Foreign Policy Blogs

Rich Debates


As questions of economic inequality elbow their way from the classroom to the headlines of the evening news, the question of tax has become ever more prescient. It was also the topic of the latest installment of the Munk Debates. The simple question was put forward as “be it resolved: should the rich be taxed (more)” was the latest in a series that since 2008 has been the Canada’s premier venue for debate, focusing on key international events. Traditionally liberal Toronto with challenges to its comparatively strong social safety net and welcoming atmosphere, was regarded as fertile ground for a debate where the country’s most populous city was largely insulated from the global economic storm. A poll conducted before the start of the debate reflected 58 percent voted in favor of the motion, 28 percent against and 14 percent undecided.

It’s no surprise the current president of Socialist International should want to tax the rich more. What does come as a surprise is when that same man is the scion of an elite political family, a former Prime Minister himself and a lecturer at both Harvard and Columbia. Yet this is exactly the position taken by, George Papandreou, the former Prime Minister of Greece. Dubbed “Captain America” in his homeland, Papandreou was at the helm of a Greek government that became a poster-child for the global crisis in Europe, revealing an incredibly indebted nation and one where ironically, tax evasion hobbled the state. Papandreou was partnered with Nobel Prize-winning economist and New York Times columnist, Paul Krugman. Krugman was the first to admit that his position on taxing the rich more was aimed directly at individuals such as himself and his friends. The friendly reminder was conceded before his opponents could get in a jab.

Arguing that the rich should not be taxed more was Newt Gingrich, who in 2013 was a parody of the bulldozer politician of the Clinton-era. Gingrich continues to argue that taxation on the rich, or anyone else for that matter, was a threat to liberty and freedom. Economic morality was high on his agenda, utilizing the well-worn phrase that he and his ilk sought to “globally rise from the bottom, not lower the top.”

Gingrich was joined by Arthur Laffer, an economist under President Regan and who still advocates a small state bureaucracy and low taxes. At times, Laffer seemed less stuck in rhetoric and more on analysis. He too, however would be undone by his own hand. Citing the example of Warren Buffet paying an equal amount of tax as his secretary, based on percentage of income, Laffer decried this as media hype. Indicative here is Krugman, who was quick to point out that the decision lower taxes on capital gains in 1997 came from none other than Gingrich, much to chagrin of Laffers debate partner. Laffer also cited Sweden as an example of a country with a strong social net where taxes and state spending were reduced. Papandreou was quick to point out that Laffer was ignoring recent riots that had flared across the country directly in response to this policy.

Perhaps Laffers worst faux pas was quoting NCAA president Benjamin Hooks in saying that “blacks were hired last and fired first,” not least because of detrimental policies he himself had aggressively pursued under Regan, but also because it spoke to the elephant in the room; privilege. Here were four privileged, white, able-bodied males speaking to an audience that could afford the modest price of admission to debate the finer points of economic policy on a Thursday night at a venue that on a regular day hosted the symphony. Krugman’s attempts to shield this stark reality with witty remarks on the straw, men of the debate causing fire (never mind moral) hazards, economists “stepping outside to throw spreadsheets at each other” and even a few well-timed swipes at Toronto’s (allegedly) crack smoking Mayor could not ignore the lack of diversity of the speakers. Even the question and answer period excluded the audience entirely and went instead to pre-recorded video questions by former U.S. Treasury secretary Larry Summers and Kishore Mahbubani, Dean and Professor in the Practice of Public Policy of the Lee Kuan Yew School of Public Policy in Singapore.

The Canadian economic context as a whole was a non-factor while the gloves remained on throughout the debate. Papandreou thrice mentioned living in Canada to escape dictatorship at home in Greece, but not a single mention was made about how the policies of his grandfather, father and even his own brief stint at the helm reinforced the patronage-based political and economic policies that today reveal a 60 percent youth unemployment rate in country synonymous with economic profligacy and is perpetually on the brink of bankruptcy. Laffer, citing his whimsical quote on the NCAA president, was not taken to task for policies that target minorities. Gingrich was prodded lightly, but it was more akin to gentle ribbing in the smoking room of an all-boys club.

After all of this, Laffer will go back to Tennessee, Krugman to his column in The New York Times, while Papandreou slugs it out on the lecture circuit between Boston and New York. Sure, we should tax the rich more. The audience was even swayed enough to increase the final yes vote to 70 percent-30 percent. But those that will draft, implement and ultimately benefit from these policies will continue to be white? Middle class? Men just like those that spoke at the Munk Debates. And while the gloves may have stayed on inside the venue, rest assured the continuing global economic uncertainty will ensure they remain off by those affected by their decisions.