(Drivebycuriosity) - It seems that billionaires are out of fashion. "I don`t think billionaires should exist", tweeted Bernie Sanders (blairbelle). Do we really need billionaires?
I think so. America`s rise was driven by inventors & entrepreneurs who often became billionaires (in today´s money). America benefited from Samuel Slater, who developed a cotton spinning machine in the 18th century and from Oliver Evans, who created a flour mill. Steel magnate Andrew Carnegie & Cornelius Vanderbilt created a networks of railroads which had an important role in the development of the vast nation. In the early 1920s Henry Ford, who was obsessed with driving production costs lower, made cars affordable for the masses and created so a huge industry and wealth for the whole nation. The banker JP Morgan used his own huge fortune and his enormous influence on Wall Street to hinder the bank panic from 1907 to evolve into a full-fledged depression.
Yes, billionaires amassed fortunes, but we, the society, gained as well. Prof. Nordhaus, winner of Economics Nobel Prizes 2018, wrote in his 2004 paper “Schumpeterian Profits in the American Economy: Theory and Measurement,” : “Only a minuscule fraction of the social returns from technological advances over the 1948-2001 period was captured by producers, indicating that most of the benefits of technological change are passed on to consumers rather than captured by producers.” (aier.org). According to Nordhaus "producers, on average, capture a mere 2.2% of the total benefits of their successful introduction into markets of technological advances. A whopping 97.8 % of those benefits are enjoyed by people each of whom as a consumer did nothing other than exercise his right to spend his money on those options that he judges best for himself".
Today millions of Americans benefit from Sam Walton, who founded Walmart in 1962, by being able to purchase a lot of things for very low prices, especially people with a tight budget are better off thanks to him. Millions of Germans - and some Americans & British - buy cheap things @ the supermarket chains Aldi Nord & Aldi Süd, founded & owned by brothers Karl and Theo Albrecht. Millions enjoy the comfort to have a huge variety of goods delivered fast & cheap to their homes - thanks to Jeff Bezos & Amazon. His obsession with customer service, low costs & prices forces the whole retail industry to get more efficient and customer friendly. It takes only a few clicks to make a purchase that will arrive at their home in about a day in most cases. The Amazon effect is keeping inflation at bay and making the economy more efficient & flexible. Many startups & established companies use Amazon`s cloud computing services (AWS) for processing & storing information. The cloud reduces the costs of managing corporations, researching complicated topics and multiple other complex tasks considerably. Thanks to the cloud, new ideas can spread faster, which is encouraging discoveries and inventions.
I use frequently Google search, Google maps & other Google services for free and I don`t get hurt that Google founders Larry Page & Sergey Brin became billionaires. More than two billion people are using Zuckerberg´s Facebook to communicate with their friends & relatives worldwide without paying any cent. All these billionaire entrepreneurs made their fortunes because they had ideas, took risks and worked hard - and they deliver a huge service to the society.
Sanders, Warren & Co. claim that the billionaire`s wealth would be in better hands when they take it away (wealth tax). Does the government really know how to use money better than these billionaires? Gates, Musk, Bezos & Co. have a proven talent for finding and investing in successful technologies & businesses. What business experience do Warren, Sanders & their bureaucrats have?
Elon Musk invests in the "Boring Company" which builds tunnel boring machines. He wants to dig a network of cheap tunnels which are optimized for electric vehicles. Musk also plans to implement Hyperloop - a high-speed transportation system ( reduced-pressure tubes in which pressurized capsules ride on an air cushion driven by linear induction motors and air compressors). All these projects will make transportation much cheaper & environmentally friendly - creating another tailwind for the global economy.
Bill Gates invests a part of his fortune in a series of startups including Grail, a life sciences company working to develop technology that could spot cancer before it's incurable; Varentec, which develops products for electrical grid systems, including a software platform that lets cities more easily manage how power flows & EtaGena, a startup producing ultra-efficient generators that supply power for companies, buildings, and microgrids.
Jeff Bezos puts his private money into a variety of start-ups including EverFi, an online education and certification firm; Unity Biotechnology, a life-extension research firm hoping to slow or stop the process of aging; Juno Therapeutics, which aims to develop a pipeline of cancer immunotherapy drugs & Plenty, an indoor vertical farming company that uses less space and fewer resources to grow fresh produce year-round.
Bezos, Elon Musk & Richard Branson, the British owner of the Virgin Group, are also developing independently from each other rockets for space flights (Virgin Galactic, SpaceX, Blue Origin). The three billionaires aim to make space travel affordable by making rockets reusable. They do a service for whole world by risking their private money for space flights which may give humanity some day more chances to survive.
The investments by Musk & Co. are supporting the world and humanity by fostering innovation, reducing global warming through sustainable energy production and consumption, fighting cancer, supporting education and much more. If their money would be taken by the government it would get into the hands of bureaucrats which are less efficient & competent. Transferring money to the government often leads to waste, inefficiency & corruption as you can see in New York City where building a subway costs far more than elsewhere the world (marginalrevolution).
The majority of US cultural institutions depends on charities financed by billionaires. At the end of 19th century people who had build great fortunes - like Henry Clay Frick, John d. Rockefeller &J.P. Morgan - began to found or endow museums, concert halls, orchestras, colleges, hospitals, and libraries in astonishing numbers in every major city (driveby ). The billionaire Carnegie - one of these donators - wrote, that "a man who dies rich, dies disgraced" and gave away nearly his entire fortune. Cultural landmarks like Manhattan`s Carnegie Hall are financed by philanthropists. If you visit New York`s Metropolitan Museum of Art - or any huge American museum - you might notice that most of the displayed art works are donated by some wealthy families or individuals (google). Even the running costs (administration etc) are partly financed by donations. Most American universities and hospitals are also funded by donations (forbes). The Rockefeller Foundation, based on the oil profits amassed by the Rockefeller family, has been supporting science, education, culture & health care for decades. Industrialist Peter Cooper initiated New York´s "The Cooper Union", which still the only major college in the US to charge no tuition and John Jacob Astor founded the Astor Library, the core of the New York Public Library, the largest privately financed library in the world. Were would America be without billionaires?
In 2017 Americans gave over $400 billion to charitable causes with the largest growth in contributions coming from foundations created by major philanthropists (i.e. the ultra-rich) ( of dollars). Warren Buffett and Bill Gates developed "The Giving Pledge" in 2010 to encourage the world’s wealthiest individuals to give away more than half of their wealth to charitable causes. To date more than 204 individuals and families have pledged to donate over $500 Billion. Bill & Melanie Gates Bill Gates declared that they are willing to give half their wealth to vetted charities of his choosing (americanthinker). Do Sanders, Warren & Co. really know how to spend this money more beneficial for the society?
Billionaires like Musk, Bezos, Gates are making the world a better place. The government should not try to stop them.
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