In Praise of Billionaires
Billionaires enrich society by creating value and opportunity
Below is an excerpt from an interview with the ethicist Jessica Flanigan and the business professor Chris Freiman, which was published in Business Insider. It’s about their essay, “Wealth Without Limits: In Defense of Billionaires.” The basic idea is that billionaires ain’t so bad - and in fact, that societies with billionaires are better off than those without. See what you think of the arguments!
What are the key insights from your research?
Market-made billionaires get rich by offering people goods and services. Often, they become successful because they invented a cool new product or they found a way to make a more affordable product. In other words, people become billionaires by making the rest of us better off, not worse off. The economy isn’t a pie of fixed size - market-made billionaires make their billions by “baking more pie.”
We also think people hold billionaires to higher moral standards than powerful public officials. There’s a widespread belief that governments should tax billionaires primarily and spend that money on public goods and anti-poverty programs. That is not how public officials spend most tax revenue, though, whereas billionaire philanthropy often focuses on providing public goods and helping the poorest people on Earth, not just people who live in their country.
How do you respond to critics who say it’s immoral, unfair, or just plain wrong that the likes of Elon Musk and Jeff Bezos have amassed such vast wealth?
We can’t tell whether it’s fair for someone to have their wealth simply by looking at how much they have - we need to know how they got it. For instance, it’s wrong for someone to become a billionaire by stealing a billion dollars. However, if someone becomes a billionaire by producing goods and services that people are happy to buy, that’s a good thing…
There is also an important question about whether giving away their money rather than keeping it in productive investments does the most long-term good. Billionaires who invest their money benefit their fellow citizens, too.
Should governments take steps to reduce wealth inequality by taxing or otherwise redistributing the richest people’s fortunes?
Wealth inequality, as such, is not morally objectionable. What’s objectionable about the gap between rich and poor is the poverty, not the gap. After all, there’s a gap between multimillionaires and billionaires, but that’s not something to worry about. The US government doesn’t allocate much tax revenue to alleviating poverty - much more goes to middle-class retirees. So this isn’t a strong argument for taxing billionaires. Moreover, increasing taxes may slow economic growth, which harms those in poverty over the long term.
You can read the full interview here.
You can read Flanigan and Freiman’s essay, “Wealth Without Limits: In Defense of Billionaires,” here.
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Once upon a time we were all poor, then capitalism flourished, and now as a result we are rich.
Yes but our intuition says wealth inequality is wrong. Rational thinking may contradict this but perhaps our evolutionary biology does not. A member of the tribe that gets most of the food may get kicked out of the tribe.
I agree somewhat with the article, who wouldn't want to be rich? Unfortunately I've come to believe that to aspire to and reach billionaire status, it takes a certain personality type that tends towards the sociopathic and obsessive. The kind of person who can easily develop a "god complex". The kind of person who may begin to believe they're so far superiour to the "masses", that they begin to fancy the idea that only they are fit to rule those ignorant masses. Thinkin' of you Elon you whore. (sorry, not sorry).