There Shouldn't Be Billionaires | Ryan Daniel Moran

Have you seen this meme going viral on Facebook? This meme was shared thousands of times and it reflected a lot of the arguments that are being given by politicians, presidential candidates, thought leaders, and celebrities on topics like the gap between the rich and the poor and whether or not billionaires add value to society. So in today's video, we're going to go into what this series of infographics got right and where it missed the mark.

This series of infographics got my attention because it did a good job of summarizing a lot of the common points and arguments that are made by those who want more wealth redistribution or who advocate higher taxes on the wealthy or overall make the argument that there shouldn't be billionaires. I believe that Bernie Sanders was the first person to actually utter those words. And we did a response to that argument that in a video called There should be more billionaires. But instead of rehashing those talking points, I want to address the things that were brought up in this series of posts because they got some things right and they got some things way wrong. The first point that is made is that billionaires hoard their wealth. Billionaires don't hoard their wealth, because wealth can only be hoarded if it is literally under a mattress. If you have the cash, the physical cash, and you have it stored somewhere, then it is hoarded. Then it is unspendable. But that's not how wealth and money works. Money is always put somewhere, even if it is just in the bank. Somewhere. A bank uses that capital to create business loans and mortgage loans and to grow their investment pool and to pay more interest to the people who have money in the bank. So they're actually helping consumers by having money in the bank. You're helping consumers by having money in the bank, because the bank is able to use that as leverage to provide mortgages and business loans and all the other things that banks do. Now, the vast majority of billionaires have their money in other companies, usually in the form of stocks, real estate, or other businesses that they acquire. And in doing so, when they have their money in the stock market, they provide something called liquidity. That is the ability for other people to sell their stocks at a profit or to get additional dividends into their investment portfolio. In the same way, if a billionaire buys a company, which often happens, that rewards the previous entrepreneur and rewards all of the other investors and stakeholders. And in that business, it also tends to create more efficiencies and a faster product line for end consumers. All this to say, I know I'm getting a little bit technical on you, but it's very difficult to actually hoard wealth. Wealth is always in motion somewhere. So even if someone controls billions of dollars, that billions of dollars is at work somewhere. The reason for this is because money is kind of worthless unless it's being used. So even if that billionaire is buying a bunch of private jets and a lot of homes, someone else is benefiting from that activity. There are laborers who make the planes. There are landscapers who take care of the multiple houses. Even if it is as surface level as that, that money still goes to work in other places. So it's very difficult to hoard wealth. It's always being used somewhere, and that always benefits other people. The other point that's made here is that no one should have so much money when other people are homeless or starving or dying of curable diseases. Well, this introduces the idea of correlation versus causation. When you see someone who is homeless, you and you blame a billionaire. That assumes that the billionaire having all that money is the reason why the homeless person doesn't. And that's just not how the economy works. Take for example, someone that I know, whose name is Trevor, who invented or at least helped pioneer a new type of treatment for a rare type of cancer and was very effective at providing a better solution than existed before. In fact, it was so helpful, it worked so well, that other companies and other investors poured into the marketplace to support the development and the spread of this cancer treatment. And because it was effective and because there was so much interest in it, Trevor made millions of dollars. So there's an irony between the statement of there should not be billionaires while there are people suffering from curable diseases. Because in the case of my acquaintance Trevor, he became very wealthy by helping people with curable diseases. You see, this idea that people get rich at the expense of others is a misunderstanding. You don't get rich by taking from other people. You get rich by serving people who need things and providing solutions to people who have problems. That's how you get rich. The way you get rich is by innovating and creating something that other people demand and desire. And so you can decry people getting rich when they invent something that helps someone else, but it is actually the act of service that creates the wealth in the first place. This is true of any of the famous billionaires that we like to talk about. Jeff Bezos paid himself $80,000 a year while other employees were making more money. And in doing so, he was able to create a platform that has created a large amount of wealth and opportunity and lower prices for consumers all over the world. He created something that other people wanted. And the same is true with Elon Musk. Elon Musk almost lost everything. Even though he was previously a multimillionaire, he put all that money into Tesla, almost went bankrupt. Bankrupt. And because he solved a global problem by giving consumers a product that they really wanted, he's now one of the richest people in the world. Again, we don't get rich by exploiting others. We get rich by creating things that other people want. That's how wealth is created, and that's how we solve all of the problems that we face as a society. The next point that's made is that the wealth gap is increasing. Now, it is absolutely true that the wealth gap, especially in America, has been widening. And that's a trend that has been happening since the beginning of capitalism. Because of capitalism, we have a larger economy than we've ever had. And because there is more pie to share, there are those who have a bigger slice of that pie. And that's a