Against Inequality The Practical and Ethical Case For Abolishing The Superrich Tom Malleson Full Chapter
Against Inequality The Practical and Ethical Case For Abolishing The Superrich Tom Malleson Full Chapter
Against Inequality The Practical and Ethical Case For Abolishing The Superrich Tom Malleson Full Chapter
T OM M A L L E S O N
Oxford University Press is a department of the University of Oxford. It furthers
the University’s objective of excellence in research, scholarship, and education
by publishing worldwide. Oxford is a registered trade mark of Oxford University
Press in the UK and certain other countries.
DOI: 10.1093/oso/9780197670392.001.0001
Acknowledgments ix
Introduction 1
1. Is It Feasible to Reduce Inequality? Income Tax and Market
Regulations 17
2. Is It Feasible to Reduce Inequality? Wealth Taxes and Tax Havens 55
3. Should We Aim for High Taxes and Low Inequality? Weighing
Costs and Benefits 93
4. Do Rich People Deserve Their Income? 136
5. Do the Skilled and Hardworking Deserve More Than Others? 164
6. Does Voluntary Exchange of Private Property Justify Inequality? 198
7. How Much Inequality Is Acceptable? The Case for Maximum
Limits on Income and Wealth 218
Conclusion 248
Notes 259
Bibliography 289
Index 325
Acknowledgments
Elon Musk, the CEO of Tesla and the richest person in the world, currently
possesses $270 billion dollars.1 The median American worker would have to
work for seven and a half million years to earn this much. To put the matter
the other way round, the total amount of money that a typical American will
earn in their whole life—after, say, 40 years of work—is the same as would
be earned by Musk in just 14 minutes.2 During the first six months of the
COVID-19 pandemic, 250,000 Americans died and 20 million lost their jobs
in the worst economic crisis since the Great Depression, yet the country’s
614 billionaires saw their wealth actually increase by a third, from $2.95 tril-
lion to almost $4 trillion (Manjoo 2020). Across the world, the richest eight
individuals possess the same amount of wealth as half the entire planet—
three and a half billion people (Oxfam 2017). Never across the entire expanse
of human history has such a level of inequality been seen before.
In the rich, economically developed countries, the past 30 years have
witnessed a general worsening of inequality. In some countries, such
as Denmark and France, inequality has increased only a small amount,
while elsewhere, such as the United States and the United Kingdom, it has
exploded (Piketty 2014). In the Anglo-American countries, inequality is now
at levels unseen for 100 years. In the United States, the Gini coefficient—i.e.,
the percentage of total income that would need to be redistributed to ob-
tain complete equality—is 42% (the most equal countries in the world by
this measure are Iceland and Slovenia, at about 26%, and the most unequal
is South Africa, at 63%) (World Bank 2017). From 2010 to 2015, the richest
1% of the American population received (before tax) 20% of the country’s
income (Piketty 2020, 421). In 2015, the top 0.01% had an average income
of $31.6 million, nearly 2,100 times more than a minimum-wage worker’s
average income (Pizzigati 2018, 32). According to economic historians, this
inequality is worse than that of the Roman Empire—where at its height in
the middle of the second century, the top 1% controlled 16% of total in-
come (Scheidel and Friesen 2009, 81)—and also worse than in Russia in the
years leading up to the world’s first anticapitalist revolution (where the top
Against Inequality. Tom Malleson, Oxford University Press. © Oxford University Press 2023.
DOI: 10.1093/oso/9780197670392.003.0001
2 Against Inequality
middle third have 23 seats; and the richest third have 71 seats.6 (The top 1%
would have 20 seats all to themselves [Piketty, Saez, and Zucman 2018]).
Parliament of Income
Parliament of Wealth
Bottom Third = 0%
Middle Third = 8%
It is useful to keep in mind the big picture: that the rich are so extremely
wealthy that redistributing even a tiny portion of their wealth could dra-
matically change the world. For instance, if we redistributed merely 2% of
the wealth of the world’s billionaires, thus leaving 99.99997% of the world’s
Introduction 5
doctrine that what matters is not inequality per se but poverty is referred
to as “sufficientarianism.”13 In Harry Frankfurt’s (1987, 21, emphasis added)
words, “Economic equality is not, as such, of particular moral importance.
With respect to the distribution of economic assets, what is important from
the point of view of morality is not that everyone should have the same but
that each should have enough. If everyone had enough, it would be of no moral
consequence whether some had more than others.”
Conservatives frequently argue along analogous lines: if poverty is the
problem, then the natural solution is economic growth. If poverty is what
really matters, and the poor are getting richer (even slowly), then we can con-
clude that things are getting better overall; it becomes irrelevant if the rich
are becoming far richer (e.g., Lucas 2004). The implication of such a perspec-
tive is that we can simply ignore the skyrocketing accumulations of the rich.
In other words, to the extent that the focus is on poverty, questions about
the legitimacy of the superrich—Is their income deserved? How does their
wealth impact the rest of us?—simply fall off the radar. Such a conclusion is
presumably deeply comforting to rich people.
On the other side of the debate, egalitarians strenuously disagree that ine-
quality is unimportant. They typically view inequality as a distinct and inde-
pendent problem that cannot be reduced to poverty.
The first and perhaps most important issue that egalitarians point to is
that inequality risks undermining political democracy. The richer that elites
become, the more they are able to use their wealth to lobby government;
promote their favored politicians; hire armies of political activists; pur-
chase newspapers, TV channels, and think tanks to amplify their views; and
otherwise extend their political power (Gastil and Wright 2019). Not only
does this undermine the foundational principle of democracy—equal influ-
ence over government; it creates a vicious cycle whereby economic power
begets political power, which in turn can be used to shape the market in ways
that allow rich people to become even richer, creating a spiral of mutually
reinforcing power (Reich 2015).14
For one example, in the United States, where it is well-documented that
the rich have come to have more and more disproportionate political influ-
ence (Gilens and Page 2014), it is noteworthy that the tax system has been sig-
nificantly reworked to benefit them. Today the tax rate that is legally applied
to capital income (i.e., income from capital assets like stocks, bonds, and real
estate) is substantially lower than the tax rate paid by regular working people
on their income. Indeed, in 2007 the average tax rate for the richest 400
8 Against Inequality
households was only 16.6%, while it was 20.4% for taxpayers in general (Stiglitz
2012, 72). The billionaire Warren Buffett famously pays a lower tax rate than
his secretary (ABC News 2012). An even graver concern is the ways in which
the rich have been able to use their political clout to stymie desperately needed
environmental regulations (minimizing carbon taxes, maintaining enormous
fossil fuel subsidies, removing the United States from the Paris Accords, etc.).
Economic inequality risks propelling democracy into plutocracy.
A second problem with inequality is that it arguably undermines the widely
cherished ideal of equal opportunity. In unequal societies, children living on
different sides of town, sometimes only a mile apart, grow up in effectively
different worlds, with different possibilities and horizons of opportunities
before them (Chetty, Hendren, Kline, Saez, et al. 2014). A superrich family
may own multiple vacation homes scattered around the world, a private jet,
indoor swimming pools, and employ cooks, cleaners, gardeners, private
tutors, etc., while a poor family down the street may live in a dilapidated,
rat-infested, crumbling apartment block with an empty fridge and lead in the
water, shivering from an inability to pay the heating bill. Indeed, economists
find a clear correlation between increased inequality and reduced social
mobility: the greater a country’s inequality, the less opportunity there is to
advance (Andrews and Leigh 2009; Chetty, Hendren, Kline, and Saez 2014;
Kearney and Levine 2014). Not only do the poor have fewer opportunities
to live good lives, but they have less opportunity to live at all: if you happen
to live in Englewood, a poor neighborhood in Chicago, your life expectancy
will be an astonishing 30 years shorter than if you were lucky enough to live
across town in the richer Streeterville (Lartey 2019).
