America now has more billionaires than at any time in history, while most Americans
are struggling to make ends meet. With such staggering inequality, it’s fair to ask:
should we abolish billionaires?
Now, there are basically only 4 ways to accumulate a billion dollars, and none of them is a product
of so-called free market capitalism. Billionaires themselves aren’t the problem. The real
failure is in how our economy is organized.
One way to make a billion is to exploit a monopoly. Jeff Bezos is worth $150 billion.
You might say he deserves this because he founded and built Amazon. But Amazon is a
monopoly with nearly 50 percent of all e-commerce retail sales in America (and e-commerce is
one of the largest sectors of all retail sales). Consumers have few alternatives. Nor do many
suppliers who sell through Amazon; for the first 25 years of its existence, Amazon wouldn’t
let them sell at a lower price anywhere else. And Amazon’s business is protected by patents
granted Amazon by the U.S. government and enforced by government. If we had tough anti-monopoly
laws, and if the government didn’t grant Amazon so many patents and trademarks, Bezos
would be worth far less.
The same applies to people like George Lucas, Oprah Winfrey, or any other figure whose brands,
ideas or creations depend on copyrights and trademarks, which are laws that have been
dramatically extended in recent decades. If these were shortened, these people would be
worth far less, too.
A second way to make a billion is to get insider information unavailable to other investors.
The hedge-fund maven Steven A. Cohen is worth an estimated $12.8 billion. Now, how did he
do it? According to a criminal complaint filed by the Justice Department, insider trading
at Cohen’s SAC Capital was “substantial, pervasive, and on a scale without known precedent
in the hedge fund industry.” Eight of Cohen’s present or former employees pleaded guilty
or convicted for using insider information. Cohen got off with a fine, changed the name
of the firm, and apparently is still at it.
A third way to make a billion is to pay off politicians. The Trump tax cut was estimated
to save Charles and David Koch – each of whose net worth is estimated to be about $50
billion -- and their Koch Industries -- 1 to 1.4 billion dollars a year, not even counting
tax savings on offshore profits and a shrunken estate tax. The Kochs and their affiliated
groups spent an estimated 20 million dollars lobbying for the Trump tax cut, including
major donations to politicians. Not a bad return on investment: More than a billion
dollars a year back for $20 million put in. Koch Industries has also been a major beneficiary
of government programs to fill the Strategic Petroleum Reserve, provide roads and access
to virgin growth forests, use eminent domain to seize private land for oil and gas pipelines,
get oil subsidies, and profit off federal lands.
A fourth way to be a billionaire is to get the money from rich parents or relatives.
About 60 percent of all the wealth in America today is now inherited.
And because, under U.S. tax law – which is itself largely a product of lobbying by
the wealthy – the capital gains of one generation are wiped out when those assets are transferred
to the next, and the estate tax is so tiny that only 0.2 percent of estates were even
subject to it in 2017. America is creating a new aristocracy of people who never worked
a day in their lives. Let's abolish billionaires by changing the
way the economy is organized. Now, this doesn’t mean confiscating the wealth and assets of
the super rich, but getting rid of monopolies, stopping the use of insider information, preventing
the rich from buying off politicians, and making it harder for the super-rich to avoid
paying taxes. In other words, creating a system in which economic gains are shared more widely.
Entrepreneurs like Jeff Bezos would be just as motivated by say, a $100 million or even
$50 million. But the cost to our democracy of billionaires with enough wealth and power
to dictate the rules of capitalism for their own benefit is incalculable.
What do you think? Do you think the rules of the free-market have been manipulated to
benefit the super rich? Let us know in the comments.
Also, if you found this video informative, be sure to watch our video on everything you
need to know about the new economy.
And, as always, be sure to subscribe to this channel for more videos like this one.