Wrong question. Better question: why is the scale of inequality acceptable?
One of the most obvious examples in America right now is a house in a desirable part of the country. Buying a house has always been a major investment; however, housing prices are now so high relative to income that many people will never be able to purchase a house in one of America's modern cities.
Whether that makes it a "right" depends on your stance on things like positive versus negative rights. I'm arguing that a system that doesn't provide that to regular people is broken regardless of whether it is a right or not.
[1] By goals in life I do not mean things like "I want to own my own island" or "I want a penthouse in Manhattan". Rather I mean something along the lines of "I want to live somewhere that I can go hiking everyday" or "I want to live in a cosmopolitan city".
I don't know where the line is, but if you say the basic right is just "house", and that gets enforced, someone's going to try to draw that line as low as they can. Probably a few developers try to argue that if everyone gets a house then zoning laws need to be relaxed so they can afford it, and (hyperbole) we're back to windowless apartments with one room per family and one bathroom per floor.
For example, if a group of billionaires bought up all of the property in New York City that would then mean that there wouldn't be any left for anyone else.
Extreme inequality undermines this by allowing those who already have significant wealth to put their finger on the scales (lobbying, anticompetitive practices, etc.)
Sure, Jeff Bezos has a lot of wealth, but really what he has is a lot of shares of Amazon. It's Amazon that really has the money. Even if Bezos is the CEO, he has a duty to the other shareholders to act in their interests. He can't just donate all the company's assets to charity even if he wanted to.
The real problem is that corporations are too big. The fact that this makes their founders very rich is more of a side note. Increasing the capital gains rate isn't going to make Apple or Microsoft smaller or give them more competition. It isn't even going to collect more money from the largest shareholders until they sell their shares, which many of them never actually do.
This is a competition problem, not a wealth problem. If there were ten times as many companies then there would be ten times as many founders who each had a tenth as much money -- or less, if the added competition directed more of the money to the customers and workers.
Bezos may not be able to donate Amazon’s assets to charity, but he can donate his assets - in this case his shares of Amazon.
He can equally well sell his Amazon shares and buy something else with the proceeds, so the wealth that is attributed to him really his his.
Of course there is a point at which Amazon’s value might be impacted if Bezos sold his shares, but he could probably realize well over 50% of his holdings before that became an issue.
Think about it this way. Alphabet owns Google. When that happened, did it create an additional company out of whole cloth with the value of Google, on top of the value of Alphabet? No. That's double counting. The value only exists once. Moreover, unless Amazon is dissolved, the corporation controls that value (and is required to act in the interests of all the shareholders), regardless of who owns the shares at any given time.
He could decide $N Billion was enough and give the shares away to all employees tomorrow. Or, we could go mediaeval and have a revolution and violently rest control of that wealth from him, and others.
I guess the trick with oligarchy is to keep things just the right side of violent revolt, just enough sharing of benefit to give hope to the great unwashed [amongst whom I count myself, in case you think I'm being pejorative].
There doesn’t need to be anyone with the cash available to pay the entire price of Amazon.
If Jeff Bezos wants to purchase something, he can trade Amazon stock for it.
The corporation doesn’t have any control over whether he does that or not.
It is exactly equivalent to money.
By this logic Google has an infinite amount of money because it has the ability to issue new shares. It can create a zillion dollars of new shares and sell them in the market and now it has a zillion dollars higher market cap because it has an extra zillion dollars in cash.
But it's not actually infinite, for two reasons. First, the money (or whatever you're exchanging the shares for) still has to come from somewhere. There isn't unlimited demand. It's not possible for every billionaire to sell their shares at once because then there would be nobody to sell them to. If they all tried to at once, the share prices would crash into the floor.
More importantly, if Bezos sells some shares in Amazon, it doesn't cause Amazon to have less capital. The company is still the same size. All you've changed is who owns it -- and unless the price he sells it for is dramatically lower than its current market value, it has to be some other rich people because nobody else has the money to buy it from him. The only way for a rich person to reduce their holdings in a corporation in order to spend the money is for some other rich person to reduce their spending by the same amount and use the money to buy the shares in their place -- and then the corporation is in control of that person's wealth, in the same amount as the original shareholder's.
The things that cause corporate officers to control less wealth are things like corporate spinoffs, taking existing public companies private (which then puts actual control into the hands of the owner), competitors eroding the incumbent's market share, corporate bankruptcies, etc. Two rich guys trading shares for real estate doesn't do that. At the end the corporation still has the same amount of wealth and the two rich guys have the same amount of wealth, you've just changed which one has their wealth in stock vs. land.
