The untenable capitalist case against billionaires

In the historical case for abolishing billionaires, Linsey McGoey formulates a capitalist argument against inequality and billionaires, by alluding to the relevant views of intellectuals of yore such as Adam Smith. While I appreciate any effort that undermines the conservative narratives, and am aligned with McGoey’s underlying values, I am not convinced this approach can be effective.

The fundamental problem is the very notion of a capitalist critique of billionaires. I hold that, upon closer inspection, it leads us to the untenable position of a “capitalist critique of capitalism”, because it ignores the political dynamics at play.

The quintessential institution of capitalism—the conditio sine qua non of this system—is property rights. No rich person, no billionaire can ever exist without the legal framework that supports and protects claims on tangible or intangible goods. By “legal framework” we mean more than a mere corpus of legislation, as it implies the presence of a state apparatus with the capacity to both promulgate such laws and, most importantly, enforce them by means of supreme political authority (sovereignty). Enforcement encompasses the use of force, which spans everything from security forces, to courts, and prison systems.

This is why the notion of an unfettered free market is essentially impossible. Either you have an instituted free market, which includes at minimum the baseline of property rights and concomitant institutions, or you have the rule of the jungle. By the same token, I find the idea of “anarcho-capitalism” to not only be a contradictio in terminis, in that capitalism presupposes an archy, but also a fundamental misunderstanding of how property rights can be maintained over the long term without the use of force or the permanent threat thereof.

Once we couch capitalist economics in terms of their underlying politics, it no longer makes sense to argue along the lines of an idealised free market, as if that were an objective benchmark by which to compare degrees of capitalism. We can go straight to the moral point of whether we want some individuals to hold far more power than others. The argument thus switches from economic criteria to power relations between people.

The shift in focus is necessary to avoid the pitfalls of the capitalist thinking on such magnitudes as so-called “efficient markets”. How can you curtail a billionaire’s power without hindering their presence in the markets they partake in? How can the polity, for instance, break the billionaire status of Mark Zuckerberg while keeping Facebook in tact? The short answer is that this is not possible and that corporations will have to be radically refashioned as well. Which then means that we will have to tear apart the fabric of legal persons to the effect that one corporation cannot own others and, furthermore, that a real person’s ownership of corporations can only be limited in scope.

This line of reasoning means that we are no longer thinking in terms of efficient markets per se. Our goal is to contain the power of the economic elite, so that we can avoid injustices in our daily life but also the degredation of democracy into plutocracy. To that end, we would be willing to forgo some ‘efficiency’, though I disagree with such narrow economistic concepts for understanding the complexity of the real world, in favour of the greater good of preserving social peace and abolishing the control of human by human.

I repeat: why bother with the whole capitalist or free market mindset if your objective is to ultimately oppose it? Why try to be a false friend and in the process frame your thinking by categories you do not recognise or indeed approve of as the midpoint of any debate on the matter?

Moving on, I would suggest that capitalism presupposes inequality and indeed an economic elite because it has always been the system whereby all state interventions are aligned with the interests of capital owners (yes, capitalism is a form of interventionism, the litanies of naive neoliberals notwithstanding). In practice, “capital owners” are reduced to a select few that not only hold capital, but actually control the very access to the industry at hand. I call them “platformarchs”. They are in charge of the platforms on which all other economic activity can be based on. The platforms consist of critical infrastructure and/or key intellectual property. Platformarchs are not mere market actors but enablers of the markets they participate in. Think of how Facebook and Google are the platform controllers of the advertising business online.

Platformarchs exist in a symbiotic relationship with the state, both because their power is an extension of the legal-institutional architecture, but also due to the fact that the state finds it expedient to maintain only a handful of major actors in any given industry. A two-tier system of oligopolies framed by complementary market forces (i.e. the capitalist order), makes the exercise of governance much easier than having to wield power over a largely diverse, heteroclite, heterogeneous whole.

Against this backdrop, the phenomenon of an economic elite amassing the majority of the world’s wealth is not an irregularity but an expected outcome. It also explains why the right wing forces, broadly understood, have no trouble swinging from the political centre to the far right, given the right circumstances. The very design of the establishment rests on the uneven distribution of resources which, at scale, produces billionaires. It follows that a capitalist case against this concatenation of phenomena cannot actually be inherently capitalist.

Social democrats have always dreamt of managing capitalism in some supposedly humane way. And we have ample evidence to show that this task is futile, since social democracy shares the exact same gigantist principles as those of explicitly pro-capitalist forces, namely, that an omnipotent state will ultimately be in charge of people’s lives and that everything will be controlled at the political centre. I already formulated an argument along those lines in yesterday’s article on the shortcomings of technocratic communism, so please read that as well.

To press on the point of social democracy being gigantist, consider the typical scenario of “guaranteeing jobs”. The state will go to great lengths to ensure that a given capital owner, say, an industrialist keeps their business activities within the national borders. The government will come up with all sorts of so-called “incentives” to entice the industrialist, such as indirect payments, favourable treatment, and even implicit state guarantees that result in outright bail-outs in times of a major crisis. Just think about the spurious argument of “too big to fail” in light of “protecting jobs” and you already have a social democratic, ostensibly “broad-based” as the bureaucrats like to call it, recipe for preserving oligopolies.

The abolition of billionaires cannot be separated from the opposition to inequality at-large. It can never be formulated in terms of the constructs it seeks to undo, nor can it be predicated on values it does not share. It must rather be defined counter to them: a revolutionary power impulse that emanates from an outright anti-capitalist view of the world.