This is an amazing nugget which should be the context for any controversial discussion about "Billionaires". I have utmost respect for the former category, but I also believe that the later category should not exist (as in those people should exist but they should not have any unearned billions and all the unearned power and privileges that come with it).
I think most people agree that a book author deserves a couple dollars every time someone purchases their media. JK Rowling's stories have been read and watched billions of times? Who deserves to control that capital more than JK Rowling herself?
While Rowling provided the creative input to her stories, they were:
- Edited by other people
- Printed by other people
- (Films were) directed by other people
- Characters in the films were played by other people
- Distributed by other people
If there was no J.K. Rowling, we (admittedly) wouldn't have the stories. But the same is true of all of the other moving parts in the media business.
I'm defending her ownership of capital, not her spending. I may disagree with my government spending money bombing Muslims that disagree with it, but I recognize it's right to collect trillions of dollars in taxes.
The government is made up of people who make mistakes even if they have the best of intentions. It doesn't make sense for a bureaucrat to have more control of the wealth than the person who created that wealth purely from her imagination.
I'm saying that it's reasonable to expect a significant fraction of the wealth that you created, which is true in every developed country. I'm not advocating for libertarianism.
So do you really believe any single person is so "brilliant" (or whatever adjective you want to use) to have truly created or earned billions of dollars through their own brilliance alone? Do you think Jeff Bezos is 1,310,000x more deserving of his wealth than the average American household?
IMO it's not reasonable at all past a certain point to continue to amass this kind of wealth that is a by-product of a broken system driven by exploitation, a system in this stage clearly set up for the rich to get richer while those struggling remain stagnant at best.
It's not about brilliance. Technology and organization allow your impact to scale to superhuman levels. I used the JK Rowling example because it's obvious that without her, we would not have the multi-billion dollar franchise that is Harry Potter. Without Harry Potter, there is no guarantee that another franchise would have taken it's place.
It's also not a stretch to suggest that Jeff Bezos or Bill Gates have created over 100 times more value than Rowling. Their roles are more nebulous, but they certainly did something better than their competitors. Microsoft Excel alone possibly has possibly saved trillions of hours productivity.
I also am not sure how you're supposed to tax something like stock.
If Bezos sold all of his stock in Amazon, well, for one he'd certainly be worth a lot less fairly rapidly as the stock collapsed based on his massive sale of it.
He's taxed on the sale of his stock as far as I understand it, although the capital gains tax should presumably be higher than the tax on earned wages.
It seems sensible that when you're putting hours in, you'd get taxed at a lower rate than someone whose money made them more money.
But... if Bezos has 10 million shares and they're worth 100 billion dollars, do you... take his shares away even if he's not selling them just because his assets are worth more than a billion dollars?
I think it's fair to say the current state of affairs where his employees are working at barely livable wages and getting carted away in ambulances from his warehouses is certainly untenable.
At that point the federal government needs to step in and say that these places aren't paying these workers enough to live a comfortable lifestyle and support a family.
It's too bad the extremely wealthy are also so able to pervert our systems of governance through lobbying efforts which they can afford.
Who’s going to invest the capital and do the work to run a company that develops technology (eg. hiring the tens of thousands of people required to fabricate 5 nm chips and build cell phones) if there is no way to become a billionaire off of it? I figure the people who are capable of that kind of stuff would put all their efforts toward overthrowing the system instead if that’s what the rules were.
I buy it for basic research that a few people in a lab can do, but it seems hard to coordinate the efforts of tens of thousands of people that way. You need ruthless prioritization of different initiatives and performance incentives for management and other stuff that public servants and academics aren’t that big on.
i still fail to understand what the issue with having billions of money is. the best part is these people ignore that money is just a stand-in for power, which they absolutely fucking hate, and that if you ban billionares people will still have more power than a billionare via other mechanisms :)
Moving the assets above the line to a social wealth fund whose profits will be paid out equally to all residents of the country. Such funds already exist in several countries (and US states), no reason why we can't get creative about how to grow them.
In good idle games they shift the goal once you hit more boring levels.
Stealing partly from someone else I can't find a reference for:
Ownership capped at 1 billion, you get a sticker saying "I won capitalism" and all further growth and income goes to the government for social programs. You get a new ticker that estimates lives saved and people homes/fed/educated - that becomes your new boasting figure.
Not entirely serious but extreme wealth should be considered a bug. Perhaps it's true that the best system overall always results in this but it's worth considering that it might not be.
Yes - this! Perhaps it should be "Ok yay you won, now did you win in cheat mode (by exploiting people and reasources) or real mode!"
