What’s wrong with billionaires?

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Posted Mar 15 2020 by Dave Darby of Lowimpact.org
Billionaires Bill Gates, Jeff Bezos and Mark Zuckerberg

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’.

Conclusion

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.


Dave DarbyAbout 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.