Should billionaires be abolished?

Benkei

There's a lot I want to write about this subject but I find myself with too little time so I hope my OP can act as a starting point for people to talk about the things I'd otherwise write.

There's some issues I'd like to talk about that I'm sure people will have different views on:

1. The pervailing idea that billionaires are rich because they know more or are smarter than others results in influence on policy and ideas that may or may not be warranted, the poor are poor because they're not working hard enough and not because the rich get rich because the poor get exploited (this is the average social perception although receptivity for other views is increasing);
2. For every "good" billionaire there are a lot more "bad" billionaires, superficially I'll define "good" as someone engaged and aware of social problems and tries to fix them, like the Giving Pledge. It's not the thrust of this discussion but I'm sure we can make a moral distinction between Gates and Koch without having to get into the nitty gritty details of the moral character of billionaires;
3. Bad billionaires can buy politicians, corrupt democratic processes (but call it lobbying) and they avoid paying taxes en masse. Historically, taxes on the rich have never been lower in a misguided belief that trickle down economics work (they do work for the rich though);
4. You cannot give a platform for good billionaires without also giving a platform for bad billionaires;
5. Almost nobody can claim to have made contributions to society actually worth a billion dollars or indeed to be able to lay claim that his contribution is that much more valuable than that of teachers (without whom the billionaire couldn't hire an educated and literate workforce) or nurses (that keep his workforce healthy) or all those other people necessary to create an infrastructure in which large corporate businesses can flourish;
6. Last year billionaires became 12% richer and the lower 50% of the world population got 11% poorer. Or another juxtaposition, the 42 richest people own more wealth than the poorest 50% in the world;
7. etc. etc.

Ok, so the title lays the blame at billionaires but that's not necessarily so as we have and pursue a system that makes this possible. We could, within the system, implement 92% income tax on anyone making over a million. We can introduce much higher estate taxes again. These are all changes within the system.

There are also, possibly, changes to the system possible that will avoid or diminish these issues. One of them could be a ban on profit motive for corporations and introduce corporations with a dynamic equity system that would be the only type allowed to have a profit motive. This would result in a watering down of initial capital investments while labourers get a capital share as the value of a corporation increases and they put in hours.

Brett

I imagine that if a country carried out such a program then they would suddenly find themselves without billionaires. Putting aside the bad billionaires, how many jobs would be created by good billionaires? You would lose them.

Benkei

↪Brett

You assume those jobs would be lost. Where's the proof? Under Eisenhower you had 8 years of a top tax bracket of over 90% and the economy was doing well. Inequality has negative effects on economic activity in a country. See for instance: Why inequality is such a drag on the economy Trickle-down economics just doesn't work.

Moreover, you're counting entirely the wrong thing. It's not the number of jobs that count, which is just counting exploited people. It's about the level of subsistance those jobs provide and the dignity that ought to go with it.

I would imagine the good billionaires would in fact stay as they recognise the negative consequences of inequality and would be supportive of change in that area. Warren Buffet himself has derided the tax system as resulting in him paying less taxes than his secretary.

Finally, You've only dealt with a situation where we'd try to make changes within the system. What about my proposal for changing the system?

Bloginton Blakley

Let's say we are in a lifeboat. And I "own" the lifeboat and all the food and water.

Once I have everything everyone else owns, in return for a place on my lifeboat.

Why would I feed them or give them any water?

Why isn't the Earth a lifeboat?

andrewk

↪Benkei

I support your proposal in principle. But it would need more than a change in tax rates, because most of the wealth of billionaires is in the shares they own in their companies, and that is not taxable income until the shares are sold. A law could be introduced to tax unrealised gains on shares, but I can imagine there being an enormous resistance to that because of its effect on middle-class people's savings. A slower, but less controversial, way to do it would be to introduce a very high rate of death duties.

TheMadFool

↪Benkei

While it may be money that concerns everybody, what about the benefits of everyone being a potential billionaire? That anyone can become rich or super-rich provides the necessary imeptus for creativity, innovation, progress in any field imaginable. Isn't this the actual, perhaps unmeasurable, gain in providing an opportunity for everyone to be super-rich? Billionaires are the success stories that motivate people and drive them to work harder and smarter.

However, if one is to make a purely monetary assessment of the situation, it does look bad.

Strange that billionaires prove that money isn't everything.

Artemis

↪Benkei

My stance ties into your point #3:

Billionaires are antithetical to a democracy.
In capitalism, money is power, and having a class of people who hold that much power just makes us an oligarchy/aristocracy.

