OP-ED: We need to address America’s growing economic inequality
When Space X went public, Elon Musk became the world’s first trillionaire. A trillion is a huge number: To put it in perspective, if you spent a million dollars a day since the day Christ was born, you still would not spend a trillion dollars. A stack of enough $100 bills to make a trillion dollars would be 679 miles high.
Critics on the left argue that existence of billionaires represents a systemic failure, because no one can earn that much money through their labor; people who accumulate that much wealth must have exploited someone to do so. This sentiment is expressed by Mario Puzo in “The Godfather”: “Behind every great fortune is a great crime.”
Conservatives argue that the rich deserve their wealth, and wealth inequalities are good because the prospect of becoming wealthy inspires people to work hard (and in a capitalist system, the rich can take risks that potentially benefit society).
Elon Musk exemplifies this; there is no doubt that he has taken risks and funded a lot of innovation. Tesla made electric cars “cool” (though he did not actually found Tesla), Space X built the Starlink satellite system that provides internet to unwired communities and is a vital part of modern warfare, and he’s founded many other innovative companies.
On the other hand, Musk is not an example of a talented, hard-working capitalist getting rich because he satisfied a market demand on his own. The federal government saved Tesla from bankruptcy and generous government-funded contracts fueled Space X, so much of Musk’s wealth was generated by the government.
Musk also used his political donations to put himself into a position to weaken parts of the government he didn’t like (especially agencies that might restrain his actions). He turned economic power into political power and used that power to benefit his companies.
Economic power and political power should check each other, not combine to enable even fewer people to amass even more power. A New York Times analysis found that in the 2024 election, 300 billionaires accounted for 19% of all the political contributions. Successful investors only spend money when they expect a return.
America today can be compared to the Gilded Age (1870s to the 1890s) when industrialization allowed “robber barons” to amass great fortunes (Carnegie, Rockefeller, JP Morgan). In a pre-industrial economy, a craftsman who built wagons, no matter how talented, could not amass a fortune. Industrialization created scale. Henry Ford used mass production techniques to make cars affordable and built a huge fortune in the process. The craftsman controls his own labor (and perhaps a journeyman or apprentice) while an industrialist controls the labor of thousands of people, accumulating profit by paying them less than the value they produce.
Technology has replaced heavy industry in creating massive wealth (9 of the 10 wealthiest Americans made their fortunes in tech). Most of the industrial titans gave some of their wealth back to society (often through the creation of foundations). In 1889 Andrew Carnegie (Gospel of Wealth) famously argued inequality was inevitable and good, but that people who created vast fortunes should give them away before they died (so they could make sure they were used effectively).
There is a modern version of this, the Giving Pledge, pioneered by Bill and Melinda Gates and Warren Buffet in 2010; signers commit to giving away at least half of their wealth. This movement has weakened as many of the technology moguls (Peter Thiel) think this is a bad idea. They believe that society is better off with successful entrepreneurs running businesses rather than foundations.
Leftists argue that billionaires control an outsized portion of the world’s resources (Musk’s wealth alone is worth 3% of the U.S. GDP; Rockefeller’s wealth was only 1.5% at its peak). Anti-tax conservatives argue citizens know better how to spend their money than the government does; are we better off with billionaires making decisions for the rest of us instead?
Capitalism, while it has its flaws, has undeniably increased the material wealth of the world, but the distribution of that wealth has become problematic. Capitalism has two inherently conflicting tendencies. Competition drives efficiency and makes the economy dynamic, but the winners of that competitive race get richer (and accumulate the power that goes with that) and use their position to stifle competition and extract rent (income earned by the company’s dominant market position, rather than the quality of its products).
In capitalism, people spending money determine how resources are deployed. This has proven to be a much more efficient system than state socialism, for example, where bureaucrats determine how the resources are deployed (producing shoes that no one wants to buy; state socialism’s inefficiencies were captured by the Soviet aphorism: “They pretend to pay us and we pretend to work”). But if all the wealth is controlled by a small group of people, capitalism breaks down. During the Great Depression, Franklin D. Roosevelt saved capitalism by using the government to fix its worst flaws (by providing jobs for the unemployed, e.g.).
People with little money have little influence in the economy, so it does not work for them. In 2025, for the first time since the data began being collected in 1989, the top 10% of earners accounted for nearly half the consumer spending; that’s who the market serves. Perfectly functional high-end kitchens get renovated to reflect the latest fashions while kitchens without wealthy owners wear out.
When Thomas Jefferson wrote that “all men are created equal,” he created the foundation for American greatness. America thrives when all its citizens can participate. America’s willingness to educate even the poor, through common schools in the 19th century and the GI bill after World War II, was an investment that paid off handsomely. Allowing economic inequality to divide this nation will lead to what Socrates feared, “two states, the one of poor, the other of rich men, and they are living on the same spot and always conspiring against one another.”
To reach our full potential, we need to address growing inequality.
Kent James, of East Washington, has a doctorate in history and policy from Carnegie Mellon University.