Michael Kinsley can make sense at times, but more often he's merely
infuriating. Last Thursday's op-ed in the Washington Post
is an example, and it appears to have cheesed me off more than usual.
According to Forbes magazine, the world is enjoying a boom in
billionaires. Twenty years ago there were 140 billionaires. Three years
ago there were 476. This year there are 793.
You can check out the stuff Forbes
has made available online
Kinsley appears to have read at least first few sentences of
this article (and has summarized them in a non-plagiaristic manner). Did
he read anything else? Let's see.
Some people automatically associate great wealth with evil, and they
deserve the ridicule they get. But the automatic association of great
wealth with virtue is equally fatuous.
Kinsley implies a tired and fallacious argument:
imagine two diametrically opposed, absurd positions that some (unnamed)
people might hold;
- I hold neither of these positions;
I am reasonable and correct.
Anyone convinced? Me neither. Let's move on:
It's probably true that most billionaires have acquired their wealth in
ways that make life better for the rest of us.
Hedging and vagueness with "probably" and "most", but it's
good that Kinsley acknowledges this up front.
I bet you can tell me, without peeking, what the first word of his
next sentence is, however.
But the Forbes list includes plenty who merely chose rich parents.
Still vague ("plenty"), and
getting way too cute with the tired "chose rich
There are many whose accumulation of vast wealth, however gumptious,
does not fit the Adam Smith model of individual drive and greed being
channeled into activities that benefit all.
Still vague ("many"), but undoubtedly true.
The rising value of exclusive franchises given away by the government,
such as cable TV and cellphone licenses, creates billionaires without
generating any general social payoff.
This is probably the best sentence in the article. Yes, many governments
(not just "the" government) shower economic favors on
groups and individuals. It's an interesting and important topic.
But Kinsley is on the moral indignation road, so this is a mere aside.
We go immediately from a valid insight to sheer fatuity:
Real estate investors do not create a square inch of land.
Free advice to op-ed columnists: when you find yourself writing a
trivial and obvious truth
as if it contained some precious
insight, maybe you should examine your assumptions. OK, real estate
create land. Duh. What do
Never mind, because Kinsley just barrels along:
Meanwhile, science undermines the notion that people deserve moral
credit for their smarts, daring, vision, dedication and similar virtues,
even when these are applied in socially beneficial ways. Intelligence
was the first to go. Why should you get the credit if your brains make
you a billionaire? Increasingly, neuroscience and evolutionary
psychology are showing that the same logic applies to other admirable
Kinsley's invocation of "science" is tendentious bullshit. If people deserve
"moral credit" (or, for that matter, moral blame) for
anything at all, they deserve
it for what they do
: the uncoerced choices they make. "Smarts" (etc.)
are involved only indirectly, in the sense
that they may make it more likely
that people will make good choices, and (hence) deserve
If you can imagine
(say) people of equal "smarts" (etc.) making different
uncoerced choices, doesn't it necessarily mean they deserve whatever
moral credit (or blame) as a result? Sure. Kinsley's just wrong.
(Of course, if "science" has made you a thoroughgoing determinist,
then people don't "really" make choices at all, and "moral credit"
and "moral blame" are simply illusions. But Kinsley isn't saying that,
is he? I don't think so; it's hard to care.)
Adam Smith explained how our individual efforts serve the common good.
We work to produce things that can be traded for things we want. That's
an improvement on making everything that we consume ourselves. The first
exchange of one caveman's dinosaur meat for another's rather attractive
decorative rock started a process that, after millions of years, leads
to DVD players at Wal-Mart that cost less than DVDs. Or something like
A breezy trivializing of the process by which great masses of people
have escaped subsistence and privation, don't you think? Again, there's
a good story there, but Kinsley's only interested in being
superficial here. He's eager to go back to sneering at rich people:
But billionaires are beyond the desire for more money to buy more stuff.
Just look at Forbes's breathy descriptions of the billionaire lifestyle.
Add it up. Yachts can cost up to $300 million to buy plus 10 percent
annually to run, and a Russian on the list has three. So you need three,
all bigger than anyone else's. Assuming that each one sinks after five
years, this will cost you $270 million a year. The most expensive car
Forbes could find was something called a Bugatti Veyron, costing $1
million. Get a new one every year -- heck, get three -- throw in a
full-time driver, and luxuriate in a visit to Jiffy Lube whenever you
feel like it, and you're still talking barely $4 million a year. Forbes
reports that actually the top 10 billionaires drive cars much cheaper
OK, so Kinsley did
read beyond the first paragraph of the
main article; good for him. But, despite his proclaimed interest in the moral
worthiness of how these 793 acquired their wealth, he's really more
interested in sneering at their alleged need to acquire conspicuous
amounts of stuff.
