Yes—Paul Mason
I had the pleasure of interviewing Jeff Bezos before Amazon took off; of chirpily asking Steve Jobs whether Apple could survive if iTunes failed; and of quizzing Larry Page and Sergey Brin about their goals in life before anyone had mentioned Google staging an IPO. I found them approachable, rational human beings—and quite needy for facetime with a BBC journalist. But once you get to the other side—where you’re calculating your wealth in billions, and seeing your brain and body as the nexus of an enormous organisation, with your senses evolved into a radar system for threats and opportunities—something changes.
If, as Marx said, social being determines social consciousness, the act of becoming a billionaire has to have psychological consequences. If we were to compute all the potential needs of a tech tycoon, a billion dollars should be enough to cover them for life—from villas and yachts to, if they’re into it, cryogenic preservation afterwards.
But it never is. Because “accumulate” becomes, again to cite Marx, “Moses and the Prophets” for the billionaire. Even those who wish to give their wealth away, leaving photos of themselves at every rural African airport as they go, need first to monopolise it ruthlessly. Even those who started out as ardent tinkerers in the shed turn, on becoming a billionaire, into rentiers. It would be throwing money away not to monopolise, not to price gouge, not to crush upstart competitors out of existence.
So abolish multi-billionaires; the victims include the rich themselves, who can never lead a fully connected life. Even the straightest end up leading a less gangsterish version of the life Michael Corleone has to lead in The Godfather Part II. A flat tax of 90 per cent on all wealth accumulated by individuals above £1bn would be a start.
“The victims include the rich themselves, who can never lead a fully connected life”
No—Deirdre McCloskey
Jeff Bezos has £135bn. Blimey. Being the first to realise that the internet could be used to reinvent the great consolidating retailers of a century ago—Sears and Great Universal Stores—has made him the richest person on Earth. We could choose to despise him for his circumstances. But then why not despise poverty or even middle-class sufficiency—circumstances which inspire low-level greed or mid-level complacency respectively?
Perhaps you believe that great wealth, being power, tends to corrupt, and since it lacks a social point we’d better divide it up by force. But this is to misunderstand what wealth, including great wealth, is for.
Most people think it’s personal incentives. The right says that the rich are rich because they work so very hard. But the left observes, quite reasonably, that the poor work hard too, and that the last £1,000 earned by Bezos can hardly give him an incentive to show up for work.
But incentives for Bezos are not the point. Nor are the incentives to the owner of the new chippy in the neighbourhood, not fundamentally. The actual economic point of profit is to send a message to all within hearing that more of this, whatever it is, is wanted. Urgently. Much greater use of the internet in retail, say, which is what has happened. A better word therefore for what we call “capitalism” is “innovism,” which works by entry at the smell of profit.
What’s the alternative? Total profit comprises about a tenth of GDP nowadays. Expropriating it would not help workers much, and its encouragement to innovation has enriched workers by 3,000 per cent since 1800 in places like Britain and Japan and Botswana. This is an economic system worth fighting for.
Envy and anger are not grown-up guides to policy. Nor is Karl Marx. Leave Bezos and his imitators alone, and they’ll make rich the wretched of the earth. And you, too, if you’re feeling hard done by.
Yes—In a market society, I have no problem with profit incentivising innovation (though I wish to replace the market mechanism in the long term). It’s just that—as in the late 19th century—the billionaire class has adopted a monopolistic and rent-seeking model of accumulation that stops them failing, stifles innovation and kills the legitimacy of capitalism.
The “market signal” I am allowed to send on Facebook is that I either like or dislike the content provided by others. I am not allowed to see the algorithm that guides content to me. And should a new market entrant challenge the monopoly, it is likely to be squashed or acquired—as WhatsApp, Instagram and others were.
You might cite shareholder power, but try getting Sheryl Sandberg to sack Mark Zuckerberg: her net worth is reportedly $2bn, his $130bn. Today’s multi-billionaires, as recent Wall Street Journal revelations about Facebook’s failures show, can flout the standard rules of capitalism with impunity. The neverending supply of fiat money ensures the value of the shares will generally rise, however bad the behaviour.
As for what capitalism has done for the world’s poor, I am always wary of this argument. Right now, apologists for Xi Jinping are using human development figures to justify the soul-crushing rule of the CCP’s playboy billionaires, just as Stalinism in the 1930s justified the gulags with grain statistics. What’s at issue is not what could have been done without corporations, but without billionaires.
There could have been a better capitalism, morally grounded and less unequal. Indeed, after 1945, it existed. Its precondition was financial repression—Keynes’s famous (if distasteful) “euthanasia of the rentier.” When Labour’s postwar chancellor Stafford Cripps imposed 95 per cent tax rates on the incomes of the super-rich, that didn’t suppress innovation—it unleashed the postwar boom.
