Ideas - The Billionaire Age Pt 4 | How democracy can beat back the oligarchs

Episode Date: October 1, 2026

Feeling despair over the threats to democracy coming out of The Billionaire Age? Let alone the predictions we'll see 10 trillionaires within three years. Well, there are concrete solutions. Relatively straightforward ones. Thinkers from Nobel Laureate Paul Krugman, to Dutch philosopher Ingrid Robyens to self-described oligarch and American venture capitalist Nick Hanauer say democracy can win over oligarchy.Listen to episodes in this five-part series, The Billionaire Age:Listen to Part One: How did we get here?Listen to Part Two: Disney heiress on the dangers of extreme wealthListen to Part Three: How oligarchs are taking over the worldGuests in this episode:Ingrid Robeyns is a philosopher and economist. She is the chair in Ethics of Intuitions at Utrecht University, and the author of Limitarianism: The Case Against Extreme Wealth.Gabriel Zucman is an economist and the co-director of The World Inequality Lab. He's also a professor at the Paris School of Economics and the University of California, Berkeley.Nitin Bharti is an economist and lecturer at the University of Western Australia. He is also the South and South-East Asia coordinator at the World Inequality Lab.Lars Osberg is an economics professor at Dalhousie University, in Halifax, Nova Scotia. His latest book is The Scandalous Rise of Inequality in Canada.Paul Krugman is an economist and the winner of the 2008 Nobel Memorial Prize in Economic Sciences.Tim Wu is a legal scholar and professor at Columbia Law School. He is also a contributing opinion writer at the New York Times. His latest book is The Age of Extraction: How Tech Platforms Conquered the Economy and Threaten Our Future Prosperity.Nick Hanauer is an entrepreneur and venture capitalist. He co-authored the book, Corporate Bullsh*t: Exposing The Lies and Half-Truths that Protect Profit, Power and Wealth in America, with Joan Walsh and Donald Cohen. He also hosts the podcast Pitchfork Economics.

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Do you think billionaires will soon or are too wealthy now to have their wealth curbed? No, I'm really confident, you know, deep down and optimistic about the power of the forces of democracy to prevail. Welcome to Ideas. I'm Nala Ayyad. Never before in the history of the world has so much wealth and power been in the head. of so few at the top. Billionaires are often worth more than the GDPs of entire countries. In fact, the net worth of the world's first trillionaire,

Elon Musk, surpasses the GDPs of about 170 countries. But it doesn't have to remain that way. I think we as citizens get to choose our futures. Canadian economist Lars Osberg. We can choose a more equal world, a world where wealth is shared more fairly, but we have to invest ourselves in the political process that demands those changes to institutions. It's not inevitable that we move to a society with greater inequality, greater insecurity, and a continual search by an authoritarian elite for a scapegoat to focus people's anger on

while they profit from the continued concentration of wealth at the very top. So there is a dismal possible future outcome out there. I kind of hope that we don't go there, but it's not for sure. It's a choice. A choice between oligarchy and democracy. What some have called the Battle of the 21st century. This is part four of our series The Billionaire Age by Ideas producer Mary Link.

And while the realities exposed in the first three parts were often dark, there is hope. Today, it's about solutions. When wealth inequality was combated in the past, it took political will. For 12 years, our nation was afflicted. We'll hear nothing, see nothing, do nothing, government. Take American President Franklin D. Roosevelt. He was fundamentally a capitalist. He wanted a thriving private sector, but not one with unlimited power and wealth.

He wanted to save capitalism from itself. FDI first came to power in 1932, defeating Republican Herbert Hoover, who was in power when Wall Street crashed in 1929 and then the Great Depression. years with the golden calf and three long years of the scourge. Nine crazy years at the ticker and three long years in the breadlines. My friends, powerful influences strive today to restore that kind of government with its doctrine that that government is best, which is most indifferent to mankind. Rosanaut laid the blame at the feet of wealthy and powerful people,

many with massive monopolies. They had begun to consider the government of the United States as a mere appendage to their own affairs. And we know now that government by organized money is just as dangerous as government. by organized mob. Never before in all our history have these forces been so united

against one candidate as they stand today. They are unanimous in their hate for me, and I welcome their hatred. FDR is speaking before a large crowd at Madison Square Gardens in New York, on the eve of the second run for presidency in 1939. I should like to have it said of my first administration

that in it the forces of selfishness and of lust for power met their match. I should like to have it said, wait a minute, I should like to have it said of my second administration that in it these forces met their master. FDR went on to win a second term, during which he raised taxes for the wealthiest to 94%, and continued to strengthen social safety nets, part of his New Deal.