As inequality worsens, so too does the amount of social friction. Eventually
the very fabric of the community can start to tear. The bottom looks up with
anger and resentment while the top looks down with contempt and mockery.
In such conditions the cauldron of social life risks boiling over. Witness
the riots in 2007 in the poor Parisian suburbs, as well as those on British
highstreets in 2011. In both cases, poor, often racialized youth rioted, burned
bus stops, broke store windows, and stole merchandise, such as expensive
sneakers. Though there was undoubtedly a range of causes of these riots—
racial ones in particular—the economic factors were clearly important too.
When asked, the explanations given by the rioters were typically those of re-
sentment of police brutality, feeling excluded from mainstream society, and
the overarching frustration of being continually told by a materialistic so-
ciety that the good life was the rich life, while simultaneously being denied
Introduction 9
any real possibility for achieving such riches (Abbas 2011; Equality Trust
2012; Phillips 2015). Countries with the most extreme inequality tend to have
little “community” to speak of, if what we mean by community is neighbors
sharing a similar lifeworld and interacting with trust and in peace; what they
have instead is perpetual, simmering class conflict, which can at any moment
violently explode. In South Africa, one of the most unequal countries in the
world, the rich often live in gated communities, behind barbed wire, with
patrolling security guards, leaving their homes only in bulletproof cars, fre-
quently living in fear of armed robbery (Govender 2017). In Brazil, another
extremely unequal country, so-called lightning kidnappings have become in-
creasingly common, where rich people are kidnapped at gunpoint, taken to
an ATM, drained of their cash, and then released (OSAC 2012).
We will see that there is extensive empirical evidence demonstrating that
inequality tends to undermine social solidarity, making people less generous
and less willing to help their neighbors, which not only worsens the quality
of social life but also undermines the cohesion necessary for collectively
funding a welfare state. Inequality also dampens civic engagement, fuels po-
litical corruption, worsens mental health, and increases a variety of crimes
(including property crime and homicide; see Chapter 3).
For all of these reasons, egalitarians disagree that poverty is the only
problem of economic distribution. Inequality matters too. Indeed,
egalitarians view the conservative position as not merely incorrect in terms
of the importance of inequality, but as deeply immoral in its apparent deni-
gration of the foundational ideal of equal human worth. The basic egalitarian
intuition is something like this: All human beings share the same funda-
mental parameters of existence—we are all born on this small planet in a re-
mote corner of the Milky Way, living for a brief moment before perishing
forever. Having one and only one life to live makes each life equally pre-
cious and entitled to equal concern. Each and every one of us has a life that
matters. Therefore, all of us should have at least roughly similar access to the
conditions necessary for living good and flourishing lives. To be denied such
equal access is to be denied our birthright of equal worth. For egalitarians
committed to this basic moral position, many of the conservative arguments
about deservingness, merit, self-ownership, incentives, tax havens, and in-
vestment rates appear to be little more than rationalizations and subterfuge,
because egalitarians simply cannot accept that the vast inequalities in life
opportunities existing today are truly compatible with a belief in the equal
moral worth of all.
10 Against Inequality
Clearly the debates over inequality are fraught. Which side is right? That
is a difficult and complex question with no easy answer. If this book, through
careful examination of both sides of the argument, is able to advance our
understanding of these issues by even a small amount, it will have been well
worth the effort.
Let me lay my cards on the table. Although the moral issues are compli-
cated, and some of the empirical data is difficult to interpret clearly, the bal-
ance of evidence leads me to conclude that the conservative justifications of
inequality are, ultimately, unconvincing and should be rejected.
In its broadest form this book reaches two major conclusions. First, not
only is it eminently feasible to reduce inequality, but the benefits of doing so
outweigh the costs, likely by a lot. Practically all of the economic concerns
with high taxation boil down to one thing: a worry about growth rates meas-
ured in terms of aggregate GDP. The need for never-ending economic growth
is the siren song of our age. Yet I hope to convince the reader that such costs
are overblown. On the one hand, the economic costs of imposing high levels
of taxation are very unlikely to be catastrophic (due to the growth-promoting
potential of redistributive public spending); on the other hand, the serious-
ness of the ecological crisis—the existential game-changing nature of the
crisis—means that reduced growth of output is not obviously a bad thing,
and may in fact be a good thing (at least for the rich countries, and at least
to the extent that it can be disconnected from unemployment and economic
insecurity).
The benefits of high taxes and inequality reduction are truly massive, and
much more significant than is commonly appreciated. We will explore a
number of important, though perhaps secondary benefits, such as reducing
government debt and enhancing economic stability and employment (after
all, the real danger of reduced growth is instability and unemployment, not
reduced GDP per se). Beyond this, there are at least five areas of enormous
benefit: meeting the urgent needs of the world’s poorest, mitigating climate
catastrophe, protecting democratic equality, reducing the threat of far-right
populism and fascism, and expanding equal opportunity. Such benefits are
difficult to overstate.
Furthermore, one of the major ideas of this book is that although the
kind of reforms that we need to reduce inequality are substantial, they are
perfectly feasible within the broad parameters of some kind of regulated
capitalist system. No revolution is required. Even though I am personally
sympathetic to the notion that the long-term goal should be to move beyond
Introduction 11
individuals morally deserve the income they receive in the market. Chapter 6
engages the Libertarian Argument by analyzing the issue of private property
and whether the right to own, transfer, and exchange such property naturally
justifies inequality.
The underlying ethical argument of this book is that people, and especially
rich people, do not morally deserve their income because such income does
not mainly derive from anything the individual does but is much more due
to what I call the vast “understructure” of other people’s prior labor. Beyond
this, I will argue that we should also reconsider the standard assumption that
individuals morally deserve rewards for their talents and efforts, because
when we consider them closely we see that in fact talent and effort are them-
selves rooted in all kinds of luck, which some individuals happen to possess
far more than others. The conclusion is that we should entirely abandon the
commonplace notion that people deserve economic rewards because of the
contribution they have made, since all of our abilities to contribute are always
inextricably dependent on the fortune of genes and circumstance. This is in-
deed a radical conclusion as it flies against the common assumptions of most
people. Yet I will try to persuade the reader that such a conclusion actually
follows quite straightforwardly from a basic belief in fairness—that it’s wrong
for some people to have significantly better lives than others due to factors
that are beyond their control.
Furthermore, this deep fact—that each of us is a unique product of
random combinations of genes and social circumstance—is true about
every single one of us. This uniqueness is one of the core respects in which
all human beings are the same. All of us, equally, live finite and unique
lives. That is the heart of what makes our lives equally precious and of equal
moral value. And it’s this equality of moral value—that your life matters
and is just as important as mine—which explains why, ultimately, the ec-
onomic things that each of us get in our lives (our income, public serv-
ices, etc.) should be roughly equal (though of course not completely equal
since different people, with diverse bodies and circumstances, will require
different amounts of resources to achieve similar levels of flourishing).
We should all get roughly the same amount because what really matters
is not any empirical fact about what any of us are able to do (since that is
arbitrary) but the moral fact of who we are: equal members of the human
family. Another way to say this is that we should talk much less about what
people “deserve” and much more about what they “need” to live good and
flourishing lives.16
Introduction 13
ideal ratio that makes perfect sense in all contexts. A threshold of 10:1 is no
more sacrosanct than that of 5:1 or 15:1. Nevertheless, that does not obviate
the importance of establishing some definite threshold. Notice that in other
domains we necessarily and successfully impose many limits on human
activities—speeding limits, minimum wages, campaign contribution limits,
minimum age of consent—all of which are vitally important, even though
the exact threshold chosen invariably remains somewhat arbitrary. We do
not say that we must forgo establishing an age of consent because the choice
of 18 years is somewhat arbitrary (Why not 17 or 19?), because we recognize
that having some threshold is more important than being able to prove that
there is a perfectly “right” one, which likely doesn’t exist anyway. The argu-
ment is analogous for the case of maximum income and wealth. Although
there will inevitably be strong disagreement as to what exactly the threshold
should be, the importance of establishing some threshold is, I hope to show,
compelling.