No—“Replacing the market mechanism” sounds lovely, if a trifle vague. But in practice it is nasty. It means letting government decide, instead of the shoppers on the high street. Government regularly doesn’t know what you want, nor the price you will agree to pay and that the shop will be willing to accept. The market is a system of agreement and acceptance. Government’s “mechanism” is coercion. Some coercions are necessary: eat your peas, dear. But self-respecting adults depend on mutual agreements in choosing their friends, language and products.
Why would it be advantageous for the billionaires to “flout the rules”? I sense an inchoate suspicion of bigness as such. The growth of Google comes from its brilliant usefulness, not from machinations in the boardroom. When some bright lass thinks up a better search engine, Google will die. The “class” of capitalists does what the shopper wants, or it disappears. Look at the companies in the FTSE 100 or the Dow Jones Industrials in 1950, and count the sad deaths: Austin Motors and US Steel. “Lo, all our pomp of yesterday / Is one with Nineveh and Tyre!”
We have seen no rise in monopolies since 1900, or for that matter 1800, 1060, or any other date you care to mention. They have sharply and steadily decreased, as consumers have acquired bicycles and automobiles, the telephone and the internet, and as inventions and companies far and wide have proliferated.
As to doubting the Great Enrichment, well, the left has been doubting and doubting at dinner parties in Hampstead, and economists have been imagining one “imperfection” after another since 1848. Meanwhile, innovism has raised up the wretched of the earth.
We should keep the system in place, along with the billionaires.
Yes—Some challenges require bigness. But we do not need the market mechanism, nor billionaires, to create projects at massive scale. The biggest project facing us—to decarbonise the world—can only succeed if led by the state, which can raise finance cheaply and arbitrate between human and commercial interests. In the process, it must suppress the market and necessarily retard wealth accumulation, not least from fossil fuels, for the super-rich.
To be clear, I do not wish to impose a super-tax simply to raise money: even confiscating the entire wealth of the UK’s resident double-figure billionaires would not fund the green investments needed. The purpose would be to crowd wealth out of speculative finance, out of rent-seeking, and encourage it into the risky business of technological innovation in a post-carbon economy. It’s instructive that, according to Forbes, only Elon Musk out of the top 20 richest people has made significant money in the post-carbon arena (and then at the price of anti-union practices and unstable cryptocurrency bubbles).
I must return to the wellbeing of the billionaires themselves in urging the limiting of personal wealth to one or a few billion dollars. My regular holiday haunt is a rented villa on a Greek island where, for two weeks every year, I see giant yachts sail past, equipped with helicopters and, in one case, two submarines. Some friends were invited onto one: as their children stepped aboard, a man in white gloves carefully wiped their footprints off the transom. We, meanwhile, revelled carefree ashore, amid cheap wine, sandcastles and bars where, if somebody wants to dance with you, it’s not because of your money. Who was happier? I don’t know. Maybe I’d be happier with a billion. But as to where the next billion was going to come from, I wouldn’t care.
No—Billionaires make lucky guesses, which give reason for others to venture. Their billions suggest they may be onto something. Bezos’s one-click shopping has made him exceedingly rich. But, and this has happened every time in economic history, others wanting in on the act—that entry at the smell of profit—makes the rest of us rich. How rich, you ask? Rich enough, say, for a regular holiday to a rented villa on a Greek island, which would have gobsmacked one’s working-class great-grandfather.
“Put envy of the rich away in the back closet with the adolescent Marxism”
In the first act, the billionaire arouses the fierce envy of the scribblers. But the imitation drives down their profits and provides us all with more economical goods and services. A washing machine that cost the wages of many weeks in 1960 now costs the wages of a few days.
The statist reckons that he or she knows better than such vulgar folk where to invest. He reckons that coerced taxes to get the funds to invest in, say, the Anglo-French Concorde is the way to go. He thinks, with Keynes in 1936, that “the State… is in a position to calculate the marginal efficiency of capital-goods on long views and on the basis of the general social advantage.” But the state is not necessary for, and is regularly stupid in, big and little projects.
A wiser path is to grow up, and put envy of the rich away in the back of the wardrobe with the adolescent Marxism. Envy is insatiable. If you envy the billionaire his yacht, affecting to disdain it, you will envy, too, “one more rich in hope, / Featured like him, like him with friends possessed, / Desiring this man’s art and that man’s scope.” There’s no end to it. By contrast, there is an end and purpose to imitating billionaires like Bezos. If we do so, we innovate, enriching the poor of the world. It works. It is the only way it has ever worked.
