What's the point of billionaires? O

[🦀🎂🦀🎂]

Or, to be less opaque, does the economy in general benefit from the presence of billionaires and multimillionaires? Do they invest more (or in better ways) than if the equivalent capital was invested by public bodies?

Or is there no benefit, but they are a necessary noxious by-product from the economy that we have to just deal with?

[Sprouts Farmers Market ✘]

Did you not see the Trump documentary - what he did to Central Park - no government could have fixed that ice rink, but he made it iconic. He is responsible for the whole city's greatness

[🦀🎂🦀🎂]

Yes well TRUMP (PBUH) is the exception as he is a god. Most other rich people are just weirdo dweebs (Romney, Silicon Valley), perverts or arseholes who don't even have the art of the deal.

[RFayette]

Yes well TRUMP (PBUH) is the exception as he is a god. Most other rich people are just weirdo dweebs (Romney, Silicon Valley), perverts or arseholes who don't even have the art of the deal.

Boo. 


I mean, it depends on the billionaire, of course.  Those who built great products and are quite philanthropic, like Gates and Jobs, absolutely.

[Ebsy]

Eh... the way I see it, having billionaires (or millionaires) hurts the economy much less than the cost of not having them- if we need billionaires to produce a good economy with stable, attainable jobs, then so be it.

I mean, sure, ideally we could split up their wealth and distribute it, but I think we can agree that this would fundamentally hurt the economy. The way to overcome this would be if the government literally came in and ran the job market. I'm not sure most people would actually want that.

I don't think there is any evidence actually supporting that claim.

[🦀🎂🦀🎂]

Here's some arguments from centre-left Czech economist and onetime presidential candidate Jan Svejnar:

http://cgeg.sipa.columbia.edu/sites/default/files/cgeg/Paris%20Brief%20-%20Jan%20Svejnar%20-%20Do%20Billionaires%20Help%20or%20Hurt%20the%20Economy.pdf

It seems he divides the billionaires into the good (the inventor etc.) and the bad (the cronyist and the monopolist) - which strikes me as an overly crude distinction. Yes, I think we can all see the difference between Bill Gates and, say, Jesus Gil or Carlos Slim. But Gates' wealth is vastly disproportionate to his initial labour. Is that an effective economic strategy?

I suppose I just find the super-rich to be weird, in that I don't see what motovation one can have after reaching a certain point. If you have 13 houses, what's one more? Does having a car elevator make you happy? I mean at a certain level of ostentatious behaviour, you become sympathetic to the communists.

[muon2]

I spent some time in the USSR before its demise to work with some scientific colleagues. Seeing both their small town and central Moscow convinced me that a central bureaucracy was very inefficient at investing capital. I'll put up with a certain amount of excess wealth to get a variety of investment strategies.

[🦀🎂🦀🎂]

?? Not sure I follow your logic? Does one necessarily need to be a multimillionaire to control a large body with many employees?

I spent some time in the USSR before its demise to work with some scientific colleagues. Seeing both their small town and central Moscow convinced me that a central bureaucracy was very inefficient at investing capital. I'll put up with a certain amount of excess wealth to get a variety of investment strategies.

True, although the dream is a solution not dependent on bureaucratic structures nor the whims of the few. And I would argue that the cirrent solution isn't particularly efficient in figuring out its investments: investment seems to predominantly gravitate towards real estate speculation, luxury apartments, tourist traps and hoarded wealth (e.g. capital stored in private art collections) and not on relatively unsexy things like infrastructure etc. I could be wrong there as well.

[DC Al Fine]

?? Not sure I follow your logic? Does one necessarily need to be a multimillionaire to control a large body with many employees?

I spent some time in the USSR before its demise to work with some scientific colleagues. Seeing both their small town and central Moscow convinced me that a central bureaucracy was very inefficient at investing capital. I'll put up with a certain amount of excess wealth to get a variety of investment strategies.

True, although the dream is a solution not dependent on bureaucratic structures nor the whims of the few. And I would argue that the cirrent solution isn't particularly efficient in figuring out its investments: investment seems to predominantly gravitate towards real estate speculation, luxury apartments, tourist traps and hoarded wealth (e.g. capital stored in private art collections) and not on relatively unsexy things like infrastructure etc. I could be wrong there as well.

I suspect you are here, if only because the guy who quietly invests in a toll road, or collects dividends from Proctor & Gamble doesn't make the news much

[tschandler]

What is the point of owning any specific amount of capital?  Because in terms of the Western World vs the rest, Myself as a teacher and a farmer is as close to an average millionaire or billionaire as I am to the poorest.   If you can't at the very least control the capital you produce then why produce at all?

