Do People Have a Right to Own Vast Wealth?

[Sunstone]

I feel that a mix of regulated capatalism and socialism would be the ideal form of government.

So do I, but that's a separate issue here. At issue here is whether someone -- anyone -- has the right to own such disproportionately vast wealth that they are a threat to representative democracy. That is, so much wealth that they have so much power and influence the average person has little or none in comparison to them.

 

[Vinayaka]

There are a few who give most of it away, and use it to run charities or benefit mankind. How are they thought of?

 

[WalterTrull]

What if a tiny minority of people, by exercising their overwhelming political power, effectively denies the majority of people their right to self-governance?

"Guillotine! Guillotine!" - Madame Defarge

 

[YmirGF]

Could you elaborate on how a cap on wealth would punish success?

I'm a bit puzzled why anyone would need an explanation. A cap on wealth would limit how much one can expect to earn as anything over that limit would immediately be forfeited. This would stifle innovation, if not kill it, outright due to the large sums that are often required to bring new products to the market. You would, in effect, make the government the biggest game in town. Everything, of any consequence, would require to government to take a major role. Try to imagine how the success story of Silicon Valley would have gone if the principals were locked into a limit on how much they could make. We wouldn't have a Silicon Valley.

What do you mean by success?

In ordinary parlance, the term usually implies financial enrichment of ones self and other principles of a given venture. Social considerations, beyond product viability haven't been much of a focus until very recently.

Do you believe our system is fair and equitable when it comes to rewarding people for what they do?

By and large, yes. I never felt short-changed other than when I was very young and held entry level positions. Even then, I understood that there was a legitimate path of upward mobility based mainly on merit and achievement.

(I sure don't - many jobs have little to nothing in the way of provisions to reward people for success and only punish employees for failures)

If only we could all start at $100,000 a year with 6 weeks vacation, safe spaces and petting zoo's. I am not excusing employers who take advantage of employees and am a firm believer in tough Labor Laws that carry very stiff sentences/fines for companies who break them.

 

[Sunstone]

How else would you handle it. If they choose to continue to create wealth, how do you plan to stop them?

Taxes.

How are they net drains on the economy?

A much larger portion of each dollar spent at a "local" Walmart store leaves the community than each dollar spent at a locally owned business. Most of the dollars spent at locally owned businesses stay in the community. Either most or nearly most of the dollars spent at a Walmart leave the community. Thus Walmart is overall net negative for the local economy.

The effect is compounded by the local businesses that Walmarts drive out of business.

More over, the local businessperson is sometimes paying his friend and employee of twenty years fairly good wages. Walmart comes in, drives him out of business, and "replaces" the good job he created with a ten dollar an hour job.

 

[WalterTrull]

Let's stick to the issue here rather than get scared of tackling it head on. Do you have a right to own such wealth as allows you to deprive other people of their right to self-governance.

OK OK Yes. What usually happens then is a revolution. Sometimes a takeover by someone in shining armor. The armor usually gets tarnished the first few times, but it's a process. You're actually asking if we should allow people to be sick.

 

[Nakosis]

My take is somewhat similar yet different: we have so-called rights when other people agree to gift us with them. And we lose them when those people no longer want to grace us with those gifts.

Laws don't acknowledge that reality and often go out of their way to pretent that it is not so. But ultimately reality is what it is.

Wealth itself is very much an example of such a gifted "right".

Ok, I just see if you can't stop me from something, I really don't care if you gift it to me or not.

Yes, generally you need laws and enforcement behind you. You need people but if I have more folks behind me than you do, not really much you can do about it unless you want to go to war and then it's still however has the most people and resources behind them.

I hear stories of the super rich going into an area and causing division because when your divided you can't really mount any kind of resistance. They play both sides in a dispute against each other. However both side allows this because of the wealth being there to motivate them.

I'm not for or against the wealthy. I just don't see away around the motivation that comes with the wealth the rich have. Someone is going to be motivated by it. If not you someone else.

Ignore the wealthy. The problem is poverty. You, imo, need to get in their and teach folks not how to be compensated for their labor but how to create wealth for themselves.

Everyone is going to be better or worse at it, especially starting out. Some folks are going to have more wealth. You can't worry about that. You have to worry about you own ability and how to improve it for yourself. Then you can set your own limits.

I don't care that Gates is uber wealthy. It's irrelevant to me. Want is relevant is my own ability to create it.

 

[Shad]

Taxes.

Tax havens, relocation of corporate HQ to a nation without those tax laws, etc. All of which are done now with the existing systems.

 

[Sunstone]

Try to imagine how the success story of Silicon Valley would have gone if the principals were locked into a limit on how much they could make. We wouldn't have a Silicon Valley.

