resolves the conflict. Since, you know, what do I care about your public declaration if I’m dying of thirst?

    So, it seems to me that natural law conceptions of rights, especially given teh hypothetical scenario above, entails that if healthcare is understood as the minimally necessary procedures to sustain one’s life, and a right is understood as the legitimate use of force against others, then it seems to me that an individual is justified in using force against others in order to sustain his own life.

    • And I don’t want to be cagey here, so I’ll just say what’s pretty obvious given some of our other discussions on the topic. The idea that a public pronouncement of dominion over an object is sufficient for protection against other rights claims against that object is a conventionally agreed upon principle that requires an enforcer to be realized in practice.

    • Stillwater, I’m not sure if we disagree here. In your example, you will die if you don’t get my water, and I don’t have a countervailing dire need for it. True, the fact that I worked to acquire it, continuously maintain possession of it against all others openly and notoriously makes it mine. But I’ve defined “mine” here as a presumption. If you’re thirsty but not dying of thirst, or if my children are dying of thirst and need the water, that presumption gives me every right to tell you to get lost, go find your own water. But the conditions you’ve laid out defeat my right to the water and justify your taking it.

      I didn’t say that a mere pronouncement of a right to something is “sufficient” to establish a right to it.

      • Yes, yes. Of course. That was the thing that initially struck me about the essay, but in the end, I think we agree to a great extent about that issue, especially in the context of this essay. I tend to agree with your broader thesis, tho. At least at a first pass. (And now a second pass.)

        That is to say: I don’t think a thin concept of property rights as it applies to complex markets captures all the things we want to say about them. But as DD has shown, the burden is on folks like me to show that a thin concept of property rights isn’t actually the correct concept. I think utilitarian concerns enter into the discussion, some (probably question begging) issues about the role the state plays in realizing some of those types of activities (eg, flash trading), as well as an understanding of the purpose of investment to begin with. At this point, I agree with your tentatively proposed conclusion (that some types of property lack the moral grounding which we conventionally think of as necessary for something to be property). I’m just not entirely sure what the argument against a thin concept of property is at this point.

        As a side note, I saw this over at BHL and thought you might find it interesting given your most recent two posts here at DC.

  6. I am not comfortable trying to define everything as “rights” positive or negative.
    In our culture, the word “right” is a very absolute term (even if philosophers mean it differently) and trying to force the entire universe of actions into this narrow framework leads to outcomes that strike most of us as absurd.

    But to address Tim’s post, within his definition, both positive and negative rights have to exist; otherwise society becomes unbearable even for those who enjoy negative rights.

    But this caught my eye-
    “religious duties do not conveniently translate to legal rights.”
    Isn’t the entire concept of rights themselves grounded in a moral postulate?

    • Isn’t the entire concept of rights themselves grounded in a moral postulate?

      Yes and no. When I argue the existence of God, I contend that intelligibility of any claims about the world is possible only by presupposing a metaphysic, which might be called religion. In that sense, I’d agree with you. But generally, I operate on the assumption that we all presuppose a certain core of metaphysics, including the life is intrinsically good and worth protecting, that coercion is generally bad, eudaimonia, etc. To the extent those agreed-upon truths yield, through the operation of moral logic, rights and duties, we are going to have more common ground when we talk politics and political theory. When we start getting into values that require a more particularized metaphysics/religion, we run into more problems and less common ground.

      • And if the truths aren’t agreed-upon?

        We are all on the island. You are making the case for proprety and natural rights.

        Over here, a group of us have a lot of weapons, and have decided for ourselves to the be Enforcers of The New Order.

        Over there, a guy is speaking about the utility of a feudal order, and is asking us to enforce an order based on brute force and slavery, with a bonus paid to the enforcers.

        What case do you make to us to choose to enforce your order over his? Without at some point premising it on a postulate of “you either accept this or you don’t”?

  7. Does the banker who takes zero-interest loans from the Fed and buys Treasury bonds at three percent have a moral right to the profit gleaned solely by virtue of his industry’s proximity to governmental power?

    No. Morally that banker is no better than a thief.

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