[Hillary pays minimum wage]

Or, to be less opaque, does the economy in general benefit from the presence of billionaires and multimillionaires? Do they invest more (or in better ways) than if the equivalent capital was invested by public bodies?

Or is there no benefit, but they are a necessary noxious by-product from the economy that we have to just deal with?

To make people like you feel insecure. I love them.

[🦀🎂🦀🎂]

Ah would you believe that (in this Christmassy time) I am concerned about these poor billionaire's salvation? They are the ones that will have to take their camel through the eye of the needle, after all.

@ssuperflash, I'm increasingly baffed, tbh.  Most businessmen are not just motivated purely by money (motivation being a complicated aspect of the human psyche). And one does not need to be exceedingly wealthy to run a company - you seem to be suggesting that worker's salaries are directly cribbed from executive pay? Or something? I'm afraid I'm lost. Maybe I'm tired from Xmas and everything.

[136or142]

As long as everybody has access to the basic needs of life and everybody shares in the gains from productivity, why should I care if somebody is a multimillionaire or a billionaire?

There are many other very good wealthy people.  Steve Jobs was a meglomaniac (at least in his younger years) but he also was a creative genius who developed many products that many people like.  Elon Musk is a true revolutionary.  Tom Steyers and George Soros have both done far more good than harm.

[Hillary pays minimum wage]

No one would love billionaires more than liberals with all of the taxes they pay towards socialist programs, but billionaires are smart enough to figure how to write enough things off to get their money back from the Democrats' flawed tax system.  It's ok though because what Democrats really want is more talking points to sell themselves for votes.

[🦀🎂🦀🎂]

As long as everybody has access to the basic needs of life and everybody shares in the gains from productivity, why should I care if somebody is a multimillionaire or a billionaire?

There are many other very good wealthy people.  Steve Jobs was a meglomaniac (at least in his younger years) but he also was a creative genius who developed many products that many people like.  Elon Musk is a true revolutionary.  Tom Steyers and George Soros have both done far more good than harm.
[/quote

Because wealth is a finite resource?

And tbh, though I don't doubt that a lot of rich people are good; I would hardly choose those four people to back up my argument lol

[Sprouts Farmers Market ✘]

Calling wealth finite is a very concerning starting point for this debate. (Well, I mean I suppose it very well may be finite, but not in a way that is causing harm.)

[Kingpoleon]

Economically, they provide a point of income stability which prevents mass collapse of the dollar value and thus entire countries. Granted, they also can lead to what is basically economic "red tape" which restricts some commerce and slight labor growths which would also probably benefit the economy.

[Ebsy]

Economically, they provide a point of income stability which prevents mass collapse of the dollar value and thus entire countries. Granted, they also can lead to what is basically economic "red tape" which restricts some commerce and slight labor growths which would also probably benefit the economy.

Did you just type random "economics 101" words and press Post?

[Foucaulf]

Responding in decreasing order of inanity:

Economically, they provide a point of income stability which prevents mass collapse of the dollar value and thus entire countries.

Income stability my foot - have you never read an article about how a billionaire's wealth shrunk by billions during a financial crisis? Why are you talking about income when the topic is wealth anyways?

I'm not sure how someone with less than a million dollars could hire thousands of employees even at minimum wage levels

Most hiring is done by firms, not individuals.

I would argue that the cirrent solution isn't particularly efficient in figuring out its investments: investment seems to predominantly gravitate towards real estate speculation, luxury apartments, tourist traps and hoarded wealth (e.g. capital stored in private art collections) and not on relatively unsexy things like infrastructure etc. I could be wrong there as well.

This isn't actually inane at all, but infrastructure investment will be unsexy so long as people send death threats to highway builders that put up a toll or the NIMBYs do not allow new residences to be built.

And analogies like this, I suppose, illustrate the heart of the political economy of billionaires. You don't become a billionaire by just being smart, or inventing something of great value to the world: you get there by capital accumulation, preserving your right to a vast pool of assets. And, once you amass billions in wealth, you have the power to claim the right to any asset you want, even ones normal people could never imagine being held in private hands.

The separate question is whether wealth accumulation by billionaires "throttle" investment opportunities. Not only do they keep afloat industries that should be downsizing, liquidity flushed into that industry allows further entry to be possible, dooming entrepreneurs to failure in the most pessimistic case. You would have to weigh this effect with the beneficial investment decisions of billionaires, of course. But this is a research question where I'm sure hundreds of papers have been published but I lack any knowledge of them.

