What’s wrong with billionaires?
I came across a clip recently (see below) of a radio host filled with incredulity that someone might actually believe that the existence of billionaires is a bad thing. Surely any antipathy towards the super-wealthy must be based on envy or ideology? Don’t they create jobs? Aren’t they philanthropic? Don’t they pay a lot of tax? Aren’t they good role-models for our children?
The caller made a dog’s breakfast of explaining to her why billionaires are a really bad idea, so I thought I’d step in.
1. Billionaires damage the economy
The point of the human economy is to produce useful things for each other. And for that we need an exchange medium. Without it, when we offer goods and services, we’d have to find someone who wants them, but who also has goods and services on offer that we want. Barter is far too difficult a way to run an economy. ‘I’m a butcher, and I want a laptop – who’s got laptops, and wants sausages?’ No, it doesn’t work.
Money is the dominant exchange medium, but if it’s used more and more as a store of value – i.e. it accumulates in very few hands, ultimately in tax havens, then it’s going to be far less useful for exchanging goods and services. If the exchange medium is tied up in overseas accounts, then there’s not going to be enough to trade with.
If the exchange medium is scarce, then it’s going to make trading very difficult – in the same way that a scarcity of water is going to make swimming very difficult. You may be a fine swimmer, but no water, no swimming. The same is true of the economy. You may be extremely proficient in your chosen profession, but no exchange medium, no exchange. Your skills will be wasted.
In an ideal world, the exchange medium and store of value functions would be separate, but that’s another story.
Radio host genuinely confused that someone might find the existence of billionaires objectionable.
2. Billionaires destroy jobs
You often hear that the wealthy ‘create jobs’. They don’t – they destroy jobs. First think how they make their billions – through returns on their investments in corporate vehicles – online platforms or branches in towns. So let’s look at some of those those corporate branches.
A report by the National Retail Planning Forum (partly financed by supermarkets) found that in a catchment of 15km around 93 new corporate superstores, around 10,000 new retail jobs were created and 35,000 destroyed – a net loss of 25,000 retail jobs (full-time equivalent). Each new superstore means the loss of 276 full-time equivalent jobs.
The figures are from the 1990s, and so the figures might be different if the study were carried out today, simply because, as the number of superstores grows, there are fewer small businesses, especially retail premises, to be closed by competition from superstores. So really, if figures could be obtained from the development of the first supermarkets, job losses would probably have been much higher.
Those corporate branches are now in every single one of our towns, which leads to next point:
3. Billionaires damage communities
Billionaires are created from the concentrated wealth that is sucked out of our communities all over the world, via online platforms and corporate branches. Those branches not only extract wealth and destroy jobs, they also destroy the unique character of your community, as all High Streets start to look the same. Every time you give your custom to a corporate branch, you are voting for clone towns and wealth extraction from your community.
But what about philanthropy – don’t billionaires do good things with their money? Here’s Oscar Wilde on rich philanthropists:
“They seriously and very sentimentally set themselves to the task of remedying the evils that they see in poverty, but their remedies do not cure the disease: they merely prolong it. The proper aim is to try and reconstruct society on such a basis that poverty will be impossible.”
And that’s exactly what rich philanthropists will never do. They work on the symptoms but not the causes. If we rely on the philanthropy of the rich, we will have to rely on it forever, because rich philanthropists will never fund work that addresses the cause of our problems, because addressing the cause would mean building a society in which there are no poor people and no rich philanthropists, because it wouldn’t allow the concentration of wealth and power that means that some people are multi-billionaires and half the world gets to live on less than £4 a day.
4. Billionaires damage nature
This one’s the easiest to explain, surely? Billionaires have a huge and damaging effect on nature due to their level of consumption. Roman Abramovich’s latest $700 million yacht joins his other 4, plus his Boeing 747 private jet. Well, he has to get around, to visit his various properties, including his castle in France.
