Great Economic Arguments and How They Reflect Our Personal Values
By Hunter Lewis
Are the rich necessary? Do we need more millionaire taxes? Is Wall Street greed corrupting our politics? Is capitalism even compatible with democracy? Do free markets cause recessions? Is the profit system to blame for the recent financial crash? Are there alternatives?
In ARE THE RICH NECESSARY?: Great Economic Arguments and How They Reflect Our Personal Values, Hunter Lewis examines the most fundamental economic questions that underlie society. An introduction to economics for laymen, the book covers both sides of the great economic arguments of our day. In an always lively, point-counterpoint style, he challenges conventional positions on both sides of each issue.
Stepping aside from the current economic battle zone, Lewis next lays out the different value systems that guide all our economic choices. By understanding the personal values embedded in the arguments, we can make better sense of them.
Finally, Lewis proposes a new way to bridge the extremes of super rich and poor, of free markets and safety nets; a solution that would involve a massive expansion of the nonprofit sector through tax credits. His solution is to build up the nonprofit sector so that it will become a full partner of government and the private sector and be able to provide real solutions in the areas of social services, health, housing, and education. Lewis’s solution offers a forward-thinking alternative to the bitter and often sterile debate between friends and foes of “big” government regarding taxing the rich and creating economic equality.
With financial disparity and economic justice among the biggest issues on the agenda of the Obama administration, Lewis asks us to make our own judgment based on our personal values about the pros and cons of the rich and solutions to this vexing problem.
In addition, Federal Reserve policy and its impact on monetary inflation, the money supply, and the economy are explained, providing both an understanding of current Fed policies whether they lead to real economic recovery or more inflation or future economic collapse.
You may pick up this book to understand the recent economic crisis or to answer some vital questions that affect the way you vote, your job, and your financial future. Either way, you will have to rethink some of your most cherished beliefs.
"Worth reading aloud on a family vacation."
—Gene Epstein (Barron's)
“Are the Rich Necessary? is both a highly provocative and a highly pleasurable read.”
—The New York Times
Best Business Book of the Year
About the Author
Hunter Lewis is the author of six books in the related fields of economics and personal values, as well as numerous magazine, newspaper, and online articles. His most recent book is Where Keynes Went Wrong: And Why World Governments Keep Creating Inflation, Bubbles, and Busts.
A graduate of Harvard University, Lewis co-founded Cambridge Associates, LLC, a global investment firm whose clients include leading research universities, charitable organizations, and families. He has served on boards and committees of fifteen not-for-profit organizations, including environmental, teaching, research, and cultural organizations, as well as the World Bank.
Are the Rich Necessary?
No 29% Yes 71%
Are the rich compatible with democracy?
No 26% Yes 74%
Must we accept so much inequality?
No 44% Yes 56%
Does the profit system glorify greed?
No 54% Yes 46%
IS being rich a good thing? According to a long line of philosophers, politicians and religious leaders, the answer is a resounding no.
Even before Jesus Christ preached that it was easier for a camel to go through the eye of a needle than for a rich man to go to heaven, the Book of Isaiah of the Old Testament berated the rich who “crush my people” and “grind the face of the poor.” Many centuries later, Franklin D. Roosevelt railed against “money changers” who were “in the temple” of civilization and “malefactors of great wealth.”
But other great minds have insisted that the pursuit of riches benefits both individuals and society as a whole. In the 18th century, Samuel Johnson opined, “There are few ways in which a man can be more innocently employed than in getting money.” In the 20th, John Maynard Keynes declared, “It is better that a man should tyrannize over his bank balance than over his fellow citizens.” Ayn Rand put it even more succinctly: “Blood, whips, guns — or dollars. Take your choice.”
These quotations represent but a few of the scores of competing ideas outlined by Hunter Lewis in “Are the Rich Necessary? Great Economic Arguments and How They Reflect Our Personal Values” (Axios Press, $20). Mr. Hunter, a co-founder of the global investment firm Cambridge Associates, has his own opinion on the subject and ideas to promote, more of which anon. But in a majority of the book’s 24 chapters, he presents both yes and no answers to the titular question and several related ones.
In Chapter 8, for example, Mr. Lewis begins by asking, “Are private profits necessary?” and proceeds to offer four numbered arguments in the negative. (“Argument 4: Even when the private profit system produces the right goods, it denies them to those who need them most, the poor.”)
In Chapter 9, he asks the same question, but presents seven arguments in the affirmative. (“Argument 7: At first glance it might seem that the profit system just produces what rich people want. But this is wrong.”)
He also asks, “Does global free trade destroy jobs?” Chapter 12 answers yes. (“Argument 3: Free trade is ultimately about exploitation.”) Chapter 13 says no. (“Argument 4: Free trade produces more and better jobs.”)
“Can central banks protect us from the excesses of the profit system and lead the economy?” Chapter 21 says yes. (“Argument 1: “Without a central bank, there would be no way to control the dangerous excesses of the banking system and otherwise keep the economy on a steady course.”) And Chapter 22, of course, answers no. (“Argument 2: The record of the U.S. Federal Reserve has been poor. The country did much better before its founding.”)
In taking such great pains to provide a balance of positive and negative points of view, Mr. Lewis risks exacting similarly great pains on the reader. He can, as he paraphrases Robert Strauss, the Washington power broker lawyer, teach the economic world to you round or teach it to you flat. On the one hand, there are five fingers; on the other hand, there are five more.
But remarkably enough, “Are the Rich Necessary?” is both a highly provocative and a highly pleasurable read. Much of the pleasure comes simply from meditating upon the often poetic insights from the famous thinkers Mr. Lewis marshals to support conflicting points of view. You may violently disagree with “The Communist Manifesto” of Karl Marx, but is there any denying that the forces of private markets plunge most people into “the icy waters of egotistical calculation?” Who can fault Ralph Waldo Emerson for observing that “the greatest meliorator of the world is selfish, huckstering trade?”
Mr. Lewis critiques fiscal hypocrisies of both Democrats and Republicans. He says that while the officially stated mission of the Federal Reserve Bank is to combat inflation, the central bank actually plans for a 2 percent annual inflation rate and typically makes decisions to increase the money supply based on politics rather than technical economic considerations. As he puts it, “easy money policies generally suit whatever party is in power, whether ostensibly of the left or right, and central bank chairmen want to be reappointed.”
Mr. Lewis abandons his balancing act in the final chapters of his book to offer a sweeping agenda for economic reform. Unlike conservative ideologues, he believes that it is not just immoral, but also self-destructive to let free-market capitalism take its course. Unlike liberal ideologues, he believes that big government, with its own self-interested ambitions of perpetual expansion, cannot and will not solve problems of poverty and economic injustice.
HIS humanist proposal is to develop a nonprofit sector of the economy that stands mostly apart from big government and the profit system. At present, individuals can claim deductions for charitable contributions that reduce the net amount of their taxable income. He argues that individuals should instead receive direct credits against their tax bills for giving money to “registered” charities that aim to alleviate poverty.
He acknowledges that the nonprofit economic sector he envisions could mushroom into a bureaucracy prone to all the excesses of big government and vulnerable to abuses by the private sector. But he has at least offered what he describes as a possible “way forward out of the old, bitter and often sterile economic quarrels of the past.”
In the meantime, the rich may or may not be necessary, but
like the poor, they remain inevitable.