Tafel Schokolade in Stücken.

Utilize our wealth together

The wealth of individuals that can be measured by money is distributed very differently. There are incomprehensible single fortunes. As these very large, hyper-solvent, and few single fortunes exert a strong controlling force, I see a need for a democratic state to counteract this financial imbalance. A democracy is based on equal rights and has the task of strengthening our social and cultural capital.

To share a bar of chocolate fairly, there is a simple method: one person splits but lets everyone else go first in choosing a piece.

Wealth is distributed very differently among individuals today. This becomes clear when compared to a virtual random distribution. If wealth in Germany were distributed randomly, the largest individual asset would be more than ten thousand times smaller than it actually is. In Germany, this natural upper limit is around 1.1 million euros. You can find out more about this in my post on intangible wealth.

Globally, the difference is even more dramatic. If we take all wealth together, we arrive at a total global net worth of USD 317 trillion, according to estimates in the Credit Suisse Global Wealth Report (2018). If this total wealth were to be redistributed randomly to all inhabitants of this world in a single distribution process, without favoring any individual, the richest person would have slightly less than one million USD. On average, it would be unchanged per capita about 42 thousand USD.

Decisions by wealthy people

Around 42 million millionaires live on this planet, about 2 million in Germany. Few of them, but more than perhaps suspected, are billionaires and thus own more than a thousand times the assets of an ordinary millionaire. In my view, this strong concentration of wealth also entails a highly undemocratic concentration of power among a few decision-makers. These decision-makers have no democratic legitimacy.

To illustrate, if investments are made in local industries or sites are closed purely for the sake of dividends, this can have massive consequences for employees in the private sector. For the employee, a move with family uprooting may become necessary, or the repayment of a loan may be at risk. The large investors do not have an eye on individual circumstances and focus on the precise target for action – the computable and clearly measurable, which can be the dividend, for example. With many stakeholders, the situation quickly becomes complex, and there are likely numerous conflicts of interest. In such complex cases, it is easier and quicker to decide based on a measure, such as the dividend, than on the essential aspect of good cooperation, which has the common interest of society in mind. The fact that the wealthier party prevails in such situations illustrates its power. But his decision-making power is also reflected in the products and in the assigned locality of the investments. Things are produced that wealthy people consider promising and made in places that investors trust. Thus, we surround ourselves with goods that rich people declare profitable. By now, for example, almost everyone holds the “modern scepter” of a business manager, a smartphone, in his or her hand every day and makes decisions with the simplest of swiping motions. Or it goes one step further: The content provided on the smartphone determines the user’s behavior.

Operating against each other prevents good togetherness

For my understanding of togetherness, Hannah Arendt’s description is influential. She states in her book “The human condition”: “This revelatory quality of speech and action comes to the fore where people are with others and neither for nor against them – that is, in sheer human togetherness. Although nobody knows whom he reveals when he discloses himself in deed or word, he must be willing to risk the disclosure, and this neither the doer of good works, who must be without self and preserve complete anonymity, nor the criminal, who must hide himself: from others, can take upon themselves.” Arendt thus emphasizes the special meaning and form of togetherness and distinguishes it from being for and against.

As a child, I became familiar with a conception of justice based on equality and fairness. Chocolate had to be shared with each other in equal pieces. But I no longer find this reflected in our way of doing business. For example, tenders are primarily about submitting the lowest price bid to win a deal. Clients often argue with the need to save money and the need for efficiency to award the contract to the cheapest bidder. In my view, this course of action is wrong. Because no adequate attention is paid to ensuring that prices are realistic and fair. It also fails to consider whether the desired quality can be provided at all under the offered conditions.

An economical use of resources in business, however, combined with the outside appearance of a lot of work for the customer, is a method to be economically successful. This is basically cheating the customer. Something different is practiced in the enterprise than presented on the exterior. Maximizing one’s profit is opposed to minimizing giving away, which is declared to the outside world as “competition.” In this competition, the masters of maximization are courted. They have comprehensive possibilities of shaping things that go far beyond their original scope of shaping things. The goal of getting rich and maximizing one’s wealth is propagated. On the other hand, there is a struggle for the price on the market. The winner is the cheapest one, who offers the minimum. In this form, it is a min-max economy that depends on playing off against each other. As good as our economy overcomes borders and brings different cultures into exchange, the incentive to accumulate economic capital is bad because this creates and reinforces inequalities. In the end, money cannot distinguish good from evil.
For example, one area where commercialization is big and is in contrast to a clearly qualitative agenda is the health care system. The evaluation of which treatment is good for the patient is increasingly under economic pressure. Through the DRG system, diagnoses are converted into money. Money is then distributed, inevitably leading to a basement effect as flat rates for individual diagnoses are assessed in the existing competitive system. Accelerating the process is the unrepresentative selection of hospitals based on which the per-case flat rates are determined, i.e., particularly cost-conscious hospitals. Although a correction in the calculation puts a damper on unrestrained competition, this is not an antidote to the quantification of a qualitative task: the treatment of a patient on the basis that each person is unique. Thus, there is objectification and distance from the humanistic nature of medicine. Other examples can be found in areas where cultural and social capital are essential.

Using the Mean(s) for Good Together

But why not take the middle path? Use the mean as a guide when awarding projects? The mean value seems to me to be an effective means of avoiding the basement staircase effect. This becomes concrete in public tenders, for example: Among at least three offers that meet the minimum requirements, one could then select the offer that is closest to the mean value and not, as is usually the case, focus only on the cheapest. However, this approach also means being satisfied with a medium income, a medium apartment size, a medium wealth. It doesn’t have to be more than that. Thus, the exact is kept within limits, determined by all comparable and measurable units. Wealth is a heritage of the past. If they are the focus of action, they set the conditions for action in the now and limit the freedom to shape the future. If we give up these limits, we open up more possibilities for shaping our future in a qualitatively good way, for which we should undoubtedly use economic means. The fact that the state, in close cooperation with the private sector, intervenes massively in everyday life in the case of insolvency and poverty is, in my view, a sign of how strongly the myth of money (see, for example: Yuval Noah Harari, “A Brief History of Mankind”) and how weakly our sense of community is anchored in our society.

A society that respects the uniqueness of everyone cannot, in my view, have as its goal the incitement of competition among all people in order to accumulate economic capital. This is a powerful and universal tool in a society, but the unconditional accumulation of money as a goal of action in no way ensures good, life-friendly coexistence. Or as Otl Aicher puts it in his essay “erweiterungen des Ichs”: “commercialism is making for the sake of making, an amputated operativity cut off from the dimension of meaning in order to optimize the operating result.

On this premise, the mitigation of hypersolvency and the equalizing redistribution of economic capital yield the sense that preserves society. One approach to practice this is an effective wealth tax, which is based on the mean value. It is incredibly essential to use our various types of wealth to shape our future well together.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.