The Trouble with Billionaires

How the Super-Rich Hijacked the World (and How We Can Take it Back)
By Linda McQuaig and Neil Brooks
UK edition: Oneworld 2013.

By Joanna and Jack Santa Barbara (reviewers) | 2014-01-01 11:00:00

Did you grow up in the period of the 1940s to the 1980s? If so, your character was formed during a historical blip of greater income equality than before or after that time in the UK, US and Canada. The fact that you’re reading Peace Magazine may have something to do with growing up at a historical time that valued economic equality more. Inequality, it appears, depresses political interest and participation due to an accurate public perception that only the very rich have much influence over policy outcomes. More equal societies produce more politically empowered citizens, according to data in the book under review.

The post-1980s rise of the plutocracy in the Anglo-American countries and their adverse effect on those societies is the focus of The Trouble with Billionaires by Linda McQuaig and Neil Brooks. They originally wrote a book by this title for a Canadian audience, with the subtitle Gluttony and Hubris in an Age of Epic Inequality. Since then they have written a version for the US called The Billionaire’s Ball and now one for the UK with the above title.

The authors skilfully convey the truly extraordinary proportions of inequality in these societies where greed has been transformed from a sin to a virtue. The UK version is, we think, the best of the three, with particularly good research data. Well-written, highly readable, even humorous at times, the book challenges myths about the extremely wealthy, such as the belief that they deserve their unimaginable riches. The common treasury of knowledge in our society, accrued over the ages by millions of increments, is the foundation for today’s wealth-producing activities. Because this treasury belongs to the whole of society and is shared freely through education, libraries and internet, McQuaig and Brooks argue that part of the wealth generated by the extremely rich should return to society.

The authors trace the very deliberate promotion of pro-market, anti-tax, anti-regulation, anti-social welfare and anti-Keynsian economic ideas over the same period in which social welfare provisions were increasing equality and economic security. Scores of think-tanks were funded by the extremely wealthy. Riding this wave, Margaret Thatcher and Ronald Reagan turned the trend toward equality backwards, enabling the “return of the plutocrats” through changes in regulation and tax structure. The authors are deeply concerned that current conditions of extreme inequality in wealth are incompatible with democracy; we have instead, they say, a functioning plutocracy.

The authors argue that the “failure to tackle the climate change crisis is the most potent illustration of how the rise of a global plutocracy” has undermined “democracy to the point that the world community appears to be losing its ability to protect itself,” potentially threatening human survival.

The authors, one of whom (Brooks), is an expert on the impact of taxation structures on economic and social outcomes, advocate changes in taxation to remedy these adverse impacts:

The income tax should be made more progressive. They recommend a tax level of 70% on incomes above a million pounds per annum. This was the upper level in the UK in the 1940s to 1980s.
Close the loopholes that now riddle the income tax system and almost exclusively benefit the rich.
Support international efforts to clamp down on tax havens. The data on this issue are astounding: “Those in the top 0.14 percent, who essentially make up the global elite, hold almost half their wealth (about 12.5 trillion pounds) in tax havens.”
Support the international implementation of a Financial Transaction Tax, sometimes referred to as the “Robin Hood” or “Tobin Tax.” This will serve to curb unproductive investment in speculation (gambling with other people’s money) as well as redistribute wealth.
Introduce a genuine, progressive inheritance tax.
With the money from the inheritance tax, establish educational trust funds for every child in the country.

This is an important and courageous book.

Reviewed by Joanna and Jack Santa Barbara, New Zealand-based activists.