BASHING BILLIONAIRES is gaining popularity—especially among candidates to be America’s president. Elizabeth Warren wants to take up to 6% of their wealth in tax every year. Bernie Sanders says they “should not exist”. “Every billionaire is a policy failure,” goes a common left-wing slogan. In Britain’s election, too, the super-rich are under fire. Jeremy Corbyn, the leader of the Labour Party, says that a fair society would contain none. On October 31st he vowed to “go after” Britain’s plutocrats, singling out five individuals and bemoaning a “corrupt system”.
Left-wingers blasting inequality is nothing new. But the idea that vast personal fortunes are made possible only when government goes wrong is a more novel and serious idea. It is also misguided. Personal wealth is at best an unreliable signal of bad behaviour or failing policies. Often the reverse is true.
The left’s charge is based on a kernel of truth. When competition is fierce and fair, persistently high profits should be difficult to sustain. Yet on both sides of the Atlantic too many companies crank out bumper profits in concentrated markets. Some billionaires have thrived where competition has failed. Facebook and Google dominate online advertising; Warren Buffett likes firms with “moats” that keep rivals out. Meanwhile America’s political system is...
