One of the more foolish concepts ever to get widespread and longstanding traction is the animosity between “classes.” Don’t get me wrong here, if you lived as a serf during medieval feudalism, I have your back on this one. But in 2020, I struggle to find any facts showing the whole movement to be much more than uninformed anger.
While bitterness towards wealthy people is an age-old concept, it recently received a modern facelift. As our world (it truly is the world… look it up) gets wealthier and wealthier, I think too many people realized during their peak earning years, they might be considered “wealthy” and got less comfortable being against “the wealthy.” Fear not! We simply narrowed the focus of our bitterness to billionaires.
This works far better, because there are apparently only 2,153 of these people on a planet of 7 billion. The vast majority of us cannot realistically imagine ourselves someday being a billionaire, so it’s much safer to be angry at a group you’re pretty confident won’t include you in the future.
What Makes Us So Angry?
From what I can tell, our modern belligerence towards billionaires typically feeds on a stew of three different conceptual ingredients: 1. Billionaires achieve their wealth based on their privileged backgrounds. 2. Billionaires don’t pay their fair share of taxes. 3. Billionaires maybe shouldn’t be allowed to exist while there are still poor people in the world.
Ok, so does any of this animosity towards billionaires actually make sense? As is the case with so many of issues, the answer is, “It depends.” Listen, if you become a billionaire by cozying up to government and getting handouts from the rest of society facilitated by our supposed representatives, then sure… that’s pretty terrible. But looking at the Forbes 400 list sure doesn’t seem to indicate that’s the majority of what’s going on.
Children of Privilege?
Let’s focus on Jeff Bezos since he’s the richest of the bunch and seems to be the poster boy for the awful billionaire’s club these days. He’s also a decent proxy for the majority of the people on the list. We’ve been told these guys get to their positions based on privileged backgrounds. You decide for yourself about Jeff’s story.
Jeff’s mother got pregnant with him in high school and married his biological father. That guy apparently stayed out late drinking pretty regularly and the marriage ended after 17 months. Three years later, Jeff’s mom married a man named Mike Bezos, who essentially become Jeff’s father. Unfortunately for our preconceived privilege story, Mike (Miguel) came to America (alone) from Cuba when he was 16 and he didn’t speak any English.
A bit later, in 1993, Jeff started an online bookstore out of his garage, and it was not exactly an overnight success, making essentially no profits until 2015 (although it definitely did get big). Fast forward a few years and Jeff is the richest person on the planet, with a net worth of roughly $115 billion.
Paying Their Fair Share
Well, ok… so Jeff’s basically a completely self-made child of a teen mother and a first-generation immigrant, but whatever… does he pay income taxes!? You know what? Amazon truly doesn’t pay federal income taxes right now (they do pay a fair chunk of other taxes). I hear people talk about this a lot, but rarely hear anyone ask why that is.
If you do ask, you get an interesting answer… it’s because we want it that way. Turns out the biggest reason Amazon doesn’t pay federal income tax is because of an intentional, non-controversial, fairly reasonable portion of the tax code that encourages companies to re-invest their profits rather than paying them out to shareholders. Apparently even politicians recognize it’s beneficial to us all for companies to continue growing, providing new value-added services and jobs. Amazon plows the vast majority of its profits back into its business. Amazon also compensates its employees partially with stock, which apparently also lowers taxes. That one I won’t pretend to understand.
Should Billionaires Even Exist?
Take a look at the richest people in the world. The list is littered with people like Jeff Bezos. People with an idea and a willingness to sacrifice all their waking hours to build it. The reality of most billionaires just doesn’t match with how they are popularly portrayed. The most important thing to remember? When someone has a billion dollars, or even $100 billion, it doesn’t make other people poorer. In fact, when someone builds a new business, they only capture a fraction of the total value created by that business. The rest goes to all the rest of us in the form of new or cheaper products and services or even jobs. And we don’t have to do a thing to reap those benefits!
Finally, the idea that there’s a level of wealth too great for anyone to possess while there are still poor people in the world doesn’t make much sense unless the poor people aren’t seeing simultaneous improvements in their lives too. The truth is the exact opposite! Poverty is the base scenario in a state of nature. One of the important jobs of society is to lift people out of poverty. Most of the world’s billionaires enhance that effort not just by making themselves rich, but also by creating products, services and opportunities that benefit others. That’s a big win, not a loss. We should think it over before going on the attack.