A central purpose of this book, therefore, is to insist on the importance of
answering the following all too rare questions: What threshold for maximum
income and wealth do you think is acceptable? Is a 10:1 income ratio com-
patible with democracy and social justice? What about 50:1? 100:1? 1,000:1?
The reason such questions matter is that as inequality increases, the possi-
bility of equal access to the good things in life, as well as the meaningfulness
of our democracy, decreases. Presumably everyone would agree that a so-
ciety in which the top 1% owned 100% of the income and wealth, and eve-
ryone else owned nothing would be unacceptable. Where, then, should we
draw the line? A central goal of this book is to encourage lively conversation
about what this threshold should ideally be. Such questions should be asked
by each of us; they should be debated around the dinner table, in community
meetings, on talk shows, and, of course, in the chambers of government.
The book is structured to start with the feasibility questions before moving
on to the ethical questions. Philosophers will wonder why it is not the other
way around. The answer is that most readers’ main concern with egalitari-
anism is likely to be practical—that reducing inequality doesn’t seem partic-
ularly feasible—so it makes sense to deal with this concern first. Moreover,
the ethical chapters delve deeply into some of the complex philosophical
debates, and since those debates may not be to everyone’s taste, they are not
forefronted.
Three chapters investigate the empirical economic evidence, and four
engage in deep philosophical debates, yet despite the disparate literatures
Introduction 15
Since current levels of economic inequality are highly racialized and gen-
dered, economic justice issues are inherently issues of racial and gender jus-
tice too. Indeed, one of the most important ways to fight for racial or gender
justice is to fight for economic justice. Doubtless, the most marginalized
groups in society require a variety of different kinds of reforms to improve
their quality of life—most of which are beyond the scope of this book.
However, one of the most crucial things that they all require is being lifted
from the bottom of the economic hierarchy and reducing the oppression
from the top—and to those issues this book has much to say.
1
Is It Feasible to Reduce Inequality?
Income Tax and Market Regulations
Many people are sympathetic to the idea that inequality is too great and
should be reduced. However, there is also widespread skepticism about
whether it is possible to do so. These first chapters examine the two most
common practical justifications of inequality. This chapter and Chapter 2 ex-
amine the idea that it’s simply not feasible to reduce inequality; Chapter 3
examines the idea that even if it were possible, doing so would be a bad idea
because the costs of redistributive taxation would outweigh the benefits.
Before beginning it will useful to clarify in our minds the major
components of what generates inequality in the first place. Early in life, in-
equality is generated through different amounts of inheritance. Throughout
one’s working years, inequality can be compounded by labor income. Over
time, inheritance, labor income, and capital income (i.e., income earned
from the ownership of stocks, bonds, etc.) can further accumulate as stocks
of wealth, which are typically reinvested and tend to accumulate ever fur-
ther. Finally, all of these components will be impacted by the tax and transfer
system.
Tackling inequality, therefore, will require addressing each of these major
areas. Accordingly, this chapter proceeds by investigating the major tools
available to us for reducing income inequality, in particular, income tax (on
labor and on capital) and market regulations (particularly those that are
crucial in the shaping of the labor market). In the next chapter we examine
major tools for reducing wealth inequality: inheritance tax and wealth tax
(as well as the related issue of tax havens). For each of these tools, we will
ask how feasible it is for governments to use them in order to reduce ine-
quality, always striving to steer clear of the twin dangers of naïve optimism
(“It’s easy to fix this!”) on the one hand and apathetic cynicism (“Nothing can
be done!”) on the other. We will see that in some cases we already have good,
concrete examples of what can be done. In other cases, we don’t yet have good
Against Inequality. Tom Malleson, Oxford University Press. © Oxford University Press 2023.
DOI: 10.1093/oso/9780197670392.003.0002
18 Against Inequality
examples, and so the task is to envision, carefully and cautiously, systems that
would likely work (e.g., by learning lessons from unsuccessful examples).
The first section analyzes the possibility of high income taxes; the second
analyzes the major labor market reforms that could reduce income ine-
quality; and the third briefly describes a handful of other important tools for
reducing inequality.
One important caveat is in order before beginning, which is that questions
of feasibility have at least two main dimensions (Wright 2010). On the one
hand there is the question of achievability—asking about the political and
social forces arrayed for and against the proposal in question. On the other
hand, there is the question of viability—asking whether the institutions, once
successfully established, would actually work as intended. It is this second
dimension of feasibility that concerns us here. The question of achievability
is of course vital, but since it is inherently a context-specific question (what is
achievable next year in, say, Sweden is very different from what is achievable
in the United States), it is one that we must bracket here; whether progressives
are powerful enough to get strong egalitarian policy passed by government
will depend completely on the specific country and timeframe in question.
Percentage
60 60
40 40
Effective
20 Effective 20
0 0
1920 1940 1960 1980 2000 1920 1940 1960 1980 2000
60 60
40 Effective 40 Effective
20 20
0 0
1940 1960 1980 2000 1900 1920 1940 1960 1980 2000
Top marginal rates in the United Kingdom Top marginal rates in the USA
ρ = 0.980 ρ = 0.864
100 100
Statutory
80 Statutory 80
Percentage
Percentage
60 Effective 60
40 40
Effective
20 20
0 0
1940 1960 1980 2000 1920 1940 1960 1980 2000
Figure 1.1 Top statutory and effective income tax rates on the top 0.01%; 0.05%
for the Netherlands and United Kingdom (Scheve & Stasavage, 2016, 61).
today is mainly due not to a drop in individual tax rates but to the collapse in
corporate rates [Saez and Zucman 2019e].) Moreover, when we look at taxes
more broadly (combining income tax with poll taxes, estate taxes, and, most
important, the corporate tax) we see that the total federal effective tax on the
richest 0.01% in 1970 was a whopping 74.6% (Piketty and Saez 2007, 13). For
every dollar a millionaire made, in other words, they paid 74.6 cents to the
Income Tax and Market Regulations 21
state. This is the important point: although infrequent, high taxes are not at
all unprecedented, even in the United States.3
In the United Kingdom during the 1950s and 1960s the top marginal rate
was 90%, while the effective rate (in 1970) for the top 0.05% was estimated to
be 69.2% (Piketty and Saez 2007, 18). This is a very high rate indeed. To see
this, recall that the highest marginal rate doesn’t apply to all your income, but
only to the top portion. To give a simplified example, if one has a total income
of £300,000, and there is a 30% tax on the first £100,000, a 70% tax on the in-
come £100,000–£200,000, and a 90% tax on the income £200,000–£300,000,
the overall effective tax rate works out to 63%. In other words, the fact that
the British effective rate was so high—69%—implies that rich people really
were paying their taxes. The 90% statutory rate was working because, unlike
in the United States, these high rates were not undermined by deductions
and loopholes. Indeed, the effective rate of total taxes (income tax, estate tax,
and payroll tax) on the top 0.05% in 1970 was a staggering 91.7% (Piketty and
Saez 2007, 18).
Another good example of successful implementation of high levels of tax-
ation is Denmark. The historical zenith of the marginal income tax rate in
Denmark was almost 100% in 1967 (Atkinson and Søgaard 2013, 18). Still
today, high taxes are common. For instance, the “participation tax rate,”
which is the effective average tax rate on labor force participation due to in-
come taxes, payroll taxes, consumption taxes, and means-tested transfers,
stands at an impressive 87% (Kleven 2014). More broadly, if we look at total
taxation—i.e., the amount of total revenue that the government taxes from
all sources—we see that Denmark (along with Sweden) has had the highest
level of tax in the world over the past 40 years; total taxes peaked in 2014
at a massive 48.53% of GDP, meaning that the government, through all its
taxes, successfully collects roughly half of the entire economic output of the
country (OECD 2018b). Of course, these taxes do not all fall on the rich, but
large amounts clearly do.
