Ending the Age of Billionaires

Jul 02

Ending the Age of Billionaires

Posted by: George Grundy

According to surveys, many people find it hard to differentiate between the period humans have been around and the age when dinosaurs ruled the earth. Despite homo sapiens being extant for just 300,000 years, we sometimes find it hard to compute just how vast the gap is that separates us from the Cretaceous extinction. Dinosaurs died out a yawning 65.7 million years before the earliest human, but we’re just not intuitively equipped when numbers get so large.

This cognitive disability might play a part in explaining why we tolerate having billionaires in our society. That same lack of numerical perspective prevents us from differentiating between the relative degrees of affluence we see everyday, and those possessing such incredible wealth that it sets them apart from the rest of society.

Most people spend their adult life striving for the same basic requirements – comfortable shelter, safety and security for our family, education for our children. We might dream of owning an opulent house, boat or sports car, but to a billionaire the very horizon of our fantasy world is little more than a rounding error.

Today around 2,000 individuals hold a net worth at least one billion US dollars. Collectively, their wealth totals around $8 trillion dollars (eight million million dollars). 85 people together hold more wealth than 3.5 billion of the poorest. We often laud these financial titans as superhuman innovators and geniuses, men (they’re almost all men) whose every thought and deed should be studied to learn the secrets of human success. Capitalism crowns these people as our champions, so it takes a mental leap to question their true value to society.

Or perhaps it takes a crisis. The morality of affluence in any society beset by poverty has been debated since the invention of money, but crises shine a brighter light on inequity than more comfortable times. Extremes of capitalism seem less tenable when millions file for unemployment and food bank queues stretch a mile long.

The astonishing wealth of Jeff Bezos presents the most extreme example of financial disparity in a wealthy nation where millions still live in poverty. Bezos, who was already worth in excess of $100 billion, saw his wealth grow by a further $34.6 billion as the coronavirus struck between March and May this year. That’s a gain of $23 million, the life’s achievement of the most successful person you might ever have met, every hour of the day, for two straight months.

In fact, the coronavirus pandemic has been kind to most of America’s (roughly) 600 billionaires, who saw their combined net worth grow by $434 billion (15%) in around 60 days. For Elon Musk, Bill Gates, Mark Zuckerberg, Warren Buffett, Larry Ellison and Bezos, coronavirus has provided a windfall rather than disaster. Indeed, on the day America’s death toll exceeded 90,000, a study was published suggesting Bezos could soon become the world’s first trillionaire.

The figures associated with astronomical wealth comfortably lend themselves to ‘what if’ scenarios. One trillion dollars is enough to buy an apartment for every single person in San Francisco. Or 42-million Toyota Prius cars. More altruistically, economist Jeffrey Sachs estimates we could end world poverty with just $175 billion per year (for twenty years) – so the world’s billionaires could end poverty across the globe and still retain more than half of their wealth. A 2014 study published in National Geographic found that a paltry $270 billion per year would transition the world’s economies to low-carbon clean energy, most probably ending the existential threat of climate change. A few hundred people hold the resources to save humanity. It’s curious that they are not choosing to do so.

It is reflexively easy, and in some ways reassuring, to resist the idea of placing a constraint on wealth. If, some say, Bezos has been clever enough to make lots of money, who are we to demand a share of his success? Yet the ‘trillionaire’ headline gave many pause for thought. Sometimes it’s impossible to decouple wealth and morality. Surely there is a number, a ceiling on wealth, an accumulation beyond which one human being shouldn’t be able to go, in a world where millions of others literally starve to death.

Ending the era of the ultra-wealthy has slowly made its way to mainstream politics. When running for president, Elizabeth Warren touted a plan to tax the super-rich and break up businesses dominating their sector like Amazon, Facebook and Google. Bernie Sanders has repeatedly pointed out that this gilded age comes at a time when America’s minimum wage hasn’t changed in decades.

The argument that there is no moral component to wealth is further weakened by the two-sided game billionaires play when it comes to social responsibility, using charity to improve their public image but taking great steps to avoid the most fundamental demonstration of citizenship – paying tax.

In the US, Amazon paid no federal income tax at all on its $11 billion in profits in 2018, and in 2019 somehow achieved a tax rate of 1.2%. Billionaires and the corporations they invest in also often make their profits in curiously distant places like Bermuda and Luxembourg. This is sold to us as corporate best practice, but the offshoring of tax shifts the burden of taxation on to everyone else, and robs a host nation of the money needed to fund the police, run the hospitals and pave the roads on which people drive to jobs in these same corporations. Something is wrong when the richest people on earth use their money to avoid tax while the rest of us do our duty, and it’s a perverse notion that we should rely on or even praise these billionaires when they use a fraction of their tax-reduced wealth on PR-friendly altruism.

The power of the billionaires has become a political vicious cycle, as those with the means can buy access and influence, and are rewarded with yet further tax cuts and incentives. As the 2020 US election looms, one billionaire tried to buy the election, half of all Americans get their news from a social media site owned by a billionaire, a cable news channel owned by a billionaire (and routinely described as ‘state TV’) dominates the airwaves and the incumbent president, who claims to be a billionaire but probably isn’t, tweets to his millions of followers on another billionaire-owned platform. You don’t need to be a conspiracy theorist to argue that the system is rigged. Billionaires have co-opted, corrupted and endangered democracy.

This isn’t an argument that exists in the ether. Our environmental future has to involve more equitable distribution of wealth resources. Everyone fantasises about being rich, but as climate catastrophe draws near it’s hard to escape the idea that, as writer Anand Giridharadas has put it, billionaires are ‘standing on our backs, pinning us down’. Our modern, connected economies have gotten out of shape, and unless we tap this incredible source of capital, held by just a tiny number of people, even the billionaires might find that their survival bunkers won’t save them.