When you think of a billionaire, what’s the first thing that comes to mind? The mansions? The yachts? Probably even the endless number of 0s in their bank account? However, it is a little-known fact that on average, billionaires hold only around $600 million of their wealth in bank accounts, a not-too-shabby amount but still considerably less than many may have estimated.[1] The majority of their wealth is actually tied up in illiquid assets: business shares, real estate, and other investments.

As of 2023, there are over 2600 billionaires in the world.[2] What makes this figure so significant is in the combined control they exert of the world's wealth, a staggering $12.2 trillion[3]; Oxfam reports that this combined fortune surpasses 60% of the world’s population’s wealth.[4] For just 10 seconds of work, billionaires earn more income than their employees’ annual salary.[5] Viewing the severity of this inequality, it may be reasonable to promote the idea of banning billionaires. Research shows that 1 in 3 billionaire’s wealth was inherited, highlighting the issue as unfair and hierarchical.[6] A billionaire’s exploitative nature of labour and manipulation of tax laws further encourages their vilification. It is, however, not a straightforward topic as its impact is wide-ranging, across multiple facets of society. This poses the question, “What would happen if we banned billionaires?”.

Upon the banning of billionaires, the redistribution of assets and wealth is the foremost consequence. When individuals can no longer own more than a billion in wealth, their assets and value are diminished. Instances of extreme wealth have been rising exponentially, with almost two-thirds of new wealth going to the richest 1%[7], concurrently, inflation has triggered an increase in poverty as many struggle to finance daily expenses. As other people receive the billionaire's redistributed wealth, the inequality gap is likely to reduce. The redistribution of wealth received by governments can additionally be directed to fund public developments, including education, healthcare, and infrastructure. 

Billionaires additionally are responsible for around 393 million tonnes of CO2 emission annually, approximately one million times more than an average person.[8] This not only owes to their million-dollar investments in companies who place profit over the environment who still exploit fossil fuels, but also owes to their luxurious lifestyles, featuring yachts, private jets, helicopters, and cars. Thus, climate change and its harmful effects, like severe storms and droughts, may be halted without the existence of billionaires.[9]

Adversely, the redistribution of assets is a complex matter where results may not always be desired. It raises questions as to how do you redistribute their wealth? Where does that money go? How can we fairly abortion that wealth? No one else should profit off the back of someone else’s hard work, purely because of the law. Some less fortunate people may receive a proportion of the wealth but lack the budgeting knowledge to manage this windfall responsibly. In turn, they are likely to be more frivolous, unprepared to use their new wealth properly. This scenario played out in real life, through Michael Caroll, infamously known as the “Lotto Lout”, who won £10 million on the UK 2002 National Lottery.[10] Former bin man, Carroll spent his winnings on drugs, alcohol, brothels, and gambling until he was left bankrupt in 2010,[11] leaving us questioning, if wealth redistribution is really a workable solution. In a similar vein, in a world where people have comparable incomes and wealth, hyperinflation is a likely consequence, with the value of money plummeting, leaving stock markets in mayhem. Luxury assets such as yachts worth hundreds of millions of dollars would no longer have any market and theoretically, any goods worth more than a billion dollars are inaccessible for purchase, reducing the value and demand of expensive assets. 

The majority of a billionaire’s wealth is directly bound to the successful companies that they have overseen, largely owing to their creative ideas. These companies, now widely successful, are worth billions and billions, employing tens of thousands of people and giving them a source of income, security, and jobs. Simultaneously, these companies provide a major source of revenue to the government through taxes. Alex Gerko, founder of XTX Markets worth 5.2 billion USD[12], contributed more than £480 million in tax in 2022.[13] In a way, this already constitutes a redistribution of wealth as these governmental incomes can be reinvested for public services such as education, healthcare and infrastructure. With the banning of billionaires, economic problems are likely to emerge, with tax revenue and employment at risk. The chaos does not stop there, with innovation and creativity being stifled. With billionaires no longer able to expand on their wealth, this diminishes any possible incentives to expand their business idea, leaving them demotivated, halting further innovation for the countries’ developments. 

Consider Elon Musk the CEO of Tesla, as an example. His net worth stands at $234.0B[14], and his company, Tesla, is valued at $819.98B[15]. If billionaires were to be banned, it means that Elon Musk could not have control of his own business or have a significant number of shares, with less than 1% of Tesla's shares exceeding his billion capital limit. Not only does this mean people in his position may exhibit a lack of desire to start new companies or explore new opportunities, but it also means that the company is more difficult to control and will not be as effective in decision-making. Consequently, the business itself may suffer and no longer be able to maximise its potential.

