We have returned to Franklin Roosevelt’s one-third of a nation ill-housed, ill-clad, ill-nourished.
As summer comes to an end the economic news is strangely bipolar. Business Insider reported that From March to June 2020, Amazon founder Jeff Bezos saw his wealth rise by an estimated $48 billion. The journal might also have added that 40 million workers had filed for unemployment compensation and that prison labor was being paid $1 per hour to fight deadly forest fires in California. The cliché is that we are all in this together. This is so only in the sense that some of us own luxury yachts capacious enough to hold luxury lifeboats while the bottom third clings to leaky life preservers. The mortgages of even many middle-class citizens are soon to be underwater.
What does it mean to have wealth approaching six-figure billions? Senator Everett Dirksen once famously quipped “a billion here and a billion there and pretty soon you are talking real money.” I think it is helpful to translate these highly abstract big numbers into the real goods and services one could command with this money. A state of the art naval destroyer costs about one billion, about the cost of an NBA franchise. One can add a few luxury homes and still have spent only a small fraction of one’s wealth. Clearly possession of an ever-growing stream of goods seems to be an unlikely motivator of the mega wealthy. Even Thorstein Veblen’s notion of conspicuous consumption must confront the fact that there are only so many hours in a day and thus limits to what can display. In this regard, I am always amused by Mitt Romney’s inability in the course of a presidential debate to remember how many houses he owned.
If unfathomable levels of wealth are often sought for something other than mere possession, what is the motivation and are these billionaires justified in the steps taken to these acquisitions?
Conventional economics construes great wealth as the market’s reward for patient investment in those goods and services that most benefit society. And the same market that bestows rewards on the skilled and innovative shows no mercy to those who squander vast resources on overly ambitious or misjudged schemes.
Adam Smith, generally regarded as the father of market economics, had a more jaundiced view of the origins of great wealth: “People of the same trade seldom meet together but the conversation ends in a conspiracy against the public or in some diversion to raise prices.” Or as Balzac famously put it, “behind every great fortune lies an equally great crime.”