The Trouble With Billionaires
McQuaig, Linda; Brooks, NeilPublisher: Penguin, Canada
Year Published: 2010
Pages: 272pp ISBN: 978-0-670-06419-9
Resource Type: Book
Cx Number: CX12573
The glittering lives of billionaires may seem to be a harmless source of entertainment, but authors Linda McQuaig and Neil Brooks argue that such financial power not only threatends everyone's economic and social well-being but also upsets the very functioning of democracy. Our society tends to regard great wealth as evidence of exceptional talent or accomplishment. Yet spectacular fortunes are often attributable to luck, ruthlessness, cheating, or advantageous positioning that allow some to build on the work and insights of others who have paved the way.
Table of Contents
Return of the Plutocrats
Why Pornography Is the Only True Free Market
Millionaires and the Crash of 1929
billionaires and the Crash of 2008
Why bill Gates Doesn't Deserve His Fortune
Why Other Billionaires Are Even Less Deserving
Hand Aaron and the Myths about Motivation
Taking the Fun Out of Tax Havens
Why Billionaires Are Bad for Your Health
Why Billionaires Are Bad for Democracy
The True Badge of Citizenship
Revamping the Ovarian Lottery
The "market" is a creation of the state, every bit as much as the tax system is. Both are based on an elaborate series of laws devised by humans and enforced by governments.
The profit level of a company, for instance, is determined by a whole range of laws: environmental laws that determine how much it may pollute or what fines it will face if it exceeds those levels, labour laws that determine whether its employees are allowed to form a union and whether they are permitted to withdraw their services, contract laws that determine what it can collect from a client who fails to live up to the terms of an agreement or what it must pay a landlord if it wants to break the lease held on its factory. After these (and many other) laws determine the company's profit level, there are a whole different set of laws governing how owners of the company will transfer those profits to themselves - what right shareholders have in determining how the profits will be divided, who will get paid and who won't in the case of the corporation's bankruptcy, and so on. (The very existence of the company, for that matter, is made possible by laws that allow for incorporation, thereby limiting the personal financial vulnerability of the company's officers and owners in the event of a lawsuit.
Once a shareholder is allotted his share of the company's profits, he may perhaps invest some of this money in bonds. Once again, the hand of the government will be involved in determining how much he will profit from his investment, since the return he receives on his bonds will be determined by interest rates, which are determined by the actions of government-appointed central bankers. Their decisions affecting interest rates will hinge on whether they (and ultimately the government that appointed them) give priority to controlling inflation (as wealth-holders tend to want) or to encouraging employment (as those without wealth tend to want).
The market is nothing but a complex web of government interventions. The income tax hike stands out in these people's minds only because it's an intervention that goes against their interests, whereas so many of the other laws and government policies favour them. As Murphy and Nagel wryly put it, "people care more about what unjustly harms them than about what unjustly benefits them." The favourable interventions tend to become invisible to their beneficiaries, as it they were just part of the natural order of things.