Similar policies were enacted in other Western countries. All this helped create a strong middle class for only the second time in 700 years. It lasted several decades into the rise of neoliberalism in the early 1980s. And today we find ourselves back in a way world with massive levels of wealth inequality, historic levels, with the top 10% own an astonishing 75% of global wealth. As of October 26, there are now 20 centi billionaires, individuals and families worth more than $100 billion. That's five more centi billionaires than the previous year.

So just to be clear, like if it was me, if I was the president, the United States today, I would do something pretty dramatic to the people with that kind of wealth. Venture capitalist and civic activist Nick Hanauer. So what would you, what would you do, Nick? Give them 12 months to give 95% of their wealth away to charity. I don't think you'll ever become a presidential candidate in this United States. Probably not. That's what I do. I'd be like, guys, you're either giving it to me or you're giving it all away.

Wow. Because it just is not helpful to anybody that you're worth $100 billion or $200 billion. Okay, this might be a bit too radical for most politicians. Mind you, here's a math. If you made somebody with $100 billion give up 95% of it, they would still be left with $950 million. But Hanauer and others also have more modest suggestions to help fix today's extreme levels of wealth disparity. Because if we continue down this path, it's predicted by 2030, there'll be 10 trillionaires, people with a million million dollars.

That's a frightening amount of power in the hands of just a few non-elected people. So what should we do? First of all, have us discuss the reasons why we should really think about limiting inequality. And second, also, again, opening up the discussion about what kind of society we want, what kind of societies do we want, what kind of world do we want? Belgian, Dutch philosopher and economist Ingrid Robbins. And I think one of the things that neoliberal thinking has done to our political imagination is, it has kind of closed the discussion on what kind of society we want to be. Because one of the things that neoliberalism did was we already earlier discussed that it has slashed the top tax rates.

But in the realm of ideas, it has also basically said, okay, we're beyond politics. We now, we're all liberal democracies and this is going to be the dominant model. And we no longer need discussions about what kind of societies do we want. And I think we're now really in a point in history where it's obvious that this was a lie, that neoliberalism itself was deeply political, even though this ideology tried to pretend to be apolitical. And a quick reminder, beyond lowering taxes for the wealthiest, neoliberalism also favors privatization. So things like utilities and health care are handed over to private companies, not the state. as well, deregulation of restrictions placed on companies such as anti-monopoly laws. There's also weakening of unions and a massive reduction of government spending on public services.

I would say that the central thing you need to do is you need to tear down the neoclassical and neoliberal economic framework. Nick Hanauer. You need to show people that while that framework of thought is mathematically elegant and internally consistent, and broadly understood, it is apicalized. It is essentially a protection racket for the very rich, and it is completely untethered from what actually happens on planet Earth. And many of the very rich are working very hard to dismantle fundamental cornerstones of democracies. Look, right now, in America and the 2020s, we actually do have a fair number of essentially evil billionaires out there. American economist and Nobel laureate, Paul Krugman.

I mean, I don't think that there's any, anybody should show restraint in calling out Elon Musk for what he is. And at this point, there was a little while when we used to think that maybe Jeff Bezos was better. Well, he isn't. I wonder, Paul, though, so there's the oligarchs, the Russian oligarchs who get to the gulag. But the oligarchs that we're talking about the extreme, the centi billion, The Elon Musk's who can control satellite, you know, Starlink, very, very vital things that affect countries, democracies, wars. You have Bezos and all those other people who are supporting Trump and what's happening. And if, for example, Elon, his wealth goes up and down, say it's the trillion, are some of these centi billionaires who are going up towards trillion?

Are they almost too big to fail in one sense? You know, you can lose in the gilded age, people could lose their wealth, but it's almost with that much money and power on top of, you know, having power over the Internet and discussion and everything that, say, the, you know, Facebook or Meta has. My concern is, do they have too much wealth now that it can't be curbed and we can't take away their power? Remember always when we try to think about, you know, can, is it, are the sentiment

billionaires, invulnerable? Are they beyond the reach of politics right or left? You know, can they, are they too big for a reformist political movement to take down? Are they too big for a, for a right-wing government that's decided that they're no longer useful to take down? You have to remember that wealth, you know, what is wealth? It's not as if Elon Musk has a castle full of, full of gold and has his guards around it, that wealth in the modern world is just ones and zeros. It's just digital stuff. It's property rights that in the end are given by governments and can be taken away. One key solution being recommended is imposing higher taxes on the wealthiest, which neoliberal policies have been slashing since the 1980s, arguing with a clear

