In Pluck and hard work, or luck of birth? Two stories, one man | Aeon Essays, David Labaree explores the role of luck and privilege in his own life.
Commenter Tom Horton asks “When you finally drop the merit illusion and acknowledge the huge role of luck in your life, what should you do about it? My own opinion is that you should share your luck as widely as possible. And I don’t mean become a philanthropist.” and Labaree replies “As you say, the first step is to give up the illusion that you earned all the social benefits that have come your way. The next step is to make this clear to others. That’s why, in the last few years, I started telling a short version of this story to my students at Stanford – a way of nudging them to reconsider the circumstances that brought them there. As you note, this is not to say they didn’t work hard to get admitted, just that there are lots of people who worked just as hard who never had a chance.”
And by telling his story more publicly, Labaree is taking the full stride of that second step – namely encouraging others to do likewise.
But there is a third step needed too. Once we have widespread agreement with the idea that inequality is largely a result of luck rather than merit (and further that having merit is itself a result of luck), then we face the question of what (if anything) to do about that.
The question then is whether and how hard we should strive to eliminate or reduce the effects of pure luck as a source of difference in human life fulfillment. Do we just accept (or even relish) the role of fate in our lives (perhaps, if on the lucky end of the spectrum, assuaging our guilt by dribbling a bit of charity down on the losers), or do we look for real ways of adjusting our society to minimize the pain that fate can impose?
There are many things we can’t equalize and risks we can’t eliminate, but the lack of early access to capital is not one of them. In the light of the fact that the vast majority of humankind’s accumulated capital wealth is the result of the thought and labour of countless generations of our mutual ancestors, and that it’s present distribution is a result only partly of the efforts of recent generations and much more on a combination of luck or theft throughout the ages, it makes perfect sense to guarantee every child access to an inheritance of a fair share of that wealth. Where should this come from? Well a tax on unfairly large inheritances would seem to be the obvious solution. And, since pre-death gifts might be used to circumvent that, it should be extended to apply to all gifts and unearned income from any source. And what rate should apply? Why not start with the same graduated rate that applies to any other income? What you want to tax the doll I give my child at Christmas? Yes, but only if the combined value of that doll with all the other gifts you and others give her adds up to a taxable income. And if you want to give your adult child an income of $100000/year rather than give it all at once when you die, then yes you will be able to reduce his overall tax burden that way (and will probably also benefit from a more gradual transition of authority if you are passing on a family business).
To my mind it has always seemed odd that our tax system privileges unearned over earned income. Does this make any sense? If not let’s put an end to it – and use the revenue to give every child a fairer share of our universal inheritance.