Home > Uncategorized > Today’s extremes of wealth and inequality result from the confluence of three historical developments

Today’s extremes of wealth and inequality result from the confluence of three historical developments

from David Westbrook and The Inequality Crisis

While we may find many sorts of inequality in the United States and elsewhere, this essay is about the specific form of inequality exemplified by Jeff Bezos or Bill Gates, that is, the Himalayan summits of contemporary wealth, mostly in the United States.

I would like to suggest that such wealth results from the confluence of three historical developments.

First, the social processes referred to under the rubric of “globalization” have created vast markets. A dominant position in such markets leads not only to great wealth, but also to the elimination of peers. Since there are few such markets, relatively significant wealth is possessed by very few people. There is only one Jeff Bezos, one Bill Gates.

Second, digital markets powerfully tend toward monopolization, of both their products and the narrative of the future. Those fortunate enough to be the monopolists profit accordingly, both directly, by doing business, but especially by investor interest.

Third, the actors in such digital markets are generally corporations, which are in turn largely owned by their founders. As a result, a few individuals have acquired almost unbounded wealth, at least as wealth is conventionally measured, nominal US dollars. Conversely, entire economic sectors (like “food” or “data”) are at least nominally under the dominance of such individuals. Political economy has been individualized, at least formally, to an astounding extent. A normative political discussion of this state of affairs is beyond the bounds of this essay.

So where to start? A listing of the ten richest Americans at the end of 2019 is illustrative:

Rank The ten richest Americans Net worth
10 Jim Walton Heir to the fortune of Walmart $51.6 billion
9 Steve Ballmer Chief Executive Officer of Microsoft from 2000- 2014 $51.7 billion
8 Michael Bloomberg Majority owner and co-founder of Bloomberg L.P (software company) $53.4 billion
7 Sergey Brin Co-founder of Google

President of Alphabet Inc., Google’s parent company, until 2019

$53.5 billion
6 Larry Page Co-founder of Google

President of Alphabet Inc., Google’s parent company, until 2019

$55.5 billion
5 Larry Ellison Co-founder, executive chairman, etc., of Oracle Corporation $65 billion
4 Mark Zuckerberg Co-founder, chief executive officer, and controlling shareholder of Facebook $69.6 billion
3 Warren Buffett CEO of Berkshire Hathaway $80.8 billion
2 Bill Gates Co-founder of Microsoft $106 billion
1 Jeff Bezos Founder, CEO, and president of Amazon $114 billion

Seven of the ten fortunes are derived from purely digital enterprises (six, if one argues that Bloomberg is also media/information/content, albeit delivered digitally). Amazon sells physical things, and brokers the sale for other sellers, collecting data all the while. Amazon is also a collector and purveyor of personal information, and a seller of cloud services – virtual as opposed to tangible activities. Walmart is a highly digitized global network for the distribution of things, and a provider of some services. In short, nine of the ten fortunes can fairly be said to be derived from “tech”.

 US   UK   JP   AU

  1. JD
    November 2, 2020 at 2:53 am

    I think it’s also appropriate to mention tax policy as a contributing factor to obscenely huge fortunes. Back when the marginal tax rate was over 90 percent (during a time of growing general prosperity in the US) such fortunes might have been impossible or nearly so. The arguments for reducing tax rates on extremely high incomes or on capital gains are all bogus, of course, but since rich people control the government in the US (just rich, not grotesquely rich) naturally they support policies that tend to increase their own fortunes.

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