You are right that Bezos selling shares does not change the amount of capital Amazon has.
The fact that nobody has enough money to buy all of Amazon from Bezos is also completely irrelevant.
You are right that Bezos exchanging stock for real estate doesn’t reduce his wealth unless the real estate is overpriced.
When you buy something with money, the same thing happens - the amount of wealth held by both parties doesn’t change unless the goods are overpriced or are consumed.
You haven’t refuted anything I said in the previous comment.
Bezos can use Amazon stock to buy whatever he wants, the same way you and I can use money, and the corporation has no control over this.
Bezos’s wealth is exactly what it looks like. He can indeed use it just like money.
Your logic is that shares are money, but companies can print shares, which would imply that they could print money.
The shares are only valuable because they represent the company. The value in the shares isn't independent or duplicative of the value of the company. If the company burned to the ground then the shares would be worthless too -- it's the same wealth, and as long as the resources are invested in the corporation, it's the corporation that has control over it.
You're trying to make a lot out of the fact that the owners could sell their shares, but there are two reasons that doesn't do it. The first is, that doesn't come into play unless they actually do sell their shares. But if they did that in practice and spent the money (not just move it to another investment security) then we wouldn't be having this debate because then they would no longer be billionaires.
And the second is that they can't actually do that at scale, because in order for that to happen, you would need somebody else to buy the shares from them, which would mean that that person would have to commit an equivalent amount of resources which then couldn't be used for some other purpose. As long as Amazon exists, it necessary that somebody be foregoing their own use of an Amazon-sized quantity of wealth.
> When you buy something with money, the same thing happens - the amount of wealth held by both parties doesn’t change unless the goods are overpriced or are consumed.
The most relevant part of that being consumed, because that's what the disposition of resources is really about. Trading one investment for another is still investment -- and investment in corporations is giving control of your resources to someone else. Actual spending is consumption. You burn fuel or use electricity. You pay a person to do a job and their time is consumed and can't be used for something else. You occupy some land that then nobody else can use at the same time. Those are the things that actually matter to people and affect the world, not whether Jeff Bezos owns shares of Amazon and Larry Page owns shares of Google or vice versa.
What I'm getting at here is that if you want to reallocate resources from adtech to something else, it is actually necessary to deallocate it from adtech, not just sell your shares in the adtech company to somebody else so that the same total amount of resources are allocated to adtech but now it's somebody else's name on the documents. If the same amount of labor continues to be spent on targeting ads, that labor is not being spent on curing cancer, regardless of whether ownership of the shares changes hands.
That is not my logic. You have made that up our of nowhere.
Obviously printing more shares leads to dilution and doesn’t increase the overall value of the outstanding shares.
But that’s just like money too - printing more money leads to devaluation of the currency.
So you are wrong, and clearly shares can be used just like money.
I agree with you that selling AdTech/Google shares doesn’t anything to reduce the resources that Google can spend on targeting ads.
But that’s not what our conversation has been about.
How about if all the workers in Amazon eco-system shared the money equally (according to the retail price index in their locality, perhaps), and reduced the cost of goods to ensure that the per-employee share matched the median societal wage (or something similar)? Still a big fat corp, but not contributing to societal inequality or unfairness (but still a problem for over-use of resources and such); how would that fit with your analysis, would it still be "these corps are too big"?
Of course, because you'd still have a single entity in control of hundreds of billions of dollars in resources. The CEO still has the same amount of money to lobby the government to relax environmental rules or suppress wages or competition or fix prices or whatever problematic thing Abstract Evil Corp does when they're too powerful. They still have the same huge pile of cash to undercut competitors with until there are none left. The size of the company is problematic independent of where the profits go.
It's also somewhat of an implausible hypothetical, because paying significantly above market wages is uncompetitive. If Amazon pays market wages then nobody can undercut them on price because they have better logistics. If they paid significantly above market wages then someone else could pay market wages and undercut them. The only way out of that is to get market wages up and consumer prices down to the level you're talking about -- which is what happens when there are more employers competing for labor and customers.
This is so important and seldom mentioned in internet discussions.
> Extreme inequality undermines this by allowing those who already have significant wealth to put their finger on the scales (lobbying, anticompetitive practices, etc.)
There is a number os scholars who will point that as we currently stand, those things, including the extreme inequality, are consequence of the current system.