“You say flatly [that] billionaires should not exist,” Wallace began his question. Does Sanders really want, Wallace demanded to know, to “confiscate” everything entrepreneurs make over $999 million? The Waltons, for example, have tens of billions of dollars but provide jobs to one and a half million Americans. Isn’t that a good thing?
Sanders dryly insisted that it’s “possible to get by” on $999 million dollars — and that, while Walmart pays poverty wages, his critique isn’t of this or that individual billionaire but of a system that enables such grotesque concentrations of wealth.
Bernie is right. In fact, he could have gone even further — calling not just for redistributing more of billionaires’ money through progressive taxation but going to the source of the problem by bringing their businesses under collective ownership.
Running the Numbers
In It’s OK to be Angry About Capitalism, Sanders writes that billionaires “possess more of the planet’s largesse than they could burn through in a thousand lifetimes.” That’s a bit of an exaggeration. Some people are really good at burning through money. But it is worth stepping back and thinking about just how damn much money we’re talking about.
Here’s a slight tweak on an illustration I heard years ago:
Imagine that a vampire came to the New World with Christopher Columbus in 1492. Every day from the moment he landed on Hispaniola to the present, the vampire somehow managed to earn or steal the equivalent of a thousand 2023 American dollars. (The vampire just stacks the money in coffins, so he isn’t earning any interest and none of it ever get spent.) Not only would he be nowhere near a billionaire today — he wouldn’t even be a fifth of his way there. Five hundred thirty-one years have passed since 1492. That’s 139,815 days. He’d have less than $140 million.
By comparison, Sam Walton had a net worth of $25 billion when he died. Jeff Bezos’s net worth stands at $167.2 billion today. When you take a minute to ponder numbers like that, spending it all in a thousand lifetimes really does sound like a challenge.
To be fair, the vampire who came over on the Santa Maria would get to $999,000,000 — the amount Wallace thinks it’s outrageous Sanders doesn’t want to let people exceed — by the late 4220s.
Their Oligarchs and Ours
In his book, Sanders also compares American billionaires to Russian oligarchs. He says that ours deserve the “oligarch” label because of their immense economic power and the way it’s intertwined with political power in our society.
This, too, Wallace found outrageous. “Russian oligarchs,” he told Sanders, “are close associates of the central government who took over state-run industries. The people you’re talking about — the so-called American oligarch — are self-made entrepreneurs who created big businesses that employ millions of Americans.”
The “self-made” part is a bit rich given that many of the people Wallace is talking about grew up in extreme privilege and benefit from various form of government subsidies, “too big to fail” bailouts, and public-sector-driven technological innovation.
Still, Wallace isn’t wrong that America’s oligarchs aren’t just stacking their money in coffins. They’re engaged in the process of capital accumulation Karl Marx described as “M-C-M’”: they use money (M) to buy commodities (C), which they either resell or use to produce new goods or services that they can sell, converting the commodities into more money (M’). In the process, they employ lots of people.
But so do Russian oligarchs! It’s not like those former state enterprises are now exclusively staffed by robots. Does Wallace think that none of the money generated by these firms was used to start new businesses that employed even more Russians?
Wallace is right to imply that Russian oligarchs are fundamentally unnecessary to the process of production — which existed before they had the keys handed to them by friends in high places. But the allegedly self-made American billionaire are equally superfluous.
At one point in their conversation, Wallace grilled Sanders about whether he thought it would be better if Walmart didn’t exist and hence the million and a half American Walmart employees didn’t have jobs. Sanders’s response, which was correct as far as it went, was to talk about the low wages of Walmart employees — more than a few of whom have to supplement their grocery budgets with Supplemental Nutrition Assistance Program (SNAP) benefits (more commonly known as “food stamps”). If they’d continued on this subject, Bernie undoubtedly would have talked about the ways his social democratic program would help these workers — for example, by making it easier for them to organize labor unions.
But none of this quite gets to the heart of the point Wallace was raising. Isn’t it good that the enterprises owned by billionaires exist and provide all those jobs?
Attacking the Roots
Here’s how Sanders could have answered:
Yes, it’s good for the enterprises to exist and provide people with an income. But there’s no reason they need to be controlled by oligarchs. Walmart, for example, could be nationalized. Or it could be turned into a giant worker-owned cooperative. Either of these options, or some hybrid like converting it into a publicly owned entity whose governing board was split between public appointees and worker representatives, would cut the Walton family out of the picture — which would be all to the good.
The average full-time worker at Walmart makes between $25,000 and $30,000 a year. Jim Walton brings in about $5 billion a year — almost 167,000 times more than the high end of that range. He doesn’t get all that money because he’s 167,000 times smarter or more talented or less replaceable than any of the people actually doing the work to keep Walmart going. He gets it because capitalist ownership relations let him just take it.
If Walmart were organized as a worker co-op, the pay scale wouldn’t necessarily be entirely flat. A majority of worker-owners might be convinced to go along with higher incomes to attract candidates to apply for administrative positions carrying a lot of stress and responsibility — or conversely, to incentivize people to take particularly dirty or dangerous jobs. But good luck to anyone trying to persuade their fellow workers that whatever they did was so essential they deserve to earn 167,000 times more than what everyone else gets.
You only get to pay yourself a billion dollars — never mind five billion a year — if you have immense structural power to decide how a firm’s revenues are divided up. Even in a fully socialist economy, some people might have higher incomes than others for a variety of reasons. But you only get the kind of staggeringly unequal distributions of wealth that make some people billionaires when you have extreme inequality in the distribution of economic power.
Of course billionaires shouldn’t exist.