Since Forbes is the default scoreboard perhaps when it makes its Billionaires List, instead of a basic sort ranked by on net worth, Forbes should incorporate Environmental, Social and Governance like factors similar to those starting to be used for Equity investing [1] and do a final ranking based on ESG*net worth.
Do you think billionaires would just stop and let the system collect their money? My first thought is they would just donate all ownership over the cap to family members. They could probably continue this forever before every family member gains $1B
How is this considered "good" in this scenario? Income is taxed anyway. So how to rerouting money away from "taxed income" to "taxed gifts" help anything?
It would mean that income is taxed twice or equivalent to it being taxed higher. Under a core assumption here that the tax revenue is used to help, this is better than it not happening.
More importantly though, it's not a precise tax plan it's intended to show the absurdity of the outcome we currently have rather than show a particular way out. That the answers are often "but there would be loopholes" rather than "having people amass much more wealth is inherently good for us all" is telling.
Couldn’t you just cap non-charitable gifts to something like $1 million lifetime per recipient in that case? I doubt that’d be particularly controversial with anyone who isn’t a multi-millionaire, unless I’m missing something.
Consider for a moment what privileges would have to attach to this sticker, in order for the billionaires to let this through Congress. Definitely they would still want to have control of dominant cultural narratives, and they'd still want to write all the laws, and those of them who appreciate fabulous personal possessions would still appreciate those. The administration of this sticker would be quite complicated...
You've pretty much summed up why billionaires shouldn't exist: their existence is incompatible with democracy. (I don't know how best to fix this either.)
It's telling that the responses to a non-serious tax plan are not on the topic "why billionaires existing is inherently good" but like this where you argue that billionaires have too much control over the democratic process for it to be implemented and a concern over the administration of a small scale sticker run.
> Ownership capped at 1 billion, you get a sticker saying "I won capitalism" and all further growth and income goes to the government for social programs. You get a new ticker that estimates lives saved and people homes/fed/educated - that becomes your new boasting figure.
But that would be a lie since most of that money/value was created by other people, most likely their employees.
First off, those employees have been paid already, so I'm not sure what the relevance is. If they agreed to work for 100k/year, and forgo the risk of starting a company, why should they get more than the agreed upon price after the company does well? It may be in the companies interest to give them a bonus to keep them around, but that's a separate issue.
Second, the only way you can argue they created more value than the founder of the company is in aggregate. But they also likely made more money than the founder in aggregate. A company tries to pay employees based on the value they bring. If a CEO makes 10,000,000/year, it's probably because the company thinks that CEO is worth it (adds more value than that). So it's silly to point out that the 1000 engineers below him add more value in aggregate. Why, yes.. they also get paid way more than 10,000,000/year in aggregate.
And if the CEO/founder flat out owns the company then all this talk is irrelevant. It's theirs. They can do what they want. If they hired people to build the company for them and the people agreed, good for them. Sounds like a beneficial negotiation for both parties.
Edit: I'm not necessarily arguing for or against the existence of billionaires. That's a tough problem that I don't think I know the answer to. I'm just saying that pointing out that "employees add the real value to the company" is a dumb argument.
What you talk about in your first paragraph is irrelevant. I am talking about the actual value the employees bring through their value, not what price they managed to negotiate for their labor on the market. If a restaurant is operated by 10 employees who manage to do all the work while the owner lives in Costa Rica, then all the value is created by the employees, even if they are only paid 10 USD an hour each.
Secondly, it’s just laughably wrong to suggest that a “company tries to pay employees based on the value they bring”. Employees are paid what they need to be paid in order to get them to work there. No more, no less. A sweatshop worker might bring much more value than the cents they are paid, and a programmer might bring much more value than their 100K salary would suggest (see e.g. no-poach agreements between Google and other big companies).
(Seriously. Cite on economist that claims that “company tries to pay employees based on the value they bring”.)
And risk is irrelevant to the question of value. If someone wins a billion dollars, should we thank them for their hard work if they donate it to charity? Maybe for the money, but it would be misleading to conflate speculation/gambling with work.
You are so fundamentally misguided that it’s just laughable.
Does the employee still get that money if the company goes under? People getting pink slips says that they're taking on just as much risk as the founder. Signing that contract does not guarantee the 100k/year
You get paid as long as you keep working, which is what the contract is. If you had to keep working whether or not the company can pay you, that would obviously be a lot riskier. But that isn’t how things work. If the company goes under you go get a new job, and sign another contract.
> So what should happen to your assets when the total of their market capitalization crosses the $1B line?
People who created enormous value in the past were rich but not filthy rich and that was not their goal in the first place. Most of them were happy enough to be paid back in respect, recognition, credit, fanfare, veneration etc..
