Coerced transfers and the public-sector union
In the 2011 episode “Fire All Government Workers,” Bob Zadek describes what he calls an involuntary wealth transfer from taxpayers to city and county workers who, in his account, are paid above the market. He argues that if private business performed the same function it would pay workers less and give them less benefit, and that paying a willing worker more than the market rate is not exploitation but overpayment. He asks why taxpayers are not enraged at being compelled by taxation to subsidize that overpayment, and characterizes their acquiescence as sheep-like. Fire All Government Workers (2011)
Adrian Moore, the guest, frames the same dynamic as an outcome of democracy rather than an aberration. He describes a process in which a little money is taken from many people who are too busy to care and given to a few people for whom it is a lot of money, and calls this the backbone of the public service system in the United States. He notes that municipal workers and other special interests attend every city council meeting in mass while an infinitesimal fraction of ordinary citizens ever go, and that only 30 or 40 percent of Americans bother to vote once in a while. Fire All Government Workers (2011)
Moore adds a distributional observation: the private sector pays skilled workers more than government pays skilled workers but pays unskilled workers much less, so government ends up providing unskilled workers with much too high pay. Zadek closes the segment by saying government as employer always pays with OPM, other people’s money, and that it is easy to be generous with other people’s money. Fire All Government Workers (2011)
Inclusive capitalism and the playing field
In the 2015 episode on inclusive capitalism, Zadek puts the coercive element directly to Sean McElwee. He says that leveling the playing field as much as possible has a cost, that the money has to come from somewhere, and that implicit in the approach is a wealth transfer from those who are more fortunate, who are forced and coerced to pay for those who are less fortunate. He asks whether it is true that the approach forces one segment of the economy to subsidize the improvement of another. Inclusive Capitalism: Economic Savior or Socialism in Disguise? (2015)
McElwee replies that any system will require taxation, and that the question is how to raise revenues without disincentivizing good behavior or incentivizing bad behavior. He notes that Norway and Finland have tax systems that tax the middle class much more heavily than the United States does, and says that is part of the reason those systems are so much more successful, because it feels like something everyone is paying for rather than merely the top 1 percent. Inclusive Capitalism: Economic Savior or Socialism in Disguise? (2015)
Zadek pushes back on the word “successful,” saying he would argue those countries are hardly successful at all and that his definition of success and McElwee’s might differ. He invites listeners to call in, describes inclusive capitalism as sometimes called middle-class capitalism and as mentioned by President Obama in the State of the Union address, and asks McElwee what he means by describing the Northern European countries as more successful. The excerpt ends as McElwee begins to answer. Inclusive Capitalism: Economic Savior or Socialism in Disguise? (2015)
Voluntary transfers and strategic philanthropy
In the 2020 episode “The Flight of the Golden Geese,” Zadek draws a distinction between coerced and voluntary transfers. He says high-net-worth individuals give substantial portions of their money to charities they favor, and that they thereby accomplish voluntarily what economics calls wealth transfers. He cites Bill and Melinda Gates, whose foundation gives away buckets and buckets of money for world health, as an example of a voluntary wealth transfer. The Flight of the Golden Geese (2020)
Zadek frames the political fight not as whether there should be a wealth transfer but as who decides who gets the money: the person who earned it, or governments acting through the political process rather than through a process based on need or efficiency. He mentions Elizabeth Warren and others who want to soak the rich, and says the rich have too much money. The Flight of the Golden Geese (2020)
David Lesperance, the guest, tells the story of meeting Chuck Feeney, a founder of Duty Free, on a flight, describing him as a non-descript gentleman with a cheap watch who was passionate about strategic philanthropy. Lesperance says Feeney gave away all of his money at an early age and directed its spending, with an enormous impact on Ireland that would have been gone in half a day had the money gone into tax revenue. He says Feeney finished giving away the last of his money through the Atlantic Philanthropies, and that this was the inspiration for the Giving Pledge, which Warren Buffett, Bill Gates, Mark Zuckerberg and many others have signed. The Flight of the Golden Geese (2020)
Lesperance adds that the Giving Pledge got a lot more support than the so-called Buffett Rule, an increase in current taxation, because it was about control over strategic philanthropy. He says his clients have no problem paying for services they use or could have used but chose not to, and paying for some others, but that there is a limit, and that at some point they treat it as charity. He argues that government activities are not a terribly effective or efficient manner to deal with a particular social ill such as early childhood education, and that Bill and Melinda Gates had more impact on the eradication of malaria in a decade and a half than all previous world governments had had since the discovery that a mosquito was a vector for malaria a hundred years before. The Flight of the Golden Geese (2020)
