In defense of billionaires

Elon Musk, CEO of Tesla and SpaceX. (Photo Agency via Shutterstock)

Billionaires make easy villains. And no wonder. To quote the historian Bernard Lewis, “It is not possible to be rich, strong, and successful and be loved by those who are none of these things.”  

Attacking the uberwealthy makes for vivid campaign soundbites. Billionaires serve as handy populist punching bags, reliable targets for social-media outrage. To rail against inequality, all a politician or activist has to do is tick off a few big names known to all: Elon Musk. Jeff Bezos. Mark Zuckerberg. A simple morality tale follows: In a world of need, no individual should command 10-digit fortunes. And if any of them do, society should force their fortunes through a filter of heavy wealth taxation. 

This story is alluring in its simplicity and intuitiveness: “Who really needs that much dough? You can only live in one mansion at a time, right?” But it is also dangerous, because it ignores how such wealth is created in America, who actually benefits from it, and the negative consequences of demonizing private fortune. 

Rather than condemn all billionaires, we would be far better off broadly distinguishing between two different types: productive billionaires, who build enterprises that generate widespread prosperity; and rent-seeking billionaires, who extract gains through political favoritism, resource monopolies, or financial gimmickry. The former can be paragons of economic dynamism; the latter, parasites on it. Lazily lumping the two together and treating them the same obscures reality and invites policies that would imperil innovation-driven economic growth.

A rally near the U.S. Capitol in Washington, D.C., on April 10, 2025. (Bryan Dozier/AFP via Getty Images)

Innovating for everyone 

The claim that all billionaires are inherently immoral rests on a false premise: that wealth and virtue cannot coexist. To make this case, critics point to jarring juxtapositions – like the existence of superyachts moored in Monaco while homelessness festers in San Francisco – and argue they prove that the system is badly askew. Yet the persistence of inequality does not prove that the wealthy are necessarily immoral or their wealth illegitimate. 

Take Bill Gates. Software produced by Microsoft, the firm Gates cofounded in 1975, helped power the PC revolution in the 1980s, enabling productivity gains that reshaped business and daily life – not to mention pouring money into millions of worker retirement accounts. The social gains Gates produced long predated his philanthropy. To suggest that he and his vast wealth only became moral once Gates became a philanthropist is to misunderstand how U.S.-style entrepreneurial capitalism works. Societies benefit not merely from big-dollar donations but from the goods and services that entrepreneurs bring into being. 

Indeed, as the economist and Nobel laureate William Nordhaus has calculated, innovators capture a mere 2% of the value their inventions generate; the rest goes to consumers, in the form of lower prices, better products, and higher living standards. If Gates (or Musk or Bezos) pocket a fortune in the process, that fortune is still is a small fraction of the overall value to society – and millions or billions of individuals – that they generate. Banishing billionaires would mean banishing the positive-sum process that is essential to sustained and dispersed economic growth in the United States. 

Capitalism, in its best form, should reward bold risk-taking. In embarking on uncertain ventures, entrepreneurs wager their personal wealth and the security offered by more conventional career paths. Many of them fail. Those who succeed may reap extraordinary gains. But that is not an aberration; it is a feature of a system designed to encourage experimentation. Wealth caps or confiscatory taxation would alter these powerful incentives. If the potential payoff to taking entrepreneurial risks shrinks, fewer people will take the plunge. This would result in fewer companies being founded, fewer technologies being invented and commercialized, and fewer jobs being created.  

Consider the case of Elon Musk. Having made a fortune from PayPal, he then risked most of that money on Tesla and SpaceX – both of which teetered on the edge of bankruptcy in 2008. Few investors were willing to underwrite such long shots. As an analysis by the University of Chicago economist Steven Kaplan shows, had tax authorities confiscated a chunk of Musk’s PayPal windfall in the way some proponents of wealth taxes have advocated, neither company might have survived. But they did not, and today, Tesla produces advances not just in autonomous electric cars but also in robotics, batteries, and energy storage. SpaceX’s reusable rockets have cut launch costs to a fraction of their former level, unleashing a boom in satellites, bolstering U.S. space defense, and edging humanity closer to becoming a multiplanetary species. 

Or take Jeff Bezos. In 1994, Bezos walked away from a lucrative Wall Street career to launch an online bookstore out of his garage. For years, Amazon bled red ink and was ridiculed as a relic of the earlier dot-com boom. Yet Bezos persisted, patiently building a logistics and cloud-computing behemoth that today underpins vast swathes of commerce and even the government. As Amazon grew, consumers enjoyed lower prices and faster delivery, and programmers and developers gained cheap access to storage and computing power. The personal fortune Bezos ended up amassing is inextricable from all that social value – even as the company has weathered union drives and antitrust scrutiny that some see as the inevitable tensions of its market dominance. Kaplan, the University of Chicago economist, estimates that a wealth tax might have forced Bezos to dump a quarter of Amazon stock right after the year 2000 dot-com crash, potentially crippling the firm.  

In both cases, the trade-offs are stark: a marginally fairer distribution of wealth would have come at the cost of dynamic enterprises that employ thousands and seed entire industries.

Jeff Bezos, Amazon CEO and Blue Origin founder, speaks at the unveiling of the New Shepard rocket in Colorado Springs on April 5, 2017. (Matthew Staver/Bloomberg via Getty Images)

Bootstrap billionaires 

The United States is not unusual for having billionaires; what makes it extraordinary is the type of billionaire it produces. Roughly 70% of American billionaires are self made, compared with fewer than half in Western Europe, where fortunes tend to accrue through inheritance or luxury brands. The American economic system – which is characterized by high levels of venture capital, flexible labor markets, and a tax system that rewards big entrepreneurial swings – channels talent into company-building. Europe’s warier stance towards wealth, combined with heavier taxation and regulation, yields fewer entrepreneurial fortunes and more sclerosis. 