But it’s not only their enormous ecological and carbon footprint that’s the problem, it’s the aspiration they generate in others. There are lots of people out there who would like to emulate the consumption patters of the super-rich, if the YouTube videos of how to get rich are anything to go by. So there’s a lot of ecological damage out there waiting to happen, fuelled by the extravagant and destructive consumption of billionaires.
5. Billionaires damage democracy
In Ayn Rand’s novel, Atlas Shrugged, her protagonist is an industrialist who has invented a machine that can solve the world’s energy problems, but who finds himself pitted against a state that insists on acquiring the machine for the ‘good of humanity’. This depiction of the state and billionaires / the corporate sector in a struggle for dominance is fantasy. In reality, the state is not a counterbalance to the power of capital, but rather, is a willing accomplice in a global struggle for wealth and power.
Source: Mimi & Eunice
The corporate sector:
- pours money into the bank accounts of political parties and politicians.
- gives cushy directorships to politicians.
- commits to buy government bonds, to keep the state ship afloat.
- bombards the state with its enormous lobbying machine.
- nurtures personal friendships with politicians, often involving wining, dining & overseas holidays.
And in return, the state:
- gives the corporate sector a huge advantage over small, local businesses by ignoring the loopholes that allow them to avoid paying the same proportion of tax. It’s incredible that independent coffee shops exist at all when they have to compete with chains like Starbucks that don’t have to pay the same percentage in tax.
- gives corporate banks a monopoly on the supply of legal tender, which they can bring into existence from nowhere, with interest attached.
- gives priority to large corporations when it comes to government contracts.
- creates barriers to market entry for SMEs via expensive licensing, or the requirement to purchase expensive equipment to counter the problems caused by the corporate sector (foot & mouth etc.).
- bails out giant corporations with our money when they fail.
- engages in many, much more subtle forms of corporate welfare.
States have been bought. As US Supreme Court Justice Louis Brandeis rightly said: ‘We can have democracy or we can have great wealth concentrated in the hands of the few. We cannot have both’.
The defenders of billionaires claim:
- that their detractors suffer from ‘the politics of envy’. We don’t – many of us have chosen paths that are not well remunerated – a strange thing to do for those envious of extreme wealth. We just think that the economy, jobs, nature, communities and democracy are things that should be protected, not damaged.
- that billionaires contribute to society by paying a huge amount of tax; this argument is bogus, in that more tax would be paid if that wealth were spread more thinly, because ordinary taxpayers don’t hide their wealth in tax havens.
- that our opposition is ideological – we think the government should take more of their wealth from them via taxation. Sure, if would be nice if the state taxed Starbucks as effectively as it taxes independent coffee shops, but ultimately (I believe) it’s the wrong way of looking at it in the long run. I’d like to help build a system in which it’s impossible to extract wealth in the first place, rather than asking the state to tax it back after it’s been extracted, which doesn’t make much sense. Let’s leave wealth in communities, rather than have it extracted, only to chase after the crumbs.
- that ‘they worked hard for it’. Please – you don’t become a billionaire through your own work, but through the work of others. Nurses and teachers work hard; our bin-men work hard, but they don’t become billionaires. Billionaires need many other people working for them, preferably, from their perspective, without unions, in countries where they can be paid as little as possible, so that most of the value of their work can accrue to those with the most shares in the company. Or – they got lucky via speculation or inheritance.
So yes, there’s a problem with billionaires – they destroy jobs, the economy, communities, nature and democracy. Apart from that, they’re fine.
About the author
Dave Darby lived at Redfield community from 1996 to 2009. Working on development projects in Romania, he realised they saw Western countries as role models, so decided to try to bring about change in the UK instead. He founded Lowimpact.org in 2001, spent 3 years on the board of the Ecological Land Co-op and was a founder of NonCorporate.org. and the Open Credit Network.
The views expressed in our blog are those of the author and not necessarily lowimpact.org's
1annbeirneanimalwhisperert March 15th, 2020
Hurrah Dave someone else who understands what’s going on. I am not in the least jealous of the rich, I prefer to live a simpler and I think very much happier life.
