None have anything to do with “free market” capitalism
For many years, whenever I’ve warned that an increasing
portion of the nation’s wealth is falling into the hands of an ever-smaller
number of people, the moneyed interests have responded: “But that’s just
the free market,” or “the free market has decided they deserve it.”
Rubbish. There’s no such thing as a “free market” to begin
with. Today’s so-called “free market” is the outcome of political decisions
over monopolization, labor organization, private property, finance, trade,
taxes, and much more.
Who’s behind these political decisions? Increasingly, the
same small number of ultra-rich who have gained disproportionate influence over
our politics. They’ve created five ways for themselves to accumulate a billion
dollars or more.
1. First, exploit a monopoly.
Does Jeff Bezos deserve his billions
because he founded and built Amazon?
No. Amazon is a monopolist with nearly 40
percent of all e-commerce retail sales in America. In addition, Amazon
is protected by a slew of patents granted by the U.S. government.
In 2023, the U.S. government — through the Federal Trade
Commission and 17 states— charged Amazon with illegally maintaining a monopoly
by crushing competition, inflating prices, and harming consumers through
anticompetitive practices like punishing sellers who offer lower prices
elsewhere. (The trial is currently scheduled to begin in 2027.)
If the government fully enforced anti-monopoly (antitrust)
laws and didn’t give Amazon such broad patents, Bezos would be worth far less.
If anti-monopoly laws were enforced, other titans of high
tech would be worth far less, too — among them, Elon Musk, Meta’s Mark
Zuckerberg, Apple’s Tim Cook, and Oracle’s Larry Ellison.
2. A second way to make more than a billion is to get insider information that’s unavailable to other investors.
Billionaire Steven A. Cohen headed up a hedge fund firm in
which, according to a criminal complaint filed by the Justice Department,
insider trading was “substantial, pervasive, and on a scale without known
precedent in the hedge fund industry.” Nine of Cohen’s present or former
employees pleaded guilty or were convicted. Cohen got off with a fine, changed
the name of his firm, and apparently is back at the game.
Former billionaire investor Bill Hwang was convicted in late
2024 and sentenced to 18 years for fraud related to the collapse of his
Archegos Capital Management. The charges focused on his trading on insider
information, market manipulation, and fraud.
The crypto market often experiences sharp volatility linked
to policy announcements by the Trump regime. Moments after Trump announced new
tariffs on China, one inside trader became $150 million richer from a leveraged
short position.
Insider trading is endemic in C-suites. SEC
researchers have found that corporate executives are twice as
likely to sell their stock on the days following their own stock buyback
announcements, when their stock prices soar, as they are in the days leading up
to the announcements.
If government cracked down on insider trading, hedge fund
mavens and top corporate executives wouldn’t be raking in nearly as much money.
3. A third way to make more than a billion is to buy off
politicians who will change the rules of the “free market” in your favor.
The first Trump tax cut has saved Charles Koch and Koch
Industries an estimated $1 to $1.4 billion a year, not even counting tax
savings on profits stored offshore and a shrunken estate tax. The second Trump
tax cut saved the Kochs even more. They and their affiliated groups spent some
$20 million lobbying for the Trump tax cut and $550
million seeking to get Trump elected in 2024. Not a bad return on
investment.
Elon Musk, the richest person in the world, sank a quarter
of a billion dollars into getting Trump elected in 2024 and is on
the way to spending as much if not more trying to keep the House and
Senate under Republican control. What does Musk get out of it? Lower taxes on
himself and his businesses, rollbacks of regulations that limit his profits,
and federal contracts that make him even richer.
Trump and his own family have also reaped big rewards by
changing the economy’s rules in their favor. By the end of 2025, they had
cleared at least $1.2
billion through their crypto investments — whose value has ballooned
in large part because of Trump’s decisions to deregulate
crypto and encourage its use.
The value of their crypto investments also rose with Trump’s
pardon of Changpeng “CZ” Zhao — the billionaire co-founder of the Binance
crypto exchange who pleaded guilty to money laundering charges. Binance was
closely tied to World Liberty Financial, actively managed by Eric Trump and
Donald Trump Jr.
Earlier this year, a state-controlled United Arab Emirates
firm bought $100
million of cryptocurrency issued by World Liberty Financial —
essentially a huge deposit for World Liberty, which could then generate returns
in the tens of millions of dollars each year.
