According to this month’s Forbes, the 10 richest people in the world are all multi-billionaires. But none of them are the richest in history, not even close. These are the ten richest as of March 1, 2013 at 8:30 AM:
1. Bernard Arnault- $225.9 billion
2. Elon Musk- $202.4 billion
3. Jeff Bezos- $126.4 billion
4. Larry Ellison- $118.3 billion
5. Bill Gates- $110.3 billion
6. Warren Buffett- $106.8 billion
7. Mike Bloomberg- $94.5 billion
8. Carlos Slim Helu- $93.4 billion
9. Steve Ballmer- $90.8 billion
10. Francoise Bettencourt Meyers- $89.4 billion
That list doesn’t include Mark Zuckerberg, who is supposedly worth over $100 billion or the Koch family, also worth over $100 billion. In any case, I think we can all agree that $10-20 million is more than enough and that anything beyond that should be taxed at a 90% rate, with zero loopholes. And if they cheat, one day trial, one day appeal, one day execution. I know it sounds harsh… but what have they done to the rest of us? As as far as subsidies to billionaires, legislators who vote for them should be held accountable as well, no matter what party they belong to.
Historically, though there have been others even richer than these 10. For example, Jacob Fugger von Der Lilie, a German merchant, mine owner and banker was born into a wealthy family in 1459. His wealth is estimated to be around $400 billion in today's dollars, equivalent to 2% of Europe’s GDP at the time. He had the patronage of the Habsburg dynasty and the Vatican.
Another contender for the title of the richest person in history, who you may have never heard of, is Mansa Musa (born in 1312), king of Mali when it was the biggest power in West Africa. His wealth was derived by selling gold, salt, ivory and slaves and is estimated to also be around $400 billion in today’s money.
The other person worth in the $400 billion range was John D. Rockefeller, an American robber baron born in 1839. Robber barons are defined as unethical, exploitative and monopolistic. Other than railroad tycoon, embezzler and lower-digit billionaire Albert J. Adams (5 years in prison), none were ever held accountable for their crimes. Others worth over $100 billion included robber baron Andrew Carnegie (over $300 billion), American Nazi Henry Ford, robber baron William Vanderbilt, robber baron Cornelius Vanderbilt, German-American opium smuggler John Jacob Astor, French-American bankster Stephen Girard— and that doesn’t count heads of state who controlled massive wealth from Alexander the Great, Augustus Caesar, William the Conqueror and Mughal Emperor Akbar the Great to more modern bandits like Stalin, and Mir Osman Ali Khan, the last Nizam of Hyderabad who controlled the diamond market and used a $100 million diamond as a paper weight.
Government subsidies and policies are in great part responsible for these vast fortunes. Even today, modern day robber baron Elon Musk has collected close to $5 billion in subsidies and tax breaks from the U.S. government— over $2 billion for Tesla and closer to $3 billion for SpaceX.
Let me suggest 4 overarching reasons why this kind of great wealth should be severely curtailed, particularly in a society striving for democratic governance:
Extreme wealth inequality inevitably creates extreme social and economic divisions, exacerbates poverty and social exclusion, and contributes to social unrest and instability.
Overly wealthy individuals and corporations have always used their money and influence to shape public policy and undermine democratic institutions.
Extreme wealth concentration leads to inefficient allocation of resources and reduces overall economic growth.
There is also a moral argument to be made that extreme wealth accumulation is unfair, particularly in cases where it is achieved through exploitation or unethical business practices, which is probably about 99.99% of the time.
The best solutions are progressive taxation and wealth and inheritance taxes. Norway, Sweden, France, Germany and Canada all have far more progressive taxation than the U.S. Let’s look at Norway, where there are over 35,000 individuals with net worths above $10 million and two multi-billionaires, Johan Andresen Jr. ($15.4 billion) and Kjell Inge Røkke ($10.4 billion). Norway has a more progressive tax system than the U.S., with a top marginal income tax rate of 38.2% and a wealth tax of 0.85% on net worth above $175,000. So, for example, if someone has a net worth of $233,200 they would pay a wealth tax of 0.85% on the amount above $174,900, which in this case would be $5,852. So the annual wealth tax— above and beyond other taxes— for Andresen would be $1.3 million. And then there’s the estate tax (the arveavgift), which applies to the value of the estate above $112,000 and which can be as high as 15.4%, depending on the size of the estate and the relationship between the deceased and the beneficiaries. The estate tax was designed to help reduce wealth inequality by preventing large estates from being passed down through generations without any taxation, as it is— for the most part— in the U.S.
Let me go back about a month to the review of Bernie’s book, It’s OK to be Angry about Capitalism, in which he notes that unfettered capitalism “destroys anything that gets in its way in the pursuit of profits. It destroys the environment. It destroys our democracy. It discards human beings without a second thought. It will never provide workers with the fulfillment that Americans have a right to expect from their careers. [And it is] propelled by uncontrollable greed and contempt for human decency.”
He reminded his readers that American oligarchs “spend tens of billions… on campaign contributions… to buy politicians who will do their bidding. They spend billions more on lobbying firms to influence governmental decisions” at every level. And ‘to a significant degree,’ the oligarchs ‘own’ the media. That is why our prominent pundits ‘rarely raise issues that will undermine the privileged positions of their employers’ and ‘there is little public discussion about the power of corporate America and how oligarchs wield that power to benefit their interests at the expense of working families.”
Sanders quotes one of the most prescient Americans of the mid-20th century, from 1944: “As our industrial economy expanded [our] political rights proved inadequate to assure us equality in the pursuit of happiness. We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence.”
The name of that dangerous revolutionary: Franklin Delano Roosevelt.
Several decades before that, Theodore Roosevelt similarly bemoaned the “absence of effective state, and, especially, national, restraint upon unfair money-getting” which “has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power”.
There is something extremely refreshing about an author who assumes it should be obvious that billionaires should not be allowed to exist– and has perfectly reasonable proposals about how they should be eliminated. At the height of the pandemic, Sanders proposed the Make Billionaires Pay Act, which would have imposed a 60% tax on all the wealth gained by 467 billionaires between 18 March 2020 and January 2021.
“But why stop at one year?” he now asks. After all, the 1950s were economic boom times in America– and under a Republican president, Dwight Eisenhower, “the top tax rate for the wealthiest Americans was around 92%. America thrived. Unions were strong. Working-class Americans could afford to support themselves and buy homes on a single income.” And the richest 20% controlled a measly (by current standards) 42.8% of the wealth.
Sanders’ 99.5 Percent Act would only touch the top 0.5% of Americans. “But the families of billionaires in America, who have a combined net worth of over $5tn, would owe up to $3tn in estate taxes.” He would accomplish this with a 45% tax rate on estates worth $3.5m and a 65% rate on those worth more than $1bn.
There is much more here, including a convincing case for Medicare for All and an excoriation of a for-profit healthcare system which spends twice as much per citizen as France or Germany and still manages to leaves tens of millions of Americans un- or underinsured, all while nourishing an obscene pharmaceuticals business in which profits jumped by 90% in 2021.
I first toured the castles of the Loire Valley as a teenager in the company of the family of my uncle, Jerry Kaiser, a 60s radical and a very early opponent of the war in Vietnam. As we absorbed the opulence of one chateau after another, Jerry had only one question: “What took them so long to have a revolution?”
The noble purpose of Bernie Sanders’ powerful new book is to get millions of Americans to ask that question of themselves– right now.