2Mike Pinard March 15th, 2020
Most of what you say has some basis of truth but….
The list of successful non free market economy countries is probably Cuba.
Venezuela was touted as the shining light of socialism but that went well didn’t it I know sanctions hurt but it was imploding before that.
I think perhaps Mr Gates has made better use of his money than the US government may have.
It’s a case of it is broke but fixing it may be worse until an acceptable working alternative is agreed not imposed.
3Dave Darby March 15th, 2020
Mike Pinard – where did I say anything about non-free market, or imposing anything? I think people jump to conclusions, based on a binary view of what an economy might be – i.e. ‘you’re not in favour of a system that generates billionaires, therefore you must be a Stalinist’. Nothing could be further from the truth (in my case, certainly).
4Mike Eaton March 15th, 2020
With the question whats wrong with billionaires the simple answer must be “nothing, IF you are one” but “Everything if you are not” – as you say David the so called billionaire sucks everything out of the community and keeps it for theirselves giving very little if anything in return. The use and amount per person of such money is of course another question, however on this one I must agree completely with you – makes a nice change I guess!
5annbeirneanimalwhisperert March 16th, 2020
People are afraid of understanding the bad things that are happening, and Billionaires, Millionaires are both as bad as each other, the worst are the rich who salt away money in off shore accounts, and don’t pay thier tax bills fully leaving the poor hardworking people in the country to foot thier share of the bill, if every firm, and rich person paid thier full tax the NHS and other bodies would not be in the mess they are now, and personally, I don’t like paying tax to back up arms dealers and destroyers of forests where wonderful creatures like Orangutans are having thier tree nests destroyed and they are shot while protecting thier homes, this is what Billionaires and Millionaires do all the time backing cruel and bad working practices, and they get to shoot big cats who cannot escape just for vile trophies, so this is the truth about fat cat rich people they are literally helping in the destruction of our beautiful wildlife and with it the planet. I am sure there may be good rich people but I think they are in the minority. We can sequester crooks money, surely we would be able to do the same to the rich that don’t pay thier dues, Oh I forgot a good number of our government are overly rich in thier own right so I don’t think we would get any help from this quarter.
6Dave Darby March 16th, 2020
ann – I hear you, but I’m focusing less on what individual billionaires do (there’s bad in all of us), and more on the system that produces billionaires. The kinds of things that people have to do to become billionaires are bad for community, nature, democracy etc. regardless of the personal qualities of the people involved.
7Andrew Rollinson March 26th, 2020
Watching and listening to that radio presenter made me feel ill.
Let us hope a better, kinder, and less rapacious world comes after the coronavirus.
In my garden yesterday I looked up in the sky and there were no aeroplane contrails. I never thought that I would like to see this again. I am so grateful.
8Andrew Rollinson March 26th, 2020
Sorry, I mis-typed. It should be “I never thought I would LIVE to see this again”.
9Andrew Rollinson March 26th, 2020
I have just read this blog, which is relevant: https://www.jonathan-cook.net/blog/2020-03-24/coronavirus-terrified-us/?fbclid=IwAR1ZBn3KRit0JflStNsFo6LGJQtWEHWnyMd4op7dpfzof4-GLNHk71Hr5qo
10Jane McDonnell April 19th, 2020
It is never, ever a good idea for the 99% of wealth in the world to be held by the 1%. This leads to people like Bill Gates ‘buying ‘ into world organisations eg he has a 15% share in the WHO and then gaining a position of extreme power in world health policy . He is not an elected politician but has more power due to his wealth. Just look at his ‘advice ‘ to the world as to the way forward and how it links in so beautifully with his real agenda of using this Coronavirus scare to introduce mandatory biometric vaccination throughout the world which is a all about mass control .
Billionaires always have their own agendas , usually of buying and therefore gaining more control – you only have to look at the extreme power of the main banking families – the Rothchilds and Rockerfeller’s.
