I probably won't get to that soon, but I'll put it on the list.

I also want to say that I'm sorry for kicking off this giant tangential thread on your post. I know this sort of thing can be a disincentive to write in the future, so I want to explicitly say that you're a good writer, this was a piece worth reading, and I would like to read more of your posts in the future.

Power Buys You Distance From The Crime

by Elizabeth Aceso Under Glass3mo2nd Aug 20197 min read64 comments

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Introduction

Taxes are typically meant to be proportional to money (or negative externalities, but that's not what I'm focusing on). But one thing money buys you is flexibility, which can be used to avoid taxes. Because of this, taxes aimed at the wealthy tend to end up hitting the well-off-or-rich-but-not-truly-wealthy harder, and tax cuts aimed at the poor end up helping the middle class. Examples (feel free to stop reading these when you get the idea, this is just the analogy section of the essay):

  • Computer programmers typically have the option to work remotely in a low-tax state; teachers need to be where the classroom is. 
  • Estate taxes tend to hit families with single large assets (like a business) harder than those with diverse investments (who can simply sell assets to pay for taxes), who are hit harder than those with enough wealth to create trust funds.
  • Executives can choose to receive stock (which is taxed more favorably) instead of cash to the exact percentage they desire. Well paid employees are offered stock, but the amount will not be tailored to their needs. Lower level employees either are not offered this, or are not in a position to take advantage of it.
  • The legal distinction between a business (whose expenses are tax deductible) and a hobby (deductions not allowed) is based on whether the activity nets you income (there are complications and you can sometimes prove a money loser is a business, but this is a good rule of thumb). Small business owners (e.g. lawyers) can fold their occasionally-revenue-generating hobby (e.g. photography) into their real business, enabling tax deductions for their hobby.
  • IRAs, 401ks, HSAs, and FSAs all lock your money up for a time or purpose, in exchange for lower or delayed taxes. You can only take advantage of them if you’re sure you won’t need the money for another purpose sooner.
  • More examples here.

Note that most of these are perfectly legal and the rest are borderline. But we're still not getting the result we want, of taxes being proportional to income.

When we assess moral blame for a situation, we typically want it to be roughly in proportion to much power a person has to change said situation. But just like money can be used to evade taxes, power can be used to avoid blame. This results in a distorted blame-distribution apparatus which assigns the least blame to the person most able to change the situation. Allow me a few examples to demonstrate this.

Examples 1 + 2: Corporate Malfeasance

Amazon.com provides a valuable service by letting any idiot sell a book, with minimal overhead. One of the costs of this complete lack of verification is that people will sell things that wouldn't pass verification, such as counterfeits, at great cost to publishers and authors. Amazon could never sell counterfeits directly: they're a large company that's easy to sue. But by setting themselves up as a platform on which other people sell, they enable themselves to profit from counterfeits.

Or take slavery. No company goes “I’m going to go out and enslave people today” (especially not publicly), but not paying people is sometimes cheaper than paying them, so financial pressure will push towards slavery. Public pressure pushes in the opposite direction, so companies try not to visibly use slave labor. But they can’t control what their subcontractors do, and especially not what their subcontractors’ subcontractors’ subcontractors do, and sometimes this results in workers being unpaid and physically blocked from leaving.

Who’s at fault for the subcontractor(^3)’s slave labor? One obvious answer is “the person locking them in during the fire” or “the parent who gives their kid piecework”, and certainly it couldn’t happen without them. But if we say “Nike’s lack of knowledge makes them not responsible”, we give them an incentive to subcontract without asking follow up questions. The executive is probably benefiting more from the system of slave labor than the factory owner is from his little domain, and has more power to change what is happening. If the small factory owner pays fair wages, he gets outcompeted by a factory that does use slave labor. If the Nike CEO decides to insource their manufacturing to ensure fair working conditions, something actually changes.

...Unless consumers switch to a cheaper, slavery-driven shoe brand.

Which is actually really hard to not do. You could choose more expensive shoes, but the profit margin is still bigger if you shrink expenses, so that doesn’t help (which is why Fairtrade was a failure from the workers’ perspective). You can’t investigate the manufacturing conditions of everything you buy-- it’s just too time consuming. But if you punish obvious enslavement and conduct no follow up studies, what you get is obscured enslavement, not decent working conditions.

Moral Mazes describes the general phenomenon on page 21:

Moreover, pushing down details relieves superiors of the burden of too much knowledge, particularly guilty knowledge. A superior will say to a subordinate, for instance: “Give me your best thinking on the problem with [X].” When the subordinate makes his report, he is often told: “I think you can do better than that,” until the subordinate has worked out all the details of the boss’s predetermined solution, without the boss being specifically aware of “all the eggs that have to be broken.” It is also not at all uncommon for very bald and extremely general edicts to emerge from on high. For example, “Sell the plant in [St. Louis]; let me know when you’ve struck a deal,” or “We need to get higher prices for [fabric X]; see what you can work out,” or “Tom, I want you to go down there and meet with those guys and make a deal and I don’t want you to come back until you’ve got one.” This pushing down of details has important consequences.
First, because they are unfamiliar with—indeed deliberately distance themselves from—entangling details, corporate higher echelons tend to expect successful results without messy complications. This is central to top executives’ well-known aversion to bad news and to the resulting tendency to kill the messenger who bears the news.
Second, the pushing down of details creates great pressure on middle managers not only to transmit good news but, precisely because they know the details, to act to protect their corporations, their bosses, and themselves in the process. They become the “point men” of a given strategy and the potential “fall guys” when things go wrong. From an organizational standpoint, overly conscientious managers are particularly useful at the middle levels of the structure. Upwardly mobile men and women, especially those from working-class origins who find themselves in higher status milieux, seem to have the requisite level of anxiety, and perhaps tightly controlled anger and hostility, that fuels an obsession with detail. Of course, such conscientiousness is not necessarily, and is certainly not systematically, rewarded; the real organizational premiums are placed on other, more flexible, behavior.