Overall, the income share of the Danish top 1% fell quite consistently from
1870 (when they received about 20% of the country’s income, the same as
what currently happens in the United States) to receiving only 6.4% in 2010
(see Figure 1.2; Atkinson and Søgaard 2013, 13). This is a powerful illustra-
tion of what is possible, and a compelling rebuttal to those who believe that
intentional, planned inequality reduction is impossible (cf. Scheidel 2017).
Along with Denmark, arguably the best example of high taxation is that
of Sweden. For 50 years, from the 1940s to the 1980s, the top statutory rate
22 Against Inequality
Percentage Percentage
60 60
50 50
40 40
30 30
20 20
10 10
0 0
1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
Top 10 percent Top 5 percent Top 1 percent
Figure 1.2 Top income shares in Denmark 1870–2010 (Atkinson and Søgaard
2013, 12). Note: The vertical line in 1970 indicates the change from family to
individual taxation.
was over 70%. When one combines the income tax paid at the state and local
level, plus social security contributions paid by employees, the top marginal
tax rate reached 85% in the late 1970s (subsequently falling to about 55%
by 2009 [Stenkula, Johansson, and Du Rietz 2014, 177]). As seen in Figure
1.1, Scheve and Stasavage (2016) estimate the effective income tax rate in the
1980s for the top 0.1% to be roughly 80%. Such rates helped Sweden attain,
by the mid-1970s, the lowest level of inequality of any modern rich country
that we have data for (Piketty 2014). For example, if you were a business
owner in Sweden in the early 1970s, paying yourself a salary out of dividends,
you would have been compelled to pay 52% corporate tax, in addition to 75%
dividend tax (the same rate as was imposed on top labor income), plus an
additional 1.2% wealth tax—all of which meant that your total business tax
bill would add up to about 95% of profits (Henrekson 2017). In terms of total
taxation by the government, Sweden holds the record for the highest level of
overall taxation that the rich countries have ever seen, at 49.48% of GDP in
1987 (OECD 2018b).4
Over the past 30 years, tax rates have dropped in many places with the
spread of neoliberal ideas and the increasing mobility of businesses put-
ting downward pressure on corporate tax rates. Yet even today there are still
good examples of high tax rates. Looking at the top effective marginal rate
(i.e., the total tax paid on the last dollar earned by a high-income worker,
Income Tax and Market Regulations 23
The basic lesson from the past 30 years of tax research is that tax changes
have a clear and unambiguous impact on avoidance5 but an unclear and
ambiguous impact on real effects (such as effort, amount of hours worked,
and level of private investment [Diamond and Saez 2011; Goolsbee 2000;
Meghir & Phillips 2008; Saez, Slemrod, and Giertz 2012]). So while it is un-
clear whether, or to what extent, the wealthy respond to high taxes by actually
working less or investing less (we analyze the existing evidence in Chapter 3),
24 Against Inequality
there is no doubt that they clearly do try to avoid and evade taxes: they try to
find loopholes, they arrange their affairs so that their income comes in a form
which is taxed less, they shift the timing of when their income is realized—
in short, they do whatever they can to reduce their tax payments as much
as possible (Auten, Splinter, and Nelson 2016). Indeed, in many cases, the
loopholes are so large, and the evasion opportunities so straightforward,
that the rich can easily avoid paying a lot of tax. Hence the billionaire Leona
Helmsley’s famously candid declaration, “We don’t pay taxes. Only the little
people pay taxes” (quoted in Sweeney 2015, 6).
What enables tax avoidance and evasion? There are three main factors.6
The first is the extent of third-party reporting, meaning the extent to
which one’s income is directly reported to the tax authorities by a third party,
such as an employer, a bank, or a financial institution. It is widely known
that tax enforcement is excellent whenever third-party reporting is in place.
And conversely, when there is no third-party reporting (e.g., in the case of
self-employed earnings or small cash payments), tax evasion will typically
be endemic. In the United States, for instance, a tax compliance study by the
Internal Revenue Service (IRS) in 2012 found that the evasion rate for per-
sonal income is 56% when there is “little or no” information reporting, yet
it is less than 5% when there is substantial third-party reporting (Kleven,
Kreiner, and Saez 2016). Kleven et al. (2011) find similar results for Denmark.
The upshot is that there tends to be little tax evasion for working-class
and middle-class people because their income comes almost entirely from
their employers, who automatically report such income. (The exception is
the self-employed, where avoidance is much more common.) The rich, on
the other hand, frequently acquire their income from a variety of different
sources. The portion of their income that comes from salaried employment,
say, as upper management in a firm, will be third-party-reported and so not
evaded. But other parts of their income may come from a variety of other
sources, such as interest payments, dividends, and appreciation on mutual
funds and derivatives, which may not be subject to rigorous third-party re-
porting, allowing greater scope for tax evasion.
So the first step in preventing avoidance is instituting rigorous third-party
reporting for all income. This already exists for most people—those whom
Helmsley calls the “little people”—but it needs to be extended to other types
of income, for instance, by having banks and money managers compelled by
law to report the income of their clients directly to the tax authorities. There
would clearly be significant political opposition to this from the rich, but
Income Tax and Market Regulations 25
there is nothing technically difficult about doing so, since essentially all that
is involved is the forwarding of income statements (which banks and money
managers already possess) to the tax authorities. Indeed, the financial data
that we require already exists: financial institutions already have electronic
records of all their transactions, and wealthy individuals already receive reg-
ular income statements. All that is needed is mandated, regular forwarding
of this information to the public authorities.
The second key factor is the breadth of the tax base (i.e., the extent of in-
come and other assets that are subject to taxation). The more exemptions,
loopholes, and deductions there are, the smaller the tax base. For instance,
if one type of income (e.g., stock dividends) is taxed at a lower level than
other kinds of income (e.g., salary), then upper managers and CEOs will do
their best to rearrange their income so that they get paid more in dividends
and less in salary, and hence pay less tax overall. Such income shifting is very
common among the rich. In the contemporary United States, the top federal
income tax rate is 37%. In reality, however, most rich individuals pay far less
than that. The main reason why is that wealthy people typically own a lot of
capital, and the tax rate on capital income (such as capital gains, dividends,
selling a business) is 23.8%, significantly lower than the tax rate on labor in-
come (Hemel 2019). This is why Warren Buffett pays a lower rate than his
secretary. This is a bizarre fact about the American system that is worth
emphasizing: people who earn their money from laboring pay a significantly
higher tax rate (almost double) than people who earn their money from
investing. This is perhaps the most important loophole to shut. In order to be
able to raise income tax rates to high levels, rich people need to be prevented
from avoiding tax by simply shifting their income into other sources. To ac-
complish this, the essential tax principle needs to be that all types of income—
in particular, income on capital—must be taxed at the same (or at least roughly
similar) levels.7
There is nothing impossible about doing this. For instance, the Tax Reform
Act of 1969 raised rates on capital gains to bring them closer to ordinary
rates. And again in 1986, the major tax reform closed many of the preva-
lent loopholes and eliminated the previously existing gap between tax rates
on capital and those on labor income (Auten, Splinter, and Nelson 2016).
