The back of this book lists an interesting fact. If you made a dollar per second, every second, you'd be a millionaire in 11.5 days. At that same rate ($3600 per hour) it would take you 32 YEARS to become a billionaire! If Bill Gates had made his fortune at that rate, he would have had to start 1,600 years ago! What this means in practice is that billionaires represent a form of wealth beyond the experience, or even comprehension, of most people. McQuaig and Brooks argue in this book that these extreme cases of wealth are harmful in a variety of ways.
Their first argument is that billionaires contributed to both the Great Depression as well as the recent depression. In a nutshell, when money leaves the hands of the middle class for the extreme rich, there is less money for general spending (run the example in reverse- you'd have to spend $3600 per hour for 32 years to run out of $1,000,000,000!!!) and more for investing (they can't spend it, so they invest it). That money led to inflated bubbles and riskier investments, leading ultimately to market crashes. Trickle down economics doesn't work (91% of the wealth created in the last two decades in the US went to the top 10%).
Their second argument is that huge disparities in wealth lead to health problems. This is becoming a well-established fact in social studies. Income disparity appears to be the best predictor of violent homicides. It also predicts general health. In a fascinating (and I think very intuitively powerful) example, the average height of Americans (who have the greatest inequality of any "modern" country by a long-shot) is growing slower than the height of Europeans, even controlling for immigrants. The inequality gap caused by ultra-billionaires is making Americans relatively shorter than Europeans!
Their third argument is perhaps their most damning, and one that I found most compelling. It should come to no surprise that the rich use their wealth to help themselves politically. Buying politicians is nothing new, it's just a lot easier when you are mega-rich. It's a vicious cycle in that the ultra-rich push for new laws and loopholes that allow them to become even more rich, allowing them to push harder, making them richer, etc. Ultra-rich billionaires represent a very real threat to democracy as their voices are heard much louder and more clearly than the average citizen's. Personally, and I suspect like many readers, I think that's natural (if not deserved). What's troubling is that the process reinforces itself. So it's not like politicians listen more to billionaires than Joe the Plumber. It's that they listen more, and more, and MORE to the billionaires and less, and less, and LESS to Joe the Plumber. I for one am shocked at how lightly the banks got off in the US after triggering a global financial crisis, and the anger in the recent US elections suggest I'm not the only one who thinks that. For another example, I first noticed when I started investing myself, advanced lucrative investments that were limited (by law in Canada and the US) to "accredited" investors. Initially, I thought that meant educated or some kind of certification. It doesn't. It means wealthy. The rich have created investments that only they can invest in.
The authors' solution is fairly simple- restore higher levels of income tax for the ultra-rich. This is the easiest way to redistribute wealth. The authors argue that much of a billionaire's wealth is due to luck and society, so why shouldn't some of it come back? If billionaires threaten to leave, up the threat by threatening to remove their foreign tax havens.
The bottom line is why this very interesting book only gets four stars. The authors' solution to raise income taxes is an obvious and strong choice, but the problem is how do you implement it? Just ask your local politician? What's needed is for some kind of a movement to begin, and the authors offer no advice to this regard. What's also needed are mountains of cold, hard facts and figures that are easy to understand and powerful motivators (like the initial math at the start of this review). I'd like to see more data- especially more Canadian data. We know that special interest groups are great at twisting facts and figures to suit their needs, so a book like this, an argument like this, a cause like this, needs serious factual support to motivate the public to motivate the politicians to make the right changes because you can bet that (some of) the billionaires are going to fight back, and they've got a lot of resources to bring to that fight. I have no problems with people honestly and legally earning large sums of money, but the "game" shouldn't be rigged so that the rich can unfairly keep getting richer at the expense of everyone else.