I seriously doubt any Silicon Valley billionaire would have gone strike and refused to work if he or she were only allowed to keep $100 million . Seems to me plenty of bright, talented people have worked their butts off for far less than that.

Besides which, people often enough work for other than money -- especially at executive levels. Some folks just love the work, and yes, I know a handful of millionaires of which that is true of at least some of them. One guy even explicitly told me, Paul, "I wake up mornings thinking I'm the luckiest guy on earth because I love finance and it pays well. But if I could make a decent living sweeping the street, and if I loved street sweeping more than finance, I'd be a fool not to be a street sweeper." He's built a very decent multi-million dollar fortune while living as merely upper-middle class. His words are where his actions are.

 

[Sunstone]

Tax havens, relocation of corporate HQ to a nation without those tax laws, etc. All of which are done now with the existing systems.

Yup. Which is why an international effort would be needed. But that's neither here nor there in the context of this thread. At issue is not how to implement a cap on wealth, but whether such a cap should be created.

So, do very wealthy people have a right to the whole of their fortunes if that means in practice that they have extraordinary political power and influence over the rest of us such that we have little or no influence? Your call.

 

[Nakosis]

Taxes.

Easy to get around. Move to another state, mover to another country. Create a number of companies, put family members, friends in charge. You personally don't have to make any taxable income and still control plenty of resources.

A much larger portion of each dollar spent at a "local" Walmart store leaves the community than each dollar spent at a locally owned business. Most of the dollars spent at locally owned businesses stay in the community. Either most or nearly most of the dollars spent at a Walmart leave the community. Thus Walmart is overall net negative for the local economy.

But it's a lot cheaper. So I have more money left over to spend elsewhere. Also Walmart employees a lot of folks. Politicians are going to toute the decrease in jobless rate. More folks have a job then not. More money in the local economy. Maybe it should be a higher percentage staying but it more wealth in the area than it they weren't there.

The effect is compounded by the local businesses that Walmarts drive out of business.

Yes, so more people needing the jobs created by Walmart. Vicious cycle.

More over, the local businessperson is sometimes paying his friend and employee of twenty years fairly good wages. Walmart comes in, drives him out of business, and "replaces" the good job he created with a ten dollar an hour job.

Yes, kind of a wealth redistribution. You make good points. I'll have to look into it some more. It's not a simply understanding of how chain stores affect the local economy.

Just some quick research...

From what I can see it's a mixed bag. There's really pros and cons for a community to decide to accept a Supercenter into their area.

http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.457.3817&rep=rep1&type=pdf

There is a book,

The Local Economic Impact of Wal-Mart By Michael J. Hicks

That most see as a fair review. Something you have to pay for to read the conclusion to. I don't know if it is going to be any less of a mixed bag than the first report.

It shows some local retailers benefit from having a supercenter move in some in direct competition will likely be dramatically affected and will likely have to adapt a new strategy to remain competitive/solvent.

It's not a simple determination that it is bad or good for the local economy.

 

[Quintessence]

You punish them by limiting their reward.

Do you believe monetary rewards are the only type of reward that could be granted, or the only reward that matters? Are there other types of limitations that you believe are punishments (for example, do you believe taxes are punishment)? If excess financial gains (whatever that value is) are invested in global benefits, is that still a punishment?

That IMO is really a problem with the mindset of the employee. One is never going to achieve wealth as an employee. Your options are limited to the whims of the employer. Thats never going to change if you rely on the wealth of others. Where you can create wealth for yourself you get to decide the rules. The mindset of an employee is not one of creating wealth, it's one of being compensated for your time.

There are many sectors of society that are not about creating wealth. They are non-profit, or exist to provide a public service. How do these fit into the picture?

How do you "create" wealth? Most folks will never be able to do what you suggest here, for various reasons. Is it really a problem with the mindset of the employee if there are systemic limitations that prevent any upward mobility or wealth creation for most citizens? What does it mean when the next generation of citizens is predicted to be worse off than their parents financially, as is projected? What's going on there?

 

[Nous]

It is simply a fact that most -- perhaps even almost all -- very wealthy people use some portion of their wealth to influence politics and/or government policy in order to benefit themselves and sometimes others. When they do so, they can be orders of magnitude more powerful and influential that the average citizens of their society.

In 2014, the Princeton and Northwestern report came out. After shifting through 1,800 policy decisions made by the US government, the researches found that the probablility of a particular policy being adopted barely changes whether a tiny minority or a large majority of average citizens favors it. In other words, average citizens have little or no say in whether "their" government adopts any particular policy that might effect them.

However, the same study discovered that policies with low support from the rich were adopted only 18% of the time while policies with high support from the rich were adopt 45% of the time, showing that the rich have much more influence over which government policies get adopted than do average citizens -- even large majorities of average citizens.

In short, the US is not a democracy, but an oligarchy.