evidence that the more we allow the wealthy to acquire more wealth, the more wealth will trickle down to the rest of us. Yeah, trickle down. has never worked. It's not for lack of trying. It's been done again and again, and it's one of those things where the people who propose it will not take no for an answer. They'll say, I'm going to cut taxes on the wealthy, and just you watch the economic boom that follows. And then when the economic boom doesn't follow, they never admit that they were wrong. And they just keep on proposing the same thing. Crookman says raising taxes for the rich is a sound economic idea. There supposedly was a time when Sweden, under certain circumstances,

when there was a marginal tax rate of more than 100%, where you actually were worse off by making more money. And I'm not for that. But the United States, the most successful period of economic growth we had was during the generation that followed World War II. And for much of that period, we had a top marginal tax rate of more than 90%. And somehow or other people kept on investing. and innovating, and in fact, we had better economic growth than we ever had before or since.

These days, of course, there are no proposals for a 90% tax on billionaires, but there is a call for countries to sign a global agreement to levy a mere 2% wealth tax on the ultra-rich. Now, to be clear, it would be a tax on their net wealth, not their income, which some billionaires have said is zero, nothing. As in zero income, I'm looking at you, Mr. Bezos. The main proponent behind this 2%

wealth tax is a French economist Gabriel Zuckman. Can you tell me how you came about this and explain it a bit for me? Absolutely, yes. So the idea is to have

a floor, a minimum tax for the super rich, defined indeed in France where a law like that was passed by the National Assembly, defined as people who have more than 100 million

euros in net wealth. And so there's a body of work that shows that these individuals, they pay very little income tax today. But would a mere 2% wealth tax have any real impact? Yeah, so with the minimum tax of just 2% on the wealth of billionaires, 3,000 people globally, that would generate about $250 billion in US dollars in additional tax revenue for the planet as a whole. And that's a lot of money, according to the best estimates that we have. for instance, developing countries, they need an additional $500 billion each year to face the challenges of climate change. And so you can get half of that with just this modest minimum tax on the super wage. Economist Nitaambeharati is the South and South East Asia coordinator at the World Inequality Lab

and a professor at the University of Western Australia. Let's say if tomorrow India starts imposing a very small, 2% of wealth tax on just the top 0.04% of the population, it will result into about 2.5% of GDP. The concentration is so high that even imposing such a small tax on such small population can result in such a large resources which can help in sort of funding the education, health and nutrition aspect in India. It can help Indian government to increase the social spending. So I think we are not there yet. In India, I think at least from my reading, it seems that Indian government is still shy about sort of discussing this openly, but everyone

sees the inequality. It's so visible that you don't need to sort of show them by number, right? Like you go to any big metro cities in India, be Mumbai, Bangal or Delhi, you can see the high level of inequality right there at your face. In 26 alone, the annual wealth of billionaires jumped by 25%. So a 2% wealth tax would hardly make a dent in their soaring wealth. And what is sort of really interesting is that it is a very modest tax, as you've called it. It's only 2%. Why the resistance, who's resisting is the governments?

Is it people who see the American dream kind of philosophy and want themselves someday become wealthy? is it the billionaires themselves? Who is resisting what seems to be a really reasonable idea? It's the billionaires themselves, first of all, and they have good reason to, they hate it, and they have good reasons to hate it, because they understand that the income tax, you know, they don't pay it, so they don't care.

You know, you can increase the top monetary income tax, right? It would barely make any difference for them. The inheritance or the estate tax, you know, it's far in the future. They don't care. But this annual tax on something that's really, hard to manipulate or to hide with no exemption or anything, that would actually make them pay significantly more. So they don't like it. And they're powerful. And they fight for their interest. Zuckman says resistance is also coming from a few still hanging on to the wildly

debunk trickle-down theory and fear that billionaires will move to another country if the tax is imposed. Zuckman has a solution. In 2024, Zuckman presented his two percent global tax proposal to G20 world leaders in Brazil. I had a pleasure to work with Brazil when Brazil chaired the G20 in 2024. And we put this proposal, this idea on the agenda, on the map. It was the first time ever that people at the G20 finance ministers, head of state, discussed this very topic of extreme wealth, what to do about it. And even the first time it was discussed at the G7.

The G7 was creating 1975. Think of this. you know, half a century, they meet all the time, never once have they discussed what is presumably one of the most pressing issue of our time. They never once discuss the problem of extreme wealth. Of extreme wealth, of the fact that the super rich are not tax, of how to address that issue collectively. And so that in itself, the fact that now it's in the declarations, it's been discussed, it's a huge progress. But you do need what you say is the coalition, the willing. It doesn't have to be everybody on board.