Perhaps if you could change the government to be immune from the power of the private dollar, AND even the poorest in our country were well off, then I could imagine allowing some people to amass wealth for luxuries. Barring that, being a billionaire is immoral and undemocratic.

Terrapin Station

If I were king, we'd not have an economy based on money in any manner similar to what we have now.

There could still be the equivalent of billionaires in my economy--people with access to a huge amount of very scarce resources, but the only way anyone would be able to get there is via some stroke of ingenuity that made life much much easier for the rest of us, so that, say, everyone has more than adequate shelter, food, health care, education, etc. and no one has to do much work for it.

In a nutshell, when I'm king, the competition is based on helping other people out/making their lives easier/better. The more you can do that, the more access to scarce resources you get.

ssu

. We could, within the system, implement 92% income tax on anyone making over a million. We can introduce much higher estate taxes again. These are all changes within the system. — Benkei

Similar things have been tried, they simply don't work.

I remember being taxed 72,9% and believe me, I wasn't making a million, I was making roughly in todays prices 4 000 euros in annual income. It was then taxed by 72,9%. It really had an effect on me personally and since then I have loathed the people arguing for higher taxes "on the rich" or higher taxes. I personally know now that I am the target of those other people who want increase the taxation of "the wealthy" while not wanting to raise their own taxation. The hypocrisy of socialism is just nauseating.

The simple fact is that when taxation is so high, people simply avoid income, postpone any selling of any property that doesn't have to be sold. Better yet, hold it in cash or simply take the money abroad.

It's a simple fact that both by increasing OR decreasing taxation and tax rates, the net income of the taxation doesn't go linearly as the tax rate would imply: raising taxes don't amount to anticipated tax revenue, but also the other idea, that lowering taxes would improve revenue and hence tax income would be greater, seems also not to work.

Better yet, I propose that anybody who proposes a tax increase to others, should pay the similar tax.

And ought billionaires be abolished? Profiting from the capitalist system is a totally another thing to profiting from a criminal enterprise or racket. Of course, the pure leftist doesn't see any difference there.

Bloginton Blakley

"Profiting from the capitalist system is a totally another thing to profiting from a criminal enterprise or racket."

How do you figure?

unenlightened

Let me offer some un-prevailing ideas.

1. Property, ownership, and money are social constructs.
Therefore;
2. Billionaires are rich because we agree that they are, not because they are smarter or more industrious...

3. I no longer agree.

4. Companies are global, but governance is still local, and so governments are no longer in control.

5. Without International agreement on transparency, an end to tax havens and enforcement that reaches all parts, nothing can be done.

6. That's why big business seeks to undermine international cooperation EU, Nato, etc.

Terrapin Station

The simple fact is that when taxation is so high, people simply avoid income, postpone any selling of any property that doesn't have to be sold. Better yet, hold it in cash or simply take the money abroad. — ssu

That's part of why the answer is to instead reward people based on the extent to which they help other people/provide the things that other people want.

The way the system is set up, as you're describing, is that you wind up with less for yourself the more you help others (via your tax dollars). If we instead make it that the way you get more for yourself, more scarce resources, is by doing more to help others, then you have an incentive rather than a disincentive to help.

Mariner

For your purposes, it would be far more efficient to abolish the idea of limited liability.

Hanover

↪Benkei

If your primary goal in eliminating billionaires is to eliminate their corrupting influence, then pass laws controlling their influence, as opposed to increasing their tax burden to eliminate their billions. That would seem to address the problem without striking a blow to the underlying ideology of the entire capitalistic system.

frank

↪Hanover

Because of their influence, we can't pass laws to limit their influence.

ssu

The way the system is set up, as you're describing, is that you wind up with less for yourself the more you help others (via your tax dollars). If we instead make it that the way you get more for yourself, more scarce resources, is by doing more to help others, then you have an incentive rather than a disincentive to help. — Terrapin Station

I would put it this way: If you have a healthy prosperous economy, you can afford a welfare state and all the perks that come with it. Hence the state should have at first priority the economy and the keeping the instititutions operating that keep the economy healthy (that prevent corruption, guarantee property rights and human rights, maintain and develop the needed infrastructure).

Above all, one has to have a power elite and rich class that feels that it is their obligation or role to take care of the ordinary people and the poor. One typical way is for the power elite to be patriotic and have a sense that they have a mission for the country.

At worst the power elite and the rich are afraid to loose their power and wealth and percieve "the people" as a threat, as the ignorant violent rabble, that has to be policed and prevented from destroying the society and collapsing everything into anarchy. In this case there isn't much if any social cohesion, and you basically have this feeling of class warfare.

ssu

Because of their influence, we can't pass laws to limit their influence. — frank

Absolute nonsense.

