I wish I had gotten around to reading this book sooner. It is a great read and takes a great deal of piss out of the arguments (made by our beloved conservative/libertarian friends) for lower taxes and more love for the wealthy. I highly recommend reading it. Check out other reviews here and here. I found a brief summary of what McQuaig talks about in the book:
“In the last few decades, the concentration of income in the United States, Britain and Canada has reached levels not seen since the late 1920s. Such extreme income concentration created a dynamic that led to the disastrous Wall Street crash in 2008 – just as it did in 1929. The financial collapse is simply the most striking example of the problems caused by the rise of a new class of billionaires. Their massive fortunes – widely considered benign or even beneficial to society — are actually detrimental to everyone else. The glittering lives of the new super-rich may seem like harmless sources of entertainment. But such concentrated economic power reverberates throughout society, threatening the quality of life and the very functioning of democracy. It’s no accident that the United States claims the most billionaires—but suffers from among the highest rates of infant mortality and crime, the shortest life expectancy, as well as the lowest rates of social mobility and electoral political participation in the developed world. Our society sees itself as a meritocracy. So we tend to regard large fortunes as evidence of great talent or accomplishment. Yet the vast new wealth isn’t due to an increase in talent or effort at the top, but rather to changing social attitudes legitimizing greed and to policy changes made by governments under pressure from the new elite.”
Oh and a quick excerpt from the book taking down the notion of the “self-made” billionaire (p.25 – 28).
“The notion that it should be possible to become a billionaire is rooted in the idea that there are some uniquely talented individuals whose contribution is so great that they deserve to be hugely, fabulously rewarded.
Some billionaires, such as Leo J. Hindery Jr., have made this point themselves. Hindery, whose contribution was to found a cable television sports network, put it this way: “I think there are people, including myself at certain times in my career, who because of their uniqueness warrant whatever the market will bear.” Similarly, Sanford Weill, long a towering figure on Wall Street, is impressed with the contributions of billionaires like himself: “People can look at the last 25 years and say that this is an incredibly unique period of time. We didn’t rely on somebody else to build what we built…”
What is striking in such statements, in addition to the absence of modesty, is the lack of any acknowledgement of the role of society in their good fortune. These men seem unaware of the pervasive role played by society in general (as well as by specific other people) in every aspect of their lives — in nurturing them, shaping them, teaching them what they know, performing innumerable functions that contribute to the running of their businesses and indeed every aspect of constructing and operating the market that has enabled them to get rich. Weill’s statement that “We didn’t rely on somebody else to build what we built” can be quickly tested. Would Weill, having built everything from scratch, be able to reproduce his fortune if stranded on a desert island?
If so, then he should be able to keep every bit of it for himself, having been solely responsible for its creation. If not, then it is reasonable to ask what portion of it was created by him, and what by others?
The Desert Island Test is a useful one to keep in mind. The primacy and ubiquity of society — so casually erased by billionaires and others justifying their fortunes — must be restored if we are to have any meaningful discussion of income and wealth, and where an individual’s claim ends and society’s begins.
One of the crucial ways that society assists individuals in generating wealth lies in the inheritance from previous generations.
This inheritance from the past is so vast it is almost beyond calculation. It encompasses every aspect of what we know as a civilization and every bit of scientific and technological advance we make use of today, going all the way back to the beginning of human language and the invention of the wheel. Measured against this vast human cultural and technological inheritance, any additional marginal advance in today’s world — even the creation of a cable television sports network — pales in significance.
The question then becomes: who is the proper beneficiary of the wealth generated by innovations based on the massive inheritance from the past — the individual innovator who adapts some tiny aspect of this past inheritance to create a slightly new product, or society as a whole (that is, all of us)?
Under our current system, the innovator captures an enormously large share of the benefits. Clearly, the innovator should be compensated for his contribution. But should he or she also be compensated for the contributions made by all the other innovators who, over the centuries, have built up a body of knowledge that made his marginal advance possible today? What share of the newly-generated wealth correctly belongs to the society that has not only nurtured him but also provided him with this rich past inheritance — without which, stranded on a desert island, he wouldn’t have the means to even keep himself warm.”
The youtube summary as well.