” in the past, no country was rich. There’s lots of uncertainty involved in historical GDP data — plenty we don’t actually know about populations, prices, and what people consumed in those eras. But even allowing for quite a bit of uncertainty, it’s definitely true that the average citizen of a developed country, or a middle-income country, is far more materially wealthy than their ancestors were 200 years ago”
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“whatever today’s rich countries did to get rich, they weren’t doing it in 1820. Imperialism is very old — the Romans, the Persians, the Mongols, and many other empires all pillaged and plundered plenty of wealth. But despite all of that plunder, no country in the world was getting particularly rich, by modern standards, until the latter half of the 20th century.
Think about all the imperial plunder that was happening in 1820. The U.S. had 1.7 million slaves and was in the process of taking land from Native Americans. Latin American countries had slavery, as well as other slavery-like labor systems for their indigenous peoples. European empires were already exploiting overseas colonies. But despite all this plunder and extraction of resources and labor, Americans and Europeans were extremely poor by modern standards.
With no antibiotics, vaccines, or water treatment, even rich people suffered constantly from all sorts of horrible diseases. They didn’t have cars or trains or airplanes to take them around. Their food was meager and far less varied than ours today. Their living space was much smaller, with little privacy or personal space. Their clothes were shabby and fell apart quickly. They had no TVs or computers or refrigerators or washing machines or dishwashers or toasters or microwaves. At night their houses were dark, and without air conditioning they had trouble escaping the summer heat. They had to carry water from place to place, and even rich people pooped in outhouses or chamberpots. Everyone had bedbugs. Most water supplies were carried from place to place by hand.
They were plundering as hard as they could, but it wasn’t making them rich.
Nor were colonized and exploited nations and peoples rich before the European empires arrived. Yes, Africa, Latin America, and parts of Asia were harshly exploited by European empires for their natural resources. But although Africa, Latin America, and Asia were closer to Europe in terms of living standards back then, they were all very, very poor by modern standards.
This should be the first very strong clue that modern rich nations’ wealth didn’t come primarily from plunder, but from something else — something that nations started doing over the last century and a half. In fact, we know what that something is — it’s industrial production, coupled with modern science.”
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“there are two more sophisticated cases you can make for the “imperial plunder” theory of national wealth. The first is that continuing plunder is responsible for income differences between countries. The second is that plunder was necessary to initiate the process that eventually led to industrial production and modern science. The first of these arguments is wrong; the second can’t easily be disproven, but there’s major reason for doubt.”
How could changing capital gains taxes more revenue? Grace Enda and William G. Gale. 2020 1 14. Brookings. The rich benefit as Democrats retreat from tax on unrealized capital gains Greg Iacurci. CNBC. 2021 12 29. https://www.cnbc.com/2021/12/29/the-rich-benefit-as-democrats-forgo-tax-on-unrealized-capital-gains.html The Many Problems With Taxing
“We do not have oligarchs in the U.S. the way countries like Russia do. Our millionaires and billionaires are prevented from pulling political puppet strings both by custom and by campaign finance laws which cap their financial contributions to some degree and require disclosures. Though companies do sometimes successfully lobby for government contracts and subsidies—Musk’s hypocrisy has been widely documented on this front—we don’t have widespread, unchecked corporatism where the government always serves to further companies’ bottom lines, or where companies become exempt from government scrutiny for having curried favor with the right people. And free marketeers tend to believe that the existing patchwork of subsidies and handouts ought to be stopped since they serve as market distortions, artificially propping up companies that wouldn’t succeed or be competitive on their own merits.
