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The author is the director of economic policy studies at the American Enterprise Institute
Zohran Mamdani, the democratic socialist who won the Democratic Mayor of the Week in New York City, was asked from NBC News when “billionaires have a right”. His answer: “I don’t think we should have billionaires.”
Mamdani has that backwards. We should want more billionaires, not less – and certainly none.
In order to support his view, Mamdani argued that a person who “has so much money” at a moment of such inequality “was problematic. He seems to believe that the economy is a game with zero sums that have to mean that I make it worse. This is deeply wrong. Billionaries make the rest richer and not poorer.
Take Jeff Bezos, whose Venetian wedding captured The attention of the world last weekend, together with its assets of $ 240 billion in the region. How did the Amazon founder make society wealthier and at the same time create so much prosperity for itself?
The economist and Nobel laureate William Nordhaus examined the returns for innovation and came to the conclusion that innovators “only a tiny fraction” recorded the advantages of technological advances. Nordhaus estimated This share of 2.2 percent. The application of this estimate implies that Bezos has created around $ 11 from us into wealth. Not a bad business.
This assets have the form of lower prices that boost the shopping of wages and income for millions of people who shop at Amazon. In addition, we are better off because we spend less time to drive to and from retail stores, to free time for longer hours or to be with families and friends, and because we have access to a greater variety of consumer goods.
This is not just for Bezos. Even without taking into account the philanthropy, billionaires make positive contributions for the general well -being. For example, Bill Gates and Michael Dell have made hundreds of millions of workers more productive by creating better software and computers and increasing their wages. Larry Page and Sergey Brin revolutionized E -Mail, Internet search and mapping technology -Many of us would eagerly spend money on these services every month if Google would not be provided free of charge. The Wall Street Titans convey efficient capital that increases the productivity and wages of employees throughout the economy over time.
If billionaires do not exist, the incentive for young people to become extremely successful would be reduced. Today’s entrepreneurs and specialists feed the efforts of tomorrow’s managers. A newspaper from 2013 found These two thirds of the richest 400 Americans do not grow up in wealthy families, and seven out of ten years were the first generation in their family to head their business.
The debate about billionaires is part of a broader discussion about whether our system of democratic capitalism is fundamentally broken. It is not. One of the central moral promises of democratic capitalism is that people receive their just rewards. In our system, economic inequality is bearable if it reflects differences in the effort, risk to risk, skills and decisions. The evidence strong suggest That this promise is kept – remuneration is mainly determined by productivity.
So billionaires have oversized prosperity because they make oversized contributions. The income was not “distributed” to them – they deserve it. And the appropriate reaction of chosen managers is to celebrate and promote success, not to disparage.
Unfortunately, Mamdani’s message has nothing new. Senator Bernie Sanders also a self-described democratic socialist-hat said that “billionaires do not exist”. It is together To hear on the populist that “every billionaire is a political failure”. On the right, Steve Bannon, a high priest of the Maga movement, argumented In 2023 for a “massive tax increase for billionaires” to promote loyalty to US President Donald Trump.
It is outrageous to eliminate billionaires for criminal policy. They should neither be treated as a Parias, which for the rest of the company one or two pens nor have to be put down as an enclosure machines. Rather, they deserve to be treated as we should all be – as full citizens with rights and duties that both benefit from society and contribute to society.
Mamdani is wrong – moral and empirical. And in the long term, probably also politically. He should remember that populists who reach the Executive Office are often frustrated when their ideology collides with reality. If he brought into the mayor’s office after the election in November, he will wish for more in New York – nothing less.