What people are you referring to? I've read a fair amount about the gilded age robber barons and such. They were definitely not content to be paid back in "respect, recognition, fanfare". In fact that is more of a distraction and nuisance, and occasionally a liability or danger. The sorts of business practices used in the past to amass and keep wealth make anything today look like kiddie stuff.
If the government or any similar bureaucracy could actually allocate resources better, we wouldn't have so many failed planned economies and not a single successful example compared to capitalist economies.
This is a false dichotomy. GP did not suggest a planned economy as a solution, and more generally a planned economy is not the only alternative to wanton capitalism where government rather has more control over resources.
Well, maybe you could have an extremely large group of people independently allocate that capital to firms who they believe could provide them with utility immediately, rather than having it inflate the cost of capital?
The Chinese government is a horrible, authoritarian nightmare, but still somehow does better at managing the country's resources than the American ruling class. The pandemic, now over in China, while our nurses tape garbage bags to themselves as thousands die daily, has proven that definitively.
> Australia and NZ are dont have an authoritarian govt
a lot of people would disagree here, see the (correct, based) coup of the aus govt over the judiciary allowing them to at will deport migrants, or the controls on going outside in australia
The pandemic happened to hit while we had a particularly idiotic populist demagogue in the White House, but even if we'd had someone more competent I still agree that China would have done better. Assuming you believe their numbers, China seems to be doing better than most of the world.
I chalk up China's governmental competence to the number of scientists and engineers involved in their government. It may be authoritarian and a bit of a nightmare, but unlike the majority of other governments in the world you have a few decision makers in there who have some clue how the world actually works. Most other government are run by lawyers, career bureaucrats, delusional ideologues, or leaders who inherited their position either officially via some line of succession or de-facto via institutional nepotism.
There are some of all those categories in China's government, but there are also apparently enough people who actually know how to do things in the real world.
Right, I was just responding to the question, whose posing is often used to suggest that the US is the best of all possible resource allocation worlds. I don't want to live under a regime like the CCP, but we did just run this experiment and the U.S. system of resource allocation failed miserably.
I don't think it's the best of all possible worlds, but it is better than some.
Only a small percentage of billionaires do incredibly valuable things, but those who do are doing things that I can't imagine the US government of today ever doing. The US government would be having meetings to schedule the meeting to discuss the meeting schedule, or fighting over culture war issues.
We need to remember they allocate resources horribly in other places though. Genocide is going there, forced abortion and sterilisation of entire populations.
Not really. If someone designs a COVID vaccine tomorrow and decide to charge just 1$ for every person receiving that, I would not begrudge them becoming a billionaire when a billion people benefit from that vaccine. That is some real value created and delivered to the society.
I agree, but in a distributed world I wonder how we could ever end up enforcing something like that in a positive way. Like, if we add some inheritance tax that ends up being prohibitively large, at some point the amount of money these people have seems to make it impossible to enforce.
In aggregate, the 400 richest billionaires put together only constitutes 4% of the total wealth in America.[1][2]
Even if you assume that power correlates perfectly with wealth, there's not really evidence that billionaires control anywhere near enough money to become a "permanent ruling class".
Well, expand that category to include every billionaire and also everyone above 100 million, as an arbitrary figure that most people will never make throughout their lives. I imagine that percentage will go up immensely.
Two thirds of wealth in America is owned by the bottom 99th percentile, i.e. households with less than $12 million net worth.[1] A near majority of wealth is owned by the 90th-99th percentile, i.e. households with between $1-12 million net worth.
By far the biggest source of wealth inequality is the division between the top and bottom 50th percentile, who have essentially zero wealth. The uber-wealthy may be rich on an individual basis, but in aggregate they still hold constitute significantly less than run-in-the-mill retirees, dentists, and actuaries.
That seems like a confused way of saying that those who are at least millionaires have 80% of the wealth.
It's much easier for a billionaire to hire lobbyists to protect his latest exploitative venture than it is for some dentist to do so. That's why the 1% held 30% of the total thirty years ago and they hold 40% now. That is a dark trend.
> Do you believe in meritocracy? Because ownership of that amount of wealth is surely going to skew the entire system.
Your focus is too narrow. Broaden the timeline -- the meritocratic spoils cascade across the generations, as they ever have. It's part of the motivation to achieve.
Is your stance that wealth in the hands of billionaires tends to do less good to raise the “common good” than if it were to be distributed in some way?
If so, what kind of distribution do you think makes sense?
You guys acting like democratic government has not yet been invented.
