Stupid Billionaire Apologetics: Mamdani Edition

Reason’s Billy Binion took NYC mayoral candidate Zohran Mamdani’s recent comment that billionaires shouldn’t exist as an opportunity to trot out a moth-eaten — and remarkably unreflective even if it were original — apologetic for billionaires: 

I know it’s trendy to hate billionaires, but many didn’t get rich by accident. Jeff Bezos made goods cheaper & quickly accessible. Bill Gates put computers in homes. Sergey Brin gave the world a search engine that works. I could go on. So yes…they should exist.

This is closely related to another right-libertarian talking point, which is also dumb: “I’ve never seen a poor person give anyone a job.” It’s dumb because in every society in human history, the class that controls access to the means of production and subsistence, and hence controls access to productive work, is the class that provides whatever “jobs” exist.

Peter Bagge reduced the argument to even more cartoonish (pun intended) levels, with a comic in which the ghost of Adam Smith, overhearing Friedrich Engels’s claim that “the workers will run the factories themselves,” responds: “How will they repair, expand, and improve those factories? Doesn’t that take capital?” As though the machinery were actually constructed by the capitalists themselves out of bundles of cash, and not produced by other groups of workers acting on the material world. “Capital” is nothing but a socially constructed claim on the right to direct and allocate resources which were created by labor. And a socially constructed claim can be deconstructed, and another one constructed in its place. 

One might argue that because capitalists can keep the profits and bear the losses associated with the uses they put capital goods to, and because they are free to exchange those capital goods in a manner that leads to market prices for that capital, they have both better incentives to use that capital in a manner that creates value and greater knowledge of how to do so. 

But there’s a difference between markets in equity and markets in capital goods — a distinction Mises missed when he treated a stock market, or market in firm equity, as the defining criterion for rational calculation in the allocation of producer goods. Even in an economy of worker-controlled enterprises, the capital goods that one group of workers supplies to another can be priced, and the enterprise will still internalize the profits and loss. The workers’ incentive is to benefit themselves by increasing productivity or the attractiveness of their product, which they fully internalize themselves in the form of increased pay or shorter hours.

Bezos, Gates, and Brin didn’t actually make or do any of the things Binion credited them with. They controlled the flow of funds that enabled others to do them. Yeah, and guess what? In any society with class stratification, the economic ruling class controls the allocation and investment of resources in any economic system — that’s not an argument for their indispensability. As Paul Goodman once put it, “a system destroys its competitors by pre-empting the means and channels, and then proves that it is the only conceivable mode of operating.”

It’s precisely billionaires’ control over the funds which is the problem. In an economy where billionaires didn’t exist, institutional arrangements for allocating resources would be different. Binion’s argument is comparable to arguing that without feudal landlords, peasants would have no land. Holders of unearned wealth using it to hold the economy hostage is bad. It’s bad to have an economy where the owners of enormous piles of wealth are vested with the power to allocate resources, whether through direct investment or the issuance of credit. The myth that “capital” is something invested or lent from piles of wealth previously accumulated through “abstention,” rather than something various groups of producers constantly supply each other with on an ongoing basis, is the root of the problem. As Thomas Hodgskin wrote almost 200 years ago:

Betwixt him who produces food and him who produces clothing, betwixt him who makes instruments and him who uses them, in steps the capitalist, who neither makes nor uses them, and appropriates to himself the produce of both. With as niggard a hand as possible he transfers to each a part of the produce of the other, keeping to himself the large share. Gradually and successively has he insinuated himself betwixt them, expanding in bulk as he has been nourished by their increasingly productive labours, and separating them so widely from each other that neither can see whence that supply is drawn which each receives through the capitalist. While he despoils both, so completely does he exclude one from the view of the other that both believe they are indebted him for subsistence. 

Binion added:

“You can still be rich even if you’re not a billionaire!” Sure — and if you strip billions from someone like Jeff Bezos, he’ll invest less in building things that actually improve people’s lives. Amazon has done more for the average person than the government could dream of….

Reading this comment, you’d think we didn’t have an economy where, thanks to increasingly concentrated wealth and reduced mass purchasing power, the super-rich had more money than they could profitably invest in productive activities, and were turning instead to asset stripping and enshittification by vulture capital — including the enshittification of Amazon by Bezos himself. 

In a remarkable display of lack of imagination, Binion also said: “Fun fact: If you taxed every U.S. billionaire into oblivion — wiped out their entire net worths — you could fund the federal government for…less than a year.” 

But that’s begging the question. Taxation isn’t the only way to keep billionaires from existing. Binion assumes the accumulation of billionaire wealth is a natural, spontaneous, and inevitable process that can only be stopped by active state intervention to stop it — and not by simply removing the interventions that facilitate it in the first place. The overwhelming majority of billionaire wealth consists of unearned economic rents of one kind or another, extracted via artificial property rights, artificial scarcities, or entry barriers — not to mention direct subsidies, regulatory safe harbors against liability, etc. — enforced by the state. “Taxing billionaires out of existence” gets it ass-backward — they should never be able to accumulate that kind of wealth in the first place.

It’s amusing, by the way, that following the predictable Bluesky backlash against his comments, Binion joined the long list of center-right and right-wing people who decided to “seagull” Bluesky (i.e., fly in, make a loud noise, create a huge pile of shit, and then leave) by making deliberately controversial statements and then whining about the “echo chamber” when they get the controversy they asked for: 

Also the unhinged response to my original post is a good snapshot of why this site hasn’t taken off: it’s a small group of hyper-online, unhappy people screeching into the void. It doesn’t surprise me this place can’t build a viable user base. Some of yall really need to log off & go for a walk. 

This is typical of grifters like James Damore who deliberately get themselves “cancelled” as self-promotion.

I checked out quite a few of the people quote-posting or replying to Binion; most of them were pretty tame criticisms and valid counter-arguments — e.g.: 

 Basic failure of logic. 

“Some (arguably) good things were done by X; therefore, X should exist.” 

“Hitler made the Volkswagen; therefore, Hitler should exist.” 

“Stalin increased literacy rates in Russia; therefore, Stalin should exist.” 

Fallacy of incomplete evidence. 

Verdict: fail.

Another one: 

These people don’t realise that all Amazon has done is improve delivery of existing stuff ([Amazon Web Services] was new) but the idea was largely obvious and other companies were on their way to doing Public Cloud (AWS just did it very well first time round)

And given IP and “criminal contempt of business model” laws, Bezos is able to enclose basic technologies created by social intellect as a source of private rents. Because he controlled the investment funds to implement them, like feudal landlords controlled access to the land. 

If Binion experienced one hundredth of the reaction that people like Anita Sarkeesian, Sarah Jeong or Leslie Jones have received on X, he’d shrivel up like a raisin. His own unhinged reaction says a lot about the kind of right-libertarian echo chamber he must be used to. 

News flash, Billy: When you say stuff that lots of people disagree with, you hear back from them. If you want a bubble where you’re protected from disagreement, go back to your safe space on X.

The Center for a Stateless Society (www.c4ss.org) is a media center working to build awareness of the market anarchist alternative

Source: https://c4ss.org/content/60535