The wealth distribution system, such as it is, is dangerously broken. Severe imbalances of wealth distribution are acknowledged to be socially destabilizing. In the past, severe imbalances have been localized in their effects due to the limitations of time, geography, distance and technology that tended to damp out the global economic effects of arrogant misjudgments by the super-wealthy. Historically the usual natural corrective mechanism has been revolution or conquest, locally disastrous, but merely an annoyance at most to the global economy.
Additionally, the relatively insignificant effects of the concurrent past medical technology limited the effects of super-wealth upon differences in longevity between the rich and poor. Prior to antibiotics, gene therapy, transplants, etc., super-wealth could do little more than buy a more comfortable death. In the twenty-first century, however, allowing massive wealth imbalances to continue to grow will have vastly more significant effects: a much longer-lived ruling class will eventually, inevitably, emerge with foreseeable and grim consequences: a medically deprived lower class with lifespans one quarter to one-third less than the superwealthy. In three generations of such disparity a permanent short-lived underclass will emerge, even without any corporate class intent or unscrupulous genetic manipulation, slaves in practice if not in name. Modern technology and globalization have negated prior limitations that kept economic disasters local, amplifying the disastrous consequences of the hubris generated by excessive wealth chasing to global proportions. As we have recently seen, what had been a local fiscal wildfire becomes a global economic firestorm.
What is required is a wealth limit to curtail addictive wealth-building. Where in the Constitution is the article that guarantees an American citizen the right to unlimited wealth? Every American lives in a world of limits: speed limits, catch limits, smoking limits, drinking limits, choice limits, and salary caps, to name but a few, and all these limitations are in accordance with the law. Each of those limits measure individual rights to take a share of the collective resource against the common good and recognize that unlimited taking has negative social consequences. It is time to place and enforce similar limits upon the amount of wealth Americans can control, for the same reasons we place and enforce speed limits, drinking limits, and all the others: for our collective safety and national well-being. Set the limit at one billion dollars, adjusting once a decade or so, allowing those currently over cap four years to draw down their wealth to the limit by allowing them to transfer their excess wealth in an orderly manner, redirecting their competitive zeal into constructive paths. Allow them to donate up to $50 million tax-free to any nonprofit, nonpolitical organization while limiting organizations to accepting four gifts total; pay any amount to reduce the national debt; use $100 million to establish a new nonprofit; gift family and friends up to $10 and $5 million respectively. Such a course would result in a strong vibrant internal economy that would dramatically transform lives worldwide, and restore some international respect to the United States.
I'm not talking about communism: I'm talking about, well, ethical capitalism, or perhaps mature-stage capitalism. A reasonable limit on wealth would allow "trickle-down" to actually function: a living wage for workers could easily be accommodated while harming billionaires not a bit, save for ego pain, perhaps: they certainly wouldn't miss any meals or be lacking for healthcare.
There are other, greater, motivating factors than more profits and greater wealth accumulation: lots of folks aren't motivated by money. Only selfish and greedy people would stagnate, science and such would leap.
To the argument that a cap would discourage progress or innovation I say this:
If Bill Gates had retired when he hit a billion, about the only difference it would have made is that Microsoft wouldn't have stifled so many good competitive products. Gates never was so much of a great engineer as a ruthless businessman. The ideas came from the people he employed.
And if you quit working after hitting a billion, that just opens a position for someone who hasn't reached that yet. And you wouldn't be missed, more than likely. Absolutely no one is indispensable to the economy, there's always someone talented to pick up the slack.
Most of the world's innovations come from people who are simply curious or are challenged by solving the problem itself, not by how much money they can make off of it. Stagnation comes when the business class, itself bereft of ideas, refuses to invest in anything that threatens to change things from the way they are, for fear of losing their position from not understanding the new things.
In a population of some 350 million people, high IQs are, in fact, a dime a dozen: ask any corporate recruiter. And as history has shown uncountable times, "irreplaceable" people have been and are replaced on a daily basis throughout the country.
To those who say wealth is infinite and therefore shouldn't be limited:
The idea of infinite wealth is a misunderstanding of the difference between potential wealth and realized wealth. Realized wealth is always finite at any given moment. It is its aspect of finiteness that gives anything its perceived value. Scarcity drives up the value. For instance, diamonds have value only because of their perceived (actually, tightly controlled) scarcity; if all the diamonds that are actually available were placed on the market, their value would be zilch. Potential wealth may be infinite, but realized wealth is always finite. Since it is finite, acquiring wealth becomes a zero-sum game: more wealth for you equals less wealth for others.
