The family who owned the Patagonia clothing company recently gave the company to a new trust which will take all the profits and dedicate it to fighting climate change. Meaning that the $3 billion company will now spend the $100 million in profits it generates annually on good things. The billionaire family hopes that their action will inspire other insanely wealthy people to do the same with their companies.
“Hopefully this will influence a new form of capitalism that doesn’t end up with a few rich people and a bunch of poor people,” Mr. Chouinard, 83, said in an exclusive interview. “We are going to give away the maximum amount of money to people who are actively working on saving this planet.”
Patagonia will continue to operate as a private, for-profit corporation based in Ventura, Calif., selling more than $1 billion worth of jackets, hats and ski pants each year. But the Chouinards, who controlled Patagonia until last month, no longer own the company.
There’s no doubt that we can all reduce our carbon footprint, but there’s one segment of the population who drastically need to cut their carbon output: the rich. Recent headlines have made it clear that the poor are impact most by climate issues, while the rich can afford solutions the rest of us cannot. What’s more, according to the UN, the wealthiest 1% produce double the combined carbon emissions of the poorest 50%. The richest 5% contributed 37% of emissions growth between 1990 and 2015.
If we’re going to avoid climate catastrophe then we need the polluter elite to do their part – not just the rest of us.
He continued: â€œRich people who fly a lot may think they can offset their emissions by tree-planting schemes or projects to capture carbon from the air. But these schemes are highly contentious and theyâ€™re not proven over time.
The wealthy, he said, â€œsimply must fly less and drive less. Even if they own an electric SUV thatâ€™s still a drain on the energy system and all the emissions created making the vehicle in the first placeâ€.
Sam Hall, from the Conservative Environment Network, told BBC News: “Itâ€™s right to emphasise the importance of fairness in delivering (emissions cuts) – and policy could make it easier for people and businesses to go green – through incentives, targeted regulation and nudges.
Democracy is rule by the people and it’s up to the people to ensure that this continues to be the case. Currently the growing inequality in democracies is threatening the very existence of these societies to continue, but there is a simple solution. If we ensure that billionaires give back to the society that they used to make their wealth then we can continue to thrive. Every billionaire made their money by extracting wealth from others and we can’t forget that. If we don’t make billionaires contribute back then we’ll continue to have many social problems. Perhaps it’s time for something radical and outright ban billionaires?
But there are far more urgent reasons than poverty to get rid of billionaires and reverse the trend of economic polarization. A growing body of economic and political-science research demonstrates that Gilded Ageâ€“type inequality does not just mean having too many with too little. It is warping the very social fabric of the country, stifling mobility, innovation, investment, and growth, and putting the country at political risk.
Given all this evidence, wealth taxes are not simply a way to pay for programs for the poor. They are a way of reducing the incentive for the rich to soak up all that money in the first place. They are a way of pushing the steps of the income ladder closer together to make them easier to climb. They are a way of ending what two leading economists on inequality, Emmanuel Saez and Gabriel Zucman, call â€œoligarchic drift,â€ and its attending political risks. They are a way of building a healthier economic future for everyoneâ€”including those 400 families up at the tippy top.
Unless you earn more then $200,000 a year corporate tax cuts likely make your life worse. Even though it’s a myth, it’s long been argued that by cutting taxes for wealthy companies jobs will magically pop into existence. Indeed, this myth is so pervasive in modern capitalism that we’re increasing inequality as a byproduct of supporting tax cuts. The good news is that the discourse is changing. Every year there’s more evidence that helping the 1% is detrimental to the rest of society and people are growing more aware of this. This month the Harvard Business School released their research on corporate tax cuts.
In the paperCorporate Tax Cuts Increase Income Inequality(pdf), Rouen and his collaborators, Duke University professors Suresh Nallareddy and Juan Carlos SuÃ¡rez Serrato, analyze data created by tax filings to compare effects on workers at varying compensation levels in different US states with and without tax cuts.
â€œCompensation and income inequality are very relevant to managers,â€ Rouen says. â€œThis is something that theyâ€™re now having to deal with in terms of SEC disclosures and having to disclose CEO pay ratio. Active managers are often the face of income inequality, in that these are the people who set the pay for everyone else and also are the highest paid employees in their organizations.â€
We’ve all heard about how downtowns have failed in smaller cities while big box stores like Walmart succeed; what we don’t really talk about is why and what’s the solution. First we need to establish that suburban big box stores are horrible for people and the economy (which is easy); then we need to address those core issues. The folks over at Strong Towns do exactly that and recently published a great piece exploring how the costs of running a big box operation from the perspective of a city is high. The solution then should be easy: reinforce local economies for success.
And we should also recognize where our wealth really comes from. It comes from our downtown and our core neighborhoods (those within walking distance of the downtown). It certainly doesn’t come from people driving through those places. It doesn’t come from people commuting in. It doesn’t come from tourists or developers or the potential of land development out on the edge. Our wealth â€” the wealth built slowly over generations â€” is slowly seeping away in our downtown and its surrounding neighborhoods.
Put these things together â€” the need to build resilience and the historic wealth that still remains in our core â€” and the strategy becomes too obvious to ignore: We need to piece our economic ecosystem back together. We shouldn’t spend a penny on the mall â€” we should be willing to let it fall apart and collapse if the market can’t support it. But we should support those investments in the core that are already paying our bills.
And here’s the really sweet thing: the downtown doesn’t need millions of dollars of investment. There are some trying to force that down the city’s throat, but we don’t need it. It’s already the most successful area in the region. We just need to start reconnecting things.