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On September 29, 1916, John D. Rockefeller became the world’s first billionaire when the stock price for Standard Oil reached $2,014. It was noteworthy enough to be front-page news at The New York Times.
Today, Forbes’ “Real Time Billionaires” list includes more than 3,100 people, with newcomers seemingly minted daily. The singer Beyoncé, for instance, officially joined the list last week, entering the company of other mega-rich entertainers like Bruce Springsteen ($1.1 billion), Rihanna ($1 billion), and Taylor Swift ($1.5 billion).
The pantheon of plutocrats includes household names like Elon Musk ($718 billion as of January 5), Mark Zuckerberg ($223 billion), and Jeff Bezos ($239 billion); scions of dynastic wealth, such as the Waltons, Kochs, and Pritzkers; as well as hundreds of more obscure entrepreneurs, many of them global. These include, for instance, real estate mogul Samir Mane, Albania’s first and only billionaire; Savitri Jindal, the widow of a steel magnate and India’s only female billionaire; and tractor manufacturer Lachhman Das Mittal, also from India, who is currently Forbes’ oldest billionaire at age 95.
The United States still dominates global production of billionaires, however, accounting for about a third of the world’s richest people. To author Chuck Collins, this is not a point of pride for America, but a symptom of its political and governmental failure.
His new book, Burned by Billionaires: How Concentrated Wealth and Power Are Ruining Our Lives and Planet, argues that the rise of the billionaire class has profoundly damaging impacts on ordinary Americans’ lives and on the functioning of democracy. Collins, who is a great-grandson of Oscar Meyer, walked away from his own fortune at age 26. He is a senior scholar at the Institute for Policy Studies, where he co-edits Inequality.org, and is the author of several books on inequality and wealth, including Wealth and Our Commonwealth, co-authored with Bill Gates, Sr.
This transcript has been edited for length and clarity. The full interview is available at Spotify, YouTube and iTunes.
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Anne Kim: I want to ask you first about the growth of the billionaire class. We can all think of problematic individual billionaires, like Elon, Donald, Mark Zuckerberg, et cetera, but you are positing that the problem of billionaires is much bigger than those specific personalities. You’re talking about billionaires as a group. How big is this billionaire class, and how much of the world’s wealth do they own at this point?
Chuck Collins: Back in 1983, there were a little more than a dozen billionaires in the US. As of this morning, there were about 920. Their combined wealth is $8 trillion just in the US, up from about 600 billionaires prior to the pandemic who had a combined wealth of $3 trillion.
In the last five years, we’ve seen a tremendous surge. Globally, there are probably 3,000 billionaires, and about a third of global billionaires are in the US. But you’re right. I focus not just on that small group of less than 1,000 households, but on the level where power starts to kick in.
I would argue that at the $30 million to $40 million level—the top one-tenth of 1%—is when people move from having wealth and luxury and agency to having power. They’re not just buying another speedboat or another house, they’re buying a senator or a media outlet or lobbying and influencing the political system.
Anne Kim: What are the driving forces behind this sudden explosion in the number of billionaires?
Chuck Collins: It’s actually part of the 50-year trend of growing inequality and concentration of wealth.
The rules of the economy have changed to benefit asset owners at the expense of wage earners, starting in the late 1970s. Tax policy is a huge ingredient of that. We used to tax high income and high wealth at much higher levels and invest in things that brought in opportunity.
We’ve reversed a lot of that and shifted taxation off the ultra-wealthy onto everyone else. And that’s probably the single greatest driver along with other policies that allow more and more wealth to accrue to very small group.
Anne Kim: It seems that in order to make it into that billionaire class, you have to be in that top tier to begin. This is not a situation where you work hard, you play by the rules, and anybody can be a billionaire, right? It’s really privilege compounding upon privilege.
Chuck Collins: I do think there’s still entrepreneurship, and people do start businesses. But we attach a narrative of entrepreneurial wealth to these great excessive fortunes when in fact many of those fortunes come about because they’ve figured out how to capture a market, dominate a market, and fend off competition. They use their power to get more wealth and power, and that’s where, as you say, there’s a compounding advantage that accrues to the very, very wealthy.
