We review this basic political theory and history to make sure it does not get totally lost amid today’s arguments over the role private wealth plays in American society. In recent days, that debate has taken place directly between progressive populists such as Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) and the billionaires, such as money manager Leon Cooperman, who would pay stiff wealth taxes Ms. Warren and Mr. Sanders propose. The senators insist that they do indeed appreciate the role of business, but are trying to keep it within proper boundaries; the billionaires counter, neither selflessly nor unreasonably, that the candidates are paying lip service to free enterprise — while the stifling impact of their taxes could extend well beyond its intended targets.
Readers might wonder if our views are shaped by our experience. It’s true that a wealthy man, Eugene Meyer, long ago saved The Post from bankruptcy and was willing to lose money on this independent newspaper for many years before finding a route to profitability. It’s also true that a far wealthier man, Jeff Bezos, bought The Post six years ago from Meyer’s civic-minded descendants, the Graham family, and has given the paper a chance to prosper while continuing the Grahams’ hands-off-the-news tradition.
Our appreciation, though, does not keep us from believing that federal law should require the wealthy — and especially the superwealthy, such as our owner — to shoulder a greater share of the nation’s tax burden than they currently do. Progressives are right to worry about growing inequality. There were 607 billionaires in the United States in 2018, according to Forbes magazine, a 50 percent increase since 2010. The top 0.1 percent of U.S. households controls 15 percent to 20 percent of wealth (economists’ estimates vary), a degree of concentration not seen since before the Great Depression. Much of this enrichment derives from financial manipulation and other rent-seeking activity. Certainly, the fact that WeWork’s hard-partying founder and chief executive, Adam Neumann, can get $1.7 billion from investors in return for leaving that troubled company does not confirm the fairness and efficiency of 21st-century capitalism.
Nevertheless, every billionaire is not a policy failure, as a catchphrase on the left would have it. Not even close. Some billionaires, such as Microsoft’s Bill Gates — and near-billionaires, such as “Harry Potter” author J.K. Rowling — got rich off world-changing innovations that enhanced the lives of millions. Their fortunes are spectacular examples of the general rule that capitalism — debacles like WeWork notwithstanding — is the font of enormous, widely shared prosperity. Nor is this country becoming an oligarchy, another oft-made but exaggerated allegation. The “billionaire class,” as some call it, seems no more unified than the nation as a whole, with George Soros bankrolling causes and candidates on the left and Joe Ricketts on the right. One billionaire, Tom Steyer, may soon find himself competing with another, Michael Bloomberg, for the privilege of running as the Democratic nominee (against yet a third billionaire, President Trump). Both men, despite their essentially unlimited funds, are very long shots.
Obviously, money should not have undue influence over the political process, which is why campaign finance regulation is necessary. Equally obviously, the market economy’s legitimacy depends on equal opportunity, actual and perceived, which is why, contrary to small-government bromides of the political right, government must intervene to protect less-advantaged participants in the marketplace. Achieving some of these objectives calls for more financial sacrifice from the well-off than the federal tax code currently requires. We have repeatedly advocated such measures, such as a restoration of the estate tax, higher rates on capital gains and the elimination of loopholes that favor upper-income households.
No reform, however, necessitates punitive policy or generalized vilification. The future of American capitalism is one of the most crucial issues of the 2020 campaign. It must be debated vigorously — and not simplistically.