It doesn't have to be all the countries. But I would imagine that it has to be some of the major countries. And so what reaction are you getting from the G7 into this? I know that Spain, the financial minister there, has been supportive of the idea of the 2%. I think Brazil is also – but what about the big players? I'm not even including United States in that. France is supportive. South Africa is supportive.

Outer of the G20 have countries like Mexico, like Chile. and more important than that people are supportive. You know, everywhere you have 75%, 80% of the population that is strongly in favor of proposals like that. In fact, in many countries, this is the number one most popular economic policy proposal. You know, it's an overwhelming majority of people across party lines. So that's what makes it makes me optimistic.

And then on your question, do we need an international agreement? do we need all countries or all big countries to be on board? The answer is no. What we need is at least one country. In any country on its own, and it could be Canada tomorrow, can do it. Can you say, look, our billionaires, our centimonaires, they will have to pay minimum 2%. And what they're going to say is very simple.

They're going to say, oh, if you do that, they don't like the tax because they understand it would be quite effective. And so what they will say, they will say, oh, we will leave the country. They will threaten to leave. And what you have to answer is no, because. what we are going to do is if you live, we will keep taxing you after you've left. And why? First, because that's justified. If you've become a billionaire in Canada and now you move to the Cayman Islands, look, your wealth was in part, everybody agrees with that as collective

creation, benefit from education and health and so on in Canada. And so you still, you will still have to pay the tax for five, ten years who can discuss after you've left if you move to a country that doesn't tax you. And number two, we can do that because, you know, 10, 15 years ago, there was a lot of financial opacity in tax havens. There was bank secrecy, but now there's an automatic exchange of bank information. So even if you move to the Cayman Islands, it's possible to track your wealth and your income and to keep subjecting you to that tax. And so what it means is that any country on its own can do it. And as soon as we will have countries that Canada or France or Brazil doing it,

what history shows is that that's what pays the way. for international coordination. I'm curious, what has been a reaction from Canada? You've met lots of people in the G20. We have this share, this high share of wealth. Have you had any reaction from Canada about the 2% proposal? You know, in our conversations with the previous government, there was interest.

He's referring to Justin Trudeau's government here. And there was Christian Friedan, in particular, seemed supportive on the substance of the idea. Like many world leaders, in fact, when you explain the idea, the proposal, most of them say, and that seems to make her not have sense, you know, we have to go there. Now the question is who's going to have vision and the leadership to say we will pave the way. Canada did not come out in support of the wealth tax when I was finance minister. Christia Freeland, why don't we have a wealth tax?

She's a few concerns about such a tax, including the fear that Billion, millionaires may move. It is very easy for Canadians to move south of the border and operate in the United States. It's easy for Canadians to stay here, but to invest their money in the United States. But it almost feels like a scare tactic that they're using because not everybody's going to move. And one third of billionaires now, they're inherited money. The majority of billionaires aren't innovators. They're in the finance business.

Now, I don't know how people would feel like that, but they're not necessarily creating jobs, per se. And so, I mean, there's issue there too, right? Look, it can be a scare tactic. And in every country, an argument that is made is you can't put this tax in place because all the innovators, all the wealth creators will leave. Of course, it's a scare tactic. But for a country like Canada, it's also a reality for us. And so we have to bear it in mind.

But the French economist, Gabriel Zuckman, says, politicians have to realize these threats are overblown. They think that it would be great to do that if we could do it, but we can't, because we live in a globalized world, and the rich we move, and it's just hopeless. It's like shooting ourselves in the foot. It's self-defeating. And that's why it's so important to explain how those forces of tax competition, threatening to move and so on can be tamed, that there are actual, practical, actionable solutions

to make this tax work even when there's no or not yet an international agreement that it can work unilatero. Still a wealth tax is a tough sell. France's National Assembly took some initial steps towards passing one, but the country's Conservative Senate voted against it. And in 26, the proposal was excluded from the budget, making a group of French billionaires who had pushed against it very, very happy. But despite these setbacks, Zuckman hasn't given up, and said the 2% wealth tax remains a viable solution.

Paul Krugman. I'm all for a global wealth tax. I think there's a lot to be said for it, except political practicality. It's very hard to implement tricky. I mean, it could be done. I mean, among other things, if we could have agreement among the world's advanced

nations, advanced meaning not a moral thing, but just in terms of per capita GDP. But if the world's wealthy countries agreed in common to tax large fortunes, we could do that. Modern governments have enormous administrative capacity if they choose to. We could certainly manage to do it, and it would do a good thing. There's a lot to be said for a wealth tax. It's also probably not anything that can happen anytime soon. But maybe it is starting to happen. On November 3rd, Californians will vote on a proposal for a one-time 5% wealth tax on residents who have more than $1 billion in assets.