Anne Kim: You write about how the outsized wealth of billionaires also means outsized impacts on the rest of us. And one of arguments you make in your book is that billionaires are literally bad for the planet. One of the statistics that I found absolutely astonishing in your book is that 20 billionaires emitted an average of nearly 8,200 tons of greenhouse gases in one year, compared to just 16 tons of carbon by the average US resident. I’m assuming that’s all the yachts and the jets, but wow.
Chuck Collins: The ultra-wealthy are the super emitters, which is not to say we don’t all need to do our part to dial down our consumption and emissions. But the top one-tenth of one percent emits about 2.2 tons per day. That’s because of having multiple houses and flying on private jets, which are the most polluting form of transportation except for super yachts.
That kind of billionaire lifestyle consumption is really burning up the planet, and I argue that those are the folks who need to change their behavior the most and probably first before the rest of us have to make fundamental sacrifices.
Part of the problem, though, is if you and I are thinking, “Well, maybe I should invest in a better vehicle or a low-emission house or something like that,” and then you see Kylie Jenner flying her jet across town for lunch, you feel like a chump. Like why am I going through this effort when these other people are behaving this way? So in order to maintain a sense that we’re all in this together, the super-rich really do have to change their consumption and emissions behavior.
Anne Kim: I want to keep going on this thread of how the existence of the billionaire class touches the lives of ordinary Americans in less obvious ways. You mentioned Kylie Jenner, and I think to a lot of people, the lives of billionaires seem very remote. They’re on TV, they’re on Page Six of The New York Post, and reality shows like Keeping Up with the Kardashians are marketed as entertainment. But your book argues that the ways that billionaires accumulate and maintain their wealth also contribute to other serious problems that we experience, such as the housing crisis. Can you explain how you came to that argument and what you discovered?
Chuck Collins: I think this imbalance of wealth supercharges the existing crisis. One reason is that the wealthy have multiple homes, and they are bidding up the cost of land and housing.
But in order to understand how these billionaires are disrupting our lives, you have to tap your inner billionaire and think, “What do I do with a billion dollars?” You don’t put all your eggs in one basket. You don’t have it all in the stock market or in one company. You spread it around.
Well, real estate is one of the ways you spread that wealth around. The reason Bill Gates is the biggest owner of farmland in the country isn’t because he’s interested in carrots, but because he has so much wealth he needs to park it in lots of places. That’s having a disruptive effect because the ultra-wealthy are buying up real estate in multiple markets, rural and urban and suburban. They’re building luxury housing not to live in but as safe deposit boxes in the sky.
And in the worst case, they’re investing their money in extractive private equity funds that are trying to make money on the housing crisis. You see a lot of funds now moving into single-family homes. There are whole investment pools buying up single-family homes, mobile home parks, and rental housing, and converting it to short-term rentals.
Anne Kim: And there are other ways in which billionaires are contributing to the affordability crisis that we’re all facing, right?
Chuck Collins: Affordability is obviously the word of the day. Some of that’s the fact that wages haven’t kept up, but a large part of that is [corporate consolidation.]
For instance, in the food and grocery sector, you have four giant meat conglomerates that dominate 80 percent of beef production, so they can really drive and dictate price. The Cargill-MacMillan family controls a fourth of all grain production and distribution in the world. There are 21 billionaires alone in that family.
Healthcare is a sixth of our economy, and a lot of these billionaire investors view it as ripe for the plunder. A third of American U.S. emergency rooms are now owned by billionaire-backed private equity funds, and more and more hospitals are being bought up to be sliced and diced.
There’s a hyper-extractive wing of billionaire investment that is squeezing the productive economy. They’re all trying to get that extra nickel as well as squeezing the workers and the communities around them.
Anne Kim: Let’s turn to politics, which is one area where billionaires’ impact is more obvious. They lobby, they finance campaigns, and they run for office themselves. How do you think about the destructive impact that billionaires have had on our body politic in just the past decade?
Chuck Collins: We’re familiar with the idea of “regulatory capture,” but what we’re living through now is “billionaire capture,” where every aspect of our democratic system is influenced to the point where most of us have no real voice or vote in the system.
For instance, 79 percent of the population thinks billionaires and the ultra-wealthy should pay more taxes. Well, we’re not going to see that in a political system that’s almost entirely engineered and captured by the ultra-wealthy.
Anne Kim: You have a lot of ideas about how to fix all of this, and one thing you argue for is a perceptual shift by the public.
