Warren Buffett, ranked by Forbes in 2008 as the world’s wealthiest man, is no moral philosopher. Yet he is capable of raising a tricky philosophical quandary. Reflecting on his tremendous riches, he has attributed his fortune largely to chance. “It just so happens that I was in the right place at the right time,” Buffett has said. “I really wouldn’t have made a difference if I were born in Bangladesh. Or if I was born here in 1700…. I just got lucky as hell…. Stick me [someplace else] and I could say I know how to allocate capital and value business. But they’d say, so what?”
In crediting luck, Buffett not only points to the birth lottery, in which some people are born into more privileged circumstances than others, but also recognizes that to a great extent he owes the accomplishments of his professional life to the manifold contributions of other people, known and unknown, past and present. They have collectively done Buffett enormous favors, affording him security and education, providing modern infrastructure, science and communications systems and creating a sophisticated market in which he could do business. Because of this, Buffett claims, “society is responsible for a very significant percentage of what I’ve earned.”
“But if this is true,” ask Gar Alperovitz and Lew Daly in Unjust Deserts, “doesn’t society deserve a very significant share of what [Buffett] has received?” This question clearly indicates how thoroughly Alperovitz and Daly want their new book to upend commonplace notions about the relationships between economic growth, productivity and wealth. The duo cite “extraordinary developments” in the study of knowledge and economic growth as the foundation of their contentions. But they are actually returning the economic discussion to where it started, with Smith, Ricardo, Mill and Marx–to moral philosophy and debates about the values that should inform public policy. Their foremost ethical question is, given that we owe most of our productivity to a common social inheritance, to what extent can we say that we have “earned” our personal wealth? If we see far, it is because we stand on the shoulders of giants, the argument goes. Therefore, a large portion of what we claim as payment for our productivity should actually go to the Goliaths who are doing the heavy work of holding us up. Even if your eyesight is much better than average, your individual claim is limited.
Most of us with regular work lives get up in the morning, expend our energy and intelligence to meet the day’s challenges and retire, depleted, in the evening. In this respect, Alperovitz and Daly claim, we toil away our workdays just as, for example, subsistence farmers did for thousands of years. What makes us more “productive” than these forebears–in the sense that they often struggled to ward off starvation, while we, relatively speaking, are surrounded by abundance–is not our individual strength, initiative or daring. Rather, it is our inheritance of thousands of years of cultural knowledge, innovation and discovery. Owing to this legacy, a person in the United States working the same number of hours as an American from as recently as 1870 will produce, on average, some fifteen times more economic output.
As early as the 1950s, economists began establishing a greater role for socially accumulated knowledge in mainstream understandings of economic growth. Alperovitz and Daly note that Robert Solow “calculated that nearly 90 percent of productivity growth in the first half of the twentieth century (from 1909 to 1949) could only be attributed to ‘technological change in the broadest sense.'” This suggestion was a radical shift away from accounts that stressed the more specific agency of capitalists and entrepreneurs–or of laborers, for that matter–in expanding our economy.