90% of the money raised would go to health care and 10% to food assistance and public education. Google co-founder and centi billionaire Sergey Brin has spent more than $100 million fighting it. Despite the pushback, polls indicate a slight majority in favor. of the tax. This is Ideas. I'm Nala Ayyed. What if I told you that most of history's underwear wasn't remotely close to the underwear you're wearing right now? Hi, I'm Greg Jenner, host of the Your Dead to Me podcast, and we're back with a brand new season. And if you're a fan of fashion trends of the past, you'll love our newest episode on the history of underwear. We explore how our underwear has changed throughout

history and whether TV depictions of Regency era ladies in their lacy underwear are truly accurate. Listen on BBC.com or wherever you get your podcasts. Wealth taxes aren't the only solution to inequality. There are others, like closing tax loopholes that favor billionaires. This is part four of Ideas producer Mary Link's series, The Billionaire Age. You had this great line that you quoted, socialism for the rich and capitalism for the poor. Yes, I don't think I invented this, though. No, but it's a great line. Yeah.

Belgian Dutch philosopher and economist, Ingrid Robbins. So I really think there's a lot of tension between imaginations that we have. We have these myths about the rich being the generators of welfare, the heroes, the exceptionally good people. And yes, some of them are exceptionally talented. But there are hardworking people all over society. And the rich have just over the last kind of five decades taken exceptionally well care of themselves through hiring the people from the wealth defense industry. The wealth defense industry, a collection of professionals like lawyers, private bankers and accountants, all trying hard to find loopholes so the ultra-rich and corporations can avoid

paying taxes, often through tax havens. Around a trillion U.S. dollars and profits were shifted by multinationals to tax havens in 2023, according to the latest research by the EU Tax Observatory. And an estimated $12.6 trillion belonging to wealthy individuals was held in tax havens, 12.6 trillion. That's a lot of unpaid taxes that could have gone towards public spending. It's not just a revenue that's missed, but it is also the general feeling that people have

that the game is rigged. And I think that explains at least part of the increase in votes for populist parties. And I don't think you can blame people for it. So many people, and I think rightly so, feel that there is an elite in the world, an economic elite, that has really really taken good care of itself and of the top 10, 20, 30% of the population. So we need fiscal fairness also because we have a social contract in each country, but we also have a social contract in the world. So that's an implicit thing.

It's basically the kind of implicit agreement that we have between all the people that live together. and the rules need to be fair and they need to be fair for everyone. And if people see that the richest can get away with stalling their money in tax havens or having all these fiscal constructions, then of course they become resentful towards politics. And I think it's a rational reaction. So we need to close tax havens and we need to enforce the rules, the fiscal rules, not just because of the revenue it will generate, also because for political reasons, to strengthen democracy.

Wealthy Canadians and large corporations have at least $682 billion in known tax havens, a whopping 165% increase since 2014, according to Canadians for Tax Fairness. The resulting loss to public revenue is estimated to be at least $15 billion annually. But the Canadian government continues to allow the use of tax havens. What would you say to Prime Minister Carney directly about why he should rethink the tax havens? So I think Canada is in a really interesting position because Canada is a major country. It's a dominant player. And I think it has also, the Canadian voters have really also made a fist towards the politics

that Trump wants to implement. So I think Canada may actually be in a position to become a moral leader, to take leadership in the moral realm. And I think the area of curbing illicit financial flows and closing tax havens would be low-hanging fruit to show moral leadership. Tax havens are a bad thing. Economist and Nobel laureate, Paul Krugman. They should not exist.

They do exist. And people are. going to make use of them. And there's only a certain amount of moral suasion. If there's somebody, I mean, if you are a money manager, unfortunately, you kind of have a fiduciary duty to your clients to take advantage of some of the things out there, even if you think it's wrong. But if you are going to be a moral crusader while trying to also be a fun man,

you're probably not going to keep the fund manager job. But the tax havens, the right thing to do is to have treaties to close down those havens, or if we can't get those to at least take unilateral action to close them down. I mean, individuals is a lot of individual wealth is hidden in the phrase I've seen is treasure islands, places where you can in fact hide it. And corporations, in some ways the corporate use of tax. havens is an even bigger issue. Before he became prime minister, Mark Carney worked in the private sector for Brookfield asset management, which had and still has billions of untaxed dollars tucked away in tax havens. If Mark Carney was listening, I mean, here's our prime minister. He's a liberal. He believes in strong social net and all those things.