Enough people aren't just interested in doing that. When there is a will, there is a way.

Hanover

↪frank

If their influence is impenetrable, then we can't pass laws increasing their tax burden either.

Hanover

When there is a will, there is a way. — ssu

Then go earn your billions.

Echarmion

While it may be money that concerns everybody, what about the benefits of everyone being a potential billionaire? That anyone can become rich or super-rich provides the necessary imeptus for creativity, innovation, progress in any field imaginable. Isn't this the actual, perhaps unmeasurable, gain in providing an opportunity for everyone to be super-rich? Billionaires are the success stories that motivate people and drive them to work harder and smarter. — TheMadFool

The exact motivational value of billionaires is dubious. Few adults entertain such fictions, and you can be rich and/or famous without being a billionaire.

f your primary goal in eliminating billionaires is to eliminate their corrupting influence, then pass laws controlling their influence, as opposed to increasing their tax burden to eliminate their billions. That would seem to address the problem without striking a blow to the underlying ideology of the entire capitalistic system. — Hanover

The problem with that approach is that their wealth is their influence. Massive economic power is always going to be power, no matter the political system.

I would put it this way: If you have a healthy prosperous economy, you can afford a welfare state and all the perks that come with it. Hence the state should have at first priority the economy and the keeping the instititutions operating that keep the economy healthy (that prevent corruption, guarantee property rights and human rights, maintain and develop the needed infrastructure). — ssu

Isn't the economy a contingent goal given your own argument? The actual first priority is the well being of the citizens. The economy is a means to an end.

Above all, one has to have a power elite and rich class that feels that it is their obligation or role to take care of the ordinary people and the poor. One typical way is for the power elite to be patriotic and have a sense that they have a mission for the country. — ssu

Care to explain why one "has to" have a power elite in the first place?

At worst the power elite and the rich are afraid to loose their power and wealth and percieve "the people" as a threat, as the ignorant violent rabble, that has to be policed and prevented from destroying the society and collapsing everything into anarchy. In this case there isn't much if any social cohesion, and you basically have this feeling of class warfare. — ssu

So, your argument is that we should fear the rich, and therefore not antagonize them?

ssu

Care to explain why one "has to" have a power elite in the first place? — Echarmion

Care to give an example of a country that doesn't have a power elite? An executive branch?

Basically any kind of centralized government means that there is in one form or another a power elite. Quite ignorant or hypocrite to assume there wouldn't be a power elite.

So, your argument is that we should fear the rich, and therefore not antagonize them? — Echarmion

No, absolutely not, my argument is that a healthy society starts with social cohesion. Antagonizing classes against each other isn't the way to create prosperity for all.

And do notice that the power elite doesn't have to be bunch of rich billionaires and wealthy families. It can be, like in the case of Venezuela, adamant socialists clinging to their power. Or in the case of China, a communist party that has thrown away communism and replaced it with state run capitalism, which could be described as fascism.

Ciceronianus

Defending billionaires is like defending gluttons and hoarders. There's nothing admirable about them.

I would have no problem with greater taxation.

frank

If their influence is impenetrable, then we can't pass laws increasing their tax burden either. — Hanover

It's impenetrability is seen in the long run. Whatever gains we make are overturned later on. Witness the present situation as the US is $20 trillion in debt, and the rich are due for a tax break.

The rich do two things with their money: 1) use it to make more money, and 2) use it to protect their ability to make more money.

ssu

Isn't the economy a contingent goal given your own argument? The actual first priority is the well being of the citizens. The economy is a means to an end. — Echarmion

Yes.

But do note that any political ideology starts as the objective being "the well being of the citizens". This well being then can be tried to be reached with quite horrible means, starting with killing off a social class or an ethnic or racial minority.

I made the emphasis as typically in the West nowdays it's just assumed that economy will do just fine and is taken as granted. And do note that it's the institutions themselves that also protects the citizens from monopolies, cartels or corruption.

That is, if corruption isn't made legal as in the US.

Baden

What always amazes me is that billionaires and the super-rich in general have managed to create not only a system that funnels more and more money to them, but a prevailing ideology whereby a significant proportion of those who have relatively no wealth in comparison feel obliged to protect them and their billions on the basis that somehow nothing could possibly work properly without them. Now that's social engineering.

unenlightened

on the basis that somehow nothing could possibly work properly without them. Now that's social engineering. — Baden

Well you surely see that without Mr Jobs and Mr Gates, there would be no working computers because RiscOS and Linux etc etc etc don't exist.

