Nick Hanauer: How Should We Distribute Our Wealth? Nick Hanauer is a rich guy with several houses, but is he greedy? He argues that an increase in minimum wage would be good for everyone.
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How Should We Distribute Our Wealth?

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How Should We Distribute Our Wealth?

How Should We Distribute Our Wealth?

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GUY RAZ, HOST:

So Nick Hanauer has more than one house, more than two, in fact, more than three. How many do you have?

NICK HANAUER: Five, six.

RAZ: Five or six?

HANAUER: Yeah.

RAZ: Which one?

HANAUER: You know, I just have a house here. I have a house in Mexico. I have a house in San Juan Islands. I have oddly two ski houses - trying to sell one.

RAZ: So Nick Hanauer is very rich, but he didn't come from money. And having so much, he admits, it's a little weird.

HANAUER: It makes my wife super uncomfortable (laughter).

RAZ: When you talk about, like, being rich?

HANAUER: Well, when anybody talks about...

RAZ: Yeah.

HANAUER: ...Our circumstance. You know, I work hard and I'm reasonably smart, but I was definitely and have repeatedly been in the right place at the right time.

RAZ: Nick co-founded a tech company, which later sold to Microsoft for $6.4 billion. So he's not just a 1-percenter. Nick's, like, in the top .01 percent, which brings us to our next sin - greed.

(SOUNDBITE OF SONG, "GOLD DIGGER")

KANYE WEST: (Singing) Now, I ain't saying she's a gold digger.

HANAUER: (Laughter).

RAZ: Is greed a sin?

HANAUER: Absolutely.

(SOUNDBITE OF SONG, "GOLD DIGGER")

WEST: (Singing) But she ain't messing with no broke, broke.

RAZ: Really?

HANAUER: Absolutely it's a sin. Greed is a sin because humans are social creatures. And they simply cannot survive without the opposite of greed, which is cooperation.

RAZ: People like Nick Hanauer - the top 1 percent - will soon control more than half of the world's wealth. And Nick believes the growing gap between rich and poor is bad for everyone. And he thinks the driving force behind that gap is greed. Here's part of Nick's TED Talk.

(SOUNDBITE OF TED TALK)

HANAUER: You see, the problem isn't that we have some inequality. Some inequality is necessary for a high-functioning capitalist democracy. The problem is that inequality is at historic highs today, and it's getting worse every day. And if wealth, power and income continue to concentrate at the very tippy top, our society will change from a capitalist democracy to a neo-feudalist rentier society like 18th-century France, you know, France before the revolution and the mobs with the pitchforks. So I have a message for my fellow plutocrats and zillionaires and for anyone who lives in a gated bubble world - wake up. Wake up. It cannot last because if we do not do something to fix the glaring economic inequities in our society, the pitchforks will come for us, for no free and open society can long sustain this kind of rising economic inequality. It has never happened. There are no examples. You show me a highly unequal society, and I will show you a police state or an uprising. The pitchforks will come for us if we do not address this. It's not a matter of if; it's when.

RAZ: Coming up, Nick Hanauer's plan to fight the sin of greed. That's in a minute. On the show today - the Seven Deadly Sins. I'm Guy Raz, and this is the TED Radio Hour from NPR.

(SOUNDBITE OF MUSIC)

RAZ: It's the TED Radio Hour from NPR. I'm Guy Raz. And on the show today, we're deep in the pit of sin, slogging our way through sloth and gluttony and lust and wrath. And before the break, we were talking to Nick Hanauer, your basic tech gazillion-aire from Seattle, about greed. So what do you think makes people that way? Like, what do you think makes people greedy?

HANAUER: So I think that the most powerful dynamic in human societies is the yearning for status.

RAZ: Yeah.

HANAUER: I think the people who end up being extraordinarily successful - it's been my observation - tend to care enormously about status, particularly business people, right? Because the only point of money, you know, the only reason to have a 300-foot-long boat is because they're bigger than 200-foot-long boats.

RAZ: Yeah.

HANAUER: You know, people do these things to prove that they have more money and more status than others. And so, you know, I think that that drives a ton of human behavior.

RAZ: And in his TED Talk, Nick says that if nothing changes, the consequences, not just for poor people, but also for rich people, could be disastrous.

(SOUNDBITE OF TED TALK)

HANAUER: So what do I see in our future today you ask? I see pitchforks, as in angry mobs with pitchforks, because while people like us plutocrats are living beyond the dreams of avarice, the other 99 percent of our fellow citizens are falling farther and farther behind. I'm not making a moral argument that economic inequality is wrong. What I am arguing is that rising economic inequality doesn't just increase our risks from pitchforks, but it's also terrible for business, too. So the model for us rich guys should be Henry Ford. When Ford famously introduced the $5 day, which was twice the prevailing wage at the time, he didn't just increase the productivity of his factories, he converted exploited autoworkers who were poor into a thriving middle class who could now afford to buy the products that they made. Ford intuited what we now know is true. Raising wages increases demand, which increases hiring which, in turn, increases wages and demand and profits. And that virtuous cycle of increasing prosperity is precisely what is missing from today's economic recovery.

RAZ: It's for all these reasons that Nick's been doing things that might seem to run counter to his self-interest, like promoting higher taxes on people like him. And, in his hometown of Seattle, Nick lobbied the city council to raise the minimum wage to 15 bucks an hour. It's now the highest in the country. And he says all of these ideas aren't just good for poor people, they'll actually help rich people, too.

(SOUNDBITE OF TED TALK)

HANAUER: The work of democracies is to maximize the inclusion of the many in order to create prosperity, not to enable the few to accumulate money. Government does create prosperity and growth by creating the conditions that allow both entrepreneurs and their customers to thrive - balancing the power of capitalists like me and workers isn't bad for capitalism, it's essential to it. Fellow plutocrats, I think it may be time for us to commit to a new kind of capitalism which is both more inclusive and more effective, a capitalism that will ensure that America's economy remains the most dynamic and prosperous in the world. Or, alternatively, we could do nothing, hide in our gated communities and private schools, enjoy our planes and yachts - they're fun - and wait for the pitchforks. Thank you.

(APPLAUSE)

RAZ: Rich people, your fellow plutocrat, Nick Hanauer, is coming after you. You can check out his entire talk at ted.com.

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