And yet, he himself was involved with tax havens. and still justifies that. Why do people that are seen as liberal, why do you think it's difficult for someone like him to let go of the notion that tax havens are a good idea? So I'm actually in the unusual position for me of actually knowing Mark Carney. Before he was demoted to his current position,

he ran something called the Group of 30, of which I remember. And he is what he appears to, at least as far as I can tell you, what he appears to be, which is a decent guy, a liberal in the American sense, and cares about social justice, social programs, but also, you know, living in the world. People aren't saints. People who claim to be saints are probably on average intolerable. And if you're going to be in the world of finance in the financial industry, then you're kind of, it's hard to do what arguably is the right thing. I guess I'm willing to cut some slack. What you really want is an environment

where it's not a big problem for yourself, where you maybe lose some money by refusing to do things that you think are bad, but you can still have a career. People do. I mean, you could criticize. I'm not going to exonerate Carney entirely. We can criticize people who aren't willing to make that choice. But God knows, with all of the terrible things, with all of the truly evil people out there in our current political scene, Carney's sins seem to me to be really pretty trivial. Yeah, and I'm not trying to vilify him myself, but I'm trying to understand why, now he's in a different position, what would be his obstacle? if he was to change his mind on tax havens, would it, and not, I don't think it would be about personal wealth for him, but is just, is he so conditioned, people of that stature? I mean, because it's not going to lose them votes,

because the minority are the ones who benefit from tax havens. What would be the fallout for him? Look, even in Canada, money has to count. I know you don't have the complete corruption of the political system by money that we do here south of the board. But alienate business people too much. It's not just that they pay for campaigns, but they have a role in the media. And I don't know enough to know whether Carney is compromising too much.

Christia, I talked to Paul Krugman. That's one of people. I asked Canada's former finance minister, Christia Freeland, for her opinion on tax havens. And I have to say, her answer surprises me. He said to me that tax havens are bad. The tax havens shouldn't exist. Not trying to put you on the spot here. You're not putting me on the spot.

I agree with that. Do you? I 100% agree with that. Wow. Mark Carney doesn't. I totally agree with Paul's point about tax havens. It's actually something that we debated at Finance Committee. that we debated in the House of, well, actually not so much in the House of Commons, but in Finance Committee.

And that is a problem. It absolutely is a problem. The thing, though, is we should not expect the important thing is to set up the rules so that people have incentives to behave properly. Have you talked, does he support to get rid of tax havens himself? Mark Carney is my friend. He is Canada's prime minister. He's the leader of the liberal party. And I support him.

Right. Okay. But you don't know where her stand is on tax havens or? I think the prime minister is the person to talk to about his positions. Okay. So I wrote to the prime minister and asked that, In light of the historic levels of wealth concentration at the very top, would the Prime Minister support ending the use of tax havens

by Canadian companies and individuals? But the Prime Minister's office didn't give me an answer and instead passed its question on to the Ministry of Finance. In their email response, there was no direct mention of tax havens. It added that it would be, quote, inappropriate to answer questions on potential changes to the tax law. Another problem of the billionaire age is that we allow huge fortunes to be amassed in the first place, especially these days by tech moguls.

One of I think the mistakes made by well-meaning progressives and liberals from the 90s onward was the following. Many said, okay, well, here's what we need to do. We'll just let the rich get wealthier and then, you know, grow the pie. And then later on, once we've generated all this wealth, we'll tax everyone and redistribute it. Columbia Law Professor Tim Wu is an authority on antitrust issues and was the special assistant to President Biden during his administration and technology and competition policy. And this sort of let people get rich now, but then redistribute it later. that was sort of the, I think the way a lot of people reconciled their discomfort with wealth, aggregation, and their desire to be progressive, but also their desire not to repeat the mistakes

of the communist nations, which seemed to seize too much and were not successful either. So the problem, which is in retrospect kind of obvious, is that when people earn enormous amounts of money, they tend to think of it as theirs. and when it comes time to redistribute it later, they're very effective at preventing the redistribution from happening at all. It's certainly been the story in the United States where, you know, the piles of money, hundreds of billions of dollars, in some cases in companies, trillions of dollars in cash,

all piled up, and there was no movement that was successful to try to tax and redistribute it. So it's a problem that isn't easily addressed. by just saying, all right, turn on the taxes. I think the longest term path runs through a redistribution of economic power. This is partially why I'm a believer in the antitrust laws. I do think you need taxes, but I also think you need a deconcentration

of the ability to earn money in the first place. One of the words for this is predistribution. You need to predistribute the ability to earn to start with, so a lot of people are making money, not just a small minority. Wu says along with Paul Krugman, you also need strong unions to combat wealth and equality. Oh, I think unions are a huge part of it.