I wouldn't want to base my worldview on the Gilens and Page study:

Since its initial release, the Gilens/Page paper's findings have been targeted in three separate debunkings. Cornell professor Peter Enns, recent Princeton PhD graduate Omar Bashir, and a team of three researchers — UT Austin grad student J. Alexander Branham, University of Michigan professor Stuart Soroka, and UT professor Christopher Wlezien — have all taken a look at Gilens and Page's underlying data and found that their analysis doesn't hold up.

Gilens and Page used a database of 1,779 policy issues — which included data on the opinions of median-income Americans, the rich, business interests, and non-business interest groups like unions or the National Rifle Association — to determine whose opinions correlated most closely with actual government policy.

But the researchers critiquing the paper found that middle-income Americans and rich Americans actually agree on an overwhelming majority of topics. Out of the 1,779 bills in the Gilens/Page data set, majorities of the rich and middle class agree on 1,594; there are 616 bills both groups oppose and 978 bills both groups favor. That means the groups agree on 89.6 percent of bills.

That leaves only 185 bills on which the rich and the middle class disagree, and even there the disagreements are small. On average, the groups' opinion gaps on the 185 bills is 10.9 percentage points; so, say, 45 percent of the middle class might support a bill while 55.9 percent of the rich support it.

Bashir and Branham/Soroka/Wlezien find that on these 185 bills, the rich got their preferred outcome 53 percent of the time and the middle class got what they wanted 47 percent of the time. The difference between the two is not statistically significant. And there are some funny examples in the list of middle-class victories. For instance, the middle class got what they wanted on public financing of elections: in all three 1990s surveys included in the Gilens data, they opposed it, while the rich favor it. That matches up with more recent research showing that wealthy people are more supportive of public election funding.

So it's hard to say definitively, based on this data, that the rich are getting what they want more than the middle class. And it's hard to claim, as Gilens and Page do, that "ordinary citizens get what they want from government only when they happen to agree with elites or interest groups that are really calling the shots." Even when they disagree with elites, ordinary citizens get what they want about half the time.​

Remember that study saying America is an oligarchy? 3 rebuttals say it's wrong.

 

[Quintessence]

I'm a bit puzzled why anyone would need an explanation. A cap on wealth would limit how much one can expect to earn as anything over that limit would immediately be forfeited. This would stifle innovation, if not kill it, outright due to the large sums that are often required to bring new products to the market. You would, in effect, make the government the biggest game in town. Everything, of any consequence, would require to government to take a major role. Try to imagine how the success story of Silicon Valley would have gone if the principals were locked into a limit on how much they could make. We wouldn't have a Silicon Valley.

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Who knows? I think you're missing a piece here, though. If there's a cap on income, that income is going somewhere. Where could that money go? It could be invested in exactly the same sorts of things you describe here, or any number of things. Roads that don't have potholes everywhere. A national health care system that actually meets the needs of all citizens instead of just those with lots of cash. A robust education system that doesn't mortgage the futures of everyone who wants a college education. A revival of the national space program to create a moon colony. Whatever... point is, that money could (and would) still be invested somewhere. And many more citizens could have a say in where that money gets invested.

 

[Sunstone]

I wouldn't want to base my worldview on the Gilens and Page study:

Since its initial release, the Gilens/Page paper's findings have been targeted in three separate debunkings. Cornell professor Peter Enns, recent Princeton PhD graduate Omar Bashir, and a team of three researchers — UT Austin grad student J. Alexander Branham, University of Michigan professor Stuart Soroka, and UT professor Christopher Wlezien — have all taken a look at Gilens and Page's underlying data and found that their analysis doesn't hold up.

Gilens and Page used a database of 1,779 policy issues — which included data on the opinions of median-income Americans, the rich, business interests, and non-business interest groups like unions or the National Rifle Association — to determine whose opinions correlated most closely with actual government policy.

But the researchers critiquing the paper found that middle-income Americans and rich Americans actually agree on an overwhelming majority of topics. Out of the 1,779 bills in the Gilens/Page data set, majorities of the rich and middle class agree on 1,594; there are 616 bills both groups oppose and 978 bills both groups favor. That means the groups agree on 89.6 percent of bills.

That leaves only 185 bills on which the rich and the middle class disagree, and even there the disagreements are small. On average, the groups' opinion gaps on the 185 bills is 10.9 percentage points; so, say, 45 percent of the middle class might support a bill while 55.9 percent of the rich support it.

Bashir and Branham/Soroka/Wlezien find that on these 185 bills, the rich got their preferred outcome 53 percent of the time and the middle class got what they wanted 47 percent of the time. The difference between the two is not statistically significant. And there are some funny examples in the list of middle-class victories. For instance, the middle class got what they wanted on public financing of elections: in all three 1990s surveys included in the Gilens data, they opposed it, while the rich favor it. That matches up with more recent research showing that wealthy people are more supportive of public election funding.

