In a new National Bureau of Economic Research paper, UC Berkeley economist Gabriel Zucman points to the tripling of wealth inequality since the 1980s. The report shows that a cohort of 400 Americans — the top 0.00025 percent of the population — possesses more wealth than the entire 150 million people who account for the bottom 60% of earners.
So how is wealth defined here? Essentially it encompasses the value of what a person owns subtracted by the value of any debt they possess. It includes investment holdings, land, homes, bank accounts, business equity, and rental property among other assets.
From these findings, Zucman assets:
“U.S. wealth concentration seems to have returned to levels last seen during the Roaring Twenties.”
This pivot in trajectory has resulted in a less secure wealth foundation among the lower and middle classes, a population of people who depend on pockets of wealth for retirement and to mitigate unexpected life events like job loss.
All of this has led to the temptation in some circles to bastardize the wealthy elite for their financial holdings and gains. Politicians like Alexandria Ocasio-Cortez and Bernie Sanders are quick to stir up a mob vengeance against those nestled in the monied upper echelons of society.
Amid all of this rancor, the term “capitalism” has arguably gotten a bad rap. Commentary about it’s unfair and exploitative qualities around undeserved privilege and power, and immoral profit making continues to garner media attention.
While these elements certainly exist in a capitalistic society, many people often have a hard time recognizing that this strain of “capitalism” known as crony capitalism has nothing to do with real free enterprise and economic freedom.
Pure, free-market capitalism that supports wealth building is an important element for a prosperous society. In Ayn Rand’s books like Atlas Shrugged and The Fountainhead, her heroes embrace the “capitalistic” quest not only from a philosophical sense but from being business builders and leaders.
As a result, some erringly think that Rand espouses the notion that capitalism is only good.
Atlas Shrugged actually exposes the dangers associated with crony capitalism. By way of example, one of the book’s main characters is James Taggart, someone who wields his influence on government to protect his railroad empire.
In the end, as depicted in Rand’s book, individuals like the steel magnate Hank Reardon are upended by statist government inspired “second-handers” leading many of them to go on strike and vow to live on Galt’s Gulch.
So should the monied class be tarred and feathered for their wealth? Your thoughts?