A number of other countries have adopted this principle of taxing all income
at the same rate. For instance, the 2018 IMF report for Denmark finds that
“the combined rate on dividends, including the CIT [corporate income tax]
paid before distribution, reaches 54.8 percent, which is very close to the top
26 Against Inequality
rate on labor income” (64). And look again at the case of Sweden in Figure
1.1: from roughly 1970 to 1990 the effective rate was nearly identical to the
statutory rate—and this at extremely high levels, up to 80%—demonstrating
that it is entirely possible to close loopholes and deductions if the political
will exists to do so.
The third factor which determines the scope of tax avoidance is the ex-
tent of enforcement. In many jurisdictions, there is simply not enough ef-
fort expended to investigate rich people’s tax claims, and the penalties for
defrauding the tax system are far too weak to motivate compliance. In the
United States, for example, the IRS is frequently unable to investigate the tax
compliance of the rich because of insufficient resources. In 2017, the IRS had
only 9,510 auditors—down from over 14,000 in 2010. Indeed, the last time
the IRS had fewer than 10,000 auditors was in the mid-1950s. In 2017 the IRS
audited only 4.4% of returns with income of $1 million or higher, less than
half the audit rate from a decade prior (Sarin and Summers 2019).
Reducing this aspect of avoidance is quite straightforward: simply in-
crease the resources of the tax collectors. Instead of the meager 4.4% of rich
people being audited, I would advocate increasing this to 20%, so that every
rich person knows that they will be audited roughly once every five years.8
That would be effective deterrence; if rich people knew that they wouldn’t
get away with evasion, they would surely attempt to do far less of it. Taking
a step back, it’s remarkable to recall that in no other area do we allow wide-
spread criminal activity to continue simply because we can’t be bothered to
hire sufficient numbers of police officers. Of course, hiring more auditors
will cost more money, but the Congressional Budget Office estimates that
spending an additional $20 billion on enforcement in the next decade would
bring in $55 billion in additional tax revenues, and these estimates don’t
even include the indirect deterrent effects of greater enforcement, which
the Treasury Department has estimated are three times higher. Indeed, it
has been estimated that every extra hour spent auditing someone who earns
more than $1 million a year generates an extra $1,000 in revenue (Sarin
and Summers 2019). In other words, hiring more auditors pays for itself. In
their study of Norway, Alstadsæter, Johannesen, and Zucman (2018) found
that by increasing its enforcement effort, the Norwegian government suc-
cessfully reduced tax evasion and raised tax revenue by 30% (a rise which
was sustained over time). Their conclusion is that “cracking down on eva-
sion by the wealthy can be an effective way to raise tax revenue, increase tax
progressivity, and ultimately reduce inequality” (3).
Income Tax and Market Regulations 27
The other aspect of the enforcement problem is that tax fraud is often
dealt with by little more than a slap on the wrist. In 2018 there were only
517 convictions for tax fraud in the entire United States; that represents a
minuscule 0.03% of rich households (i.e., households in the top 1%). We
don’t know the proportion of rich families that are engaging in tax fraud,
but it is likely to be orders of magnitude higher than this. For instance, in
Norway, in exchange for amnesty, fully 11% of the richest individuals in the
country voluntarily declared they were engaged in tax fraud (Alstadsæter,
Johannesen, and Zucman 2018). This suggests that the current US system is
dramatically failing to catch those who are stealing from the public purse.
Moreover, only 68% of convictions led to prison, and the average sentence
was 17 months. Forty-four percent of offenders were White and 36% were
Black (USSC 2019c). Compare this to more conventional low-level rob-
bery, where 58% of offenders are Black and only 24% are White; 99% of
these offenders were sentenced to prison, and the average prison sentence
was 107 months—six times longer (USSC 2019b). And as if that wasn’t
egregious enough, note that the median loss for tax fraud was $309,000,
whereas it was only $2,100 for robbery. In other words, even though tax
fraud is simply a different kind of robbery (stealing from the public), and
even though it involves much larger amounts of money than conventional
robbery, it is punished far less, likely because it is the wealthy who are
committing the crimes as opposed to suffering from them. The disparity is
similar for the “crime” of selling marijuana, a drug which scientists say is
mostly harmless (Nutt et al. 2007). Here 91% of offenders were sentenced
to prison, with an average sentence of 29 months, which is a sentence
40% longer than for tax fraud (USSC 2019a). Even more dramatically, the
American Civil Liberties Union (ACLU 2013) has found that more than
3,200 people across the country are actually serving life sentences without
parole for nonviolent offenses. Of those prisoners, 80% are behind bars for
drug-related convictions; 65% are African American, while only 18% are
White—evidence of what the ACLU calls “staggering racial disparity.” The
crimes that led to life sentences include stealing gas from a truck, shop-
lifting, possessing a crack pipe, facilitating a $10 sale of marijuana, and
attempting to cash a stolen check (6, 21). There is thus an astounding asym-
metry in how the US judicial system currently treats tax fraud compared
to other nonviolent crimes (particularly those committed by poor and
racialized people). A Black man stealing a chocolate bar risks being thrown
in jail, while a White man stealing a million dollars from the state through
28 Against Inequality
sophisticated tax fraud is more likely to be given only a stern warning (if
not a job offer from PricewaterhouseCoopers).
Opponents of taxes on the rich often discuss avoidance and evasion as if
they are perfectly reasonable behaviors. For instance, Aaron Wudrick (2019)
opposes taxing the rich on the insouciant grounds that, “[w]hen the wealthy
leave a jurisdiction, they’re not paying any taxes there anymore. Trying to
squeeze a little more comes with the risk of getting nothing.” Likewise, Chris
Edwards argues, “Wealth taxes encouraged avoidance, evasion, and capital
flight” (2019, 1). Such cavalier sentiments are extremely common, but note
the implication: that it’s the attempt to levy a tax that is the problem, not the
criminal act of evasion itself, which is portrayed as natural and inevitable. In
contrast, imagine if one were to say “Anti-theft laws simply encourage theft
to be committed underground and in other jurisdictions.” Clearly such a po-
sition would be absurd. It is not the laws that are the problem, but the under-
lying unethical activity.
In my view, society should be clear and forthright that tax evasion is a se-
rious, morally reprehensible crime. As will be argued in later chapters, what
tax evasion really represents is direct robbery from the community—the re-
sult of which is to deprive people, particularly poor people, of their right to
hospital beds, clean classrooms, and affordable homes. Tax theft should be
seen not only as a serious crime but as a more serious crime than petty theft,
personal drug use, or other such nonviolent infractions—and so should
have more serious consequences. Instead of locking up poor Black men for
smoking marijuana and letting billionaires simply pay a meaningless fine for
facilitating mass tax evasion, it would be more sensible for the severity of
consequences to be reversed. What exactly should be done to tax evaders?
That is a difficult question. Some jurisdictions will presumably wish to use
jail as their main source of punishment and deterrence for those convicted of
large-scale tax fraud on the grounds that few things are as likely to concen-
trate the mind of billionaires and their accountants as the prospect of being
dragged out of their office in handcuffs. In my judgment a less carceral ap-
proach would be preferable; this might involve the perpetrator having their
personal wealth confiscated, having their professional employment licenses
revoked, perhaps being declared legally bankrupt, and being required to per-
form several years of community service. (Such an approach would have as
its aim not hurting or punishing, but deterring and disincentivizing, as well
as repairing some of the damage done.)9 Each jurisdiction will have to decide
for itself how best to deal with tax criminals, but the basic moral principle is
Income Tax and Market Regulations 29
hesitation about simultaneously reducing avoidance, which is, after all, a less
controversial policy.
Emigration
That said, it is hard to gauge the relevance of the Young and Varner (2011)
and Moretti and Wilson (2017) studies for our purposes because the tax rates
in question are much lower than the ones we are envisioning here, so there
might be more of an effect than the studies suggest; then again, it is presum-
ably much easier to move out of state than leave the country, suggesting that
there might be less of an effect than the studies imply.