We tend to revere billionaires mainly as self-made. Certainly Donald Trump has cultivated that myth, and people still think that billionaires have earned their status in some way. They’re supposed to be smarter than us, and they’re supposed to work harder than us. But you argue that billionaires are also subsidized by us in a lot of ways, including through tax policy.
What would you do in public policy so that the billionaires responsible for exploiting the US economy and the rest of us begin to pay their fair share?
Chuck Collins: Part of it is to understand how wealth is created. I used to work with Bill Gates’s father, Bill Gates Sr., and he and I wrote a book about how to defend the estate tax. He used to say about his son, “Yeah, he worked hard, but a lot of people work hard.” And he benefited from public investments in knowledge, infrastructure and the Internet that created the foundation for the Internet economy.
No one does it alone, and taxation of substantial wealth is essentially fair payback to the society that you’ve disproportionately benefited from. So changing the story and addressing the mythology of individual wealth creation is really important.
But in terms of public policies, I think the estate tax is irrelevant now. The ultra-wealthy can pretty much opt out of it, plan around it, and not have to pay it.
Restoring the progressivity of the income tax in important, along with a genuinely robust luxury or estate inheritance tax and probably an annual wealth tax. [I’d also add] investing in enforcement because at a certain level, you have a whole team of people working with you to help move your money to the shadows and dodge taxes. I call it the “wealth defense industry”—the tax attorneys and planners.
At this point, the IRS is completely outgunned by these professional wealth-hiders to the point where the wealthy are pretty much opting out of paying most of the taxes that they should rightly pay.
Anne Kim: What about solutions for the two other major problems we’ve talked about, such as the capture of particular industries? How would you regulate the economy to eliminate or limit that kind of capture by the billionaires? And then on politics, what are your top recommendations for limiting billionaire influence in the political sphere?
Chuck Collins: I think we have to look at what is essential in our economy that should not be an arena for wealth plunder. Take hospitals. Most hospitals were founded by religious organizations and civic groups for the public welfare. Now they’re seen as cash cows.
Maybe we create a new ownership entity that recognizes that healthcare belongs in a protected commons and is not an arena for plunder. Maybe we need to tax luxury speculative real estate and invest in what most of the world calls “social housing”—permanently affordable housing, rental housing, and cooperatives.
Same on politics. You and I have both been around, and we’ve probably watched different kinds of campaign finance reform proposals come and go and even get implemented, but it hasn’t really changed the balance. I’m afraid with money and influence, it’s like water running down a hill. You put up a barrier, but it’s going to find a way around it. I think the only answer to saving democracy is reducing the concentration of wealth and power.
Having billionaires—people having more than a billion dollars—is just too much power. It’s not about the money. It’s not about the consumption. It’s about the power element. And especially in a society where there’s so much unmet need.
I liked the singer Billie Eilish addressing a group of billionaires and wealthy singers and asking, “Why are you a billionaire?” And I think that is a fair question. Why? How much is enough? Both from an individual point of view, but from a societal point of view, I can say having a billion is too much to have a healthy, well-balanced democratic republic.
Anne Kim: If billionaires control everything, how do ordinary citizens bring about the kind of change that you’re talking about? You’re also part of an organization called Patriotic Millionaires, and I’m wondering if you could also talk a little bit about that.
Chuck Collins: Erica Payne, Morris Pearl and others co-founded this really interesting network of high net-worth individuals who would agree with a lot of what I’m saying—that wealthy people need to pay more taxes, pay higher wages in their companies, and not have so much power in our democracy. They put their necks out there publicly and lobby on behalf of those issues.
And I describe that as one of the cracks in the system. I actually am very optimistic after the last month of being out talking to people about this book because I feel like there’s an awakening. People understand implicitly the harms that are caused by these great fortunes and extreme concentrations of wealth, and they’re trying to find places to push that agenda forward.
Nothing much is going to happen in Washington, D.C. at the national level, but in lots of states, people are pushing for luxury real estate taxes to fund affordable housing, or taxing private jet fuel to fund green infrastructure. The incoming mayor of New York is saying he’s going to levy a 2 percent tax on incomes over a million dollars in New York.
More and more people are going to stand up and run for office on the basic platform of “I’m going to work for everybody, not just the billionaires.” They’re going to make sure all boats rise, not just the yachts.
