Sam Pizzigati puts the case for fairer wealth distribution

The US writer and activist has long argued income should be capped – and he is newly optimistic

For most of his adult life Sam Pizzigati has been arguing the merits of an idea – that income and wealth should be capped.

It is a thought that tends to make some people froth at the mouth at its mere suggestion. But this week the former writer for several American trade union journals, author of books on money and greed, and associate fellow at Washington's Institute for Policy Studies, was in Dublin at a Claiming our Future event, arguing the case for the idea that greater equality results in greater happiness for the greatest number.

“Societies function best when we have more equitable distributions of income and wealth. Any time we veer from that, any time we let wealth concentrate, any time we let income concentrate, we’re asking for trouble,” he says.

In recent years, many western societies have indeed veered towards a greater gap between those at the top and those further down the income chain: the harvest of neo-liberal economic policies and light-touch regulation.


Maximum wage

Almost 20 years ago (when Thomas Piketty was an assistant professor at MIT and little known outside the circles of academic economic theorists), the

New York Times

was describing Pizzigati as “the chief proponent” of the idea of a

maximum wage

, an idea that, even he acknowledged, was unlikely to gain much traction in post-Ronald Reagan, post-George Herbert Walker Bush America where neo-liberal economic thinking held sway, even though Bill Clinton had taken over at the White House.

He thinks the tide may be turning. Sitting in an armchair in the faux library-cum-senior common room setting of the Library Bar of Dublin’s Central Hotel, the soft-spoken warrior for fairness outlined his philosophy.

“A decent society is one where people can feel fulfilled. Where people, if they work hard, can have a guarantee of moving on in life. Where there’s a sense of fairness in society, where there’s not a great deal of exploitation in society,” he said. “All those things add up to social decency. We know from history, that we have social decency, or we approach social decency, when we have a more equitable distribution of income and wealth.”

Achieving that, in Pizzigati's view, involves tackling the practices, power and influence of big companies: "The modern corporation is the engine of inequality in our world," he says.

He describes what has happened in the US in the past half century or so as an unholy alliance between a few at the top and a section of the many lower down.


“Conservatives in the

United States

have essentially made a brilliant strategic move. The corporate class, which does not have a mass political base, lined up with the conservative cultural base and that gave them a mass base. So you had, at the top of this coalition, the corporate elite in the United States, and you had, as the grass roots, cultural conservatives – on abortion, gun control, taxation . . . on a number of other issues. It’s a blocking minority and it’s made all the difference.”

This social and political movement, which manifests itself in the Tea Party organisation, the ultra conservative wing of the Republican Party, and lobbying groups such as the National Rifle Association, is bankrolled by millionaires and billionaires and impacts on the democratic process.

“Look at the amount of cash that the billionaire class is putting into elections,” he urges. “So when people see on their TVs night, after night, hour after hour, campaign after campaign ad on one side, that’s going to skew the deck.”

Despite this he thinks he can win the argument with ordinary Americans, partly by showing that his suggestions are rooted in how America used to be.

Strong regulation

“If you look at the United States in the middle of the 20th century, a time when we had an activist government, we had strong regulation of the economy. . . those two decades after World War Two were the golden age of the American middle class,” he says.

“The United States went from a nation that was two-thirds poor before World War Two to a nation that was two-thirds middle class. Meanwhile, the richest at the top came much, much closer to the rest of society.”

President Roosevelt proposed a 100 per cent tax rate in 1942 for anyone earning over $25,000 (about $375,000 in today’s money) and in the Eisenhower 1950s, the top tax rate on income over $400,000 was 91 per cent, says Pizzigati.

The top rate today is 39.6 per cent although, as he points out, some billionaires including former Republican presidential candidate Mitt Romney pay as little as 13 per cent.

“Every society sets limits, in fact civilisation is about limits. We tell motorists you can only drive so fast on the highway; we tell developers you can only build so high; we tell hunters you can only shoot so many ducks and we preserve wildlife. We need to set limits on income and wealth as well.”

Social science research shows that in more equal societies, people are happier, live longer and there are fewer social problems, including murder.

He believes recent legislative moves in California, Rhode Island and Washington, focussing on illuminating the gap between top corporate pay and the wages of ordinary employees, suggest the idea of capping income and wealth is coming onto the mainstream political agenda. So is there hope in a US that many see as dominated increasingly by shrill intolerance and extreme views?

“I’m an optimist!” he says cheerily. “I see a number of hopeful signs. Essentially the inequality in the United States has become so extreme that ideas that once seemed at the margins are creeping their way into conventional political discourse, like the idea of the maximum wage.”