Harry Binswanger – a member of the Ayn Rand Institute and defender of laissez-faire capitalism – recently created a storm of controversy when he wrote that it’s time for the 99% to give back to the 1%.
The numbers refer to the Occupy movement – which started with Occupy Wall Street – in which protesters claimed that the country’s wealth is concentrated in the top 1% of the rich, while the other 99% are exploited. They argued that the 1% should give back more to everyone else.
Binswanger not only disagreed with that in a column for Forbes, but also proposed that the highest earner each year in the United States should be awarded the Congressional Medal of Honor.
Much of what Binswanger wrote echoed the beliefs of Rand, a Russian immigrant who wrote fiction and non-fiction in the first half of the 20th Century. Her most famous works are “The Fountainhead” and “Atlas Shrugged,” two works that use fiction to promote Objectivism, Rand’s philosophy which, among other things, proposes that the only moral purpose of life is the pursuit of happiness.
The controversy over the column should be of interest to those in business and business students. Rand’s philosophy and writings are very popular in some quarters of the business world, particularly her belief that laissez-faire capitalism – keeping a minimum of government regulations on business – is the best course for a happy society.
In his Forbes column, Binswanger said the idea that successful people should be forced to “give back to the community” through taxes is based on a bad assumption that the wealthy take money from “the community” and that wealth is created by exploiting the masses (he refers to the latter as a “Marxist notion”).
“it’s not the Henry Fords and Steve Jobs who exploit people,” he wrote. “It’s the Al Capones and Bernie Madoffs.”
He went on to write, “The shoe is on the other foot. It is “the community” that should give back to the wealth-creators. It turns out that the 99% get far more benefit from the 1% than vice-versa.”
He goes on to propose that the highest-earners should not be forced to pay more taxes, but should be “thanked and public honored.” He also proposes that anyone who earns a million dollars or more should be exempt from all income taxes.
Binswanger argued that this sort of thinking could lead to Warren Buffett getting the same sort of adulation from the nation’s youth that is currently focused on the likes of Lady Gaga.
Finally, he likens the Internal Revenue Service to “a vampire squid wrapped around the face of humanity,” using a line that has been used by others to criticize Goldman Sachs.
“An end must be put to the inhuman practice of draining the productive to subsidize the unproductive,” Binswanger wrote.
There are already more than 100 comments on the column, most of them attacking Binswanger. The back and forth between Binswanger and his critics makes for good reading to anyone interested in the ethics of business.
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