The banning of billionaires would clearly have a detrimental impact on innovation; as irrespective of the money generated, people’s earnings and their wealth are still capped, removing motivation for development. Interestingly, this may only be superficial. There is the intriguing possibility that with wealth redistributed and the removal of dominant players in the market, who may have developed a monopoly, many more businesses are likely to spring up. If billionaires are banned, gaps will open up in the market, providing smaller businesses with opportunities and room for creativity to grow. In an instance where a billionaire’s company controls 60% of a car market, their market would now have to be redistributed upon their limitation, giving other companies a chance to replace its productivity. With greater access to finance, greater access to the market as well as a lack of competition, it might encourage startups who previously could not enter an already monopolised market to develop their alternative products. 

Unfortunately, this could in turn cause several start-up companies within the same field of work to pursue an aggressive policy of product development or production. As such, they may collectively generate more emissions than the one already well-established business who has the ability to streamline and control their production waste. In theory, emissions from luxury lifestyles as mentioned before would surge again if start-up entrepreneurs become more wealthy and successful as a result of the removal of a monopoly. Now, instead of one CEO’s lifestyle, there will be 10 CEOs using their jets. 

An outright banning of billionaires is unlikely to gain worldwide support, and as such the wealthy from countries who wish to implement this ban, could simply move to a country that does not ban it. This is seen with tax laws where not all countries follow the same strict guidelines, allowing people to move overseas to take advantage of lower tax rates.[16] If for instance country A has a 70% tax rate, businesses may no longer base their headquarters there, and would move to a country charging lower, 30% tax. Country A’s government will then lose out on all taxes revenue from that business because they no longer domicile there. There has never been a single policy or law that the entire world has adopted. So, to ban billionaires means there will still be countries that do not abide by it. Where countries impose the banning of billionaires, they will run the risk of losing large companies to another country that is more lax, losing tax and employment benefits. 

As most billionaires’ value is directly tied to companies, the effect of the banning of billionaires deters smoothly running economies, so may not be the most appropriate solution to reduce wealth and the income inequality gap. Governments should instead target the reduction of cash stockpiling by the wealthy. To prevent scenarios where billionaires are hoarding large amounts of money, there can be a cap to the amount of maximum fiscal capital you can hold in banks. The wealthy should be required to make investments elsewhere such as assets or in other companies, to redistribute their wealth to others through jobs and contribute towards the economy. This in return improves interest rates and reduces inflation[17], since money, a scarce resource, will continue to cycle across the economy, rather than 100 billion per se, confined in someone’s bank account and removed from the economy. 

There must also be the redistribution of land; a lot of land ownership is historical, where London, for example, may be owned by only several lords and ladies, dukes, or the king and queen. It is reported that the majority of central London’s real estate is under the Crown, the Church, and five aristocrats, collectively holding £22 billion.[18] This may seem unfair to many where land was merely given to them as they are from a generation of the ruling family hundreds of years ago during the separation or division of land. Other investors are also prone to charge high rent prices and benefit unjustly from appreciating markets. Limits on the amount of land you can have in any one country is a feasible solution to this problem. 

There really is no telling how the world would look if we ban billionaires; though there are plenty of opportunities and threats, the issue remains extremely unpredictable. In summary, the opportunities lie within the fact that monopoly companies are broken down, creating gaps in the market for other enterprises to fill. Obvious threats are the potential halt to innovation, lower rates of taxes, and mass unemployment. Established businesses provide a way of living for millions of people around the world. By hindering and restricting businesses, there would be a human capital cost. There is also no guarantee that these companies that try to come in would be as profitable and successful, or would be able to provide the same wide-scale employment the way the large company has done. 

Banning billionaires impacts every individual; billionaires themselves would now no longer be being financially rewarded for their work as they should, stifling productivity and their desire to work. The wider public would suffer a loss from job insecurity, job availability as well as product quality; lastly, the government would receive less taxes from businesses however more money would be in circulation for the wider population. In a sense, the banning of billionaires also raises ethical questions. Is it really right to hinder someone’s ability to make money? Is it right to take other people’s wealth and assets? They’ve made money through being successful and generated revenue through taxes, so we shouldn’t be punishing them for it. Hence, billionaires shouldn’t be banned, however, wealth caps of liquid money in the bank should be put in place to slow down inflation.

Microsoft founder and former world's richest man Bill Gates has said, “As I look to the future, I plan to give virtually all of my wealth to the foundation.”[19] The Bill & Melinda Gates Foundation has donated billions of dollars to fighting poverty, disease, and inequity where it's most needed.[20] Similarly, over 240 of the top wealthy have pledged to give the majority of their wealth to philanthropy through the Giving Pledge.[21] This opposes the typical stereotype of selfish billionaires, as often many are responsible for charities and the redistribution of wealth through their own foundations and projects. Billionaires have got the powers the government doesn’t have or wish to use, hence their presence should not be banned, with the hope that their work continues to benefit the wider public. 