Gates agenda re mandatory vaccinations is there for all to see in his ID2020 group. He is openly doing this and we are all , through our ignorance and hyped up fear, sitting back and allowing his agenda to be rolled out . Frightening .
Please do your research , follow the money trail – it’s all there if you look . If we do not question and question then the life you all want to see after this CV19 scam will never be achieved .
11Matthew Fagin August 15th, 2020
I’m certainly not even a millionaire or rich, but i don’t feel rich people need to give me their money. Didn’t they earn it? That said, helping less fortunate when I can.
12Mark Kuramoto-Headey December 21st, 2020
While I agree with the sentiment of the analysis, one point I feel sure others would argue is that the equating the rich with draining money from the poor is presuming economies are a ‘zero sum game’. While I do not claim to understand macro-economics, I’m sure I’ve heard others argue that the wealthy countries have raised the level of general wealth while allowing the rich to exist. Of course, one can argue that the level to which the rich can increase their wealth may have been restricted in the past (at least more than today), but I’d have to leave that to others.
13Dave Darby December 22nd, 2020
“Didn’t they earn it?”
No. You don’t become a billionaire by working. You become a billionaire by receiving rent on property, interest on lent monies, dividends on share ownership etc. In other words, other people earn it for you. If everyone got paid the full value of their work, it would be impossible for anyone to become a billionaire.
It’s not a zero-sum game if you’re just talking about money as if it’s a pile of banknotes or big numbers in an account. But billionaires don’t leave their money like that – they translate it into real-world goods. So which billionaires don’t have several homes and cars, a private jet, a luxury yacht? Bearing in mind the effect humans are having on ecology already, then everyone trying to consume at those levels would cause ecological collapse. So when we’re talking about the planet’s finite resources, yes, it’s a zero-sum game.
14Steve Gwynne December 23rd, 2020
Researchers have showed that increasing income equality within a social environment of competitive relations will increase conspicuous consumption.
Presumably this will occur not only at national levels but global levels too, especially as the global middle class expands.
This hypothesis is verified to some degree by the notion that greater equality drives greater economic growth due to an increase in conspicuous consumption compared to the notion that inequality ‘incentivises’ firms and individuals to save, invest, work hard, and innovate with the idea that taxation of profitable firms and rich households will blunt those prospects with the result of reduced effort and lower economic growth.
In other words, in terms of using policy to control consumption growth, the debate is not black and white but a wicked problem that seeks to find the balance between equality and inequality with the former tending to increase aggregate conspicuous consumption (especially within socially competitive environments) which alleviates poverty and increases material well-being but is the most damaging to the ecological world especially under conditions of human population growth.
Within this context, billionaires and the inequality that underlies their existence is less damaging to our ecosphere especially within socially competitive environments. But also means needing to accept greater levels of poverty.
15Dave Darby December 23rd, 2020
“Within this context, billionaires and the inequality that underlies their existence is less damaging to our ecosphere”
I don’t think that follows. My biggest concern is that wealth concentration corrupts democracy, and prevents any meaningful change (stabilising GDP, protection of habitats from drilling, banning certain pesticides).
But, as you say, not advocating “socially competitive environments” anyway.
16Steve Gwynne December 24th, 2020
Yes Dave, more work needs to be done to clarify the extent of conspicuous consumption under conditions of increasing equality versus the conspicuous consumption enjoyed by billionaires and the very wealthy. And yes, the distorting effects of wealth within democratic systems needs more work too.
Thomas Piketty’s recent work speaks of co-determination to increase economic democracy which might be a good entry point to reduce the oligarchal power of big business.
No easy answers especially if conspicuous consumption driven by equality simply leads to more economic power for corporations. Hence the need to create greater levels of social cooperation via mutual credit systems and other ‘horizontal’ institutions.
Once Brexit is out of the way, I’ll be focusing more on the equality/inequality debate and how to build up mutually beneficial local economies.
