A World Without Billionaires

Are billionaires good for the world?  Is hyper wealth an important and necessary component of capitalism or is it a poison that has a toxic effect on our social compact?  Does it stockpile resources that could otherwise lead to a more harmonious economy if they were more evenly distributed?

The super wealthy capitalist is seen as a lynchpin of the capitalist economy and is fantasized in almost mythological terms.  He or she is the one who will risk all for an ingenious idea, who will mortgage the family home and work 7 days a week to take a tiny Mom and Pop venture to a mega corporation.

The necessity of having the fabulously rich in society is rarely questioned.  But let’s look at the underlying principles and see if they are really so axiomatic.  I can see three basic ideas that are said to undergird this so-called necessity:  (1) the free market will necessarily produce the super wealthy and should not be inhibited, (2) capitalism needs the super wealthy to fund new ventures, and (3) people will not be motivated to create new businesses if the reward of becoming super wealthy is no longer there as an incentive.

The first justification is a circular argument.  The free market and its legendary ‘invisible hand’ is not an absolute.  There are already many adjustments being made to the ‘free market’ because of the complex interwoven nature of post-industrial society and global economies.  The market may allow a huge amount of wealth to move in one direction (the absurd amount of money that is captured by wall street and various money managers is a classic example) but that does not mean that it should stay there or that the ‘market’ would somehow be harmed by its re-direction.

The second argument, that the super wealthy are needed as venture capitalists, is more difficult to counter.  I would argue that the super wealthy and the venture capital ‘society’ become a club and self-fulfilling prophecy for new ventures.  Is the serial entrepreneur repeatedly successful because of some rare genius or simply because he or she now has access to a club of mutually supportive wealthy people who promote one another’s ventures both from a financial and marketing perspective?

I suggest that the new, more egalitarian forms of providing capital – kickstarter and other Internet-based mechanisms - are better sources of funding.  And remember that most great businesses did not need that much capital to get started.  The modern examples of massive venture funding and huge losses before success is achieved are perhaps examples of forced business growth by the plutocracy, rather than organic, democratic growth.

The 3^rd argument, that entrepreneurs would not be motivated to take the risks and sacrifices necessary if they are not hugely rewarded, is amusing to me.  Aren’t capitalists idealized as noble spirits whose passion to create a new concept or business is what drives them?  Isn’t the joy of creation and the feeling of accomplishment sufficient reward?  Isn’t the challenge of building something and seeing it flourish the true motivation for entrepreneurs?  I am quite certain there would be more than enough gallant entrepreneurs who would be inspired by these goals. I suspect they would probably be a better class of entrepreneur in many ways.

And we are not talking about denying successful people their financial rewards.  Any successful entrepreneur will have plenty of money.  We are simply talking about taking the massive wealth – tens of millions or billions of dollars – that are generated by new businesses and feeding them back into society through infrastructure development and tax cuts to the working poor and middle class.

Re-directing the huge wealth that might otherwise go into billionaire’s pockets into a wider population would have many benefits.  The public use for large infrastructure projects would become the basis for the next generation of businesses and technologies.  Education through university, trade school and even graduate school for the entire population could easily be financed.  And the money that would find its way back into the population at large through tax breaks would be spent in normal consumer fashion and thus stimulate the economy much more than it would sitting in the vast holdings of some billionaire.

It is often theorized that the massive wealth of billionaires is necessary for investment.  But investment is neither necessary nor worthwhile unless there is demand.  Returning the profits back to the workers will create that demand.  Investment will surely follow and there will be no dearth of capital.

As to how to achieve a world without billionaires, that is not a simple issue, but it is certainly attainable.  Heavy individual income taxation such as occurred in the 1950’s in the U.S. is one option.  This taxation would have to target stock sales and overall wealth as well as income. The tax would have to be careful to allow full compensation for the investment and sacrifice that is made and provide a reasonable level of wealth without allowing too much to accumulate. 

Another is to heavily tax corporations that benefit from monopolistic trends, such as Apple, Amazon, Google and others.  This taxation would avoid the negative repercussions of tech dynasties and overly powerful mega-corporations.  The taxation might limit some innovation in these companies, but having that innovation spread more evenly across other companies is a better long-term situation.

In the end, having no billionaires (and eliminating even the next several layers down) and no mega-corporations would lead to a much healthier socio-political environment.  Power and wealth are too closely related, and they make for a toxic mix that is becoming ever more dangerous for our fragile world.

Middle Class Guilt, Ethical Living and Spending Habits

I have always been pretty frugal, though let me qualify this statement.  On a relative scale, my life is extravagant.  I have always had good cars, nice houses, wonderful vacations and most of the possessions that I needed or even wanted.  I eat out fairly frequently at some very nice restaurants and drink good wines and cocktails. I sent my daughters to an International private school and then to expensive colleges.  Compared to most of the earth’s residents I live in luxury.