trend that will probably continue for the next decades. And the next several centuries, there will be an increasing war. Wealth gap in terms of dollars. Now, here's the opposite argument. Although the wealth gap in terms of dollars has increased, the standard of living gap has closed and it's closing at a faster and faster rate. In fact, every day, over 100,000 people are lifted out of extreme poverty. And that's been the case since 1990. In fact, extreme poverty is almost completely eradicated. Here's the rub. Our view of poverty, our definition of what is poverty, has moved over time. If you look at third world countries, extreme poverty is considered dying of hunger. But in first world countries, poverty is a bad cell phone plan or bad Internet or going to the supermarket on a budget. Now, we should always work to increase our standards of living. But in first world countries, where we have a wealth gap in terms of dollars, we have a smaller gap of standard of living. And that is because people who get rich get rich by inventing and creating things that increase our standard of living. So in doing so, we have increased the total amount of available money and growth and opportunity. And all of our lives have benefited as a result. Some people just have benefited at a greater degree in terms of dollars than others. Now, this next point is interesting. It says that billionaires aren't actually charitable. And it says Jeff Bezos made headlines for donating $100 million to Feeding America. In April. He makes $215 million a day. Bill Gates donated $589 million to charity in 2019. And. And that's 0.6% of his $98 billion net worth. Now, this point shows a misunderstanding between net worth and cash flow or cash. Bill Gates might have a $98 billion net worth, but the vast majority of that is tied up in Microsoft stock or other investments that he might hold. And so, again, when you try to correlate net worth and cash flow, it's not as though Jeff Bezos has $100 billion in the bank. He has. He has, I think, 20% or 13% of Amazon's ownership. And as a result, other people who have bought that company has driven up the value of that, which have put a paper net worth on Jeff Bezos. But the reality is he might only have a few billion dollars in cash, and he has given $100 million of that to other charities. It's actually a much larger donation than he's being given credit for. And another thing that I would just say is, if you're. If you're complaining about somebody giving $100 million to charity, why aren't you doing your fair share? How much should you give to the same organization? Why aren't you giving more? I don't know why we feel the need to cast judgment on other people who are doing good things. It just reflects belief that somebody has that billionaires are bad people and they're looking for any evidence to support that rather than honoring good work and good deeds that people are doing. One of the final points that is made in this series is that billionaires are a threat to democracy. And it says, quote, billionaires are some of the most important political figures in the country, but they are unelected, which means that the public has no direct way of holding them accountable. This is just simply not true, because billionaires are the most elected people and the most accountable people to the public, because the only way that they can make money is providing products and goods and services that people vote for in the terms of dollars. We have absolute accountability over them because we can stop buying their products if we don't like them. And this point is wrapped up by the phrase, many of us are only one bad year or one medical issue or one lost job from complete financial ruin. Almost none of us are one really good year away from becoming billionaires. Well, here's the reality of this. All of us are one really bad year away from losing everything. There is no such thing as absolute financial security. Look, I'm not a billionaire yet, but I am a multimillionaire and I've lost everything twice. And you don't get any power by blaming other people for your plight. If you want change, it starts with you. It doesn't start from other people changing. It's a powerless position to look at other people and to blame them for the situation that you find yourself in. I mean, even if this was all 100% accurate, it's still just a disempowering feeling to put all of your attention on what other people are doing to keep you stuck. Of course you're not going to be one year away from being a billionaire if you think you're not one year away from being a billionaire and you're blaming all the billionaires for your plight. You can't get rich if you hate on rich people. Your brain won't let you. If your brain says rich people are bad, what are the chances of you ever becoming successful? Zero. Because your brain is now equated. Rich people, bad. Money, bad. If you make money, you're bad. You can't do it. It will now be a conflict of your morals to ever be successful. This is the way that you get rich. You start by owning a problem and taking responsibility for doing something about that problem. Not waiting for somebody else, but you deciding to do something about that, and then creating something that serves and solves that problem, and then being in the act of service for all the people who are affected by that problem. The way you become successful is by solving problems for other people, creating solutions to those problems. But the byproduct of all of that is that you create a better world and you get rich. The world is stacked. This is the beautiful thing about capitalism. The world is stacked for us to be in service to one another. It's stacked for us to collaborate and to work together. The world has literally incentivized us to create a better world for each other. What a beautiful world. Let's celebrate that here at capitalism.com, we're here to empower that person, that entrepreneur who is doing something in the world that solves a problem, creates a solution, and serves other people. It's what we're here to do. When you're ready to start your journey, join us@capitalism.com start to download all of our free resources. When you're ready for us, we'll be ready for you. There should be more billionaires. I hope you become a billionaire. It means that you'll have been making the world a better place. That's why I'm rooting for you. Thanks for watching. Take care.