BC

↪Benkei

Of course they should be abolished--not personally, of course. We don't need to liquidate the super rich, just divest them of their ill-gotten gains. Once their financial morbid obesity has been cured, they can work as salaried employees in a research and development company, where they will excrete great ideas for humanity. Or else.

Speaking of research and development, people who think no one will work unless they can get rich, should look at Bell Laboratories (now Lucent Technology). The researchers at Bell Labs came up with many discoveries which enabled various new industries. University researchers come up with new ideas all the time, and generally the University owns the patents. That doesn't mean the researchers aren't rewarded, just that the rewards are reasonable.

Echarmion

Care to give an example of a country that doesn't have a power elite? An executive branch?

Basically any kind of centralized government means that there is in one form or another a power elite. Quite ignorant or hypocrite to assume there wouldn't be a power elite. — ssu

People can be in power without forming a "class" or a specific "elite" group. Which is difficult and has very rarely been achieved. I was merely commenting that the an "elite" is not logically necessary.

No, absolutely not, my argument is that a healthy society starts with social cohesion. Antagonizing classes against each other isn't the way to create prosperity for all. — ssu

It is a nice thought that we should just all get along, but arguing that we shouldn't be "antagonizing" each other is vague. Of course we shouldn't be putting people to the guillotine. But there needs to be some amount of "antagonizing" to change the status quo.

And do notice that the power elite doesn't have to be bunch of rich billionaires and wealthy families. It can be, like in the case of Venezuela, adamant socialists clinging to their power. Or in the case of China, a communist party that has thrown away communism and replaced it with state run capitalism, which could be described as fascism. — ssu

People in power do have the tendency to be filthy rich though, and filthy rich people always have power.

Yes.

But do note that any political ideology starts as the objective being "the well being of the citizens". This well being then can be tried to be reached with quite horrible means, starting with killing off a social class or an ethnic or racial minority. — ssu

Does it? What about a theocracy? Or just a feudal society that puts people in boxes which determines their rights? The well being of citizens in general is not always the stated goal of a political ideology.

I made the emphasis as typically in the West nowdays it's just assumed that economy will do just fine and is taken as granted. And do note that it's the institutions themselves that also protects the citizens from monopolies, cartels or corruption.

That is, if corruption isn't made legal as in the US. — ssu

I don't know about that. It seems to me that governments are very anxious to be seen as the driving force behind the economy. As long as it's trending up, anyways. "The economy" has been the major factor in a lot of general elections across the West in recent memory.

Bloginton Blakley

↪ssu

When you say power elite, I read authoritarian. The use of authoritarianism is a choice that came along with setting up civilization... using crops... defending the idea of property. It ultimately comes down collecting a population with belief in some ideal or the other so as to concentrate large populations of human will into the hands of very few people.

It's also an idea that repeatedly fails in terms of stability of organization.

Now human will is so tightly concentrated that a single human being can launch weapons that will destroy the ecosystem.

We can't afford large systems of concentrated human power. Humans are evolved to exist in small groups with leaders who are directly connected to the people they are leading. In other words, if a small group leader screws up, the group is able to directly interact with the leader to express their disapproval.

Small group leaders that make bad decisions don't stay leaders for long.

In contrast to this large group leaders are quarantined from direct feedback from the vast majority of people being led. So the leader is no longer part of the community that sent him/her to Washington D.C. with the same general interests as the community that elected him/her. Instead the community of leaders in Washington D.C. becomes the elected leaders new community and the newly elected leader interest begin to conform with those of other leaders and not the community that elected them.

We have a fiction that presidents or politicians are our leaders...when in fact it is easily seen that billionaires are the true leaders.

I have very few interests in common with a billionaire, or the system that is currently doing it's best to wreck the planet.

Rank Amateur

If, like me, you believe Modern Monetary Theory is the best explanation of how the economy really works. Concentrations of wealth are extremely detrimental. The extremely wealthy, as a a percentage of their wealth are small consumers. The conventional wisdom was, that they made up for that by being investors. However, as less and less goods and services are bought, there is less and less need for investment in the companies needed to supply them. Having more and more investment dollars chasing fewer and fewer investments - driving down the price of money, and artificially inflating stock price.

MMT would say the way to manage this would be selective taxes on the very wealthy - to take those dollars out of the economy and allow the government to use them to stimulate economic activity if times of high unemployment.

Bloginton Blakley

↪Rank Amateur

The thing about taxes is that they are set by a government which will quickly become owned by the wealthiest in the system. Any government...

Everyone uses money, why would we need government to cut the wealthy down to size especially when the government is paid to be inclined not to intervene?

What would happen to the economy if everyone with a loan payment decided to skip a month...

The same month?

Should billionaires be abolished?

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