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I don't like conspicuous consumption more than the average guy, but let's remember why it's prefixed "conspicuous" here. You spend your wealth to impress not only those above you, but also those poorer than you. And then the fact that many billionaires don't flaunt their wealth is less surprising. When you can revive a whole industry by yourself, how much more conspicuous can you get?

[muon2]

I would argue that the cirrent solution isn't particularly efficient in figuring out its investments: investment seems to predominantly gravitate towards real estate speculation, luxury apartments, tourist traps and hoarded wealth (e.g. capital stored in private art collections) and not on relatively unsexy things like infrastructure etc. I could be wrong there as well.

This isn't actually inane at all, but infrastructure investment will be unsexy so long as people send death threats to highway builders that put up a toll or the NIMBYs do not allow new residences to be built.

And analogies like this, I suppose, illustrate the heart of the political economy of billionaires. You don't become a billionaire by just being smart, or inventing something of great value to the world: you get there by capital accumulation, preserving your right to a vast pool of assets. And, once you amass billions in wealth, you have the power to claim the right to any asset you want, even ones normal people could never imagine being held in private hands.

As Foucaulf notes, great wealth is about asset accumulation. To be useful in accumulation an asset should either be expected to appreciate in value or to provide a return in rent that more than compensates for its depreciation. Infrastructure is generally going to depreciate as it ages and needs repair so it needs to generate sufficient rent to justify its use as an asset.

One example where wealth has recently gone into infrastructure that was once public are toll roads. Some states and cities have sold these assets to private investors. The rights to the Chicago Skyway (I-90) were sold in 2005 for $1830 M to last for 99 years. The concession provided an agreed set of toll increases over the years. In 2015 the Spanish-Australian investors sold its concession to a Canadian group for $2800 M. That works out to a 53% profit or 4.3% per year compounded which exceeds inflation over the period, plus the benefit of the annual profits from the operation.

So perhaps to the OP, the point of billionaires was to enable the city of Chicago to gain a one-time infusion of cash while still insuring that the toll Skyway would be available to the public.

[Virginiá]

I don't see a real issue with billionaires, provided that they are largely prohibited from having an out-sized influence in politics via their wealth, and that they are also prohibited from consolidating entire industries to the detriment of everyone else. The problem these days is that both of those issues are severe problems. Money is/has been ruining government and, you could also say due to this money, corporations are being allowed to consolidate way too often. You see this issue in almost every industry - Food, IT (especially), banking, etc. This is having a lot of negative effects on society.

I don't think most people would really have it out for wealthy people if the government would take care of these 2 main issues. But yet here we are.

[muon2]

I don't see a real issue with billionaires, provided that they are largely prohibited from having an out-sized influence in politics via their wealth, and that they are also prohibited from consolidating entire industries to the detriment of everyone else. The problem these days is that both of those issues are severe problems. Money is/has been ruining government and, you could also say due to this money, corporations are being allowed to consolidate way too often. You see this issue in almost every industry - Food, IT (especially), banking, etc. This is having a lot of negative effects on society.

I don't think most people would really have it out for wealthy people if the government would take care of these 2 main issues. But yet here we are.

I don't see industrial consolidation as new or unusual, especially in communications and technology. In the 1970's communications was so consolidated that there was usually only one choice- the Bell System (the original AT&T). In the early 80's the court ordered it to break up. In the four decades since most of the pieces have come back together as either AT&T or Verizon. Cable giant Comcast provides additional competition to the wireless providers. Compared to the offerings I had in college there is less consolidation today than 40 years ago. If those big three were to merge, then we could talk about consolidation of the form I saw growing up.

Computing technology had reached the same point in the 1970's and IBM was almost broken up because of it. The case was resolved just before they released the IBM-PC or they certainly would have been broken up. When I shopped for computers in the 1980's there were very few choices:  IBM and Apple dominated PCs. Since then new companies have emerged and many have consolidated since, but today I can go to Best Buy and see a wider selection of companies on display than I could 30 years ago as a grad student.

So, in what way is IT consolidating too much? And how is that having negative effects beyond those when I was young, and wealth was not the issue it is today?

[Virginiá]

So, in what way is IT consolidating too much? And how is that having negative effects beyond those when I was young, and wealth was not the issue it is today?

ISPs and their regional monopolies are choking the life out of consumers and it's no wonder people hate them so much. Google, as much as I like them, has become far too powerful. They are extending themselves everywhere. It's not that I think they are particularly harmful now (in fact, it is basically only them who can/and is competing with ISPs to make service better for people). It doesn't take much to see just how much control they have, though. I could say CPU designers as well, as it seems the only real players are Intel and AMD, but I don't think they are an issue (not that they couldn't be eventually, though).

