Yes, there are economic problems, that need to get fixed, but we have to be smart about this. That starts with actually trying to describe reality accurately. The narrative that once you are rich you’ll always stay rich, while if you are not born rich, you have no chance, doesn’t hold up for the majority of people. Just look at the most valuable firms in the world. If you exclude financial institutions and resource companies, you’ll see that the founders didn’t inherit their wealth. They are able to provide amazing goods/services and that made them rich. It was always has been and always will be the case that a tiny minority of people are actually the initiators of lasting global economic (and intellectual) development. These people have always accumulated extreme wealth and in a globalised world, they will become even wealthier. Yet the actions of these people also benefits everyone else.
The debate is always about inequality, but it should be about the standard of living for normal people. I’d rather live in an extremely unequal society, where even the poorest are better off, than in a society, where that is equal but poor. The underlying fallacy is to assume, that people only get rich at someone else’s expense. That’s true when people get rich by extracting economic/political rents. There are some sectors where this is a significant problem but that won’t be solved by increasing taxes. The sectors that extract significant rents are often closely connected to governments. Parts of modern finance post ~1980/90ish or energy/resource companies are probably the most famous ones.
Just to say, I've never once said that once you are rich, you will always stay rich (just look at Premier League footballers, '
3/5 go bankrupt within 5 years'). Indeed, that's not the point. However, as you say, inequality is growing year on year.
The super rich are becoming super richer. Even as Bill Gates and Warren Buffett give "most of their money to charity" their wealth grows faster and faster. Using "old money" to increase your wealth, is a lot easier than starting from scratch, that much should be obvious. To put some numbers on it; in 2000 the top 10 richest people in the world has a combined wealth of $275 bn. Today the top 10 richest people in the world have a combined wealth of $612 bn. The US Economy in the same time frame grew from a GDP of 10 trillion usd to around 18 trillion usd. (You could say I'm being slightly unfair here, but we'll leave it for now)
And to be clear, I'm not criticising the rich or the super rich. I'm more than happy for them to try and make trillions, and then pass as much of that on to their children as possible. And indeed, a 40% inheritance tax is too high (although as Jippy says, only idiots pay it).
But we both agree that inequality is a thing, so let's move on to the next point
The debate is always about inequality, but it should be about the standard of living for normal people. I’d rather live in an extremely unequal society, where even the poorest are better off, than in a society, where that is equal but poor. The underlying fallacy is to assume, that people only get rich at someone else’s expense.
I've never said that people only get rich off of other people's expense, but likewise, I think you're committing a fallacy yourself when you assume that people's standards of living will go up
because we let the rich become super rich.
I will try to strengthen my argument with a series of statements
- With hedge funds, wealth management services and indeed just investment funds, it has never been easier to make your wealth work for you. In the old days, turning wealth into greater wealth was more difficult.
- We having an aging population, people are living older than ever. Previously, within 100 years, a large wealth might have been divided up 20 ways. Now, a large amount of wealth might only be divided up 2-6 ways in that 100 years.
- House prices in parts of the western world are growing faster than the average wage, and have been for a long time.
- The CEO/Worker wage ratio has increased thousands fold over the years
- Automation has, at least the possibility, of causing mass unemployment. But the owners of the these companies will get super rich as the cost of manufacturing, production and delivery collapses.
All of the above is my argument, but I would sum it up with this once sentence; Will we be left with generations of children who remain super rich (and indeed are only getting richer) from the work their parents did generations ago, and could this lead to the return of a two-class society (much worse than it is today)? You are dismissing inequality as no problem whatsoever, but I think that is extremely foolish.
