The stock market listing of SpaceX has sparked celebration from Wall Street to Silicon Valley, but economist Gabriel Zucman warns that the rise of trillionaires poses a grave threat to democracy. In a stark opinion piece, he argues that extreme wealth translates into extreme power, enabling the super-rich to stifle competition, shape public discourse, influence policy, and even buy elections.
The Historical Perspective
Zucman notes that thinkers from Aristotle to modern scholars have warned about the corrosive nature of extreme wealth. Even conservative icon James Madison, a key architect of the US Constitution, compared wealth inequality to war in its toxicity for democracy.
The Return of Extreme Wealth
After World War II, progressive taxation nearly eliminated extreme wealth. However, it has surged back. In the UK, the wealthiest 200 families now own 20% of GDP, up from 5% in 1989. In the US, the top 0.00001%—just 19 households—control 14% of GDP, far exceeding the Gilded Age peak.
Real Power, Real Consequences
Zucman dismisses the notion that billionaire wealth is 'virtual.' He cites Elon Musk's purchase of Twitter and subsequent influence on politics, including his role in the 'Department of Government Efficiency' (Doge), which cut USAID funding—potentially leading to millions of deaths, according to a Lancet study.
A Solution: Taxing Billionaires
The economist proposes a minimum tax of 2% on wealth exceeding $100 million, ensuring the super-rich pay their fair share. In the UK, this could raise £15 billion annually from just 1,000 families. He contrasts this with the £1.5 billion saved by cutting winter fuel allowances for retirees, calling for a break from the logic that burdens the poor while protecting the wealthy.
Zucman concludes that no one should live in a society where individuals amass trillion-dollar fortunes, as such wealth inevitably distorts markets and democracy. The time to act is now.