However, despite all of this I would still classify myself as relatively frugal.  By this I mean that I spend much less than other people of a similar income and wealth level.  I rarely stay at luxury hotels, I don’t buy high end cars, I look for bargains on clothes, furniture, and other goods. I don’t fly first or business class unless I am upgraded.  Basically, I fret over spending money.

Part of this is due to a frugal nature that I believe I inherited from my father.  I am also a risk averse person in financial matters.  This may be caused by the health problems I have always had and which for many years caused me to worry about possibly losing my ability to generate income.

But there is another component to my frugality – the guilt I feel in indulging myself while so many on this earth are struggling to survive.  I wrestle with this guilt partly because of the pangs of my own conscience, and partly because of my wife Karen’s very strong inclinations toward social justice and simple living.  She challenges me on a daily basis on this issue and I find it difficult to argue effectively against her principles. 

Karen has always battled for social justice and if she were not married to me, she would probably be living a much simpler lifestyle.  I have corrupted her somewhat, or perhaps it is more accurate to say she has acquiesced in our higher standard of living.  But if it were not for her persistent challenges there is no doubt that I would be spending much more money.

Choosing a simple (or simpler) lifestyle could potentially be desirable on two levels:  (1) It is possible that simpler living is a healthier and more satisfying way to live, and (2) it may be that living simply is something we can do to make the world a more equitable and more sustainable place.

The first idea, that a simple lifestyle may simply be a better way to live, is a concept that we have all heard many times.  It drove the counter-culture movement of the 60’s and early 70’s, it has been a basic tenet of many of the world’s religions, and it continues to be a topic of contemplation for just about anyone who takes the time to examine life seriously.

The difficult question is what does living simply really mean?  Does it mean driving a Subaru instead of a Mercedes?  Or living in a 2500 sq. ft. house instead of a 4000 sq. ft. one?  Does it mean eating out 1 time a week instead of several times?  These are absurd comparisons, but 'simple' is relative.  

The way most of us who even pretend to care about this topic deal with it is to limit our materialism and try not to have the pursuit of material goods and luxury dominate our thoughts and actions.  Christians have developed impressive logical gymnastics to interpret Jesus’s admonitions about wealth and materialism as warnings about ‘obsession’.  As long as they can convince themselves that they are not ‘obsessed’ with wealth and that they have their ‘eyes on the prize’, then they can accumulate vast holdings and feel perfectly justified and at peace.

And, of course there are lots of people who have no illusions about living simply.  They indulge their every whim and desire and never give the danger of excess or the possible salutary benefits of a less material life a second thought.

I have also seen the other extreme – people whose simple lifestyle is a badge of self-righteousness.  It becomes a chip on their shoulder and a source of resentment for them. They are so obsessed with living simply that they cannot enjoy life.

In the end, we must individually decide what the best lifestyle is for us in terms of how it affects us mentally, spiritually and physically.  And this is in great part determined by our financial means.  A simple lifestyle for a millionaire is likely quite different from that of a blue-collar worker. 

The second possible reason for living simply and curtailing one’s consumption is if one believes that doing so would benefit humankind.  There are two related but somewhat independent lines of reasoning here.  The first says that we have reached a point in human development where we will have to limit our use of resources or face increasingly unpleasant consequences for the planet and its inhabitants.  Such habits as recycling, avoiding the use of plastics, using less carbon-based energy, and creating less waste are the types of behavior that one would choose to support this concept. Additionally, one can argue that limiting a family to two children would make sense in order to avoid over-population.

But there is also the question of how lifestyle impacts the problems of global poverty and inequality.  Consumption is the basis of economic growth, and there are many that would argue that we should consume and acquire at the upper level of our means to ensure continued expansion of the global economy, which in turn creates jobs and lifts people out of poverty into the middle class.  

It is a basic tenet of capitalism that consumption is a good thing and necessary to promote general well-being, i.e. that the engine of capitalism needs the fuel of consumption to work efficiently.  This is basically the ‘rising tide lifts all boats’ argument, sometimes characterized as trickle-down economics.

But there is a counter argument that the long-term health of global society is dependent on a more equitable distribution of wealth and that this will never be achieved if people strive to accumulate in an unlimited manner for their own private use.  Moreover, the worship of wealth and the cult of materialism create an unhealthy disharmony in society that creates a cycle of social upheaval.  The argument here is that a consciousness of moderation and sharing, if embraced by all, would ultimately move our society toward less income disparity and a higher level of community.

Also, if consumption is the necessary fuel for the economic engine, wouldn’t it be just as effective, and much more socially beneficial, for this consumption to be distributed more evenly so that the wealthy don’t consume quite as much, and the less wealthy consume more?  This is not easily done, but the northern European economies seem to have come close to achieving this type of balance.