It's not like alternatives to billionaires owning the planet doesn't exist. Just America seems to be fairly resistant to the idea of public good.
And the other consideration is how the money of billionaires is actively used to make everyone else's lives worse, either through manipulating markets and commodities, raising our rent, or literally polluting and destroying the planet.
Or buying media and brain washing the population with their crazy ideologies. These are all highly negative events that come from a small group of people having control of too many resources.
No one yet has responded to me why it's such a great idea for billionaires to exist. I wonder if an argument could even be made that didn't even a personal fantasy/wish fulfillment scenario.
> No one yet has responded to me why it's such a great idea for billionaires to exist. I wonder if an argument could even be made that didn't even a personal fantasy/wish fulfillment scenario.
K, here's one, whether or not you accept it. I don't think the world would have SpaceX or Tesla were it not for the existence of billionaires.
Elon Musk already had a billion before founding/buying these companies. If he had "maxed out" and couldn't make any more money, I think there is a good chance he wouldn't have taken risks on these companies. I think we are better off with the existence of companies like these.
Even if you don't like Tesla or SpaceX, these are just examples. There are a lot of other companies that would not exist as well, especially if you consider the potential scarcity of funding in this scenario. And without their existence we would all be worse off.
There are downsides to having billionaires too, but it's pretty disingenuous to pretend there aren't upsides as well.
When you say we would not have Tesla or SpaceX, do you just mean the brand? Or that we would not have reusable rockets and electric cars?
That seems unlikely, considering the USSR produced the space launches, and electric cars existed before Tesla. Without billionaires, you'd also lose the Koch's making it hard to move away from fossil fuels, which I think would make electric cars significantly easier, rather than harder
If you just mean that we won't have those brand names, should I care? It's just a name
It's a mistake to conflate the work of entire companies with one man, and I strongly disagree about the state of progress in America if billionaires did not exist.
Someone else would have taken Musk's place. There is no inherent quality to billionaires that make them valuable outside of their wealth.
> especially if you consider the potential scarcity of funding in this scenario.
how is this an argument? I assume banks still exist in this world without billionaires?
As mentioned, there are other vehicles to obtain financing. Secondly, when billionaires disappear, their wealth doesn't disappear with them. Not sure what you are asking.
Because at least for big moonshot ideas, it's much easier for one billionaire to bankroll some crazy idea everyone else thinks is a waste of money.
And even if you could gather the funding, you now have to keep a few dozen investors happy versus just pursuing your idea however you want.
And sure the money doesn't disappear, but would you really expect an Amazon warehouse worker who now makes $70k instead of $35k to be investing in highly risky ventures? I mean, they wouldn't even qualify to invest.
r > g, where r is the rate of return and g is the overall economic growth of the economy.
It means the rich capture a growing portion of productivity, and in modern days it is on the strength of the financialization of productivity, not necessarily people actually doing work.
How is this an optimal system? How is it even a functioning system? What we are doing as a species, today, right now, is not working and our ability to live on this planet is increasingly in danger.
So? I already said that I have utmost respect for those who create wealth. I am in full support to letting people create wealth as much as they want.
What I firmly oppose is someone who has a birth lottery of being born to such wealth creators - they don't deserve to inherit a vast fortune and all the power and privilege that come with it.
Familial wealth disperses and collapses pretty quickly, eventually being split up between 2 to the n heirs thereabouts.
Irrespective, the wealth is the property of an individual who earned that wealth through voluntary exchange. If they want to give it all to their kids, to a charitable cause, or just destroy it, that should be their right as owners of that property, it is not just for the state to steal that property because some people don't like it when the parent decides to give that wealth to the child. Focus taxation on things that harm an unwilling third party, not things that involve only two consenting parties where nobody is made worse off.
If I'm a fitness coach charging $60/hour, all my customers are there because they think I'm providing a service of value greater than $60/hour. Perhaps their subjective value is $80/hour, so they get $20/hour benefit and decide voluntarily to engage in this transaction with me. This is a positive sum voluntary transaction where all parties are better off (except for the carbon pollution which we expelled to drive to the venue, which I think should be taxed!).
I find it hard to believe that anyone could disagree with the above, which means you must disagree that the fruits of this exchange should be my property. Well let me ask you this: the customer made $20 in utility by engaging in this transaction with me. Why should they be able to keep the $20 utility but I must give up part of the $60? And what right do you have to reach into my pocket? If my customers instead traded groceries for my hour of training, should I not be able to keep these groceries?Is it only money that makes the difference for you?