If Sanders’ point is not merely that wealthy people exercise undue influence on the political process (as oligarch implies) but rather that wealth accumulation always and everywhere ought to be prevented, as he insinuates when he mentions their superyachts, that’s an even weaker critique. People accumulate extreme wealth in this country most often through inventing a product or founding a company that millions or billions of people end up valuing highly. Consider Jeff Bezos, worth $177 billion, per 2021 numbers; Elon Musk, $151 billion; Bill Gates, $124 billion; Mark Zuckerberg, $97 billion; Warren Buffett, $96 billion; Larry Ellison, $93 billion; Larry Page, $91.5 billion; Sergey Brin, $89 billion. More often than not, that process is iterative, with tons of failures before striking gold. When a company is successful, those who were involved in its founding often scatter, taking their earnings and intellect and founding new companies, starting the whole iterative process over again.”
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“Financial planning firm Ramsey Solutions’ 2021 millionaire study found that 79 percent of the 10,000 U.S. millionaires surveyed did not receive any inheritance from their families. Of those who did receive inheritances, who are in the top 1 percent, Federal Reserve data show those inheritances were to the tune of $719,000 on average. More than half of America’s billion-dollar companies have at least one immigrant founder who came to the U.S. as a kid. Extreme wealth, by and large, isn’t generated by investing inherited money, but by starting companies that bring value to millions of customers.”
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“The ’08 financial crisis almost brought Tesla crashing down, and disastrous Falcon 1 launches around that same time almost left SpaceX in pieces. “That historic fourth flight on September 28, 2008 made the Falcon 1 the first privately built liquid-fueled booster to reach orbit,” writes Pethokoukis. “It saved the company. But would that launch have happened if Musk had left PayPal with $60 million less? Would Tesla have muddled into 2009 and beyond? Kaplan doesn’t think so.”
Nor does Musk, in fact.
Central planners like Biden and Sanders don’t appreciate how fragile many of today’s biggest and boldest companies—SpaceX, Tesla, and Amazon—once were. Serial entrepreneurs, who exit one venture and quickly invest their earnings in another, are oftentimes wealthy enough at exit that they would be hit with wealth taxes if the Biden plan or any of its evil twins become law. But two things must be kept in mind: Their wealth is rarely liquid, and that money often gets quickly invested into other ventures that we would lose out on if it had been taxed away.”
“the Massachusetts Institute of Technology (MIT) announced that it would reinstate its SAT/ACT test requirement for applicants. In a departure from the trends set by other elite universities, MIT rolled back its admissions policy, implemented in the 2020–2021 admissions cycle, which made standardized test scores optional. Administrators cited key issues with “holistic” admissions standards, an increasingly popular method of equitably distributing open spots to students regardless of how well they perform on standardized tests.
In a statement explaining the decision, MIT Dean of Admissions and Student Financial Services Stu Schmill noted that MIT’s “research shows standardized tests help us better assess the academic preparedness of all applicants, and also help us identify socioeconomically disadvantaged students who lack access to advanced coursework or other enrichment opportunities that would otherwise demonstrate their readiness for MIT.”
Without an objective measure like a standardized test, low-income students—who may not have equal access to other pieces of the holistic pie, such as a plethora of Advanced Placement (A.P.) classes or numerous extracurriculars—have a harder time proving that they are academically prepared for an MIT education. A move that was intended to increase diversity and help low-income students, as it turns out, mostly helps low-scoring wealthy students—and makes it harder to identify talented yet underprivileged applicants.
MIT now distinguishes itself from other elite universities, a spate of which have removed their SAT and ACT requirements in recent years, primarily citing COVID-19 and diversity-related justifications for the policy change.
The original logic of such policies is based on the idea that SAT and ACT scores correlate strongly with income, which suggests that students from poorer households are denied admission to competitive schools solely because they can’t afford to ace the SATs.
However, omitting standardized test scores makes all applicants reliant on application materials that correlate even more highly with income, such as admissions essays. A 2021 Stanford study found that essays are actually more strongly correlated with household income than SAT scores. Thus, by omitting one income-correlated metric, one that is even more closely related to income takes prominence.
While wealthy parents can pay for test prep, they can’t take a standardized test for their children (well, almost never). However, with essay coaches and college counselors at their disposal, many wealthy students’ college essays can be manicured to fit exactly what schools are looking for.”