But note the tailing admission about the cars; doesn't it
cast some disconfirming cold water on Kinsley's point? Let's look
at what Forbes
The cars and trucks driven by those in the Top 10 of the 2005 Forbes
list was, in short, shocking. You won't find a Bugatti, Ferrari or BMW
driven by these billionaires. But you will find a Lincoln, a Mazda, even
a Dodge and Ford. It seems that for the super-rich, a vehicle is seen
not as a status symbol, but as a means to an end in which to get from
point A to point B. Status is something that these billionaires need not
prove to others. In many cases, the people on our list prefer to live
inconspicuously, avoiding the limelight at all costs. This might explain
why many of their vehicles cost less than your own daily driver.
Emphasis added. But never mind, Kinsley rolls on:
House? Prince Ahlwaleed bin Talal Alsaud has a palace that cost $130
million. Suppose you own five of these, and every 10 years you start
again. Even including maintenance, air conditioning and condo fees, you
have to struggle to hit $100 million a year. Put one of your houses on
your own private island. The most expensive island Forbes could find for
sale was listed at $39.7 million. Buy a new one every year, but don't go
see it. Fly a private jet to the Bahamas instead. Forbes says you can
charter a plane to the Bahamas for $40,000. So do that every weekend. It
adds up to $2 million. Check into a nice hotel. Add another million and
use the mini-bar.
More of the same. Is there a point to be made in largely
how a billionaire might spend money?
I suppose that, if you're writing op-eds, you have to come up with a
word count, and this is how Kinsley does it. (For someone
who felt it necessary to point out "Forbes's breathy descriptions of the
billionaire lifestyle", Kinsley is pretty breathy himself.)
Staff yourself silly with personal assistants and special
British-trained security agents. Have a Starbucks latte every single
day. Total? Uh-oh, you're spending over $400 million a year. At that
rate, the average billionaire's $3.3 billion stash could be gone in less
than a decade. But about 90 percent of that is the boats and the houses.
Settle for one maximum-size yacht, two enormous houses (plus a Las Vegas
time share) and only one private island. Congratulations, you're down to
barely $100 million a year. At that rate, you can live like a Saudi
prince, and $3.3 billion will last you and your children forever.
(Depending, of course, on how many children you have. This guarantee
does not apply to actual Saudi princes.)
Three paragraphs of nearly fact-free snarking at how someone
spend their wealth. Anyone see a point? If you
do, Kinsley's about to pull out the rug:
Surely billionaires are not inspired to accumulate more billions by the
prospect of a third gigantic yacht. Most billionaires spend far less
than these amounts.
"So never mind that stuff I've been writing about."
Many of them give huge amounts to charity. But it's
also hard to believe that the chance to give it away is a major motive
for earning it in the first place. And if billionaires do earn it
primarily to give it away, that itself would require a special economic
theory just for them, different from the one that explains the rest of
Um, fine. So is Kinsley about to apply the same "economic theory" to
billionaires as he would to the rest of us?
The prevalent theory of billionaire behavior is that it's a matter of
keeping score. Billionaire investor Carl Icahn recently told Ken Auletta
of the New Yorker, "I enjoy winning and making money." Keynes meant
something similar when he used the term "animal spirits."
Yes. Immediately after denying
that there should be
a "special economic theory" for billionaires, Kinsley is now
explicating a "theory of billionaire behavior."
Never mind because we're about to come to the real point:
Okay, fine. But if it's all about winning, wouldn't (say) half as much
money be just as much winning -- as long as everybody else in the game
had half as much money as well? If Icahn is right, a stiff tax on
billionaires ought to have no effect on the fragile incentive structures
of billionaires, as long as it is applied to all billionaires equally.
I'm not advocating such a tax. I am, though, suggesting that the
exquisite sensitivity to the incentives of rich people that dominates
our tax policy may be overwrought.
After 900-some words, it's all about taking their money away. Kinsley,
based on an offhand comment from one gigabuccaneer, is ready to decree
that a 50% wealth tax on billionaires wouldn't alter their
incentives much. Maybe. Although he's not advocating that.