The Trouble with Billionaires

This is an interesting but far from groundbreaking, and ultimately disappointing book. Written by two Canadians, an investigative journalist and an academic, it is aimed at a British audience, with most of its examples drawn from the UK or the US.

Its main argument is straightforward: that the vast inequalities in income that have grown, particularly in the Anglophone world, in recent decades are hugely damaging, but that, contrary to the neoliberal common sense, they can, and should, be reduced by the tax system.

This is an important argument to put and one that the authors back up with an array of facts about the distribution of income in various countries and the impact this has on a variety of economic and social trends.

In a set of graphs reminiscent of Wilkinson and Pickett’s The Spirit Level they demonstrate that higher tax rates, such as those in the Nordic countries, have positive outcomes for rates of poverty, infant mortality, gender equality, environmental sustainability and workers economic security, among others.

This is what we might expect but they also show that higher tax rates, both in general and as applied to the very richest, do not inhibit economic growth, competitiveness or innovation.

Low tax rates do nothing to improve economic well-being for most people, as the ruling class would have us believe. What low taxes do is make the rich much richer.

This is useful stuff and is enriched by an argument that destroys the idea that the rich deserve their wealth.

The only distinguishing quality of billionaires, McQuaig and Brooks conclude, “is an unusually fierce determination for self-enrichment”. The book is written in lively and straightforward language with apt metaphors and anecdotes, which makes for a good read.

However, the analysis is thin, and when it comes to the promise of their subtitle, the argument is inadequate.

McQuaig and Brooks propose six changes to the tax system, which they suggest would have two effects; redress the negative social effects of income inequality; and by taking money from the rich to put in the pockets of those more likely to spend it, help the economy out of recession.

Such proposals are subject to all the criticisms that apply to Keynesian arguments, but from a socialist point of view they suffer from other weaknesses as well.

Although the authors say that they do not underrate the difficulties of bringing in such changes, there is no consideration given to how the opposition of the rich (with all their acknowledged power) is to be overcome, and this is clearly a top-down programme to be implemented by enlightened leaders with no active role for the working class.

Nor is there any understanding of how the wealth that the very rich have managed to gather to themselves is created in the first place – there is no analysis of the process of exploitation.

Moreover, it is clear that even if implemented these proposals would not go very far in reducing inequalities. On rough calculation someone “earning” 2 million pounds would still be taking home 750,000 pounds, or 30 times the median wage even with these proposals implemented.

As the authors say, “There need be no fear that privilege would disappear in the UK.”

The Trouble with Billionaires is available from Bookmarks bookshop.