Now, I wasn't meaning to generalize everything-tech, but there are very important parts of these industries that are too big and too powerful. It just happens that ISP/Search monopolies and what they have become are either a major threat to innovation or are on their way to becoming one sometime in the future. I may have a different idea of when the government should step in, but the fact that we have what we have right now seems proof (to me, anyway) that the government is not doing its job.

Historically, I can't comment. I'm pretty young and I don't know how it was. However, if it was worse decades ago, then that doesn't make me feel better about this. Why hasn't the government broken up ISPs already when it's been obvious for years that they are critical to the development of the Internet but yet are abusing their power to try and control and manipulate their position to increase profits at the expense of others? Google, which I do admit I see somewhat altruistically (maybe naively), is very clearly in a position of power that could be just as bad as it is good, if they so chose to be that way.

Finally, I have to say that I'm not a big fan of just waiting until everyone is being gouged and pissed off by overbearing and incontestable corporations. Corporations should not be allowed to even be in a position where they can exert overwhelmingly control over entire industries, regardless of their agenda. But, that's just me, maybe.

[muon2]

So, in what way is IT consolidating too much? And how is that having negative effects beyond those when I was young, and wealth was not the issue it is today?

ISPs and their regional monopolies are choking the life out of consumers and it's no wonder people hate them so much. Google, as much as I like them, has become far too powerful. They are extending themselves everywhere. It's not that I think they are particularly harmful now (in fact, it is basically only them who can/and is competing with ISPs to make service better for people). It doesn't take much to see just how much control they have, though. I could say CPU designers as well, as it seems the only real players are Intel and AMD, but I don't think they are an issue (not that they couldn't be eventually, though).

Now, I wasn't meaning to generalize everything-tech, but there are very important parts of these industries that are too big and too powerful. It just happens that ISP/Search monopolies and what they have become are either a major threat to innovation or are on their way to becoming one sometime in the future. I may have a different idea of when the government should step in, but the fact that we have what we have right now seems proof (to me, anyway) that the government is not doing its job.

Historically, I can't comment. I'm pretty young and I don't know how it was. However, if it was worse decades ago, then that doesn't make me feel better about this. Why hasn't the government broken up ISPs already when it's been obvious for years that they are critical to the development of the Internet but yet are abusing their power to try and control and manipulate their position to increase profits at the expense of others? Google, which I do admit I see somewhat altruistically (maybe naively), is very clearly in a position of power that could be just as bad as it is good, if they so chose to be that way.

Finally, I have to say that I'm not a big fan of just waiting until everyone is being gouged and pissed off by overbearing and incontestable corporations. Corporations should not be allowed to even be in a position where they can exert overwhelmingly control over entire industries, regardless of their agenda. But, that's just me, maybe.

I guess when I look today I have my choice between AT&T, Comcast, or a wireless provider for my ISP. I've switched when one got uncompetitive or I didn't like their pricing structure. I can get cloud storage and web hosting lots of places, so that's very competitive it seems. In the search world Google is big, but I've used Bing and even Yahoo at times when I didn't like the ad layers that came with particular search requests.

The government (FCC) was just in a huge fight last year with the ISPs over net neutrality, with the content providers winning over the ISPs. How much competition are you looking for?

[Virginiá]

The government (FCC) was just in a huge fight last year with the ISPs over net neutrality, with the content providers winning over the ISPs. How much competition are you looking for?

Yes, I followed this pretty extensively. I'm rather eagerly awaiting the recent lawsuit verdict as well.

I don't consider myself too greedy for competition. For ISPs, I simply want enough that forces the providers to offer actual, decent customer service, good prices, good service and no bullsh**t limitations. Comcast is likely to hit my area with data caps this year and given my usage, I'll have to pay that extra $30 for unlimited data. It's things like this that really drive home how little competition there is. They would not dare do this if there were more providers in the area all competing for customers, but since that is generally not the case, they roll out whatever messed up plans they feel like.

I only have 2 choices in my area. Comcast or Dish. Though, I might as well only say 1 choice because the other is not even an option for me. Google Fiber's incursions into zero-competition areas has really shown just how much we are losing out. Suddenly, AT&T and others are dramatically upping broadband speeds, dropping costs and all sorts of other good stuff. Our system simply does not work the way we envision without adequate competition and ISPs are a prime example of this (in my opinion).