They Alone Can Fix It?

When the US Congress recently voted on a bill to keep the US Government running, one unelected voice spoke louder than any other.

Elon Musk, the world's richest individual, used his social media platform X (which he bought for $US44 billion in 2022) to effectively wreck a bipartisan spending bill.

The implication in Musk's repeated messages to his 200 million followers - messages that were full of falsehoods - was that Republicans who did not vote as he directed would have their funding cut and be disendorsed.

Musk ostensibly would do this both as a major donor to Donald Trump's re-election as US President and as the man Trump has appointed - alongside another billionaire in Vivek Ramaswamy - to what the incoming far right administration is calling a 'Department of Government Efficiency' ('DOGE' for short, and named appropriately after an internet meme that turned into a crypto-currency).

Musk is proposing to cut $2 trillion in what he calls 'wasteful' US government spending. In other words, a man who has gotten obscenely rich partly on government subsidies and tax breaks now proposes to make the poorest Americans fund his next round of tax cuts via reductions to the social safety net. The irony was not lost on some congressional representatives:

Musk's ascent unelected to the apex of global political power - matching his status on the global wealth table - is the most disturbing signal yet that liberal democracy is giving way to plutocracy, a system where political power derives from wealth.

This phenomenon is now the subject of a timely new book which warns of the consequences of a system in which the moralisation of the ultra-rich is obscuring vast and widening economic injustice, not just in the US economy but around the world.

In 'Stinking Rich: The Four Myths of the Good Billionaire', Sydney academic Carl Rhodes examines how modern fables of the ultra-rich as heroic, generous, meritorious, and vigilantes of justice are steering liberal democracies back to former systems of feudalism and plutocracy.

We have all heard the myths: These men (and they are mostly men) have changed the world. They've earned their wealth. They want to do good with 'their' money. Nothing else is working anymore. Perhaps only they can fix it.

Rhodes - Professor of Organization Studies and Dean of the Business School, University of Technology Sydney - is careful to say his target is not the billionaires themselves but the grossly distorted and failed ideology of neoliberalism that has driven disparities of wealth to obscene levels.

"This book illustrates how visibility of this shift in the locus of power has been obfuscated by the cultural valorisation of the billionaires; the very people who both epitomise and reap the material benefits of the growing catastrophe of economic inequality," Rhodes writes.

The evidence that global wealth inequality has returned to levels not seen since the Belle Epoque of the late 19th century is now irrefutable. Rhodes quotes Oxfam research showing that between 2020 and 2023 (the years of the pandemic) the richest 1 per cent of the global population sequestered $US42 trillion, or almost two thirds of the wealth created in the world in that time. For every dollar of wealth added to a person in the bottom 90 per cent, each billionaire acquired $1.7 million.

The problem is not just the disparity of wealth itself, but how billionaires and major corporations now routinely moralise and mythologise the power resulting from that wealth as benevolent and deserved. And they do this while exploiting public disenchantment with the increasingly paralysed institutions of democracy.

Four decades of failed trickle-down economics (and, arguably, the tweedle dum-tweedly dee parties of the centre-left and centre-right) have bred cynicism about the political process. This in turn has led to a popular belief that perhaps we must look to billionaire businesspeople, with their entrepreneurial flair and no-nonsense ability to cut through red tape, if we are ever to deal effectively with our most intractable problems - like poverty, homelessness and climate change.

But this frustration with stalled politics (which itself is a consequence of neoliberalism's undermining of public institutions) is leading to dangerous trends in which those who have amassed unprecedented financial power are now beginning to use that wealth not only to influence but to direct political outcomes in their favour.

"The billionaire 'solution' to social environmental and political problems sees the power and influence of business increasingly encroach on the public sphere, taking over what was once the preserve of the government and public institutions," Rhodes writes. "Effectively, there is a transfer of political power from public into private hands."

Of course, when warnings are made about the increasing encroachment of the mega-wealthy into the workings of democracy the standard replies are, firstly, that those making them are guilty of the 'politics of envy'. And, secondly, if the likes of Bill Gates or Warren Buffett want to use some of their squillions to set up foundations to address worthy causes, isn't that a good thing?

Of course, the 'politics-of-envy' argument goes back to the two political architects of neoliberalism - Thatcher and Reagan - who relentlessly pushed the doctrine that if the rich were liberated from regulations and high taxes, everyone would benefit in the end. That this 40-year experiment with trickle-down-economics failed utterly is now widely recognised. Even the International Monetary Fund admitted in a 2016 paper that aspects of the neoliberal agenda had "not delivered as expected". (As context, this is a bit like the Catholic Church casting doubt on the virgin birth.)

