Even if you don’t follow Elon Musk on Twitter (even though you absolutely should), you will have likely seen his recent conversation about his billionaire status. Replying to an accusation that his being a billionaire simply means he ‘hoards wealth’ from the rest of the world, Musk responds:
“No, it means I created jobs for 50,000 people directly and, through parts suppliers & supporting professions, ~250,000 people indirectly, thus supporting half a million families. What have you done?”
Musk is absolutely spot-on with his rebuttal here. All too often, the affluent and very-wealthy few are dragged through the mud simply for the amount of cash in their bank accounts. This alone, many seem to believe, demonstrates the dangers of capitalism, where the few prosper at the expense of the many.
Not only is this critique woefully outdated, but it misunderstands the very nature of free trade in itself.
Let’s start by addressing the latter critique; that capitalism allows billionaires such as Musk to reach their status only through hoarding wealth and exploiting the rest of society. First, this claim falls flat in its perception of wealth and value, since it implies that the billionaires of the world simply take money from the rest of society, and give little or nothing in return.
This is simply false; trade cannot be a zero-sum game. Musk did not make his millions like some kind of robber-baron of yore. Rather, he created a product good enough that people were willing to exchange monetary value for practical worth. Bill Gates did the same with the home computer. Steve Jobs did the same with the iPhone.
To say that the process of becoming a billionaire is exploitative, or a matter of hoarding wealth, thus ignores the fact they must create as much value as they earn. Billionaire entrepreneurs ‘give back’ to society not in monetary value, but in jobs, useful products, and innovation.
Sadly, this will likely fall on deaf ears. In a world of blatant income and wealth inequality, billionaires (understandably) provide a useful scapegoat. After all, how can it be fair that the infamous 1% can enjoy unparalleled luxury, while the rest of the world lives in squalor? This is the rhetoric of popular politicians such as Bernie Sanders of Jeremy Corbyn, and has proved popular with many voters.
But this rhetoric is not only hyperbolic to the point of untruth, but it only holds up if you take a very, very narrow worldview.
To inject a little capitalist optimism, let’s look at just how far the world has progressed. Global poverty has decreased massively, the middle-class has expanded, and economic growth has skyrocketed living standards over the past century. This has all been thanks to the ever-increasing trade and innovation made possible by global capitalism.
Thus, while Sanders and Corbyn may be correct about rich people getting richer, what they ignore is the fact that everyone else is as well.
People like Musk cannot, therefore, be fairly accused of hoarding wealth. In fact, in building their businesses and filling their wallets, they’re providing the infrastructure and opportunities for everyone else to advance as well. It is this effect of innovation and growth than Musk captures so well in his tweet.
It’s paramount that the bigger picture be seen here. The world is getting better, contrary to what politicians and the media will tell you. Violence, famine, and disease have been on the decline, no-one sees the benefit more than the poor who are lifted out of poverty as a result. While it might seem that billionaires build their fortunes on the backs of the impoverished, in reality they represent the best motor of growth and prosperity.
In understanding this, we can avoid falling into the traps of populist rhetoric and harmful collectivist ideology, and ensure a prosperous future, for all, for years to come.