By taking excessive amounts of wealth you rob others of the capital they need to achieve wealth for themselves, too. Too much wealth in too few hands always results in a decaying society as those with wealth seek to keep control of it by preventing the growth of new ideas, products, and innovations that might threaten their position.
Capping wealth for some will create greater wealth for all, as many new inventions and ideas will blossom and create new markets that will create more realized wealth for everyone.
I think that this is what the wealthy fear most: lacking any other measure, as others become wealthy, too, they lose their self-image of superiority.
To those who wonder how to count wealth and how to enforce a cap I offer this:
What counts is the sum total of cash, stocks, bonds, and all other financial instruments, plus all real property such as buildings, land, yachts, aircraft, cars, art, jewelry, furs, and collectibles. In short, anything that carries value and serves as a money sink.
As for how do you police it, you hire forensic accountants (I actually know an excellent one who can find a misplaced dollar in a $100 million budget) to audit them on an annual basis. Some of the "best and brightest" could be doing that work instead of inventing new complex derivatives on Wall Street. Since there are a mere 1348 (last count I had) billionaires in the world the cap would apply to on a global scale, plus some 1,000 more near-billionaires, you'd need about 600 or so auditors to monitor them at 4 per auditor, less for the US alone.
As to how to enforce it, that too is fairly simple. Make the punishment fit the crime. Any monies or property that is attempted to be hidden is simply confiscated: 100% loss, no tax writedown, no comp, just gone, and sold at auction, proceeds to the governments having jurisdiction shared equally between federal, state, county and city (or their foreign equivalents, speaking from a US perspective here). Get caught doing it twice, go to jail for a few years and lose the right to conduct business, period. Get caught more than twice, well, here's a 3-strikes and you're out law I can support: loss of citizenship, confiscation of all property and financial instruments within the borders of the country with jurisdiction and declaration of persona non grata status, and shown the door and no more business for you or any company you might have left.
Capping wealth won't destroy creativity or productivity. Capping wealth won't deny us any new products or innovations. Those arguments stem from the idea that the super-wealthy are personally responsible for all the ideas and inventions that flow from the companies they control. Get real: they aren't. Bill Gates is a piss-poor engineer who stole MS-DOS, but he was smart enough to market it and hire some really brilliant people to do the actual creating, most of whom didn't get nearly the rewards they deserved. Indeed, after a certain wealth point, it is in the best personal interests of the super-wealthy to stifle new inventions and ideas that might threaten their dominance.
Humanity is marvelously inventive, and capping wealth would not stifle it, but rather unleash it, providing desperately needed capital to thousands of inventions waiting in the wings to transform our economies and world. The super-wealthy tend to retard that progress because they happen to like the world as it is, and don't care for it to be transformed.
Even some of the super-wealthy admit they have too much, but under the system we have, they aren't allowed to stop accumulating lest the other sharks rip them to pieces. A wealth cap would allow them to safely retire and actually manage their fortunes wisely. A wealth cap is win-win for most, save only the sociopaths.
It is not a utopian ideal, but rather a necessary and pragmatic evolution of capitalism. Capitalism without a cap is extremely destructive of societies, great for the very few individuals who ruthlessly exploit everyone and everything they can think of without regard for the consequences, but horrendous for those having to cope with the whims and competitions of the callous. Without a cap, there will inevitably be yet another revolution leading to yet more of the same.
Isn't it time we stopped this insane merry-go-round and made a mature decision about when more than enough is enough?
Without a wealth cap we are on the way to overt global slavery.
There would be zero negative effect upon most people's lives, including those directly effected, the billionaires. The biggest negative would be purely emotional for them, and wouldn't effect their capacity to buy anything they wanted. If you disagree, please stipulate exactly what difference that you think it would make in their lives beyond the emotional one. I allow that they might get bored not being able to play money games anymore, but that's curable by simply finding different interests. But would they lack for food? For shelter, for medical care, for any of the things for which we work in the first place?
On the other hand allowing the capital to return to circulation, to be used not for one person's agenda but for the myriad of enterprises that inventive people can unleash would solve many of the issues facing the world today. The economy would be restored and capitalism rejuvenated.
I see nothing but good from such an idea, and very little bad.
What bad there might be, at the bottom it seems to be little more than hurt feelings and nothing provably substantive.
I ask you to think of the real freedom a cap would give: the freedom from hunger and want, the freedom from fear of sickness and homelessness, the freedom from sick sociopaths buying and perverting governments.