These examples differ in an important way from tax structuring: structuring requires seeking out advice and acting on it to achieve the goal. It’s highly agentic. The Wells Fargo and apparel-outsourcing cases required no such agency on the part of executives. They vaguely wished for something (more revenue, fewer expenses), and somehow it happened. An employee who tried to direct the executives’ attention to the fact that they were indirectly employing slaves would probably be fired before they ever reached the executives. Executives are not only outsourcing their dirty work, they’re outsourcing knowledge of their dirty work. 

[Details of personal anecdotes changed both intentionally and by the vagaries of human memory]

Example/Exception 2.5: Corporate Malfeasance Gone Wrong

The Wells Fargo account fraud scandal: in order to meet quotas, entry level Wells Fargo employees created millions of unauthorized accounts (typically extra services for existing customers). I originally included this as an example of "executives incentivizing entry level employees to commit fraud on their behalf", but it turns out Wells Fargo made almost no money off the fraud- $2m over five years, which hardly seems worth the employees' time, much less the $185m fine. I've left this in as an example of how the incentives-not-orders system doesn't always work in powerful people's favor.

Thanks to Larks for pointing this out.

Example 3: Foreign Medical Care

My cousin Angela broke her leg while traveling in Thailand, and was delighted by the level of care she received at the Thai hospital-- not just medically, but socially. Nurses brought her flowers and were just generally nicer than their American counterparts. Her interpretation was that Thailand was a place motivated by love and kindness, not money, and Americans should aspire to this level of regard for their fellow human being. My interpretation was that she had enough money to buy the goodwill of everyone in the room without noticing, so what she should have learned is that being rich is awesome, and that being an American who travels internationally is enough to qualify you as rich.

This is mostly a success story for the free market: Angela got good medical care and the nurses got money (I’m assuming). Any crime in this story were committed off-screen. But Angela was certainly benefiting from the nurses’ restrained choices in life. And had she had actual power to affect healthcare in US, trying to fix it based on what she learned in Thailand would have done a lot of damage.

Example 4: My Dating an Artist Experience

My starving-artist ex-boyfriend, Connor, stayed with me for two months after a little bad luck and a lot of bad decisions cost him his job and then apartment (this was back when I had a two bedroom apartment to myself-- I miss Seattle). During this time we had one big fight. My view on the fight now is that I was locally in the right but globally the disagreement was indicative of irreconcilable differences that should have led us to break up. That was delayed by months when he capitulated.

One possibility is that he genuinely thought he could change and that I was worth the attempt. Another is that he saw the incompatibility, or knew things that should have led him to see it, but lied or blocked out the knowledge so that he could keep living with me. This would be a shitty, manipulative thing for him to do. On the other hand, what did I expect? If the punishment for breaking up with me was, best case scenario, moving into a homeless shelter, of course he felt pressure to appease me. 

It wasn’t my fault he felt that pressure, any more than it was Angela’s fault her nurses were born with fewer options than her. Time in my spare bedroom was a gift to him I had no obligation to keep giving. But if I’d really valued a coercion free decision, I would have committed to housing him independent of our relationship. Although if that becomes common knowledge, it just means people can’t make an uncoerced decision to date me at all. And if helping Connor at all meant a commitment to do so forever, he would get a lot less help.

This case is more like the Wells Fargo case than Amazon or Nike. I was getting only the appearance of what I wanted (a genuine relationship with a compatible person), not the real thing. Nonetheless, the universe was contorting itself to give me the appearance of what I wanted.

Summary

What all of these stories have in common is that (relatively) powerful people’s desires were met by people less powerful than them, without them having to take responsibility for the action or sometimes even the desire. Society conspired to give them what they wanted (or in the case of Connor and Wells Fargo, a facsimile of what they wanted) without them having to articulate the want, even to themselves. That’s what power means: ability to make the game come out like you want. Disempowered people are forced to consciously notice things (e.g., this budget is unreachable) and make plans (e.g., slavery) where a powerful person wouldn’t. And it’s unfair to judge them for doing so while ignoring the morality of the powerful who never consider the system that brings them such nice things. 

Take home message:

  1. The most agentic person in a situation is not necessarily most morally culpable. One of the things power buys you is distance from the crime.
  2. Power obscures information flow. If you are not proactively looking to see how your wants and needs are being met, you are probably benefiting from something immoral or being tricked.

This piece was inspired by a conversation with and benefited from comments by Ben Hoffman. I'd also like to thank several commenters on Facebook for comments on an earlier draft and Justis Mills for copyediting.

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