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Rich People

Rich people add way more to society than they often get credit for

A small and colorful calendar iconPosted on:July 28, 2023

I know a lot of people who get upset that there are rich people in the world. They seem to think that these folks don’t deserve the wealth that they have or that they should do something to help the world, etc.

I find this interesting because I think most really rich people are rich because they do that very thing: Help people and make many people’s lives better.

Let’s take the example of Jeff Bezos and see how a guy like that helps — literally — millions of people have better lives.

First, he directly employs over a million people. That’s a million people who have jobs and food and a roof over their heads. And yes, that includes the drivers and warehouse folks. They have jobs. They think they are better off working there, otherwise they wouldn’t be working there. People seem to presume that they know better than the warehouse workers themselves what wage they should accept.

Second, Bezos has built huge amounts of wealth for other people. Senior executives at Amazon are multimillionaires, even billionaires (and so this article works recursively for them). Middle management have good jobs at good salaries. It’s a great place for early career people. Many, many, many people have good, wonderful lives because of the wealth he has created and the jobs he provide. And let’s not even talk about the people who benefit from Amazon employees having all that wealth (Oh my! The dreaded “trickle down” economics!)

Third — he created a way for businesses to reach customers that they otherwise would not reach. His third-party vendors sell billions of dollars worth of products and employ millions of people in that process. I frequently buy products from small businesses on the Amazon platform that I never would have found otherwise.

Fourth, Bezos has utterly revolutionized retail for hundreds of millions (billions?) of people throughout the world, giving them access to products they might not even know existed, making it immensely easy to access those products. The return process for purchases that don’t workout is dead simple. All of this is value that benefits huge swaths of humanity.

Fifth, he’s help make ordinary folks who hold 401(k)s and other retirement vehicles better off by creating a company whose stock has dramatically grown in value. That stock sits in many retirement accounts, enriching all kinds of folks from all walks of life.

Sixth, Bezos buys stuff. Sometimes he buys really expensive stuff, like his three-masted yacht. Some folks look at that and think “That’s obscene! It’s too much! No one needs that!” I myself see jobs for the people taking care of the yacht, and food on the table for people who build and equip yachts. Nor would I ever presume to tell someone else what they “need.” And that is just his yacht.

That just really scratches the surface. The guy has literally changed the world for the better in so many ways that are almost unmeasurable.

But for some reason, many people seem to take the view that he is a horrible rich guy that needs to be knocked down a few pegs. He’s too wealthy and his wealth needs to be taxed at some exhorbitant rate.

The one thing that I think many people don’t understand is that most rich people don’t have their wealth in cash. Most of the people we think of as rich have a lot of wealth tied up in their companies. Most of Bezos’s wealth is tied up in his Amazon stock and other similar holding.

My guess is he doesn’t have billions of dollars in sitting around in a money market account. So if you think that these rich folks ought to be giving their wealth away, then you need to realize that doing so isn’t that easy, and has a lot of ramifications. And if we decide to tax his wealth, the only way for him to pay it would be to sell his Amazon stock, and that would be, well, really not good.

The process of selling his stock would cause the price drop precipitously and that would have all kinds of ripple effects. People’s retirement funds would lose value and the market itself would likely drop. Jobs would be lost, retirements ruined, and who knows what else. Amazon employees would lose the value of their stock options. All kinds of hell would be unleashed. The whole stock market itself might drop and become volatile as a result. There’s no telling what would happen.

Another thing to consider is that Bezos can’t really do much about the stock price of Amazon (except make it go way, way down by selling all he has…). I mean that he created the company and it was other people buying Amazon stock that created Bezos’s wealth. He can’t will the stock to go higher — only the marketplace can do that. So in a sense, Bezos isn’t responsible for his wealth, everyone that buys Amazon stock is.

Some people are rich because they inherited their wealth. This also seems to bother people. Apparently they don’t “deserve” it. Well, perhaps not. Maybe none of us deserve anything we have — hard to say. However, these folks have it because their parents decided to give it to them. And of course, one is free to give one’s wealth away to whomever one wants. I guess you can look down your nose at people with inherited wealth, but I don’t view that as a very kind thing to do. Envy is not a quality I find becoming.

Shoot, given all that, I say Bezos isn’t wealthy enough.

Added: I had a further thought on this: The fact that people have wealth harms no one, and helps a lot of people. Unless a rich person turns all their assets into cash, gold, or some other physical asset and hides that in vault or under the mattress, or something, the existence of their wealth harms no one. Now, they can do harmful things with their wealth, but that’s a totally different matter. The actual existence of the wealth harms no one.

More Added: An additional point here is that the only real way to prevent people from getting as rich as Jeff Bezos is today is to either limit the market capitalization of a company (literally limiting the stock price) or limiting how much of a given company anyone can own. Both are complex problems. And both, of course, will result if few jobs and few people willing to take the risks to create companies.

In other words, if we don’t let people get filthy rich, then everyone will be worse off.