In reading After Piketty, a collection of essays by leading economists in response to Thomas Piketty’s seminal Capitalism in the 21st Century, I ran across the expression: “winner take all” economy. The “winner take all” economy describes an economy in which a very few people get most of the income and therefore accumulate most of the wealth, kind of like today in the United States. More accurate perhaps would be to call it the “winner take most” economy, since our system of compensation, taxation and government benefits leaves scraps for the upper middle class and breadcrumbs for everyone else.
The “winner take most” ideology is a harsh one for several reasons. On the most obvious level first, it creates a society in which there are winners and losers, and proposes to reward winners and make losers suffer. “Winner take most” ideologues typically attribute strident moral values to winning and losing. Winners deserve everything they get because they worked hard and are more talented, forgetting that people do nothing to earn the talent with which they are born, that much of “winning” results from the luck of having connections or money, and that others may work just as hard for less reward because they don’t have the connections or have less appreciated talents. Besides glorifying the rich, “winner take most” ideologues often demonize the poor. Not only are they losers—a negative attribute—but they’re losers for a reason. This view neglects both the importance of luck and the great costs extracted by having to deal with food, housing, education and other scarcities. My metaphor for summing up the importance of luck is to imagine Willie Mays turning 20 in 1850 instead of 1951.
Behind this harsh view of society as a human jungle rests the idea that everything can be reduced to the brutally immoral lowest common denominator of money, even self-worth and morality.
People like to compete and to win. There are winners and losers in wars and games, which are civilization’s sublimation of the urge to wage war. The pursuit of winning often leads to new knowledge and improvements in how we play in both games and real life. For example, Babe Ruth created the upper cut to get an edge—the home run—that helped his team to win at about the same moment in time that Henry Ford reorganized production to lower the cost of his cars and thereby sell more cars than anyone else. It feels good to compete and it feels better to win. A less crass, less celebrity-addled society in which civic virtue and not private greed is the primary value may not have such a clear divide between the winners and everyone else, but it nevertheless has winners who enjoy more material possessions and greater recognition of their worth as individuals.
The question therefore should not be whether creating a society of winners and losers is good or bad. The question should be: how much do winners and losers deserve? A slew of studies have shown that the top one percent and the top one tenth of one percent of income earners take a far larger share of income and wealth today than in 1980. The Congressional Budget Office, for example, estimates that since 1979, the income of the top 1% has grown by 275% before taxes (and 314% after taxes). By comparison, the income of the next 19%, the middle 60% and the bottom 20% have grown by 68% (73% after taxes), 38% (43%) and 41% (44%), respectively. Piketty shows that wealth has also skewered to the top 1% over the past 40 years, the share of one-percenters rising from 33.5 percent of all capital in 1979 to 54 percent in 2010. If you break out the top one tenth of the top one percent, the increase in wealth and income since the election of Ronald Reagan is even more extreme. Some studies conclude that these people got more money because they earned it by being better or more productive at what they did. But as Piketty and other economists point out, the top 1% and .1% are not dominated by the LeBron James and Bruno Mars of the world, but by owners and operators of and investors in businesses who have taken advantage of changes in technology, tax laws and business customs to increase their share of the pie through greater profits, or “rents” as economists like to say. All have benefited from a political culture that has continually cut taxes on the wealthy and slashed government services and benefits to everyone else over the past four decades.
We have turned America, once a “winner take more” economy, into a “winner take most” economy.
Perhaps it’s because I have always been an avid game player and my son participated in many games and sports growing up, but when I reflect on whether we should as a society actively seek greater equity in income and wealth, I think of the concept of “participation” trophies, which are essentially keepsakes of having participated and not done well in a youth competition.
