Because the super rich have become more stingy and it’s a problem for everyone – WWN

Because the super rich have become more stingy and it’s a problem for everyone – WWN

There are no longer the rich people of the past, and it is a problem for everyone. Because traditionally the richest knew that their wealth was a privilege frowned upon and in the most difficult times they were willing to give something back to the societies in which they lived, to at least partially balance the scores. Today this is no longer the case and the risk is the destabilization of contemporary society.This is the thesis of a New York Times editorial written by the Italian Guido Alfani. It is a “guest essay”, one of the opinion articles that the great American newspaper has outside its organization write when it wants to open the ongoing debate on relevant topics. Alfani teaches economic history at Bocconi University in Milan and has done extensive research on how the great epidemics of history have changed the societies that were affected by them (including that of Covid). The NYT article is an excerpt adapted from his forthcoming book in the United States, As Gods Among Men: A History of the Rich in the West.

«Starting from the 15th century, and starting from the most economically developed areas of Europe, such as central-northern Italy, the rich were assigned a specific social role: to act as a private reserve of money from which the community could draw in moments of greater need” explains Alfani. They were considered as “private granaries of money” to use the expression coined by the Tuscan humanist Poggio Bracciolini in his 1428 treatise De avaritia (“On Avarice”).: just as the authorities accumulated public reserves of food to draw on in times of famine, the communities needed the rich (“many greedy individuals” as Bracciolini defined them) to draw on their assets in times of collective difficulty. Examples of this mechanism are the forced loans imposed by Venice on its richest citizens after the plague of 1630 during the war against the Ottoman Empire in 1645-69, but also the «Liberty Bonds» issued in the United States in 1917-18 for finance participation in the First World War. Progressive taxation is another form of application of this principle, according to which those who have a lot or very much must help others more. A principle which, however, according to Alfani, is now in crisis.

Despite the debt crisis and the Covid pandemic, in fact in Europe and North America there has not been a significant increase in taxation on large assets and in the United States President Joe Biden’s intentions to do so have largely failed. On the contrary, during the Covid pandemic inequalities have increasedand Alfani hypothesizes that «the exceptional resilience of the rich to recent crises has been achieved in such a way as to make society as a whole less resilient», given that the high public debt accumulated during the pandemic in many countries will weigh especially on the most poor.

«Today’s rich, whose wealth was largely preserved by the Great Recession (that of the debt crisis, ed) and the Covid-19 pandemic, they have resisted reforms aimed at leveraging their resources to finance mitigation policies of all kinds. This is a historically exceptional development. Helping to pay the bill for major crises has long been the main social function attributed to the rich by Western culture. In the past, when the richest were perceived as insensitive to the difficulties of the masses, and especially when they appeared to profit from such difficulties (or were simply suspected of doing so), society became unstable, leading to unrest, open revolts and anti-wealth violence” writes Alfani, who looks with concern both at the inability of states to increase taxes for the rich and at the direct descent of the rich into politics (the most striking example of which, in Italy, is was Silvio Berlusconi). For Alfani this trend represents the breaking of a “centuries-old social contract”, the consequences of which are unknown and dangerous.

Furthermore, it is not just that the rich contribute less (in proportion) to common well-being, it is also that the distance between the few who have a lot and the many who have little is increasingly marked. Over the last 30 years, inequalities in Italy have increased very significantly, as Daniele Checchi and Tullio Japelli write on and today our country is one of the most unequal in the OECD: «In terms of inequality our country occupies third position, after the United States and Spain. Germany, France and most other European countries have Gini indices 10-20 percent lower than Italy” explain the two economists. But very marked social inequalities also have political consequences, because they make democracy work worse. The states remain formally democratic, but the richer social classes have a disproportion of power because they control the resources necessary for the functioning of the democratic machine (just think of the financing of electoral campaigns). This is why ensuring a more equal distribution of wealth is not just an economic issue.

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