Emerging markets illustrate another divide. Russia’s oligarchs or Mexico’s telecom magnates amassed fortunes via one-time privatization deals, political protection, or monopolies on certain natural resources. Such fortunes, which stem from appropriation, not innovation, breed cynicism, anger, and disaffection in the countries where they exist. They represent what the scholars Daron Acemoglu and James Robinson call “extractive” systems, in which the elites can enrich themselves by capturing the state or monopolizing its resources, stifling innovation and broad-based prosperity. Citizens of such countries understandably conflate “capitalism” with corruption. Yet the existence of rent-seekers abroad is no reason to hobble productive entrepreneurs in the United States. 

Indeed, a glance at the global picture reveals some truths to which we should all pay attention. Today the most dynamic economic sectors in the world – digital platforms, biotech, space, and artificial intelligence – are disproportionately shaped by U.S. firms led and backed by American billionaires. Europe, for all its social democracy, has produced no equivalents to Tesla, SpaceX, or Amazon. China has minted plenty of tycoons, but only under its one-party system, and accruing and maintaining private wealth requires absolute loyalty to the regime. 

Still, some critics argue that great fortunes can undermine democracy. As they point out, vast resources allow billionaires to lobby, shape media narratives, and tilt the rules in their favor. These are all genuine concerns. Yet the remedy to such problems lies in creating transparent campaign finance rules, in the robust enforcement of antitrust regulations, and in curbs on cronyism – not in blanket hostility to wealth. The danger of equating all billionaires with malign political influence is that it confuses cause and effect: The problem is the capture of state power, not the existence of rich entrepreneurs. 

It is also wrong to suggest, as some critics do, that American billionaires do nothing productive with their money. It’s true that some of the 0.01% spend some of their cash on elaborate doomsday bunkers in Hawaii or New Zealand. But they plow much more money back into their businesses, and a hefty chunk into philanthropy as well. According to data from Altrata and the Wall Street Journal, U.S. billionaires have given away or pledged some $185 billion since 2015, and nearly half of that money has gone to education and medical research. The pattern is patchy – a quarter of American billionaires have given away less than $1 million in philanthropic donations over the past decade – but the broader picture contradicts the cartoon-image of Scrooge McDucks hoarding their loot in vaults. Billionaires often allow people with deep knowledge of industries and causes to funnel large portions of their money into universities, laboratories, and civic bodies. This messy pluralism of philanthropy fosters experimentation and diversity in ways that centralized state spending rarely manages. 

A scene from “Blade Runner,” 1982. (Photo by Warner Bros./Archive Photos/Getty Images)

The Blade Runner Fallacy 

Perhaps the most imaginative indictment of billionaire wealth is the idea that today’s tycoons are plotting to abandon the rest of us and our problems – that Jeff Bezos wants to escape to colonies on the moon and that Elon Musk is heading for Mars. Popular culture has primed audiences for this dystopia. In Blade Runner, Ridley Scott’s 1982 classic film, the Earth of 2019 is a ravaged, rain-soaked husk. Floating above a bleak, smog-choked Los Angeles, advertisements invite those rich enough to move to the “off-world colonies.” In recent years, real-world critics have repurposed this imagery to warn that billionaires plan to decamp for the heavens, where they will cackle from above as the earth-bound masses linger in polluted slums. 

It is a powerful narrative device, and one Elon Musk has done more than a little to encourage through his public ruminations and his tongue-in-cheek T-shirts. Yet it is also a delusion. Call it the Blade Runner Fallacy. The idea that billionaires are planning to abandon the rest of us depends on the belief that technological progress can coexist with economic collapse so severe that only a handful of people would manage to benefit. The reality is the reverse. The kind of civilization that could build viable lunar bases or terraform Mars would, by definition, command such abundant energy and advanced engineering that it could also remediate climate change, desalinate oceans, and feed billions. To be sure, that doesn’t guarantee it would choose to do so – history is full of examples, like America’s costly Afghanistan misadventure, where vast resources might have been redirected toward more socially productive ends. But the capacity would exist. A society capable of off-world colonization and machine superintelligence is one capable of solving terrestrial problems many times over. 

Nor does history support the notion of exclusive techno-privilege. Billionaires do not own better iPhones. They do not enjoy premium versions of mRNA vaccines. Consumer technologies diffuse broadly. Even cutting-edge breakthroughs – self-driving electric cars, AI assistants, weight-loss drugs – swiftly move from luxury to mass market. Technological progress, when spurred by entrepreneurial risk, tends to trickle down the income ladder. 

The cinematic caricature of billionaires as sci-fi villains fleeing a ruined Earth reveals less about plausible futures than about cultural anxieties. It makes for potent cinema and convenient rhetoric, but as a guide to policy, it is useless. Better to focus on ensuring that the fruits of innovation spread widely than to indulge dystopian fantasies of plutocrats on planetary lifeboats. 

If Elon Musk or anyone else reaches a trillion-dollar net worth, it will be because their companies created technologies people wanted on a massive scale. Fortunes at that level are possible only when innovations spread widely – when electric cars become mainstream, rockets lower the cost of accessing space, or algorithms reshape entire industries. In each of these cases, the real story is the millions of consumers whose lives are changed by such breakthroughs. 

Societies obsessed with leveling down risk stifling the very dynamism that generates broad prosperity. Better to see large fortunes – when built through invention, not favoritism – as markers of progress. As a society, we should not seek to eradicate the rich, but to expand the circle of opportunity and ensure that as many of us benefit from innovation as possible. Billionaires, at their best, are not evidence of capitalism gone wrong. They are evidence that capitalism is working.