A few years back, the participation trophy was a minor motif in the mass media for a few weeks, as shrinks, economists, public intellectuals and pundits opined about the so-called danger of awarding a trophy to every child. Instead of bolstering the children’s self-esteem, many thought participation trophies made the children feel entitled to rewards and contributed to making them soft mentally and emotionally—kind of like the “snowflake” that is now a derogatory term for someone too sensitive to stand up to the pressures of the real world (of course, as defined by the accuser!). One female teenage athlete’s opinion piece in the New York Times in 2016 condemned participation trophies for making everyone believe they’re a winner, when in real life, there are few winners. Interestingly enough, a Google News search for “participation trophy” reveals that over the past year, only professional athletes have used the term in the mass media, always in the derogatory sense of labelling someone as the loser or potential loser of a competition.
Clearly these comments represent the views of winners. The worst paid player in the major leagues will make $545,000 a year in 2018 (or roughly 5 times the annual salary of Mickey Mantle and Willie Mays—the two best players since World War II not tied to steroids), so even the worst players on the last place teams are “winners” when it comes to harvesting the rewards of society.
When first encountering participation trophies in the mass media, I remembered that in the 1990s organizers of the chess tournaments and baseball leagues in which my son participated often gave participation ribbons. I liked the idea of ribbons because it rewarded kids for their hard work and gave them something to commemorate the season or tournament. I wondered though if the trophy was going too far. One trophy per kid certainly raises the organizer’s budget, which might lead to an increase in entry fees. To have a truly open tournament or league, fees have to be low enough for most every family to afford and needed to include the possibility of scholarships of free entries. Of course, an organizer could save money by making the winners’ trophies less elaborate. At the time, I didn’t recognize that being okay with ribbons but not trophies also represented the winners’ viewpoint.
Youth chess tournaments have a complicated method to reward a wide variety of trophies and ribbons. A tournament of 250 children might have 10 sections based on chess ratings. Every section awards three to five trophies to the top finishers, plus other lesser ribbons. There is also a school team competition that combines scores in various sections, usually won by schools that bring along a large number of bad chess players. Because there are so many sections, everyone has a chance to win. As a chess parent, I liked this approach because it gave so many kids a chance to win and increased participation. My only gripe was that the trophy of the winners of the top section didn’t get slightly bigger trophies than the winners of other sections. After all, the kid who came in fifth in the top section would likely handily trounce any of the 230 kids playing in the lower sections.
That was also winners’ thinking, and I’m now ashamed that the idea ever occurred to me. Like all winners, my son’s many top trophies in the highest section depended on many things beyond his control—his immeasurably high IQ in math; his parent’s ability to afford chess camps; classes and private lessons; the role model of his disciplined and career-driven parents; the fact that he never had to worry about where his next meal was coming from. I’m proud of his efforts and achievements, but ashamed that I ever thought about diminishing the size of the trophy of the kid who came in third in the beginners’ section. I’m especially ashamed when I start to conceive of participation trophies as a metaphor for the competition for income and wealth in which all of us are forced to participate from the day we leave school—except of course for trust fund babies like the Trumps, Kochs, Mercers and others for whom the pursuit of additional wealth really is a game.
Translated into real life, the participation ribbon or trophy equals the cut of the income and wealth pie that the 99% of non-winners get. But whereas a trophy or ribbon merely fills up space on a dresser, the participation ribbon or trophy buys food, shelter, medical care, transportation, clothing, entertainment, education, charitable contributions and retirement. Whether it’s a ribbon or a trophy, we give them to children to motivate them and to satisfy an emotional need for dignity. There are also emotional components to what makes humans loyal to any society: Whether it’s an open society or a fascist one, people want to feel that they have a chance to win, that they will be okay whether they win or lose the money wars, that they have a reason to participate in the game, and most significantly for the stability of the game, that they have a stake in its outcome.
Over the past 40 years, American society has time and again created a choice between giving participation ribbons or trophies, and we have chosen always to downgrade a trophy to a ribbon, or to remove the incentive altogether. Lowering the buying power of the minimum wage. Defunding public colleges. Implementing policies that made it harder for workers to unionize. Funding tax cuts for the wealthy with tax increases to others and lower levels of social welfare benefits. Government and large company outsourcing of functions to other organizations that pay employees less. It’s as if we’re always cutting corners on the rewards of participation to provide bigger, glitzier tributes to the winners of a game in which luck matters much more than actual skill or performance.