So, you know, I live in the United States where unions are down to about six or seven percent of the private workforce. So you need to have some kind of counterweight to corporate power, employer power. I think for the last 30 years, we sort of thought that, well, you know, companies want to treat people well because, you know, it's in their interest to have

happy workers and so on. But what we didn't think about is the pressures the companies face to constantly be reducing costs. And what that means is either firing people or keeping wages flat. So there's no question in my mind that you have to have countervailing power in the form of unions to keep things fair. Now, that said, I don't think unions are beyond criticism. I think in some ways, I'm speaking about the United States, you know, that in some ways unions have failed to really convince people that they, and part of it's company propaganda, I know that, but sometimes they haven't convinced people that they're really going to serve their interests. So I think people are making it better.

I think the main unions are trying to reform themselves right now. But we definitely need a lively union movement. to countervail corporate power. Beyond unions, another way to improve salaries at the basic level is for governments to raise the minimum wage, Nick Hanauer. So if it was me, if I could just change the law in the United States, I would instantly raise the minimum wage to $25 an hour for all large corporations. And I would hold companies that have, let's call it,

500 to 5,000 employees to $20 an hour, and for all small businesses it would be 15. And that Pennauer says would be a huge boost to the economy overall. That's actually how the economy goes. When workers are paid more money, businesses have more customers, and hire more workers. There's an enormous amount of empirical evidence to support it. There is no evidence that contravenes this basic idea. And you have to be able to show people that even though their favorite economics professor

continues to think that if you raise the minimum wage, it will be automatic job loss, that that is just factually incorrect, that they were just very mistaken about economic cost and effect, and that in fact, most of the policies that seem intuitively sensible to most people, like making sure that people get paid enough to get by without food stamps by giant corporations, isn't bad for the economy, it's actually good for it. And that is a, that's a, that's a, that's a big battle. Because if you've been in this business, you hear these excuses again and again, what the rich never say, what the Chamber of Commerce never says, what the K2 Institute never says is fuck the poor. Can I say that? You can bleep it.

What they say is, oh, we care about the poor so much. That's why we have to keep wages low. Because if we raise their wages, they'll all lose their jobs. So the trick is, you. So the trick is always the same is to use pro-social language for antisocial ends. And what's funny, of course, is that in the moment, these claims always seem plausible, right? Oh, maybe if you do constrain these people, it will be bad for everybody. But if you look back in history, they say, they've been the same, the same thing. You know, it was the cigarettes people say it and the lead people say it and the, and the DDT people said it. And, you know, like, you name a harmful thing, I'll show you a bunch of, you know, middle-aged white guys making pro-social arguments for why that horrible thing is good for everybody, right?

Most of the potential solutions we have discussed so far, and many others we haven't, are for the most part relatively straightforward. Paul Krugman. So all of this is well within, not only well within what you can imagine doing, but it's things that we used to do. So it's not hard. Oh, sure, you might say, that happened the past, but it can't happen today, especially in a capitalist country. Well, have you heard of Denmark? I don't want utopia. All I really kind of want is Denmark, right? And Denmark exists, and it's not utopia, and not everybody is happy, but you can do that. And what is Denmark to you?

Denmark is an example of a social democratic society that is with a strong safety net, powerful representation of workers through unions, high taxes, but not crippling. And if the United States could go a third of the way towards that, I would be extremely happy. I absolutely agree on the Danish point. Christia Friedland. And actually Francis Pukyama has this sort of famous line where he says, you know, becoming more like Denmark. And he argues that that sort of should be the direction that democratic capitalism, that democratic market economies try to go. I broadly agree with him. And you're right that one of the things Denmark has figured out how to do is have a very generous social safety.

net, and also a strongly growing economy and a lot of innovation, right? And OZempic, that's Denmark. And so Denmark has a much higher rate of, let's see, I just wrote that, Denmark has the top income rates are 52%. Capital gains is 42%. They have one of the lowest income inequalities. They have a thriving middle class. Taxes didn't scare away people from Denmark. Could that ever be our future? Again, I think Denmark is a very admirable society and country. It is really different from our own, but I think we have a lot to learn from them. Tim Wu discusses Denmark in his book, The Age of Extraction. You write about Denmark as a sort of a shining example where they have a healthy sort of middle class and economy.

