Want To Stop the Rise of Socialism? Then Fix Trillionaire Capitalism | Opinion

American capitalism has faltered. While it once spurred extraordinary growth and innovation, it now exhibits staggering wealth concentrations that defy justification. This has sparked political backlash against capitalism itself. Zohran Mamdani's rise in New York and the surge in support for Democratic Socialists of America are direct reactions to ordinary folks witnessing billionaires' fortunes soar while essential services like housing, education, and healthcare become unaffordable.

Anger toward the ultra-wealthy and tech oligarchs is becoming mainstream, leaving younger Americans increasingly skeptical of capitalism.

However, capitalism remains the most potent engine of prosperity, innovation, and progress humanity has ever known. The issue arises when capitalism produces inequality so extreme that many view it as grotesque, leading to political instability. Elon Musk's wealth, hovering above and below the trillion-dollar mark, exemplifies this problem. A trillion is more than the annual GDP of numerous nations; it's an amount no single person should possess.

While markets should reward success and governments shouldn't arbitrarily decide when someone has enough money, an economy dominated by a tiny plutocracy becomes morally repugnant, economically dysfunctional, and politically unstable. The risk of collapse, even violently, is real. Gallup's recent poll shows that nearly 40% of Americans have a favorable view of socialism, indicating we're dangerously close to this tipping point.

Inequality is not just an unfortunate byproduct of capitalism; it's essential to a rational universe, but only up to a point. The real question is how much inequality creates sufficient reward for extraordinary achievement without producing untenable and immoral wealth concentrations that foster a perception that the system is rigged against millions.

The U.S. has the highest inequality levels among developed nations. The populist politicians' mistake lies in misdefining the rich. Successful professionals like surgeons, lawyers, and entrepreneurs worth $10 million should be encouraged. However, the difference between being successful and possessing wealth on the scale of nations is vast.

Such fortunes grant unprecedented power and unaccountability, especially in the tech age where billionaires control critical infrastructure—social media, search engines, AI, satellites, and vast data collections. These tech titans, like Musk, Page, Bezos, Brin, Dell, Zuckerberg, and Ellison, wield private power once exclusive to governments. They are becoming moral pariahs, as depicted in the recent film Mountainhead.

To prevent this, we shouldn't wait for someone to accumulate a trillion dollars before confiscating it. Instead, we should re-align capitalism's rules to prevent fortunes from compounding to such extreme levels, leaving the majority of successful people undisturbed. Raising income taxes on hundreds of millions of dollars, taxing capital gains like regular income, and implementing stricter inheritance taxes can help.

Antitrust policy is crucial too; companies shouldn't be broken up solely due to founder wealth, but dominant firms must be prevented from stifling future competition by absorbing all rivals. Ultimately, the capitalist system—private property protection by the state—aims for the greatest good for the greatest number. This is maintained when society creates rich individuals and occasionally extraordinarily rich ones.

But what purpose does having $10 billion turn into $100 billion or a trillion serve? It's hard to justify that a billionaire worth $50 billion would be deterred from innovating by higher marginal taxes. The additional revenue should expand genuine prosperity opportunities: quality education, affordable healthcare, and infrastructure.