Probably the most powerful evidence comes from two studies by Henrik
Kleven and collaborators. Kleven, Landais, and Saez (2013) studied the lo-
cation decisions of wealthy soccer players and found a large effect of tax
rates. Similarly, Kleven et al. (2014) found large effects of high-income for-
eign workers moving to Denmark in response to a specific tax cut. They
concluded that “the scheme had a very large effect on the number of highly
paid foreigners in Denmark” and that “incentives to offer tax havens for
highly skilled workers are likely to generate tax competition across European
countries. This will require international coordination and the design of
rules regulating such special schemes” (336, 376). However, the authors also
point out that while higher taxes do discourage high-income foreigners from
moving to Denmark, they largely do not encourage Danish natives to leave—
which is important for overall tax capacity, since it’s the native population
that pays the overwhelming share of tax revenue.
In sum, the weight of the evidence does seem to suggest that, without any
preventative measures, a country which introduced very high income taxes
would likely suffer from significant emigration of the rich.
What, then, are some practical policies that could help to reduce the risk
of emigration? Three stand out. First, countries should emulate the kind of
law which already exists in the United States, where the IRS levies an in-
come tax on the worldwide net income of its citizens, regardless of where
they currently reside (Avi-Yonah 2013; Westin 2013). This means that rich
individuals cannot escape US taxes by setting up shop or investing in a for-
eign country.12 With such a policy in place, individuals could escape taxation
only by renouncing their citizenship. Needless to say, that is quite a serious
thing to do, as it means that they forfeit their right to live and work in their
home country, lose the right to visit friends and family without a visa, and
give up diplomatic protections. Nevertheless, some rich people may desire
to do this, so a second important policy would be to impose a significant exit
tax on those renouncing their citizenship (at least for those with substantial
wealth). This too is eminently feasible, as seen by the example of Section 877A
of the Internal Revenue code, which imposes an exit tax on rich expatriates,
32 Against Inequality
so that any wealthy US citizen who moves abroad and renounces citizenship
is subject to a 30% income tax on the unrealized gains of all their assets (as if
they had sold all their property before expatriation [Westin 2013]).
The basic goal of such policies should be to prevent people from leaving
with significant resources. If anyone desires to emigrate, they should be free
to do so, but they should not be able to take with them large amounts of what
I will argue later is really the community’s wealth. Finally, legal policy is not
the only tool that can be useful here. A third policy that government and
progressive people can attempt to use is moral suasion. Progressives can and
should argue that millionaires who flee the country do so in order to enrich
themselves at the expense of the community that helped create their wealth
in the first place—and so rightly face public censure and criticism.
In sum, high levels of taxation would likely produce significant pressure
to emigrate. Nevertheless, implementing a couple of complementary legisla-
tive policies (such as taxing worldwide income and imposing a stiff exit tax)
would likely prevent emigration of the rich en masse.
Although the bulk of this book focuses on taxation as the major tool for re-
ducing inequality, this is obviously not the only tool that matters. In the rest
of this chapter we briefly look at some other important ones.
A central driver of economic inequality is, of course, the widely different
incomes that people earn in the labor market. The explosion of economic
inequality in the United States over the past 30 years has been driven by
strong divergences in the income of different classes.13 The rich have seen
their incomes explode (from increasingly exorbitant CEO salaries, among
other causes), while the poor and middle classes have seen their income stag-
nate or decline as trade union membership and real minimum wages have
fallen. Over the years these income differentials have built up, leading to ever
greater inequalities of total wealth (Piketty 2014; Reich 2015; Stiglitz 2012).
So far we have been discussing the feasibility of reducing ine-
quality through redistributive taxation. But it’s important to realize that
predistribution—the amount of money that one is able to earn from working
or owning property—matters just as much for total inequality as does redis-
tribution. The predistribution of income—i.e., the differentials in earnings
among different people—is determined by the ways that markets are shaped
Income Tax and Market Regulations 33
Unions
50
30
20
% of labor force in trade unions
10
1918 1928 1938 1948 1958 1968 1978 1988 1998 2008 2018
Figure 1.3 Changes in trade union strength and inequality in the United States,
1918–2008. Reproduced from Wilkinson and Pickett (2018, Figure 9.3). The
original data comes from Gordon and Eisenbrey (2012).
Another random document with
no related content on Scribd:
James Jones.[737]
The source for the statement is not given, but it appears it must be
subject to the like inaccuracy suggested above in reference to
Birmingham.
The report of the school committee which seems to contravert the
time of the establishment of schools, given by Jordan, is herewith
included.
[Sidenote: Report
We of the committee appointed to the care of of 1779]
schools and education of the youth, report we
have in some degree attended to the importance of the
service, have lately visited two schools, which are now
established in some measure agreeable to the concern of the
Yearly Meeting as recommended in the extracts for that
purpose....
Such aid as this doubtless hastened the coming of the first school
which was reported by the committee in 1786.[749]
SUMMARY
The establishment of schools in Chester, Radnor, [Sidenote: The
Darby and Concord meetings is discussed in this meetings]
chapter.
There is evidence that education was provided [Sidenote:
for some children in Chester before the Quakers Chester]
came to the colony. The first meetings at Chester
were held in the Court House, but land for a [Sidenote:
devised for
Land
SUPPORT
At various times in the course of this study, it has been [Sidenote: Problem
mentioned that the activities of the lower branches of the of support]
meeting organization were directed by means of advices
sent out from the yearly meetings. These advices, [Sidenote: A fixed
salary necessary to
particularly at the earlier dates, were of a very general secure better
nature, and, as one would judge from the name, were only teachers and retain
them]
recommendations as to what should be done, with
occasional expressions of approbation or reproof as the action of the
constituent meetings merited. As years went on, however, the advices became
of more consequence, sometimes mapping out plans of action in considerable
detail.[750] One of the questions which came to demand a great deal of
attention was that of supporting teachers in the schools. Great trouble had
always been experienced in getting masters, properly qualified mentally and
morally, who would continue long in the same place of service. The
suggestions of the yearly meeting in 1750 sought to remedy that serious
condition. The opinion then expressed was that,
It was directed that the meeting’s clerk send copies of the above
recommendation to all quarterly meetings, which were in turn to supply each
of their monthly meetings and direct them to send in a report to the next yearly
meeting.[752]
The above is cited as one of many similar [Sidenote: A
recommendations; and, without the presentation of any weakness of the
more of them, it may be well to point out one of the great meeting
organization]
weaknesses of the system—that weakness being the lack
of a strong central control in the organization which could formulate plans and
compel them to be carried into execution. A financial plan based on that idea
would no doubt have resulted quite differently than did the one pursued, which
left it wholly to the determination of the locality whether they would settle
regular funds for the schools. Since this study is historical we shall limit
ourselves to that point of view exclusively. Let us notice then the reception of
the recommendations in the case of a few meetings, tracing it to the lowest
meeting whence, in the last analysis, the funds usually came.
What became of the recommendation when it had been [Sidenote: How
sent out from the yearly meeting? In some cases recommendations
committees were appointed in the quarterly meetings to reached the lower
meetings]
which it came. An instance of this is the case of Concord
Quarterly Meeting which in 1754 appointed a committee to [Sidenote: Function
inspect and examine the accounts and all moneys which of committees
appointed]
were given to charitable and educational purposes.[753] At
another time Concord appointed a committee to visit the monthly and
preparative meetings to ascertain the state of schools among them; this
committee reported soon after that they had visited the meetings but that not
much had been done in regard to schools.[754] The appointment of these
committees was quite a common practice and, no doubt, they had
considerable influence. They often worked with the committees of the monthly
meetings,[755] and in some instances produced very full reports of their
activity, which they, of course, forwarded to the yearly meeting.[756] The duties
in general performed by the quarterly meetings, as doers of the yearly
meeting’s will, were as follows:
1. To transmit the advices through the representatives to [Sidenote: Duties of
the various monthly meetings. the quarterly
meeting
2. To appoint committees (a) for investigation and (b) for summarized]
coöperation with those in the monthly meetings.
