> The U.S. could not long have tolerated robber barons without major social trials.
Then, as now, there was a lot of envy/dislike of wealthy people. That doesn't support the idea in this thread that wealthy people are bad for the economy.
Then, as now, there was a lot of envy/dislike of wealthy people. That doesn't support the idea in this thread that wealthy people are bad for the economy.
https://www.google.com/#q=concentration+of+wealth+effect+on+...
It's your right to believe whatever you want, but that's what this world-view is, belief, and nothing based on evidence or reality.
Sure they invest, but that also tends to hurt the economy by driving up relistate prices etc without actually increasing output. They also tend to do vanity investing which is why VC firms for example average such terrible returns.
There's no evidence of that. The canonical robber baron, Rockefeller, steadily drove down kerosene prices by 70%. They did not go back up. See "Titan" by Chernow.
> wealthy people tend to spend money on less economically scalable things.
This makes no sense to me.
> hurt the economy by driving up relistate prices etc without actually increasing output.
This is claiming that rich people spend more money than non-rich for the same item. There is no "rich premium" paid for things. Even so, the person who gets paid that money then goes and spends it - it doesn't disappear from the economy.
> They also tend to do vanity investing which is why VC firms for example average such terrible returns.
You're asserting that wealthy people are terrible at managing their money. It's like saying an Olympic athlete doesn't know how to train effectively.
Would you prefer to take financial advice from a rich person or a poor person?
Or maybe, the assertion is that wealthy people are good at managing money in ways that benefit their entrenched holdings, but not good at finding the Next Big Thing. Or in ways that simply improve the economy overall.
Your entire argument can be countered simply by the example of the Ford Motor Company and its decision to pay workers more than the bare minimum so that they could actually afford to purchase the vehicles they were making. This lead to huge gains over other boutique automobile manufacturers at the time which produced vehicles that cost several times that of the Model T. And improved the economy of the area immensely.
In general, extreme concentration of wealth is bad for the economy because it does not allow enough people to make decisions that cause growth overall and improve the wealth of the nation. The most obvious historical example is that of the high middle ages where all of the land, currency, military power, etc. was in the hands of the few and 90% or more of the population was at a subsistence level. The wealth of the nation was not spent on improving the lives or economy of the people, but on defending the holdings of the rich from other wealthy people.
In contrast, the renaissance started when that wealth was distributed among merchants, craftsmen, and bankers who were able to invest their income and gains back into technology that improved productivity for everyone (but most especially for themselves) and resulted in an overall wealthier nation.
You can't automate million dollar paintings. If you sell 300,000$ watches the cost is part of the appeal, it's just conscious consumption.
Supply demand curve, if someone wants to buy land as an investment there is no new land created which increases prices somewhere. See any city with significant vancant housing stock from foreign investors.
JK Rowling did not become wealthy by being a wise investor. The Walton family includes someone who diversified and guess what they have less money than the others, demonstrating incompetence. I could go on but having lots of money and being a competent investor are very different things.