Unjust Deserts

Unjust Deserts

November 19, 2008

At the center of their rich and persuasive argument is the economic impact of socially-created knowledge. As people have solved numerous problems that bewildered and plagued those before us, we have accumulated an immense stock of knowledge which now plays a central role in economic growth and is largely responsible for the real income gains that separated the twentieth century from all that came before. This stock of knowledge is a social inheritance, nurtured by governments, institutions, and culture, and created by many generations of people.

And yet even as our economic growth has become so highly socialized through the impact of expanding knowledge, the fruits of knowledge — the wealth being generated by knowledge-based growth — flows increasingly to the top. A new aristocracy is reaping huge unearned gains from our collective intellectual wealth.

In exposing and challenging this contradiction, Unjust Deserts, says Barbara Ehrenreich, reveals the untold story of wealth creation in our time, and, as Bill Moyers writes, it opens an extraordinary new vista on the moral bankruptcy of our second Gilded Age.

Praise for Unjust Deserts

Unjust Deserts is an elegant work of moral philosophy, a reflection on science, technology, cumulative causation and the collective character of the common wealth. It is work with deep implications for structures of pay, ownership and taxation, perfectly timed for the end of the grab-what-you-can era."

-James K. Galbraith, Lloyd M. Bentsen Jr. Chair in Government/Business Relations, University of Texas at Austin

"A fresh and original analysis of how a modern economy progresses through the cumulative results of invention, discovery, communication and learning...A genuine work of scholarship."

-Thomas Schelling, Nobel Laureate in Economic Sciences, University of Maryland

"This deeply informed and carefully argued study of the social and historical factors that enter into creative achievement formulates issues of entitlement in ways that have far-reaching implications for a just social order. It merits careful study and reflection, and should be a call for constructive action."

-Noam Chomsky, Massachusetts Institute of Technology

"The authors' many interesting and important insights and observations make this a work thatdeserves to be widely read."

-Robert A. Dahl, Sterling Professor Emeritus of Political Science, Yale University

"Unjust Deserts reveals the untold story of wealth creation in our time. Our celebrated entrepreneurs and money men are hoisting a cherry to the top of an already existing sundae-and then laying claim to the entire ice cream parlor. There may be individual effort and even genius involved with the cherry placement, but their individual rewards fail to recognize the contributions of other actors-workers, nature, taxpayers, community infrastructure, and our technological inheritance-as the real stars of the show."

-Barbara Ehrenreich, author of Nickel and Dimed

"Rarely do the facts of the matter so illuminate a moral truth as they do in Unjust Deserts. Quite simply, this book changes the fundamental terms of reference for future debates about inequality. It convincingly demonstrates that knowledge is the primary source of our national wealth, with or without the elites at the top who claim the lion's share. In a surprising yet persuasive way, Alperovitz and Daly help us understand what this reality means, and the values at stake, in a nation growing more unequal with each passing day. This book opens an extraordinary new vista on the moral bankruptcy of our second Gilded Age."

-Bill Moyers, Host, PBS' Bill Moyers Journal

Inside the book

Table of Contents


Part I: The Fruits of Knowledge

1. Knowledge and Economic Growth
2. Deep Knowledge and External Memory
3. How Does Technological Progress Occur?
4. Public Foundations of Private Wealth

Part II: Just Deserts

Introduction to Part II
5. Unearned Income
6. Unearned Income Extended
7. Toward a More Encompassing Theory

Conclusion: Earned and Unearned in the Era of the Knowledge Economy

A Note on the Philosophical Argument

Key Facts from the Book

Who invented the telephone? You might have said Antonio Meucci, if the largely unknown émigré stage technician could have afforded the $10 fee for patent on his "teletrofono" that he had designed more than five years before Alexander Graham Bell's patent.

A 1995 MIT study found that eleven of the fourteen most medically significant drugs developed over the previous quarter century originated with research financed by the government.

The popular heroic tale of the steamboat's invention by lone genius Robert Fulton missed the fact pointed out by his biographer that "not one of the essential devices used by Fulton was new."

The frames of airplanes depended upon production of light-weight aluminum that drew on a long history of chemistry research leading to an electrolytic method which in turn required mass generation from public hydroelectric plants to bring it to scale.

Gregor Mendel's genetic theory was ignored for more than a generation after his death until statistical methods became common place as a "way of knowing" and Mendel was rediscovered as the "father of modern genetics."

As late as 1770 British factory production had been only two to three times as fast as hand weaving and spinning in India. By 1820, however, Britain could produce sixteen times as much cloth for the same labor effort.

Plowing, planting and harvesting one acre of wheat took an estimated fifty-four labor-hours of work in 1829. By 1895, innovations reduced this figure to less than three hours.

In 2004 federal government funding accounted for nearly two thirds of all basic research done in the United States.

70 percent of science citations in biotechnology patents are from papers originating in "public science institutions."

As early as 1972 the Defense Department sought to persuade a commercial operator to take over the ARPANET. However, the market in data services was deemed too small at the time to invest in what has since become the internet.

According to one estimate, 30 percent of GNP is based on inventions made possible by quantum mechanics.

Microsoft had $1.9 billion in physical assets, yet nearly $330 billion in market capitalization in the year 2000.

By some estimates, 80 percent of economic growth over the past century was created not by technological progress - rather than by labor and capital inputs.

Before 1650 there were fewer than 10 scientific journals published in the West. By the mid-twentieth century, some fifty thousand has been founded.

The richest 1 percent of households owns nearly half of all individually owned investment assets - the bottom half of the population owns less than 1 percent.

The distribution of income and wealth in the United States is more unequal today than at any time since the 1920s.

The world's wealthiest man, Warren Buffett believes that "society is responsible for a very significant percentage of what I've earned."

Economic output per hour worked has increased fifteenfold since 1870.

In 2000, college and university libraries in the United States held over 900 million items.

Human cognition developed from the "episodic" memory of apes, to the capacity for "mimesis," to the "externalization of memory" in which our knowledge was stored and accessible for reference, communication and revision.

Agricultural economist Vernon Ruttan attributes more than 50 percent of modern agricultural productivity growth to a combination of public-sector research and increased education in farm communities.

As late as 1969 more than 75 percent of basic research and development in aeronautics was financed by the federal government.