And it's funny because I was speaking to Paul Krugman, and he said to me, quote, I don't want you Topia, all I really kind of want is Denmark. Yeah. So what is it about Denmark that can teach the rest of us in terms of, because it's among the wealthiest and most egalitarian nation on Earth? So how did it achieve this? And what can we learn from them? Yeah, I think there's a few nations on Earth, Denmark, other Scandinavian countries,

Taiwan and to some degree Japan, Korea. These are countries that manage to grow extremely wealthy. without enormous imbalances in wealth. Obviously, they have some. Korea has some very wealthy families and so on. But a country like Taiwan or country like Denmark, is an extraordinary level of equality and an explosion of the mythology

that you can only be really equal and poor or have a rich country but have enormous inequality. And so I think those of us who want to believe that, you know, that you can have wealth and also equality, the fact these countries have done it is very inspiring. The question we have to ask ourselves, I think, is this. What is the purpose of an economic system if it's not about creating billionaire and trillionaire overlords? If prosperity in human societies is,

best understood as the accumulation of solutions to human problems, which is what it really is, then every economic act becomes an explicit moral choice. Are you solving people's problems, or are you creating more problems than you're solving? Nick Hanauer. And if that becomes the responsibility of business, if you change from the old paradigm, which is just make money for your shareholders to solve human problems in a fair and sustainable way, and profit is very, the reward you get for doing that, then you have made a, you've taken a big bite out of the worst impulses and the worst behavior. The British economist John Maynard Keynes, who was a great influence in your own economic

viewpoints, he was said to have always treated economics as preemptly a matter for ethical judgments. What are your thoughts on that? There's a, I mean, how do we think about economics? You know, Adam Smith's first big book was the theory of moral sentiment. and economics is, economics is not just moral. A lot of it is just how stuff happens.

Paul Krugman. Alfred Marshall, great Edwardian economist, said it was about the ordinary business of life. And I sometimes say that economics is about the least interesting aspects of human behavior. It's about the mundane decisions that we make, getting and spending and all of that.

And a lot of that is not moral. But the purpose, if you treat it as purely a technocratic enterprise, you're missing the point. It's an economic is supposed to be. It's something that we do in order to make society better. And a lot of that involves, yeah, and you do need to understand supply and demand and marginal rates of return and all of that. But in the end, you should never forget that this is about people and it's for people. The philosopher, the British philosopher Thomas Hobbes described in 1651, without government, we would end up as a state of nature.

And increasingly we're seeing in the neoliberal world, move away from looking after health care, education, various things like that. What does a state of nature mean and what is its implications in today's neoliberal world? Thomas Hobbes had this basically justification for governmental rule, for a state at all, for government. Philosopher and economist, Ingrid Robbins. And his argument, summarized in a nutshell, is that if we do not have a government or somebody who basically make sure there are rules and that there is protection of individuals' lives,

but also their property, that there would be a war of everyone, every single person against all other persons. And that would be what he calls a state of state of state. nature and he describes this as life would be brutish and short because basically everybody would just attack each other. So you have to think about a situation like war and anarchy. And I think the lesson to learn from this whole tradition of what we call social contract theory is that we basically need a government, a well-functioning government to provide

us with some background conditions that make it possible for us to live good lives. And this is important because I do think we cannot live without a good government. At the same time, we see that if you look at our actually existing governments, we do have reasons to criticize them. I am very critical even about my own government, the Dutch government, which is still by international standards, I think a relatively good government. But we have as citizens, we have to be critical about our government and keep pressing our governments to be carrying. for the common good for solving collective action problems that are problems that cannot be solved by individuals and also for making sure that we can live lives that are better if we live together than if we were to live in a state of anarchy. And I think this is a big disagreement

that I have with libertarians or the tech pros from Silicon Valley because they believe we should get rid of governments. But if you have their preferred worldview, they would be in charge, they would be the bosses, and basically they would abolish democracy. And then it's basically our purchasing power and our political power that will determine how good our lives are. Whereas I think we should keep striving for a world where everybody has equal opportunities, independent of what your innate talents are, where you were born, with the parents you were born with, and so forth. And so that's a very different few what we owe to each other. And that is in the end really the fundamental question.

What do we owe to each other in society and how do we want to live together? And I think it's really, really urgent that we have rational and reasoned conversations about this. Conversations that should feature the one question that rarely, if ever, gets asked, how much money is enough. That's part five of our series, billionaire age by Ideas producer Mary Link. You just heard part four. Technical production Danielle Duval.

Lisa Ayuso is the web producer of ideas. Senior producer Nicola Luxchich. Greg Kelly is the executive producer of ideas. And I'm Nala Ayyed. For more CBC podcasts, go to cbc.ca.ca slash podcasts.