Should Billionaires Exist?

Bernie Sanders and Elizabeth Warren think billionaires shouldn’t exist. This has caused some well publicized indignation on the part of some famous billionaires like Blackstone’s Stephen A. Schwarzman, who countered by saying “Maybe Bernie Sanders shouldn’t exist”. In fairness to Sanders and Warren, I don’t think they are calling for the elimination of anyone in particular, but rather are questioning a system where the 26 wealthiest people in the United States can own more wealth than half of the overall population combined. It’s a fair question. For the record, I don’t favor Medicare for all, nor do I support the elimination of all student debt. I think those policies are impractical and political losers. This is not to say that I support the status quo for healthcare or the student problem. There are other solutions being floated by other candidates that I think are better.

Recently, nearly 200 executives with the Business Roundtable committed their companies to a broader vision of their responsibilities by looking beyond shareholder return by also measuring their stakeholder return. In other words, they are committing to a measurement of success that includes their company’s impact on employees, customers, and society. Seems like a pretty easy thing to embrace, but in reality this was a highly controversial statement. Many free-market purists believe only government should worry about societal issues, and corporations should be exclusively focused on profit and shareholder returns. Vice President Pence, for example, characterized the Roundtable’s statement as “leftist”. Personally, I believe in free-market principles, but I also understand that the world is not a fair place. Free markets have pioneered new industries and spurred innovation, and created wealth that has benefitted billions of people. But let’s face it, some people have advantages that others do not, and the growing disparity of wealth in this country is a symptom of a cracked system that will eventually break apart.

Do I think billionaires should exist? Sure, but not if our society starts to resemble Hill Valley in Back to the Future Part 2. I believe the thrust behind the Business Roundtable was an understanding that companies will do even better in a healthy society. I also think the competition for talent becomes more intense; if companies report their impact to society along with their quarterly earnings, the corporations that truly do well by doing good will have an advantage in attracting the best and the brightest employees. I don’t think there is anything leftist about that. Can corporations solve America’s ills? Of course not. Am I skeptical? Absolutely, but in a capitalistic society, economic interests drive political policy more than the other way around, and a more enlightened corporate America can definitely be part of the equation.