The Chains that Bind

Breaking the Bonds of Limitarianism

Introduction

Tova O’Brien, the chief political reporter for Stuff, has a podcast. On 28 March 2024 in episode 23 she interviewed Dutch philosopher Ingrid Robeyns and David Seymour. That section of the podcast lasts nearly 35 minutes and in entitled “The Great Wealth Debate – Limitarianism v Libertariansism”.

The note to the podcast reads as follows:

“How much money is too much? We talk to the political philosopher who says Limitarianism - essentially a cap on the rich - is the way to a better world. Internationally, critics have dismissed the idea as “claptrap” and avowed Libertarian David Seymour agrees. He offers the counterview in this fascinating debate. Plus, the incredible numbers that demonstrate how little police pay has kept pace with inflation.”

I have some quibble with the description of Mr Seymour as a libertarian. Libertarianism is a political philosophy that upholds liberty as a core value. Libertarians seek to maximize autonomy and political freedom, emphasizing equality before the law and civil rights to freedom of association, freedom of speech, freedom of thought and freedom of choice.

I doubt that a true libertarian would put in place a system that compelled parents to send their children to school. Rather I think that in the main, Mr Seymour is more a classical liberal rather than a libertarian.

However, the conflict – doesn’t there always have to be a conflict – raised some interesting issues apart from the similarity between the two words (and no, they are not homophones). In this article I shall briefly outline Professor Robeyn’s theory and follow it with what I consider to be a libertarian riposte.

Limitarianism.

Limitarianism is a word coined by Professor Ingrid Robeyns. She was born in 1972 and is from Leuven, Belgium. She earned a Belgian licentiate qualification in economics from the Katholieke Universiteit Leuven (KU Leuven) in 1994.

She went on to study social and political science in Germany at the Georg August Universität, Göttingen (University of Göttingen). Robeyns returned to the Katholieke Universiteit Leuven for her MSc in economics, which she completed in 1997.

Her doctorate in economics came from the University of Cambridge in 2003. Her dissertation was on gender inequality and the capability approach. Robeyns also has an MA in philosophy from the Open University (2007).

She is, as might be expected, well published but developed her ideas about limitarianism in an article entitled  "What, if Anything, is Wrong with Extreme Wealth?". Journal of Human Development and Capabilities. (2019) 20 (3). Journal of Human Development and Capabilities.

This was followed by a book entitled Limitarianism: The Case Against Extreme Wealth which was published in January 2024.

The core of the argument is that no one actually deserves to be a millionaire, much less a billionaire. Robeyns' solution is for nations to pass legislation that limits how much any individual might possess to no more than $10 million (or euros), more than adequate to anyone's needs.

Robeyns suggests that the idea of people being below the poverty line is morally unacceptable and wants an upper threshold too.

“We have a societal agreement that nobody should be poor, but the question is, should there also be something at the opposite side? Should we say that at some point somebody has too much? And the claim of Limitarianism is that, yes, you can say, that at some point somebody has too much.”

Limitarianism suggests that each country and society works out its own threshold depending on things like welfare provision, health care, a public pension system, etc.

Robeyns also says you have to take into account the large number of people in society who are motivated by financial gain.

“To allow those people, who are motivated by money, to at least keep contributing to the economy, I think you need a number that's sufficiently high.”

She sets that figure at 10 million euros or $NZD18 million.

Robeyns describes the way in which she came to the term “limitarianism”

“I started to think through the ethics of extreme wealth concentration in a systematic way, and after a decade I became convinced that we must create a world in which no one is super-rich – that there must be a cap on the amount of wealth any one person can have. I call this limitarianism”.

Limitarianism is best understood as a regulative ideal. It should be viewed as an outcome to be strived for but which, being realistic is, like the eradication of poverty, unlikely to be attained.

According to Robeyns, limitarianism calls for three kinds of action.

First there is structural action. Our societies’ key social and economic institutions should give people genuinely equal opportunities, through affordable childcare, free high-quality education and a comprehensive anti-poverty strategy.

The more structural steps we take to reduce inequality, the less need there will be for the second strategy, fiscal action.

If taxation were our only tool for achieving a limitarian society, the tax rate would need to be set at 100% for wealth and income beyond a certain point

The third kind of action limitarianism calls for is ethical action: we all need to embrace a limitarian ethos.

One objection to this might be that limiting how much wealth a person can accrue would require us to give up private property or the market mechanism, and force us into USSR-style communism.

The real question, which we must seek to answer, is rather which constraints on the market and private property we need if we are to achieve limitarianism.

