May 23, 2019 (1031 words)
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A danger of extreme wealth concentration: it gives rise to new imperatives.
Tags: inequality, game-of-thrones
This post is day 143 of a personal challenge to write every day in 2019. See the other fragments, or sign up for my weekly newsletter.
There’s a common refrain on the left when it comes to the presence of extreme wealth: “Every billionaire is a policy failure”.
It’s a memorable adage, and a useful one insofar as it highlights the link between the distribution of wealth and politics, something that should be obvious but which is often forgotten in our political discourse. Billionaires are not natural - the policies that allow them to mint that wealth (through inheritance, starting companies, financial speculation, and/or paying minimal tax) are not inevitable; they are political choices. We can make different choices. We can construct a different economic paradigm where we keep the engines running without having to make a few well-placed individuals unfathomably rich.
Of course, not everyone agrees with the idea that billionaires are policy failures. A cursory search for the term will dig up no end of articles claiming that we should be grateful that billionaires exist. I personally haven’t seen any such arguments that I find compelling; here’s a puff piece written by the CEO of some random libertarian think tank, which somehow manages to claim that entrepreneurs are motivated by altruism more than wealth while still implying that they need to make that much money to continue working. I’ve also seen attempts to refute the statement’s theoretical applicability, as if it’s meant to be a universal rule describing every possible economic system (what if the average income was $100m?? surely billionaires would be normal??) rather than a critique of the system we have right now, given the realities of wealth inequality today.
That doesn’t mean the slogan is perfect, of course. You could argue that the choice of “billionaire” is arbitrary (why not millionaire?). Which is true: inequality is a spectrum, not a binary; everyone has a different idea of what an acceptable amount of inequality is, and there is no easy way to come to a consensus on this front. The point of using “billionaire”, in a world where 99+% of people are not billionaires, is to build the largest coalition possible by grounding the statement in material realities while also keeping it short and snappy. “Billionaire” works here simply because it’s so outrageous - you can imagine spending a million dollars in a lifetime, and maybe even ten million, but a billion? You’d earn more in interest than you would be able to spend in a year. It’s a completely different ballpark, and it elevates you from the realm of “money as a means of survival” to “money as a means of exercising power over the future of humanity”.
Now, the latter is a problem because the person holding this power is unelected, and is not directly accountable to anyone. And there’s really no reason to assume that someone who has managed to accumulate billions of dollars through whatever means is necessarily well-suited to decide the future of humanity.
You could argue that this characterisation is an exaggeration, because the existence of billionaires doesn’t necessarily imply a worrisome amount of power over the future of humanity. But if they made this money through entrepreneurship, then it is the direct result of telling people how to spend their time, and having control over how a lot of people spend their time means they already had some say in the future of humanity. And when they do spend this money - whether by investing it somewhere, or hiring people - they are exerting control over others, and the more money they have, the more control they can exert.
Of course, it’s theoretically possible that billionaires would only choose to spend money in ways that are purely benevolent - rather than hiring private chefs or slowly taking over an island in Hawaii, they could choose to spend it the same way that we would have done democratically. It’s theoretically possible that an unequal distribution of wealth doesn’t result in any negative consequences, like undue power over others. But it’s not practically possible, because if being a billionaire did not grant you outsized privileges relative to others, then we wouldn’t really care about it, and we certainly wouldn’t call it “billionaire” (the way we don’t grant semantic priority to people who have a ton of Pokemon cards, because having lots of Pokemon cards isn’t very relevant to how our economy works). It wouldn’t be wealth, in other words. The point at which being a billionaire does not compromise others’ freedom in some way is the point at which being a billionaire doesn’t mean anything. We simply wouldn’t be talking about it the same way - Forbes would not be compiling wealth lists, and journalists wouldn’t bother identifying people as billionaires. The whole point of being a billionaire is having power over lots of other people, and we all kind of know that, which is why we make a big deal out of it.
But maybe this is okay? Maybe this centralisation of power is regrettable, but unavoidable, because it’s the price we pay for a dynamic economy?
I don’t think this is true (I think we could still have innovation and creativity and hard work under a different economic system), but even if we did accept this possibility, there are still unforeseen consequences. Power creates its own logic; it warps the field of what is seems good, or possible, or necessary.
If you’ll bear with me for another Game of Thrones analogy, look at what happened to Daenerys during the course of her storyline: she started off with good intentions, but the process of attaining power corrupted her, and gave rise to new imperatives (like, endless war to “liberate” people who have never asked her to liberate them). In a similar way, as capitalism chugs along and wealth continues to concentrate, we’re seeing the rise of new incentives, new dynamics, new forces. Even if capitalism began as the most optimal way to improve people’s lives at the time, in our current era, it seems clear that improving people’s lives is not the primary motive. Instead, much of the current system seems devoted to ways of making the rich richer while keeping the poor poor. Time, perhaps, to stab it in the heart.