The limits to wealth creation
There is a debate in the economics literature, usually referred to as the limits to growth debate in which the ecological impact of growth and wealth creation is considered. Many of the wealth creating activities mentioned above (cutting down trees, hunting, farming) have an impact on the environment around us. Sometimes the impact is positive (for example, hunting when herd populations are high) and sometimes the impact is negative (for example, hunting when herd populations are low).
Most researchers feel that sustained environmental impacts can have an effect on the whole ecosystem. They claim that the accumulated impacts on the ecosystem put a theoretical limit on the amount of wealth that can be created. They draw on archeology to cite examples of cultures that they claim have disappeared because they grew beyond the ability of their ecosystems to support them.
Others are more optimistic. They claim that although localized environmental impacts may occur, large scale ecological effects are either minor (in terms of magnitude) or non-existent. They sometimes claim that if these global scale ecological effects exist, human ingenuity will always find ways of adapting to them. To them, there is no limit to the amount of growth or wealth that this planet will sustain.
Restricting the limits to the surface of Earth also restricts potential growth and the effects upon this planet.
The distribution of wealth
Societies have different opinions about wealth distribution and of the obligations related to wealth, but from the era of the tribal society to the modern era, there have been means of moderating the acquisition and use of wealth.
In extremely ecologically rich areas such as those inhabited by the Haida in the Cascadia Pacific East Rim ecoregion, traditions like potlatch kept wealth relatively evenly distributed, requiring leaders to buy continued status and respect with giveaways of wealth to the poorer members of society. Such traditions make what are today often seen as government responsibilities into matters of personal honour.
In modern societies, the tradition of philanthropy exists. Large donations from funds created by wealthy individuals are highly visible, although small contributions by many people also offer a wide variety of support within a society. The existence of organizations which survive on donations indicate that a society has some level of philanthropy.
In today’s societies much wealth distribution and redistribution is the result of government policies and programs. Government policies like the progressivity or regressivity of the tax system redistribute wealth to the poor or the rich respectively. Government programs like “disaster relief” transfer wealth to people that have suffered a loss due to natural disaster. Social security transfers wealth from the young to the old. Engaging in a war transfers wealth to certain sectors of society. Public education transfers wealth to families with children in these schools. Public road construction transfers wealth from people that do not use the roads to those people that do (and to those that build the roads). Some people resent having to contribute to some of these programs and disparagingly label them social engineering.
Most economist agree that there is an efficiency loss associated with redistributions, whether government or philanthropic. This is because of the bureaucracy that is required to collect the money (through taxation or through television commercials) and then redistribute it. People on the libertarian side of the political spectrum claim that this problem is more serious with government redistributions than with philanthopic redistributions.
Proponents of the supply-side theory of "trickle-down" economics claim that it is form of time-deferred philanthropy. The theory is that newly created wealth eventualy "trickles down" to all strata of society. Although wealth is created primarily by the wealthy, they will tend to reinvest their wealth, and this process will create even more wealth. As the economy grows more and more people will share in the newly created wealth. A similar arguement can be made about Keynsian economics. According to this theory, government redistributions and expenditures have a multiplier effect that stimulates the economy and creates wealth. Supply siders claim that wealth is created primarily by investment (supply), whereas Keynsians claim that wealth is driven by expenditure (demand). Today most economists agree that growth can be stimulated by either the supply or demand side, and these are really two side of the same coin, that is you seldom get one without the other.
Stresses within social distribution systems can be understood within a broad theory of political economy, where tradeoffs between means of protection, persuasion and production, and valuations of different styles of capital, are described. Simply put, if the rich do not at least once in a while give away, on their own free will, at least a small part of their richness to the poor, the poor would be much more likely to rebel against the rich.
Wealth in the form of land
Many indigenous cultures reject the notion of land wealth. In the western tradition, the concepts of owning land and accumulating wealth in the form of land, are justified according to John Locke. He claimed that because we admix our labour with the land, we thereby deserve the right to control the use of the land and benefit from the product of that land. In our post agricultural society this arguement has many critics. However the core idea has resurfaced in the modern notions of ecological stewardship, bioregionalism, natural capital, and ecological economics.
Source | Copyright