The 360: Should billionaires exist?

‘The 360’ shows you diverse perspectives on the day’s top stories.

Big company and big money.
Big company and big money.

Words by Mike Bebernes

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What’s happening:

Billionaires in many ways run the world. They lead the biggest companies. They own most of the media. A billionaire currently inhabits the White House. How many billionaires are there? By one count, there were 2,153 globally in 2019. They are worth a combined £6.8 trillion.

So where do they live? The US is home to around 700 billionaires - more than twice as many as any other country. Amazon CEO Jeff Bezos alone has a $131 billion (£102 billion) fortune, making him the world’s richest person. In the UK, there are around 150 billionaires.

To some, these lofty numbers are impressive, even admirable. But a growing movement among progressive politicians is starting to question whether it makes sense for so few people to have so much wealth.

Why there’s debate:

Jeremy Corbyn has placed the role of billionaires at the front of his election campaign, recently tweeting: “There are 150 billionaires in the UK while 14 million people live in poverty. In a fair society there would be no billionaires and no one would live in poverty.” He has previously spoken out against “billionaire football bosses” and the “billionaire, tax exile press barons”.

And when Bernie Sanders says “billionaires should not exist,” it might sound extreme to some. The real extreme, Sanders and other fellow democratic socialists argue, is that a small number of people possess more wealth than half of the world’s population combined.

Billionaires don’t just hold a disproportionate share of the world’s wealth, critics argue, they also use their power to perpetuate the divide between the rich and the poor.

Defenders of billionaires say rich people shouldn’t be criticised for their success. Limiting the opportunity for individual wealth, some argue, would prevent the type of entrepreneurship that drove billionaires like Bezos, Bill Gates and Mark Zuckerberg to start companies that have created millions of jobs.

Many billionaires also pour tremendous amounts of money into philanthropic initiatives that are making progress on problems that governments have struggled with. Bill and Melinda Gates, for example, have reportedly given away more than $45.5 billion to improve global health, promote education and fight poverty.

What’s next:

A lot needs to happen before billionaires would need to start worrying about their fortunes, at least in the next few years. A progressive Democrat like Sanders or Sen. Elizabeth Warren would have to win the Democratic primary, then beat Donald Trump in the general election. Even then, Congress would have to get behind massive changes to the tax code. Polling suggests that Americans are largely behind many of the individual policies that would reduce the wealth of billionaires, but are against the idea of eliminating them entirely.

In the UK, Mr Corbyn would also face major issues. Supporters of Corbyn say the ambition is to “do what Thatcher did in reverse” by redistributing income, assets and ownership. One of Labour’s central planks - to renationalise vast swathes of the UK economy - has estimated the cost to the public purse would be in the region of £200bn.

Perspectives

There is no accountability for philanthropists’ largesse

Philanthropists decide how to spend their money based on their own personal whims, rather than what is best for the social good. In the US, for example, just 12% of philanthropic money went to human services in 2015 – it was much more likely to be splashed on arts and higher education. Governments are at least democratically accountable for their spending decisions, and are under far more pressure to meet the needs of their population rather than simply indulge private hobby horses. - Owen Jones, the Guardian

Concentrated wealth is bad for democracy

“Dramatic inequality in wealth means dramatic inequality in terms of political power means a political system unresponsive to what most people want. Wealth inequality, in other words, is an anti-democratic force.” — Annie Lowrey, the Atlantic

It’s immoral for a few people to horde wealth when many people are struggling

“Billionaires should not exist — at least not in their present numbers, with their current globe-swallowing power, garnering this level of adulation, while the rest of the economy scrapes by.” — Farhad Manjoo, New York Times

Abolishing billionaires shouldn’t be the goal, but it may be a side effect of an equitable society

“Perhaps a way to cut through the murk would be to change the question: Once we’ve made the changes necessary to create a truly just society, would billionaires still exist? If we made a world where opportunity is abundant and prosperity is shared, would the rejiggering of resources and money flows still leave room for billionaires to become billionaires? I think it’s safe to assume the answer is ‘no.’” — Jeff Spross, the Week

The effects of billionaire philanthropy are overstated

“If all the billionaires were in fact giving all their money away to charity there’d be no billionaire wealth to tax, and thus no wealth tax debate except in a totally theoretical sense. But that’s obviously not the actual situation.” — Vox co-founder Matthew Yglesias

The founders understood the corrupting power of concentrated wealth

“America’s first political theorists took these truths to be self-evident: that a person could not exercise political liberty if he did not possess a modicum of economic autonomy, and that disparities in wealth inevitably produced disparities of political power.” — Eric Levitz, New York

The goal of becoming wealthy drives innovation

“Saying wealth accumulation stagnates innovation bucks reality. The prospect of wealth is the antidote to economic stagnation, not its cause. Sitting still, betting on old ways lasting forever, causes stagnation.” — Tim Mullaney, MarketWatch

Billionaires create benefits for everyone else

“When we let billionaires become billionaires, they employ hundreds of thousands of people and create trillions of dollars of wealth for the economy overall. When we let billionaires stay billionaires, even the most undeserving of them keep gobs of cash in investments, growing the economy for everyone as they sleep.” — Tiana Lowe, Washington Examiner

There’s nothing immoral about being wealthy

“Maybe billionaires should pay higher taxes, or at least their estates should. We can have that debate. But their existence isn’t a sign of capitalist immorality. In America, at least, it’s a sign of economic vibrancy.” — James Pethokoukis, the Week

Many billionaires use their power to defend democracy

“Other democracies envy the United States for this vibrant, independent, thickly muscled web of institutions and its check on government overreach. And these institutions would not exist but for the generosity of those billionaires and their millionaire fellows.” — Fred Hiatt, Washington Post

Taxing billionaires out of existence is a slippery slope

“It’s a slippery slope. First, the billionaires are targeted, then the rich. Soon, it will be the middle class. After a while, there will be no one left to tax.” — Jack Kelly, Forbes


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