Here’s a letter to The Economist.com:
Will Wilkinson’s essay on income inequality in America is splendid (“This ain’t no banana republic,” Nov. 19).” In it, Mr Wilkinson correctly challenges New York Times columnist Nicholas Kristof’s claim that “the wealthiest plutocrats now actually control a greater share of the pie in the United States” than in several countries of Latin America. Rich Americans, Mr Wilkinson rightly points out, overwhelmingly are business people who serve the middle-classes and not political, military, or ecclesiastic predators who steal from peasants.
This fact makes Mr Kristof’s claim that wealth is “controlled” in America highly misleading.
Except insofar as rich Americans succeed at getting government to protect their wealth with special privileges, such as tariffs, wealth is not “controlled.” Wealth is created only by serving consumers – that is, by making others wealthier – and it flees from those who stop serving consumers. Should Apple stop producing innovative products that consumers willingly buy, Steve Jobs’s fortune will disappear. Should Southwest Airlines start charging uncompetitive fares, its shareholders’ wealth will dissolve. Should a super-wealthy hedge-fund manager consistently fail to increase the value of his clients’ portfolio, he will become a not-so-super-wealthy ex-fund-manager.
In market economies, wealth isn’t controlled so much as it is deployed in the service of others.
Donald J. Boudreaux