No one is trying to take the $60 an hour you make coaching. The way Bezos or Gates or Zuckerberg make their wealth is not at all similar to how you or I do. If you want to take the conservative argument, Gates taking my tax dollars by selling his computers to the government is not a voluntary transaction. He then takes that money to lobby the government so that I have to give him even more of my tax money.
If you assume that "individual property earned through voluntary exchange" is the ultimate value to be upheld, you may end up having to defend a hellscape world. You need at least to temper it with something along the lines of the Lockean proviso.
I fully agree with this, I see it as one value to be upheld among many others in a Pareto-like trade-off. Optimizing for only a single value is going to lead to pathological outcomes as you rightly point out.
But I do consider it an important value since a lot of the motivation behind redistribution is self interest and jealousy (this is a finding in social science research), benelovant compassion only explains a small proportion of the variation.
I made my money by creating software and engaging in voluntary transactions with people (mostly wealthy people) who wanted to transact with me and would've been worse off having not done so. It was totally positive sum with no harmed third party. A very large proportion of transactions (plastic surgery, sports cars, entertainment, holidays, restaurants, personal trainer, Netflix, etc) are of this nature where the rebuttal that "it's not really voluntary" doesn't apply in the least.
1. As for what decides the individual's rights in a society, this is a pretty complicated question but the answer is going to be rooted in evolutionary psychology, cultural evolution and memetic evolution.
On what grounds do they hold that right? I'm not religious so I can't appeal to an ultimate moral authority. See (2).
2. If you grant and enforce property rights you stake the individual, and the overall outcome is a more prosperous world. Removing property rights is a good way to collective starvation, it's been tried before. So it's moral in the sense that enforcing property rights minimises human suffering through the above mechanism.
The existence of compound interest and exponential growth mean wealth inequality will become more and more extreme over time as generational wealth accumulates.
History teaches us that extreme inequality and class resentment leads to societal collapse. First there is civil unrest, then revolution. We have seen the beginning of some serious civil unrest this year.
From a purely self-interested point of view, if you value living in a peaceful and stable society, you ought to be concerned about wealth inequality. Generational wealth is one of the major factors here.
>In America, at least, we have historically rejected the idea of a hereditary monarchy.
Just looking at history of presidents...George Bush Jr and George Bush Sr. Do you think George Bush Jr would have been president if his father wasn't? I'm not saying that GWB isn't competent or anything like that...but is your assertion that if he didn't have the name (and inherited wealth and connections), he would have been a viable candidate?
Same could be said about the Clinton's, so I don't think this is partisan.
In a hereditary monarchy, the king rules until he dies, or abdicates in favor of his son. If this breaks down, through war, sibling rivalry, or lack of an heir... that tends to be a real problem.
In the United States, the titular head of state is chosen through a weird gameshow, and any given head of state can play that game twice. On two occasions, the son of a successful game show contestant has leveraged name recognition to also win a round in the hot seat.
Right, and we also have billionaires. That doesn't seem to negate the fact that historically, this country explicitly rejected the idea of a hereditary monarchy.
I don’t. I don’t believe more than about 10 million should be able to be passed on to children. Maybe less than that. Just having been born to such rich parents is an opportunity that gives them incredible legs up in society, let alone them getting a ton of money due to the luck of their birth. If a parent that rich cares about their child they have many ways to help them achieve in life. If it is actually possible for a person to be so much better at creating things than another that they deserve billions of dollars, the parent can pass on that skill to their child. It’s hard enough to keep wealth from accumulating without also letting it accumulate across generations.
If I had a billion pounds of rice, and millions of people were starving, would it be immoral for me to stockpile that so 50 generations of my family would be taken care of before the millions of starving people now?
Edit: because i can't reply right now:
I'm curious if a direct application of your question to something you need to survive would get a different answer.
We think of money as something we can accumulate without limit but if you replace it with other things in a similar context it seems different. Why is it okay for billionaires to exist, but not for someone to stockpile too much food?
Yes. 1-2-3 generations, ok. 50? Definitely immoral. They'd be as remote to you as a random fisherman in Kamchatka. They should also make their own contributions to society.
If someone earns billions, they can do whatever they want with it as long as it is legal. Only when someone gets something which is not earned, that should become a taxable event.
This way, a billionaire giving his fortune away won't be taxed. If that fortune goes to charity, still not taxed. If that fortune goes to his kids or to their trust fund, it should be heavily taxed.
> You don’t believe that if someone makes billions they should be able to pass it on to their children?
I believe no individual has ever _earned_ a billion USD. If it were up to me, people like Jeff Bezos would have everything to their name seized by the state. It should be used for the benefit of the many -- and not a selected few. He'll be compensated with a trophy, though: "Congratulations, you won capitalism. Continue for New Game+."
