Redistribute the wealth

Billionaires’ Ball:

Gluttony and Hubris in an Age of Epic Inequality

MY MAIN complaint about this book is false advertising. With a title like this, I expect to be regaled with outrageous tales of Roman orgy style decadence. I want to read about Sheldon Adelson performing ritual sacrifices of endangered polar bears and top secret unmanned drone demolition derbies taking place at an undisclosed location belonging to one of the Walton heirs.

But Linda McQuaig and Neil Brooks focus less on the material privileges than philosophical ones. The super rich don’t just get whatever goodies they want; they also get their own logic and moral code.

For example, the tax system is set up so that the wealthy pay lower taxes on their investments than most working people pay on our income. Why? Because rich people deserve a reward for taking the risk of investing their money. But, the authors point out, “no one ever seems to argue for special low tax rates for the real risk-takers among us—miners, oil-rig workers, acrobats, firefighters, window washers on tall buildings.”

Not only that, “in the last thirty years, vast swaths of the economy could be designated as risky for those needing to earn a living.. . . A layoff can mean the loss of the family home or health benefits, or even destitution—far more serious plights than anything likely to befall a hedge fund manager.”

Billionaire’s Ball is full of similar observations about American capitalism’s upside down system of rewards and punishments. Once I resigned myself to the fact that there would be few salacious nuggets of TMZ-type scandal, I quickly warmed up to the authors’ keen eye for double standards. Others include:

  • When regular people get caught stealing we go to jail. When rich people are caught avoiding tax payments, not only do they not go to jail, which would discourage other rich people from doing the same, but politicians often use it as an argument for why taxes should be lower. It’s as if a prosecutor argued at a poor person’s robbery trial that the defendant should have gotten a raise at work.
  • Food stamps and school breakfast programs are seen as government handouts to the poor while businesspeople suffer no scrutiny for deducting from their taxes half the cost of business-related meals and entertainment—to the tune of eleven billion dollars each year.
  • Corporate executives are said to need outrageously high salaries and low tax rates in order to motivate them to perform to their highest ability, while for the rest of us, these generous benefits and services are supposed to make us lazy and unmotivated.

The central argument of Billionaires’ Ball is that the massive inequality of North American society (the authors are Canadian) is socially disastrous and that there needs to be a redistribution of wealth. McQuaig and Brooks demonstrate in creative ways how economic inequality has a corrosive effect on both our political bodies and our physical ones.

In a chapter on how inequality impacts our health, the authors surprisingly don’t focus on the US for-profit health care system (probably because they are Canadian), but on how inequality levels directly correlate to levels of stress and violence. The chapter on billionaires and democracy adds to familiar arguments about the influence of money in politics by demonstrating how the wealthy have been able to conservatize politics without even having to affect a right-wing shift in popular opinion, which they haven’t been able to do.

To make the case for wealth redistribution to an audience beyond the Left, the authors know they have to disprove the conventional wisdom that the rich deserve their wealth. This they do with wit and flair, first by challenging both the notion that high tech billionaires like Bill Gates and Mark Zuckerberg have made such uniquely valuable contributions to society—to say nothing of bankers whose main achievement was destroying the economy—and then by pointing out that the only reason so many billionaires today are “self-made” is because they have helped create a financial system rigged for those who run it. Hedge fund managers, they note, usually pocket two percent of the funds they manage and twenty percent of the profits. In other words, “hedge funds aren’t so much an investment strategy as a compensation strategy.”

On a more basic level, Billionaires’ Ball makes a refreshingly socialist argument: all wealth is socially created. The fortunes of even the most self-made billionaire owe less to his or her own ideas and strategies than to those of untold numbers of collaborators and predecessors, not to mention school teachers, friends, and loved ones.

In one of their many effective thought exercises, the authors imagine the story of the personal computer as a play, beginning with scenes portraying the development of punch card technology in the 1800s and progressing through early computers designed in the mid-twentieth century; Microsoft would not make an appearance until late in the show. At the end of the show, the authors write, “it would be hard to imagine Bill Gates getting a curtain call or stealing the lion’s share of the applause, let along walking away with the entire box office.”

Unfortunately, the author’s understanding of the social nature of wealth is not informed by a working-class perspective, but rather one that yearns for a class-neutral state that would treat all its constituents with fairness. The United States today is compared unfavorably both to its New Deal past and to present-day Scandinavian social democracies. These are effective comparisons to expose how our rotten current state, but they don’t tell us much about how to move forward. Putting Sweden on a socialist pedestal is a decade or two out of date (Stockholm is burning from poor peoples’ riots as I write these words.) And, contrary to the authors’ sketchy history of the 1930s, the US social safety net was created in response to the threat of massive strike waves more than any vision of equality in Franklin Roosevelt’s brain.

For the most part, workers are virtually absent from Billionaires’ Ball other than as victims. It’s notable that in the passage about Bill Gates, for instance, the authors don’t talk about how much of his wealth has been socially created by Microsoft employees. McQuaig and Brooks advocate many fine plans of redistributive taxation to remedy inequality but don’t address the other primary way to remedy inequality—workplace battles to wrest more compensation out of those profit margins.

Weakness aside, however, Billionaires’ Ball makes a valuable and entertaining contribution to the current political moment because it challenges liberals to grow a spine and to raise the demand that electrified Occupy Wall Street, and that could reignite at any moment—the demand that conservatives dread and point to in the most tepid White House proposals—redistribute the wealth! 

Issue #103

Winter 2016-17

"A sense of hope and the possibility for solidarity"

Interview with Roxanne Dunbar-Ortiz
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