"Dismissing one's political opponents by accusing them of a politics of envy comes hand in hand with a moralisation of unequal wealth," Rhodes writes. "This is a topsy-turvy world where demands for justice are dismissed as selfishly motivated."

As to the 'righteousness' of the billionaires' social and public activities, Rhodes notes a tendency of successful businessmen to imagine that what worked so well for them in the commercial world will automatically transfer to thorny problems like the energy transition (this being another example of the common delusion that if your only tool is a hammer every problem starts looking like a nail).

"The political implication is that billionaires, as private citizens, are using the wealth they accumulated at the expense of others to create equally obscene inequalities of power," Rhodes writes. "The billionaire solution is markedly undemocratic if not megalomaniacal. What is presented as private benevolence is revealed as a ploy to use wealth to buy political power."

Can anyone argue against the proposition that this is just what we are seeing now? A man worth more than $400 billion - an immigrant no less - is directing the economic policy of the world's biggest and most powerful economy in real time by issuing orders to the legislature via a social media platform he bought for $44 billion in the name of 'free' speech? The gall.

Even in some of the more philanthropic and less overtly political actions of billionaires like Gates and Buffett, none of the democratic controls that limit individual power or provide checks and balances on decision-making apply, Rhodes notes. There is no office to kick Gates out if any majority of citizens do not like what he is doing. He can spend his money however he pleases and if changes his mind and eventually gets bored with the issue he's championing, well that's the way it goes.

After addressing the four myths of the billionaires ('heroic', 'generous', meritorious', 'vigilante'), Rhodes ends with a chapter called 'Reasons for Hope', where he points to a "rising chorus of voices" demanding an attack on economic injustice. This includes the short-lived Occupy Wall Street movement of 2011, the influence of new figures on the left of politics like Bernie Sanders in the US and Jeremy Corbyn in the UK, the popularity of French economist Thomas Piketty's writings on rising inequality and calls by economists at the G20 summit in 2023 for a tax on extreme wealth.

I'm not so hopeful. It's true that there is justified voter anger at the consequences of failed neoliberalism - the huge disparities of wealth, stagnant low-to-middle incomes, fiscal austerity, cuts to public health and education and the growing role of money in democratic politics. But the re-election of Trump and the rise of right-wing nationalist politicians around the world suggest that much of this anger is being successfully redirected toward those at the bottom and the fringes of society - people like refugees, the unemployed, homeless and the LGBTQ community. The traditional centre left parties appear to have no answer to the wave of anger beyond tipping their hats to symbolic identity politics and mouthing the bland managerialist creed they have clung to for 30 years so as not to scare the bond market ('Look mum, I balanced the budget!').

I do agree with Rhodes that there is a substantial body of respectable opinion that the four-decade experiment with deregulation, tax cuts, privatisation and the idea that private markets and private wealth are morally superior to democratic public institutions has failed miserably. However, I'm not so sure those ideas are penetrating much to the wider public - unsurprising really when legacy and social media are owned and controlled by billionaires like Murdoch and Musk.

And one does not have to look as far away as the US to see this lesson. Look in Australia at what happened to the Labor Party in 2019, when Bill Shorten took to the electorate a policy to reform tax policies which favoured the already wealthy. This policy was dishonestly reported by the Murdoch media as an attempt to kill dividend imputation, a policy the ALP had introduced in the first place.

So while I'm all for positivity, "reasons to be hopeful" may be stretching it. On the other hand, Rhodes is undeniably right that, without intervention, democracy itself is in danger of collapsing under the pressure of the extreme capitalism that has created today's new generation of the ultra-rich.

By falling for the myths of the billionaires as heroic, generous, meritoriously deserving, can-do mavericks working outside the system, we risk sacrificing our own agency and making being poor and destitute an issue of individual responsibility. Worse, we risk surrendering the powerful idea of collective action to solve our problems and leaving our fates instead to the magnanimity of a small caste of people who effectively won the lottery in a failed 40-year economic experiment.

Put simply: No, greed is not good. And, no, they alone can't fix it.

In this book, Professor Rhodes has delivered a a penetrating and powerful analysis and one that couldn't be better timed.

'Stinking Rich: The Four Myths of the Good Billionaire' by Professor Carl Rhodes is published by Bristol University Press and will be available for sale from January 21, 2025. An advance copy was supplied to this writer for review.