A web site recently reposted a video of an NYU professor dutifully and smugly rattling off the latest rationalization for modern wealth inequity, as he is likely paid to do by his corporate patrons. His line of patter? That we should be GRATEFUL for wealth inequities since "surely" those are a result of somebody who has done something that improved the world SO MUCH that people were glad to pay a premium to get this unique and wonderful thing. So "obviously", the money these people accumulated is only a fraction of the value they've created, as is testified by their being rich.
So here is my response, slightly edited for reposting here.
Professor Epstein’s statements are based on ideology, not facts. Here is the reality.
Most wealth is not primarily a result of innovation. America’s wealthiest businesspeople from Vanderbilt forward, are mostly successful makers and enforcers of monopolies. America not only doesn’t gain from monopolies (or even oligopolies) it is harmed by them as people are forced and scammed into paying excessive prices for things that they need. And honorable companies who try to succeed based on doing good work get destroyed by unscrupulous slime right alongside of us exploited consumers.
Another disproportionate source of business success is starting out rich. Bill Gates was richer at the age of five than most people will ever be, with a fat trust fund and daddy a hotshot corporate lawyer. Almost every part of Microsoft has always lost money. They still lose money on things like the X Box. Their wealth comes largely from the market power they got from the Windows license. An operating system that Bill Gates didn’t create. In fact, he stole it. But since his mother was friends with the IBM executive choosing their OS, he got the contract anyway.
More wealth comes from using other people’s money and insider connections to buy up companies (or government assets) break them up like a horse butchered and sold by the pound to make glue and dog food. Pay off enough legislators and you can get away with almost anything. America is further and further “stripped for parts” by looters like this every year. They get richer. We get poorer.
Then we get the media fortunes. Most media companies are doing very badly. But the executives are getting richer all the time. They falsify the recordkeeping. They put their friends in sweetheart jobs. Look it up. And ask yourself if America is really enriched by this.
Then we get executive salaries. Which get bigger all the time, even for people who are obviously incompetent or evil. Explain to me how Yahoo’s previous CEO “deserved” twenty million dollars. Or H.P.’s. And this is money that comes directly out of the pockets of the actual workers in the company who create that wealth.
Epstein is bought and paid for. Don’t believe the hype.
And please, do not succumb to the logical fallacy that anybody saying that we need change is just “against somebody being richer than others”. Nobody I know with more than three brain cells is that simplistic. This isn’t some rap song where the world is divided into “playas” and “playa haters”. We’re not opposed to have some be richer than others. We’re opposed to a society where too many people successfully steal, defraud, bully, and scam their way to wealth and then pay *less* in taxes while getting *more* government protection.
We’re opposed to a 1.3 TRILLION dollar savings and loan bailout after which not a single person served a jail term as long or as hard as that of a bank robber who steals a thousand dollars. We’re opposed to companies like Enron having killed people (yes, those rolling blackouts resulted in deaths) by intentionally shutting off power supplies to Americans, all to up their quarterly profits. And then, while we know that dozens of them actively designed and executed these schemes and hundreds or even thousands were knowing participants, three people in the entire multi-billion dollar corporation ever saw any noticeable jail time at all and most of them got to keep most or all of the money they “made”.
I run a small business. I work hard to create excellent products and I expect to be paid for what I create and sell. I hope to some day make a lot of money doing that. I have known millionaires who I'm delighted got millions of dollars for their work. They deserved it. Bully for them. The problem is that in reality most of the people getting rich and staying rich are NOT “creating value.” They are getting rich by hurting people. And the trail of bodies and misery they're responsible for is more than most people can even imagine.
Most of our farmers have been reduced in recent decades to sharecroppers on their own land, with almost no control over what they grow, how they grow it, or how they sell it. As the grandson of a Kansas farmer, I find that monstrous.
Congress required our worker pensions to fork over a percentage of their money to be “invested” by venture capitalists. Venture capitalists who then ignored most of the real entrepreneurs and instead blew it on funding “dot-coms” run by the kind of people they liked drinking with. Almost all these dot-coms went bankrupt, the real businesspeople having to compete for resources made more expensive by these spendthrifts, and money that was supposed to fund the retirement of schoolteachers and factory workers was instead spent on fancy dinners and condos for rich bankers.
Our engineers and scientists have created waves of good products, from old-school Rubbermaid appliances to “clamshell” computers. And then some new executive fad comes along and they’re ordered to cheapen the quality or move the factory overseas or simply replace it with some shoddy garbage. All while customers are BEGGING to be allowed to buy the high-quality goods that our engineers created in the first place. In those cases even the companies lose money. Again, look at H.P. And the executives who do this get millions in pay and bonuses and even if the company fails, and then get even more money to serve on boards of other companies.
And THAT is what we are opposed to. This is a wave of crime against the vast majority of the American people and we have no intention of passively waiting to be told what to think or what to do. We are informed, we are outraged, and we are fighting back. And I can guarantee you that the “Occupy” movement isn’t even close to all that we are doing.
And, ya know, here I am writing these marathon responses to Professor Epstein’s trash and maybe I just need to keep it simple. If somebody being rich is “obviously” because they found ways to sell things that made the world even better than what would have existed otherwise, what has he got to say about drug dealers and pimps? After all, they get rich. And they certainly do so by selling products that are in demand.
Check what people like the FBI and business insurance firms say. As far as they can tell, most embezzlers get away with it. And they get away with billions. And frequently they do it by being freelance bookkeepers to many families or small businesses, who they defraud over years, thereby, yes, concentrating wealth. Just as you crowed about.
So tell me, Professor Epstein, if YOUR bookkeeper got rich by stealing YOUR money and that of ten of your friends, would you call that a “gain” to society?