Like so many other questions about how to live, there is no simple answer.  I do believe that we have a social obligation to carefully consider the impact of our life choices on the world around us.  But it is also clear that the complex nature of our economy, political biases and philosophical inclinations plays a large role in our decisions. The global warming crisis and other ecological issues may in the end dictate much of our future behavior.  That may be a good thing, if we can adapt quickly enough to avoid massive injury and misery in the process.

Is the Evolution of Human Thought the Key to Progress?

Almost no one is in favor of slavery anymore.  Yet a mere 170 years ago there were millions of people in the United States who felt that somehow slavery was a morally acceptable institution.  They justified it through passages in the bible and through various forms of supposedly logical reasoning.  There may still be instances of slavery  in the world today but there is no longer any serious attempt at justification.

Less than one hundred years ago, a majority of people in this country believed that a woman’s place is in the home and that she should not be allowed to vote and should only have a vocation if she is unable to find a husband.  There may still be people who believe that today, but generally one can say that this is no longer an acceptable point of view in society at large.

There is a general ‘consciousness’ in human society that evolves.  It is different from biological evolution in that it may go through pendulum-like cycles of advance and regress, but there can be little doubt that our global consciousness has changed dramatically over the centuries.

Examples of this are the two major shifts mentioned above.  But there are others:  

• The idea of conquest of another society or people is no longer generally accepted.  War still occurs, but for other reasons – ethnic, religious, economic – i.e. for failures of diplomacy rather than outright desire for conquest.

• War itself is now seen as a ‘necessary evil’ rather than a noble calling.  We still venerate war heroes and seem fascinated by war, but the idea of war and battle being a crucible that all men should pass through is no longer embraced by most of the world’s people.
• The idea that some races are innately superior to others has also fallen into disfavor.  There is certainly still racism, sexism and ethnic prejudice and stereotyping, but most people accept, at least in a theoretical sense, that every race and ethnic group should be treated equally.
• Torture is no longer seen as an acceptable form of punishment or interrogation.  There is sadly still plenty of torturing done, but society in general no longer tolerates it.

Societal norms change.  Some may change and then revert back in a reaction to either too rapid or too dramatic a result.  An example of this is sexual practices.  There have been numerous periods of more liberal sexual mores followed by a return to conservative practices.  However, the general trend, or change in consciousness, has been a gradual recognition of the complexity of our sexual nature and an acceptance of more open sexual relations, including the use of birth control, the widespread acceptance of pre-marital sex, depictions of sexual relations in film, TV, books, etc. and the overall willingness of people to openly discuss sexual matters.

The evolution of consciousness can in some cases be accelerated in today’s world where there is instant global dissemination of information and ideas.  The rapid de-criminalization and acceptance of homosexual relationships, including the legalization of marriage in many countries, is an example of this phenomenon.  This has taken place over a period of 50-60 years.

As we look forward to the future and ponder how human society can confront the many ills that still plague it, it seems clear that the path forward is through a global shift in consciousness.  We have learned through painful episodes that humans rebel when forced to do something and that the reaction can sometimes wipe away any progress.  Laws alone cannot change society.

The civil rights movement is a good example.  In the end, it was not Brown vs. Board of Education or the Civil Rights Act that brought in the new era for African Americans, though certainly they helped solidify the gains.  After all, there were laws on the books after the Civil War that should have in theory accomplished much the same thing. It was a tectonic shift in attitudes throughout our post-WWII society that allowed these new behaviors to take root and slowly become part of our societal organism.  And that consciousness is still evolving.

The biggest impediment to progress is and always has been self-interest.  It is only when self-interest can somehow be associated with societal consciousness that advancement is possible.  But how does this occur?  Theories of change such as the tipping point, the hundredth monkey and Gaia have all postulated a kind of organic relationship in society where a critical mass of thinking can rapidly spread more or less uniformly across the entire population.

An example is recycling.  It is inconvenient for people to do the extra effort required for recycling, and they will rationalize their refusal to do so. But if recycling is taken up by enough people to become a societal norm (as it is already in some European countries), then people will feel motivated to embrace it as if it is in their own self-interest, which of course it is in the long run.

Someday it will no longer be acceptable to let people in the world starve or die from preventable diseases.  It will no longer be acceptable to have some members of society go bankrupt paying for chemotherapy.  Someday it will be accepted that we must curtail our use of carbon-based energy to save the planet and it will feel good to accept some limitations on income and material possessions as a part of a world sharing of resources.

These are very idealistic goals for the evolution of consciousness, but human beings have undergone some pretty amazing shifts in thinking over the past two hundred years, so why not hope for the best?