Tova Podcast: Limitarianism v Libertarianism, is it time for a cap on wealth?
Friday, 29 March 2024
Tova O’Brien is Stuff’s Chief Political Correspondent and host of the weekly political podcast, Tova. Listen to the latest episode, The Great Wealth Debate: Limitarianism versus Libertarianism, here.
Is it possible to have too much wealth? To be too rich? And should we therefore have a cap on wealth?
Dutch political philosopher Ingrid Robeyns believes the answer to those questions are: yes, yes and yes!
ACT Party leader David Seymour, on the other hand, argues: no, no and hell no.
Robeyns has written a book arguing that we’d have a vastly better world if we had a hard limit on the wealth that any one person can accumulate - a cap on the rich. She calls the concept Limitarianism - and she’s willing to put a number on it.
In the latest episode of the Tova podcast, ‘Limitarianism v Libertarianism’, we break down the concept, look at the pros and cons and ask whether there’s really ever any chance of the theory becoming a reality.
To better help us conceptualise extreme wealth, Robeyns uses the example of Elon Musk, owner of Tesla and SpaceX.
To amass Musk’s level of wealth, guess how much you would need to earn hourly over your lifetime?
If you were working 50 hours a week between the ages of 20 and 65 - week in week out, year in year out - your hourly wage would need to be $3,124,782.
More than 3 million New Zealand dollars an hour, every working hour of your entire life to amass Musk’s wealth.
Robeyns says you need examples like this because our brains are unable to process the extremity of the hundreds of billions of dollars people like Musk are worth.
Seymour says “people try to bamboozle you with these sort of strange numbers”.
He doesn’t believe that Musk level of wealth is too much.
“No, I don't. And there's something in our psyche, I think, that we always want to drag others down. I'm very clear that I want to live in a free society where other people's success is a good thing. And actually, over time, it's good for everybody.”
But Robeyns, a professor of philosophy and economics at the University of Utrecht in the Netherlands, says too much wealth creates societal harms, that a cap on wealth would minimise them.
She says the idea of people being below the poverty line is morally unacceptable and wants an upper threshold too.
“We have a societal agreement that nobody should be poor, but the question is, should there also be something at the opposite side? Should we say that at some point somebody has too much? And the claim of Limitarianism is that, yes, you can say, that at some point somebody has too much.”
So how much is too much?
Limitarianism suggests that each country and society works out its own threshold depending on things like welfare provision, health care, a public pension system, etc.
And Robeyns says you have to take into account the large number of people in society who are motivated by financial gain.
“To allow those people, who are motivated by money, to at least keep contributing to the economy, I think you need a number that's sufficiently high.”
That number?
“I proposed, as a ballpark figure for discussion, 10 million euros,” says Robeyns.
Which would mean a cap on wealth of over NZ$18m.
Seymour says that places a primacy of one person’s needs or wants over another’s.
“Why should a person have to justify it?” he asks, “There has always been something inside us that wants to dominate other people, a kind of tribal society, and what this person [Robeyns] has written is just the latest version.”
“On the flipside, you know, free societies have doubled life expectancy, nearly eradicated, absolute poverty and made the world a much better place for minorities. We're a much more tolerant and inclusive society than we used to be.”
To hear further debate about the merits or lack thereof of a capital gains and wealth taxes, and whether Ingrid Robeyns truly believes her philosophy is realistic, listen to the latest episode of the Stuff’s Tova podcast, Limitarianism v Libertarianism, here.