Another objection might be: doesn’t limitarianism mean equal outcomes for everyone, regardless of what they do? The answer is simply: no. Limitarianism does not advocate strict equality. There are reasons, based on principle as much as pragmatism, why some degree of inequality is justified. Some people work much harder than others, take more risks or assume more responsibility. Others, meanwhile, lead sober lifestyles that generate savings over time.

Critics of Robeyn’s ideas tend to fall into two camps; she is either naive or a communist (or both).

She insists she is neither and counters these arguments by making the case that placing an upper limit on earnings and wealth is not only ethical but also rational.

In this argument she can not only cite the likes of Thomas Piketty, author of the bestselling Capital in the Twenty-First Century, as a fellow traveller, but also philosophers of democracy going back to Plato (the latter argued that no cohesive society could ever be created if the richest citizens earned more than four times the wages of the poorest; last year, Jeff Bezos earned the average wage of one of his Amazon employees every nine seconds).

For society to pursue these aims Robeyns argues that a radical reform of taxation to concentrate on wealth rather than income is clearly necessary. She makes the case that inheritance is the ultimate non-meritocratic advantage, and has to be largely a collective, not a familial benefit.

“There is real value to everybody having some wealth,” she says. “The problem is, as it happens now, it’s so hugely unequal. The vast majority of people get almost nothing [from the previous generation]. And then there are people who just perpetuate these dynasties of multimillionaires and billionaires. It is deep in human nature to want to protect your offspring. So we need to show that if you were to redistribute a lot of that money back to people in general, not to the government, it would in fact promote that security. There is this stickiness of institutions; it’s quite difficult for people to imagine that we could make them differently. And, of course, what neoliberal policymakers have done for decades is to just say: this is the way it is.”

A Critical Overview

One of the fundamental flaws of limitarianism lies in its infringement upon individual freedom and autonomy. By imposing arbitrary caps on wealth accumulation, limitarianism restricts individuals' ability to pursue their aspirations and achieve their full potential.

In a free society, individuals should have the liberty to excel and prosper through their talents, hard work, and entrepreneurial endeavors, without being constrained by government-imposed limits.

Limitarianism undermines this principle by curbing ambition and stifling innovation, ultimately hindering societal progress and prosperity.

Moreover, limitarian policies overlook the diverse motivations behind wealth accumulation. While some individuals may amass vast fortunes for personal gain or luxury, many others strive for success to contribute to the greater good.

Philanthropists like Bill Gates and Warren Buffett have pledged substantial portions of their wealth to charitable causes, leveraging their resources to address pressing global challenges such as poverty, disease, and education.

Limitarianism fails to distinguish between benevolent wealth creation and exploitative accumulation, disregarding the potential positive impact of wealth redistribution through voluntary philanthropy and social entrepreneurship.

Furthermore, implementing strict wealth caps could have adverse consequences for economic dynamism and innovation. Incentives are essential drivers of progress and creativity, motivating individuals to innovate, invest, and take risks in pursuit of financial rewards.

By limiting the rewards associated with entrepreneurial success, limitarianism undermines these incentives, dampening entrepreneurial spirit and disincentivizing wealth-generating activities. As a result, economies may stagnate, innovation may wane, and opportunities for social mobility may diminish, exacerbating rather than alleviating socio-economic disparities.

Critics of limitarianism also highlight its impracticality and potential for unintended consequences. Determining and enforcing fair and equitable wealth limits pose significant logistical challenges, as wealth is dynamic and multifaceted, encompassing various assets, investments, and forms of income.

Arbitrary thresholds may incentivize creative accounting practices or wealth concealment, leading to inefficiencies and distortions in economic behavior. Moreover, limitarian policies risk driving high-earning individuals and businesses offshore, seeking jurisdictions with more favorable tax and regulatory regimes, thereby undermining domestic revenue streams and economic competitiveness.

Furthermore, limitarianism overlooks the root causes of wealth inequality and socio-economic disparities. Rather than focusing solely on redistributive measures, addressing systemic issues such as unequal access to education, healthcare, and economic opportunities is crucial for fostering genuine social mobility and inclusive prosperity. Comprehensive policies aimed at empowering disadvantaged communities, promoting equitable access to resources and opportunities, and tackling structural barriers to upward mobility are essential for addressing the underlying drivers of inequality effectively.

Thus, while limitarianism may offer a seemingly straightforward solution to wealth inequality, its implementation is fraught with complexities and potential drawbacks. By infringing upon individual liberty, stifling innovation, and undermining economic dynamism, limitarianism risks impeding rather than fostering societal progress and prosperity. Instead of resorting to blanket wealth caps, policymakers should focus on crafting nuanced and inclusive approaches to address the root causes of inequality while preserving individual freedom and incentivizing entrepreneurial initiative. Only through a balanced and multifaceted approach can societies aspire to achieve genuine fairness, opportunity, and prosperity for all.