Endnotes:

1 Frank, Robert. “Billionaires Are Hoarding Piles of Cash.” CNBC, CNBC, 22 Sept. 2014, cnbc.com/2014/09/22/billionaires-are-hoarding-piles-of-cash.html 

2 Peterson-Withorn, Chase. “Forbes’ 37th Annual World’s Billionaires List: Facts and Figures 2023.” Forbes, 1 June 2023, www.forbes.com/sites/chasewithorn/2023/04/04/forbes-37th-annual-worlds-billionaires-list-facts-and-figures-2023/?sh=4177b3b177d7. 

3 Peterson-Withorn, Chase. “Forbes’ 37th Annual World’s Billionaires List: Facts and Figures 2023.” Forbes, 1 June 2023, www.forbes.com/sites/chasewithorn/2023/04/04/forbes-37th-annual-worlds-billionaires-list-facts-and-figures-2023/?sh=4177b3b177d7. 

4  “World’s Billionaires Have More Wealth than 4.6 Billion People | Oxfam International.” Oxfam International, 25 May 2022, www.oxfam.org/en/press-releases/worlds-billionaires-have-more-wealth-46-billion-people.

5  Glum, Julia. “The Median Amazon Employee’s Salary Is $28,000. Jeff Bezos Makes More than That in 10 Seconds.” Money, Money, 2 May 2018, www.money.com/amazon-employee-median-salary-jeff-bezos/ 

6  Jacobs, Didier. EXTREME WEALTH IS NOT MERITED. Nov. 2015.

7 “Top 5 Ways Billionaires Are Bad for the Economy.” Oxfamamerica.org, 2023, www.oxfamamerica.org/explore/stories/top-5-ways-billionaires-are-bad-for-the-economy/. 

8  “A Billionaire Is Responsible for a Million Times More Greenhouse Gas Emissions than the Average Person.” Oxfamamerica.org, 2022, www.oxfamamerica.org/press/press-releases/a-billionaire-emits-a-million-times-more-greenhouse-gases-than-the-average-person/. 

9 Nations, United. “Causes and Effects of Climate Change | United Nations.” United Nations, United Nations, 2020, www.un.org/en/climatechange/science/causes-effects-climate-change. 

10 Bett, John, and Fasika Zelealem. “King of Chavs Who Blew £10m Lottery Win Shares Horrifying Old Breakfast Routine.” Mirror, 2 Sept. 2022, www.mirror.co.uk/news/real-life-stories/king-chavs-who-blew-10m-27895060. 

11 Nsubuga, Jimmy. ““Lotto Lout” Who Blew Fortune Remarries Ex-Wife Who Left When He Used Prostitutes.” Metro, Metro.co.uk, 11 Oct. 2021, www.metro.co.uk/2021/10/11/lotto-lout-who-blew-fortune-remarries-ex-wife-who-left-when-he-used-prostitutes-15399089/.  

12  “Alexander Gerko.” Forbes, 2023, www.forbes.com/profile/alexander-gerko/?list=billionaires&sh=6bd9a5392378. 

13 Graham, August. “Russian-Born Mathematician Biggest Taxpayer in the UK Last Year.” Evening Standard, Evening Standard, 27 Jan. 2023, www.standard.co.uk/business/business-news/russianborn-mathematician-biggest-taxpayer-in-the-uk-last-year-b1056010.html. 

14 “Elon Musk.” Forbes, 2023, www.forbes.com/profile/elon-musk/?list=rtb/&sh=5f2f75707999. 

15 “Tesla Net Worth 2010-2023 | TSLA.” Macrotrends.net, 2023, www.macrotrends.net/stocks/charts/TSLA/tesla/net-worth. 

16 “Highest Taxed Countries 2023.” Worldpopulationreview.com, 2023, www.worldpopulationreview.com/country-rankings/highest-taxed-countries. 

17 “Hoarding: Definition, How It Works with Commodities, and Examples.” Investopedia, 2023, www.investopedia.com/terms/h/hoarding.asp. 

18 “Who Owns Central London?” Who Owns England?, Who owns England?, 28 Oct. 2017, www.whoownsengland.org/2017/10/28/who-owns-central-london/ 

19 Twitter, 2023, www.twitter.com/BillGates/status/1547235392721629185.

20 “Bill & Melinda Gates Foundation.” Bill & Melinda Gates Foundation, 2022, www.gatesfoundation.org/. 

21 “About - the Giving Pledge.” Giving Pledge, 2023, www.givingpledge.org/about.