Who wants to be a billionaire?

capitalism3 It is official. The UK has more Billionaires per head of population than any other country. London alone has 72. Makes you proud to be British doesn’t it? The nation where the rich get richer (because they deserve it) and the poor get poorer (serves them right; lazy scroungers that they are.) More locally, to me at least, Scotland has 7 Billionaires, up from 6 last year. This from the BBC;

The Grant-Gordon whisky family tops the Scottish element of the list with a fortune of £1.9bn.

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There are now 104 billionaires based in the UK with a combined wealth of more than £301bn, the list says.

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The Grant-Gordon Banffshire distilling family have ousted Mahdi-Al Tajir from the top spot in Scotland. Al-Tajir, whose interests include a development of luxury homes at Gleneagles, is worth £1.67bn, according to the list.

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Sir Brian Souter and Ann Gloag, the siblings who founded the Stagecoach transport empire, have become members of the billionaire club for the first time. They share a fortune of £1bn – an increase of £270m on last year.

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Other Scots on the super-rich list are Sir Ian Wood and family whose £1.32bn fortune comes from oil services and fishing, and the Thomson family, owners of publisher DC Thomson, who are worth £1.2bn.

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Former Harrods owner Mohamed Al-Fayed, who owns an estate in the Highlands, is estimated to be worth £1.3bn, while Jim McColl, of engineering business Clyde Blowers has an estimated fortune of £1bn.

Setting aside the morality of concentrating so much wealth in the hands of individuals, two questions seem important-

  1. Do these people create prosperity for the nation- for working people- commensurate with the position their own assets gives them?
  2. Does their wealth produce anything of worth?

As you look down the short list of Scottish Billionaires, the arguments supporting positive answers to these questions seem weak. Whisky, posh flats, posh shops, mega profits from former privatised industry (transport) paid for by subsidies from the tax payer. There are a couple of industrialists there however. It is impossible to look at this list and not feel that Piketty’s analysis of how wealth rises exponentially, like some kind of run away greed machine, in capitalist economies. I quoted this previously;

Anyone with the capacity to own in an era when the returns exceed those of wages and output will quickly become disproportionately and progressively richer.

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The incentive is to be a rentier rather than a risk-taker: witness the explosion of buy-to-let. Our companies and our rich don’t need to back frontier innovation or even invest to produce: they just need to harvest their returns and tax breaks, tax shelters and compound interest will do the rest. Capitalist dynamism is undermined, but other forces join to wreck the system.

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Piketty notes that the rich are effective at protecting their wealth from taxation and that progressively the proportion of the total tax burden shouldered by those on middle incomes has risen. In Britain, it may be true that the top 1% pays a third of all income tax, but income tax constitutes only 25% of all tax revenue: 45% comes from VAT, excise duties and national insurance paid by the mass of the population. As a result, the burden of paying for public goods such as education, health and housing is increasingly shouldered by average taxpayers, who don’t have the wherewithal to sustain them.

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Wealth inequality thus becomes a recipe for slowing, innovation-averse, rentier economies, tougher working conditions and degraded public services. Meanwhile, the rich get ever richer and more detached from the societies of which they are part: not by merit or hard work, but simply because they are lucky enough to be in command of capital receiving higher returns than wages over time. Our collective sense of justice is outraged.

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The lesson of the past is that societies try to protect themselves: they close their borders or have revolutions – or end up going to war.

Piketty fears a repeat.

Perhaps then we need to watch carefully for those who tell you that the poor and broken are the problem- they are not, they are the consequences of unsustainable wealth creation by the few. Watch too for the convenient scapegoat-makers, the border-closers, the nationalists. They tend to play right into the hands of the super rich. It is a distraction from the real operation of capital, and a convenient way to wall wealth away from taxation. It also pretends that the problem of austerity is caused by the poor outsider, come to steal our jobs, our houses, our NHS facilities. Blessed are the poor, but who wants to be poor? We all want to be Billionaires…

One thought on “Who wants to be a billionaire?

  1. A social responsibility for what they do with their wealth? Ann Gloag bought Manstone airport in Kent with a promise of keeping it open for 2 years. After 6 months it has closed affecting 300 people now without jobs. OK she bought £23m of debt for £1.00. But how much will she make from lots of expensive brick boxes for commuters to journey into London. Will the jobless be able to afford her new homes. Likewise, what is done by the whiskey millionaires – for the Alcoholics, the landowners – for the homeless.

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