A Libertarian View?

Limitarianism is yet another string to the collective bow and ignores individualism – that is the idea that individuals should pursue their own self-interest and happiness, and collectivism, the belief that individuals should subordinate their own interests to the interests of society or the collective.

Limitarianism is opposed to laissez-faire capitalism, advocating for a free-market economy where individuals are free to pursue their own economic interests without interference from the government.

The achievement of a Limitarian objective involves a significant level of government intervention in the economy and society. Government regulations, controls, and interventions as detrimental to individual freedom and economic prosperity.

The limitarian approach does not only limit wealth. It is a clog on individual reason. Reason is important as the primary means of understanding the world, making decisions, and achieving one's goals.

Limitarianism also limits and dictates principles and values and dispenses with the concept of the heroic individuals  who refuse to compromise their principles and values, even in the face of adversity or societal pressure.

Although limitarianism allows for the acquisition of some wealth – the amount to be determined by the State – it does not allow for the continuing virtues of hard work, productivity, and achievement. Characters who are industrious and innovative are heroic, while those who rely on government favors or manipulate the system and willingly succumb to the diktats of the State are not.

Countering the concepts and values that underpin limitarianism is what could be called the morality of self interest. This challenges notions of altruism and self-sacrifice, arguing that individuals should pursue their own self-interest as a moral imperative.

This is summed up in Ayn Rand’s philosophy of Objectivism which emphasizes reason, individualism, and rational self-interest. Objectivism holds that individuals should pursue their own happiness and that self-interest is a moral virtue. However, Rand condemned libertarianism as being a greater threat to freedom and capitalism than both modern liberalism and conservatism. Rand regarded Objectivism as an integrated philosophical system. However, it would be safe to say that Ayn Rand’s views have had an influence upon the development of libertarianism, especially in the United States.

It should be noted that the Atlas Society, which is often cited by left wing organization as a funding source for views of which they disapprove such as the ACT Party and the Free Speech Union, is an American nonprofit organization that promotes Ayn Rand’s philosophy.

The Atlas Society derives its name from Ayn Rand’s best known work “Atlas Shrugged”.

For readers interested in Rand’s views the best sources are her novels. “The Fountainhead” was her first literary success written in 1943 and filmed in 1949. The novel's protagonist, Howard Roark, is an intransigent young architect who battles against conventional standards and refuses to compromise with an architectural establishment unwilling to accept innovation. Roark embodies what Rand believed to be the ideal man, and his struggle reflects Rand's belief that individualism is superior to collectivism. This is probably the most accessible of Rand’s work from the reader’s perspective.

“Atlas Shrugged” is a lengthy and rather dense read. Rand described the theme as "the role of man's mind in existence."

The book depicts a dystopian United States in which private businesses suffer under increasingly burdensome laws and regulations. Railroad executive Dagny Taggart and her lover, steel magnate Hank Rearden, struggle against "looters" who want to exploit their productivity. They discover that a mysterious figure called John Galt is persuading other business leaders to abandon their companies and disappear as a strike of productive individuals against the looters. The novel ends with the strikers planning to build a new capitalist society based on Galt's philosophy.

The book received largely negative reviews but has continued to be in publication. It has been cited as an influence on a variety of libertarian and conservative thinkers and politicians.

The chapter towards the end “This is John Galt Speaking” covers some seventy pages in which is articulated Rand’s Objectivist philosophy.

Throughout the book the antagonists to the main characters are described as “looters” bureaucrats and government officials, who confiscate others' earnings by the implicit threat of force ("at the point of a gun"). Some officials execute government policy, such as those who confiscate one state's seed grain to feed the starving citizens of another; others exploit those policies, such as the railroad regulator who illegally sells the railroad's supplies for his own profit. Both use force to take property from the people who produced or earned it.

“Moochers” on the other hand are those unable to produce value themselves, who demand others' earnings on behalf of the needy, but resent the talented upon whom they depend, and appeal to "moral right" while enabling the "lawful" seizure by governments.

I have embarked upon this digression into Ayn Rand’s work to demonstrate an opposing – albeit controversial – view to that of limitarianism. However, the more I delved into Robeyn’s theory the more I was reminded of the “looters” and the “moochers” of Rand’s novel.

Conclusion

Robeyns’ limitarianism is an ideal and an unachievable one in the same way that the purist approach to Rand’s Objectivism is likewise. But in Rand’s arguments lie the counters and opposition to those of Robeyn. There can be no place for a “robber” state which decides how much property a person may hold. To even entertain such a perspective is to touch the forelock to an all embracing and highly invasive totalitarianism.