1. Start a company
2. Issue 1_000_000 shares to yourself
3. Find a friend who owes you a favor, then issue another share in the company and sell it to them for $1000
This is an extreme example, but most of the people on the world's richest list have been able to similarly inflate their net worth through illiquidity. Market caps are a misleading way to measure wealth. To take another example, the market cap of Tesla is based less on the company's physical assets than the anticipation of earnings over the next 20-30 years. My own net worth would look a lot better if it was calculated using the same methodology.
I'm not trying to argue that inequality doesn't exist, but I think this obsession with the paper value of the 1-percenters is a distraction from the fact that reducing inequality needs to ultimately involve the redistribution of physical assets and labor.
If we get obsessed with confiscating the abstract financial assets of billionaires, we will likely find out they don't have much buying power when being traded for real things like housing or energy.
1. Start a company 2. Issue 1_000_000 shares to yourself 3. Find a friend who owes you a favor, then issue another share in the company and sell it to them for $1000
This is an extreme example, but most of the people on the world's richest list have been able to similarly inflate their net worth through illiquidity. Market caps are a misleading way to measure wealth. To take another example, the market cap of Tesla is based less on the company's physical assets than the anticipation of earnings over the next 20-30 years. My own net worth would look a lot better if it was calculated using the same methodology.
I'm not trying to argue that inequality doesn't exist, but I think this obsession with the paper value of the 1-percenters is a distraction from the fact that reducing inequality needs to ultimately involve the redistribution of physical assets and labor. If we get obsessed with confiscating the abstract financial assets of billionaires, we will likely find out they don't have much buying power when being traded for real things like housing or energy.