3. To collect reports and make final report for their locality to the yearly
meeting.
4. At some stages of development the quarterly performed some duties later
performed by the monthly meeting.[757]
What became of the recommendation when sent on from [Sidenote:
quarterly meeting? After arriving at and being perused by Procedure in the
the monthly, they were always sent by the representatives monthly meeting]
back to the various particulars, or preparatives, there to be
considered also.[758] The preparative meeting was not primarily a “record-
meeting” and little can be found of their organization, if they had any, for
raising funds, save from the reports of the monthly meetings. This does not
mean, however, that the preparatives did not share in raising the funds; it
means only that the organization for so doing was in the monthly meeting.[759]
The plans adopted by that body were drawn up in the most part by a
committee which was representative of each particular meeting. Let us
examine briefly the general nature of the plans proposed by some of the
meetings for establishing permanent funds. Only those of two or three will be
mentioned, as there was great similarity in all of them. The text of the plan for
some of the meetings may be found in the chapter in which those meetings
are considered.[760]
In 1796 the minutes of Kennett recorded a plan their committee had devised
for the establishment of a permanent fund. As has already been suggested,
one of the greatest weaknesses of the whole system was that everything was
done upon individual choice.[761] That is probably the first thing to strike the
reader’s attention as he looks over the plans devised. We will state as
concisely as possible the chief points.
(a) Subscriptions were voluntary, and if a note were [Sidenote: Kennett
given it bore interest at 5%; plans for raising
funds summarized]
(b) There was a regularly constituted board of trustees
for the funds;
(c) Record was to be kept of receipts and expenditures and reported to the
monthly meeting;
(d) All money paid in was to be vested in real property as soon as possible;
(e) Disagreement among the trustees must be settled before the monthly
meeting;
(f) Funds were to be used for paying salaries or keeping buildings in repair
provided the amount of the principal fund be not lessened.[762] From reports of
the success in establishing schools in Kennett meeting,[763] one must believe
that their trustees managed the funds wisely and that subscriptions were
generously made, but their exact financial state is not given.
Similar plans were devised by many other meetings, [Sidenote: Similar
such as London Grove,[764] Darby,[765] Sadsbury,[766] and plans by Darby,
London Grove,
Buckingham.[767] In all the outstanding characteristics are Buckingham,
the same as those mentioned in the Kennett plan. One Sadsbury, and
others]
very interesting characteristic which frequently recurs, is
that in the fifth rule of Kennett which allows that the funds
may be used also for the poor, who are not members of Friends.[768]
Other forms of support besides the subscription just mentioned were, (1)
legacies, given on terms determined at the will of the donors, (2) fees, and,
occasionally, (3) issue of bonds for rather small sums, which were needed in
case of emergency, such as completing a school house which had been
begun. An instance of the third method occurred in 1701 when Philadelphia
Monthly Meeting agreed that £100 be raised in that manner for completing the
work on the school house.[769] Many similar instances were found in records
of other meetings. The rate system was so commonly used as a means of
support in the early schools that it needs no special attention here. Some of
the rates paid for teaching will be noted in a later presentation of masters’
salaries. Legacies have been very frequently mentioned in previous chapters
and it is here necessary only to call attention to the chief characteristics of the
bequests and refer the reader to previous chapters if he wishes to examine
the text of them.[770] The common characteristics are:
(1) Entirely voluntary, though the making of them was [Sidenote: Main
frequently urged by the meeting[771] and was in fact the characteristics of the
bequests made]
concern of the queries which were regularly sent out. By
this means the yearly meeting was informed of the interest taken in making
donations.
(2) Almost universally consisted of (a) sums of money or (b) land.
(3) The donor chose trustees in the meeting to be subject to its direction.
(4) The purpose was generally definitely stated; also how the money should
be invested.
An entire chapter might be devoted to this interesting [Sidenote: The value
and very important means of support of the Quaker of legacies in a few
schools, but much less space must suffice. The value of it meetings]
may be indicated by a few figures given in statements of a
few meetings and school records. The table gives the yearly value of the
legacies or other permanent endowments at the year stated. The list is not
complete, due to inadequate records, but may be taken as indicative of the
extent of this form of support.[772]
ORGANIZATION
The machinery of organization which had any [Sidenote: London
connection with the direction of the school system has advices on
already been frequently referred to. It is the same education]
organization which was discussed in Chapter II.[780] It has
further been pointed out that one of the functions of the head of this
organization, the yearly or general assembly, was to issue advices for the
direction of the lower units. These advices began very early, so far as they are
concerned with education. In 1692 London Yearly Meeting warned all others to
be careful of a “Christian care in the education of their children,”[781] and
followed it successively each year with more suggestions.[782] These advices
all found their way to the Yearly Meeting of Philadelphia and Burlington, and
the similarity between the advices of the two meetings is striking but not
surprising.
It may be convenient for the reader if some of the chief [Sidenote: London
recommendations of the London Advices are stated briefly, advices
that the likeness of the two may be noted later when we summarized]
THE SCHOOL
It has already been mentioned that one of the yearly [Sidenote:
meeting’s earnest recommendations was that a lot of Permanent
ground be provided where schools might be necessary, properties
recommended for
sufficient for a garden, orchard, grass for a cow, etc., and schools]
that a suitable house and stables and other necessary
things be arranged for the securing of more permanent and [Sidenote: Property
acquired by
better qualified teachers.[796] There were certainly several Philadelphia schools
of the meetings where land for the purposes of schools and meeting]
was possessed before these recommendations were
[Sidenote: and
made. Notable instances, which may be mentioned, were Abington]
Philadelphia and Abington, and many others, who early
secured permanent lands for the meeting which were also used for the
erection of schools. Some of the early acquisitions of school property in
Philadelphia were: (1) that purchased in 1698 of Lionell Brittain;[797] (2)
another deeded by John Goodson and Thomas Lightfoot to the overseers;[798]
and (3) that devised by William Forrest, upon which the overseers erected a
school in 1744.[799] There was also the piece of ground left to the monthly
meeting of that place by George Fox, upon which the meeting gave
permission for the building of a school, free from ground rent.[800] The
property gained by Abington in 1696 was for the support of a school.[801] A
meeting house was erected on the land between 1696 and 1700. These cases
of endowment directly for schools were very limited as to locality at the early
part of the eighteenth century. Their number increased in later years, and the
increase may have been due partly to the influence of the yearly meeting’s
urgent advices.
A few instances of the tendency toward the policy of [Sidenote:
purchasing permanent lands may be mentioned. In 1779, Warrington and
Fairfax Quarterly]
Warrington and Fairfax Quarterly reported two of their
monthly meetings had purchased grounds and erected
houses for the said purpose.[802] Another meeting had [Sidenote: New
purchased sixteen acres, built a house, but had difficulty in Garden]
securing a suitable master.[803] All other accommodations [Sidenote: Goshen,
recommended for masters had been provided. Near the Darby, Buckingham]
close of the century (1794) William Jackson of New
Garden deeded a lot of ground to Friends of that meeting for the use of a
school.[804] New Garden also reported a school house built about 1795 on
land given for the purpose by Jeremiah Barnard.[805] In 1792 Kennett reported
that their preparative meeting had purchased of Abraham Taylor a piece of
ground for a school and were preparing to build a house on it. It was situated
about 2½ miles from Kennett.[806] Other instances of like procedure were:
Goshen, 1795[807] and 1782;[808] Darby, 1793;[809] and Buckingham in 1794.