Starmer’s manifesto vision for greater devolution is well timed in this respect.
Have a good Christmas and New Year.
17Alex Vivaldi April 25th, 2021
What’s wrong with billionaires? They are all evil, worthless, selfish monsters that lack morality, empathy, any trace of humanity in them. They would let all people on Earth die in suffer if they would have to gain money. Wait a minute…thats what are they doing right now. Thats why we cannot stop greenhouse emissions and we cannot save the Earth, being stuck with 19th century technology for making electricity and we must accept that we have only few decades left.
90% of billionaires are evil minds, psychopaths and criminals. And their kids are growing up to be the same. I saw on snapchat rich kids that use laptops as umbrellas in the rain, wasting and destroying phones and tablets only to show they are rich. I hate them. Those bastards cannot learn respect, empathy, love for nature and will think only money are important. Their wives who are 20-30 years younger are nothing but former prostitutes and gold diggers that became extremely lucky, doing nothing all day but eating like cows, appearing in bikinis on instagram and waste money on luxury clothes. They dont deserve to live. Nearly all billionaires with few exceptions deserve to be brutally killed, their children deserve to be torture to death and their women and daughters raped with bestiality until they are unconscious. I wish I can burn all their worthless money, their houses, their cars and themselves too. I want them and their worthless children to suffer, they dont deserve health, they dont deserve happiness, their money, they deserve nothing.
They are the reason for the climate change, destructions of the Earth, lung cancer rates being extremely high, because although they know how bad are fossil fuels for environment and human life, they spread misinformation about it. And we as suckers must pay expensive energy bills and must accept our tragic faith as we are doomed to a collapse only for them to flourish. Billionaires are human scums and parasites, but human scums and parasites with power as they rule the world.
18Juliet September 1st, 2021
hi Dave, i really enjoyed your article and based my entire IT project off of it (i hope that’s ok) i understand where your coming from but i do not understand your reasoning for why ‘billionaires damage communities’ when i tried to research that statement the only thing i could find was the allegations against Nike in 2013 for exploiting their workers in Indonesia but that’s all i could find. Am i doing something wrong when trying to find examples and sources of these type of statements? no disrespect I’m only 14 and trying to educate myself.
19Dave Darby September 1st, 2021
Juliet – no, very happy to help. The reasoning behind ‘billionaires damage communities’ is that the corporations from which they make their billions suck money out of communities. So for example, if you buy a coffee in Starbucks, some (quite a lot) of it immediately leaves your community to pay shareholders – and the people who hold the most shares become billionaires. But if you buy a coffee in an independent coffee shop, they don’t have to pay shareholders who live outside the community, so your money stays in the community. Same for any corporate branch or website vs small, local, independent businesses. So the small businesses find it hard to compete, and so jobs then tend to be of the Amazon warehouse / Uber driver type. Not very nice jobs (and also fewer jobs than small businesses provide), and again, a lot of their work goes to make shareholders rich, not them. So the more we use corporations, the more billionaires we help create, while money drains out of communities, and people’s work gets worse, with lower pay. Small shops get boarded up, communities get slowly less interesting, poorer, less fun and less safe and with fewer jobs. Hope that makes sense. Good luck.
20Juliet September 8th, 2021
Dave, thank you so much i really appreciate it! i understand and agree with what your saying.
21Norman September 12th, 2021
Gates isn’t remotely ‘philanthropic’. See the Corbett Report on him, dated July 2020 I think. His ‘Foundation’ should be renamed ‘Bill Gates, Inc.’ He wants us to think that he is giving away money for the benefit of humanity. He’s had some success in this PR campaign, sadly.
His family company’s future profits will come, he hopes, from selling 7-8 billion vaccines per year, in perpetuity. Or maybe more than that, if some people are said by corrupted medics. operating under today’s pharma-devised system to need two boosters per annum. Aaargh.
Search elsewhere for the harm to health being caused by these inadequately-tested products.