Buying peace and the median
In the 2021 episode “When More is Not Better,” Zadek offers a different rationale for wealth transfers. He says that if the only goal were to improve everyone’s quality of life, more efficiency and more free market would be better, but that the result leaves many people behind economically, whether through their own failings, circumstances or accident of birth. As that number grows, he says, society becomes more vulnerable and fragile, people are angry and have no stake in the system, and wealth transfers are done not to correct an imperfection but to buy peace so that a growing class of unhappy people does not cause unrest. He calls it buying peace in a good way, not like paying protection money so your store does not burn down. When More is Not Better (2021)
Roger L. Martin, the guest, responds that Zadek emphasizes this more than he would, and that he does not think the left-behind want to catch up; their goal is just having a better future, and when they stop feeling there is a chance for one, that is when people become unruly. He says he is much more obsessed about the band around the median than about the tail of the distribution, that he believes a good society is one in which willingly those who have more help those who have less, and that the trigger for America is when the middle of the distribution gives up. The excerpt ends as he describes what the middle says. When More is Not Better (2021)
Student loan forgiveness as transfer
In the 2022 episode on student loan debt forgiveness, Zadek calls the policy a wealth transfer to the middle class or upper middle class, saying the demographic shows that and that it is not really disputed. He notes that the word transfer means from-to, that the to part is middle class or upper middle class people hardly in need of debt relief, and asks Elizabeth Nolan Brown who bears the from part. Student Loan Debt Forgiveness (2022)
Nolan Brown says the question is tricky because it is not a direct tax on anyone, and that the government is writing off money it is owed rather than spending it. She says the government will have to make up that money somewhere, that from what we know it will not do so by cutting spending elsewhere, and that it therefore seems it will cause eventual rising in taxes. She adds that federal money has to come from somewhere. Student Loan Debt Forgiveness (2022)
Earlier in the segment, Zadek asks about the moral effect on recipients of having a debt forgiven without regard to merit, and Nolan Brown says she does not think people with student loan debt are necessarily irresponsible, noting she had student loans herself and that her husband helped her pay them off, with the final payments in 2019. She says Biden’s plan backdates the relief so that people who made final payments even in 2020 can get a reimbursement, and jokes that they should have waited. She says she is more worried about the effect on future borrowers, that it creates bad incentives, and that it is rational for people to think more debt will be written off in the future. Student Loan Debt Forgiveness (2022)
Zadek compares the policy to the 2008 financial crisis bailouts of General Motors, large banks and large brokerage houses, asking how it is anything other than a bailout. Nolan Brown agrees it is the same concept, says she and colleagues were also against the business bailouts, and calls the student loan policy essentially a middle-class entitlement, noting it is not aid going to the poorest people or to people who could not go to college but to people who have gone to college and are making up to $125,000 a year. She says it is silly to claim someone making $125,000 a year cannot afford a few hundred dollars a month in student loan payments, and gives the example of a doctor whose income is under the threshold now but will soon be well over it. Student Loan Debt Forgiveness (2022)
Across episodes
The topic recurs across all five episodes, but the treatment does not develop along a single line. The 2011 episode locates the transfer in public-sector pay and attributes the political dynamic to union influence and low citizen participation; the 2015 episode debates whether leveling the playing field necessarily coerces one segment to subsidize another; the 2020 episode distinguishes voluntary philanthropic transfers from coerced ones and asks who decides; the 2021 episode recasts transfers as a way of buying peace and preventing unrest; and the 2022 episode applies the frame to student loan forgiveness. Zadek advances the coerced-transfer framing in each, while Moore, McElwee, Lesperance, Martin and Nolan Brown each qualify or redirect it.
What the sources do not cover
The excerpts do not state the size, cost or legal basis of any transfer program discussed, nor the name of any bill or statute. They do not report which amendment, if any, a case turned on, or the holding of any case. They do not give the founding date or full principle of the Giving Pledge or the Atlantic Philanthropies, and several guest answers break off before their point is complete.