[810] Similar cases might be cited for almost every monthly meeting in the
southeastern part of Pennsylvania, and it doubtless extended elsewhere. It is
to be noted that this general purchasing of school property did not come until
late in the eighteenth century, when the great advancement in Quaker
education had its beginning. It may be fairly stated that by the end of the
century most of the schools were established on school property held by the
meeting for that purpose. As pointed out above, this had been a slow
development, beginning with a few in the seventeenth century that started with
land endowments.
The earliest schoolhouses would doubtless present an [Sidenote: Early
interesting picture if we could see them inside and out. schools held in
Unfortunately there is little information extant, which throws meeting houses]
light upon the earliest. In fact, at the very earliest [Sidenote: Family
establishment of schools, there were no special houses school]
built for them. For many of them this condition prevailed till
fairly near the close of the century. Joseph Foulke, writing in 1859, concerning
his first school days, stated that he first attended school at Gwynedd, which
was held in the meeting house, there being none other for that purpose.[811]
His next schooling, in 1795, was at a family school taught by Hannah Lukens,
who lived in a little house on the Bethlehem Road. He then attended school in
a log schoolhouse, built about 1798 by his father.[812] Other instances may be
cited in connection with the use of the meeting house for schoolhouse. In
1693-4 Middletown Friends allowed a school to be held in the meeting house,
provided it should cause no disturbance,[813] and again in 1699 a similar
request was granted.[814] As late as 1740 Philadelphia Meeting proposed to
erect a meeting house with chambers over it sufficiently large for the
accommodation of a school,[815] though, as mentioned before, they already
had some of their schools in regularly constructed schoolhouses.[816]
The writer has had the opportunity to visit one of these [Sidenote: An old
little schoolrooms established in the meeting house. Not schoolroom at
much is known of the school at Merion, though the oldest Merion, Pa.]
of Friends meetings, but it is quite certain that whenever
their school began and however pretentious it may have been, it must have
been held in the upper part of the meeting house. The schoolroom in the
present building is quite hidden away under the eaves. The walls are bare and
the rafters low overhead. Ample light is furnished. Rude wooden benches and
tables, the latter with sloping tops, constitute the furniture of the room as it
now stands. One of the table tops bears the date 1711, doubtless the telltale of
some vandal outcropping, which might tempt one to place a school at that
early date. It is however too meagre and uncertain evidence to justify such a
conclusion.[817]
From a few sources of information we gather some [Sidenote: Size and
clews as to the size of the schoolhouse generally. The cost of school
house proposed by the Goshen Meeting in 1782 was to be houses; Falls]
Goshen,
Pay Free
Master Year Items Amount
Scholars Scholars
Charles Thompson 1757 Books and firing for 31 7 £150/00/00
(Latin) poor scholars
Alexander Seaton 1757 Teaching poor 30 41 58/15/ 4
(English) scholars
Premiums 3/00/00
Books and firewood 15/ 4/ 9½
Clothing for poor 6/17/ 8½
Joseph Stiles 1757 Teaching poor 14 28/18/ 1
scholars
Books and firewood 3/14/ 7
Rebeckah Burchall 1757 Teaching poor 23 36/ 9/10
children
Firewood 3/ 4/ 6
Ann Thornton 1757 Teaching poor 3/ 2/ 9
children
A fairly good mental picture of the school, and the atmosphere pervading it,
is obtained from a perusal of the list of rules which were adopted both for the
guidance of the masters and the observance of the pupils. We cannot gain
much from a discussion since they are self-explanatory, hence there is
submitted a concise digest of those issued for the masters and mistresses in
the several schools.
1. All pupils must be at school promptly. [Sidenote: Rules for
the government of
2. No one shall be absent without a permit from parents. schools
summarized]
3. Strict obedience to the monitor is demanded, but if
there is a real grievance, complaint may be made to the master.
4. Be orderly in coming to and leaving school.
5. Use the plain language to all persons; be civil to all.
6. To avoid, in hours of leisure, all “ranting games” and quarrelling with one
another.
7. Shall not play or keep company with rude boys of the town, but play with
own school fellows.
8. They shall come to school on 5th day prepared to go to the regular
meeting.[839]
The rules above, which, if all followed, one must admit would have made an
almost model school so far as behavior was concerned, were shortly
thereafter expanded a little to meet the needs of the Latin and English
schools. Those rules, however, were more concerned with the curriculum and
part of method, and were doubtless a guide for the instructors more than to be
followed by the pupils. They will receive attention in the next few pages in the
discussion of the curriculum. We shall however be interested at this juncture to
read the rules adopted by Robert Proud, schoolmaster and historian, for the
government of the Latin School, in which he was the head master for many
years. They are very similar to those already noted, though drawn up by Proud
for his school alone.
[Sidenote: Rules
Orders and Directions adopted by Robert
In the School Proud while master
of the Latin School]
Reverentia Jehovae Caput Scientiae
The fear of the Lord is the beginning of wisdom.
1. Duty in attending.
Fail not to be present in school precisely at or before the time
appointed for learning, being clean and decent; except sufficient
reason require thy absense; in which case, on thy first returning ...
before the master, immediately inform him thereof to his satisfaction.
2. On entering, remaining in and departing from school, having
taken thy appointed seat, with as little noise and disturbance as may
be, move not therefrom, to that of another during the time of learning
without absolute necessity and then, very seldom; nor go out of the
school without the master’s leave or knowledge. And observe the
same silently and orderly behavior, in thy departing from the school, as
in thy entering it.
3. How to behave and study in the School.
Be always silent, in School or during the time of thy studies, so as to
be heard, neither in voice, nor otherwise, as little as possible; except in
writing or speaking to the Master or Teacher; and discourse not with
thy Schoolfellows during the hours of study, without the Master’s
permission; unless in asking, or giving information relating to thine or
their learning; and even then observe to whisper, or speak as low as
possible to be heard by him, who is next thee.
4. Behavior to the Master, and during the presence of visitants, etc.
Make all thy speeches to the master with due respect; and observe
cheerfully to perform all his directions and commands, with readiness
according to thy ability. And, if a stranger or visitant speak to thee in
the school, stand up, turn thy face towards him respectfully and give a
modest and ready answer, if any answer be required or necessary;
resuming thy seat again, with a silent application to thy study; which
order and silence are more particularly and especially to be strictly
observed and kept during the presence of any stranger, or visitant, in
the School.
5. Behavior to one another.
Behave thyself always in a submissive and kind manner to thy
School fellows, never provoking, quarreling, nor complaining,
especially about frivolous matters; but use the word please, etc., or
expressions of similar signification when asking anything of them; and
observe a proper gratitude for every kindness received, be it ever so
small; using thy utmost to cultivate a special Friendship with them; not
returning injuries, but learning to forgive; and shew them, by thy
exemplary Deportment, how they ought to behave.
6. Not to take Another’s Property, etc.
Neither take nor use anything which is the property of another or in
his custody, without first having his permission and as much as
possible, avoid borrowing, at any time, but provide thyself with all
books, instruments and things necessary for thy learning and studies
according to the Master’s direction; always keeping them clean and in
good order.
7. The Language.
Let the common language, used in School, be Latin, as much as
conveniently may be, according to the speaker’s knowledge and ability
therein, but in all places let every one speak with as much propriety
and grammatical accuracy as he is capable in whatever language he
makes use of.
8. School transactions not to be divulged.
Be not forward to divulge any transaction, passed in school, more
especially, to the disreputation of any in it; nor mock, nor jeer any of
thy school fellows, for being reproved or corrected, lest it may
sometime happen to be thy own case; but rather be assisting, than
troublesome, to the masters or teachers by rendering thyself as
agreeable, both to him and them, as possible, in all laudable and good
order and discipline, as well as in the advancement and increase of
learning and all real improvement in the respective branches thereof:
that, instead of introducing any cause of punishing, severe reproof, or
servile fear, the place of thy learning may be a place of pleasure and
delight.[840]