How rich is too rich?

Abstract

Limitarianism: The Case Against Extreme Wealth Ingrid Robeyns Allen Lane (2024) As radical as they might seem, calls for limits on wealth are as old as civilization itself. The Hebrew Bible and Torah recognized years during which debts should be cancelled, slaves set free and property redistributed from rich to poor. In classical Greece, Aristotle praised cities that kept wealth inequality in check to enhance political stability. And in 1942, then-US president Franklin D. Roosevelt argued that annual incomes should be capped at the current equivalent of US$480,000. In Limitarianism, Dutch and Belgian economist and philosopher Ingrid Robeyns argues that it’s time for twenty-first-century governments to do the same. She explores what setting limits on wealth ownership might mean, and why our societies should want to do so. It is a fresh take on a much-needed discussion at a time when, for example, the richest 1% of the US population owns about as much wealth as the bottom 90%. Why the world cannot afford the rich Robeyns, who has studied how people perceive wealth, opens with a provocative proposal — governments should set a wealth limit on the order of 10 million euros or US dollars per person. This figure, more of a guideline than a strict cut-off, “strikes a balance between what different moral and political considerations tell us is the maximum level” of wealth one should own, she explains. Why cap wealth at €10 million? The author’s research across Europe suggests that this level, or an even lower “riches line”, would be broadly accepted by the population. Among a representative sample of Dutch people, for example, Robeyns and her team found that nine out of ten respondents agreed that having wealth exceeding €4 million for a family of four — in terms of ownership of certain assets, such as a mansion, a second home, luxury vehicles and a specific amount of savings — qualifies as being super-rich. In low-income countries, that threshold could be much lower. Robeyns points out that extreme wealth “is often tied to immoral and criminal practices”. As evidence, she notes the massive use of tax evasion among ultra-wealthy people and their firms. Whether legal or not, she labels these practices as unethical. Going further, she reminds us that current wealth inequalities have some roots in historical practices such as slavery or military conquests — as scholars of global history have revealed, for example in Sven Beckert’s 2014 book Empire of Cotton. To bolster her case and persuade detractors, Robeyns argues that limiting wealth accumulation would make societies better overall. Indeed, although individuals might disagree on whether market outcomes are fair, many would agree on the value of social-welfare objectives, such as having a healthy democratic system or offering equal opportunities for all.