Trump’s wealth soared again in
mid-December on news that Trump Media & Technology Group, the publicly
traded company whose biggest shareholder is Trump, is merging
with TAE Technologies, a privately held fusion technology company. The
additional wealth was the consequence of more self-dealing by Trump: His
Department of Energy had created an Office of Fusion to support the
commercialization of fusion.
The family company of billionaire Commerce Secretary Howard
Lutnick has also been making a bundle off political influence. Lutnick’s
company helped raise capital for Toby Neugebauer, a billionaire who’s building
one of the giant data centers that will power the next generation of AI, banking
millions in fees in the process. Lutnick has also been twisting the
arms of American allies and dangling policy favors in exchange for investments
in U.S. industrial projects that have given his
family’s clients access to foreign capital.
If we had tough anti-corruption laws preventing such
political payoffs and self-dealing, the Kochs, Musks, Trumps, Lutnicks, and
other high-rollers wouldn’t get the spoils of their political influence: tax
breaks, regulatory rollbacks, and government subsidies that have enlarged their
fortunes.
4. The fourth way to make more than a billion is to extort
big investors.
Adam Neumann conned J.P.Morgan, SoftBank, and other
investors to sink hundreds of millions into WeWork, an office-sharing startup.
Neumann used some of the money to buy buildings he leased back to WeWork and to
enjoy a lifestyle that included a $60 million private jet. WeWork never made a
nickel of profit.
After Neumann was forced to disclose his personal conflicts
of interest, WeWork’s initial public offering fell apart, and the company’s
estimated value plummeted. To salvage what they could, investors paid him over $1
billion to exit the board and give up his voting rights. Most other WeWork
employees were left holding near-worthless stock options. Thousands were set to
be laid off.
A few wealthy fraudsters have been found guilty and forced
to disgorge their ill-gotten gains (in 2024, Sam Bankman-Fried, founder of the
FTX cryptocurrency exchange, whose net worth reached an estimated $26 billion,
was sentenced to 25 years in prison for defrauding customers and investors of
nearly $10 billion).
But many have not. If we had tougher anti-fraud laws and
better enforcement, Neumann and others like him wouldn’t be billionaires.
5. The fifth way to make more than a billion is to get the
money from rich parents or relatives.
A new
UBS report finds that a record number — 91 people — became
billionaires in 2025 through inheritance. Their total bounty was almost $300
billion.
It’s the beginning of what’s expected to be the largest
inter-generational wealth transfer in history, during which heirs will inherit
at least $5.9 trillion over the next 15 years.
An estimated 45
percent of all wealth in America is inherited. That’s because, under
U.S. tax law — which is itself largely a product of lobbying by the wealthy —
the capital gains of one generation are wiped out when those assets are
transferred to the next.
As Mitt Romney (remember him?) recently pointed
out, had Elon Musk purchased his Tesla stock for, say, $1 billion and held
it until his death, and if it were then worth $500 billion, he
would never pay the 24 percent federal capital gains tax on the $499 billion
profit. Under the current tax code, when Musk’s heirs inherit his stock, the
assets will be treated as if the heirs purchased it for $500 billion. So no one
will ever pay taxes on the $499 billion capital gain.
If unearned income were treated the same as earned income
under the tax code, America’s non-working rich wouldn’t be billionaires. And if
capital gains weren’t eliminated at death, many heirs wouldn’t be, either.
The good news is that Americans are becoming increasingly
alarmed about the harms billionaires are inflicting on our system. A Harris
poll released
last month finds that over half of Americans (53 percent) believe that
billionaires are threatening democracy.
In addition, a significant 71 percent of Americans believe
there should be a wealth tax. And a majority believe there should be a cap on
how much wealth a person can accumulate.
These schemes also threaten capitalism itself. The system
doesn’t work when monopolies, insider trading, political payoffs, fraud, and
large amounts of inherited wealth are rigging it. As the system loses public
trust, it begins to unravel.
When and if sane and honest people ever again control the
U.S. government, one of the first things they should do is enact a tax on large
accumulations of wealth.
Also an end to the current rule that allows all capital
gains to be erased when the owners of the capital die, thereby enabling heirs
to inherit all the accumulated wealth tax-free.
Not the least, we must get big money out of politics — to
end the bribes and corruption that have distorted capitalism for the benefit of
a handful of people at the top. (Here’s a
way to do it.)