So it's hard to say definitively, based on this data, that the rich are getting what they want more than the middle class. And it's hard to claim, as Gilens and Page do, that "ordinary citizens get what they want from government only when they happen to agree with elites or interest groups that are really calling the shots." Even when they disagree with elites, ordinary citizens get what they want about half the time.​

Remember that study saying America is an oligarchy? 3 rebuttals say it's wrong.

Such critiques of the paper cannot compare to an actual empirical study contradicting the paper. Until that happens, I'll tentatively accept the paper as one more bit of evidence, among many different lines of evidence, that the average citizen has little or no influence on policy these days.

 

[YmirGF]

Who knows? I think you're missing a piece here, though. If there's a cap on income, that income is going somewhere. Where could that money go? It could be invested in exactly the same sorts of things you describe here, or any number of things. Roads that don't have potholes everywhere. A national health care system that actually meets the needs of all citizens instead of just those with lots of cash. A robust education system that doesn't mortgage the futures of everyone who wants a college education. A revival of the national space program to create a moon colony. Whatever... point is, that money could (and would) still be invested somewhere. And many more citizens could have a say in where that money gets invested.

But you are taking the power out of the hands of the people who created their income and handing it over to someone else who may or may not have any financial expertise in any particular area. There are an uncomfortable amount of assumptions at play here and as well as some quite laudable ideas.

The thing is how to get from point A to point B? For example, @sun rise quoted a $10,000,000 cap and @Sunstone floated the idea of a $100,000,000 cap. One thought that occurred to me was how could either be implemented without collapsing the stock market, especially if the figure was set at a measly 10 million? As I asked Sunstone, who decides on the cap level? What if the cap level is put at $250K (or $500K) which is a LOT of money to the vast majority of humans on the planet?

Likewise, as I see it, any plan of this nature would have to be done on a global scale otherwise any given country would just succeed in crashing their economy.

 

[icehorse]

In short, the US is not a democracy, but an oligarchy.

Which raises the question: Should there by any limits to the amount of wealth one person can own and control in this world, especially given that ownership of large amounts of wealth translates into disproportionate political power?

Why or why not?

If no, then what form of government do you prefer and would an oligarchy or dictatorship be acceptable to you?

I agree that we are or are almost an oligarchy. That's not good.

I think that we need a better taxation system. Oligarchs have to use the common infrastructure and their corporations should not be parasitic (e.g. Walmart). If a wealthy person is paying their fair share - really - and their wealth is based on an offering that benefits society, then I don't see why we need limits. But in reality, few Oligarchs pay their fair share or run beneficial companies.

 

[Quintessence]

But you are taking the power out of the hands of the people who created their income and handing it over to someone else who may or may not have any financial expertise in any particular area. There are an uncomfortable amount of assumptions at play here and as well as some quite laudable ideas.

The thing is how to get from point A to point B? For example, @sun rise quoted a $10,000,000 cap and @Sunstone floated the idea of a $100,000,000 cap. One thought that occurred to me was how could either be implemented without collapsing the stock market, especially if the figure was set at a measly 10 million? As I asked Sunstone, who decides on the cap level? What if the cap level is put at $250K (or $500K) which is a LOT of money to the vast majority of humans on the planet?

Likewise, as I see it, any plan of this nature would have to be done on a global scale otherwise any given country would just succeed in crashing their economy.

Yeah, implementation has its issues (though I'm not convinced all the things you describe here are necessarily issues). The way we typically seem to do implementation of wealth controls is with taxes and regulations. But we've kind of dropped the ball on that one lately, so...

 

[Sunstone]

I agree that we are or are almost an oligarchy. That's not good.

I think that we need a better taxation system. Oligarchs have to use the common infrastructure and their corporations should not be parasitic (e.g. Walmart). If a wealthy person is paying their fair share - really - and their wealth is based on an offering that benefits society, then I don't see why we need limits. But in reality, few Oligarchs pay their fair share or run beneficial companies.

Even if a wealthy person is paying his or her "fair share", do you see the danger of an extraordinarily wealthy person could pose to a representative democracy?

 

[YmirGF]

Yeah, implementation has its issues (though I'm not convinced all the things you describe here are necessarily issues). The way we typically seem to do implementation of wealth controls is with taxes and regulations. But we've kind of dropped the ball on that one lately, so...

I hear ya. It sounds simple enough and even has a tempting appeal to it, however, depending of the cap level it would likely collapse economies outright or at the very least put great stress on them. Another thought, hitting the most capable people in the population, with a punitive "tax" is not likely to work because they are already mobile enough to uproot and move away to more hospitable climates. You would almost have to freeze their assents, passports, accounting firms, etc... it would be a total nightmare.