Is income inequality really fantastic?
Millionaire investor & star of Shark Tank Kevin O’Leary believes income inequality serves a purpose. In fact he believes income inequality is fantastic.
The following exchange occurred on his Canadian show The Lang & O’Leary Exchange.
Amanda Lang: The wealth, that’s according to Oxfam, of world’s 85 richest people is equal to the three and a half billion poorest people.
Kevin O’Leary: It’s fantastic. And this is a great thing because it inspires everybody. They get the motivation to look up to the one percent and say I want to become one of those people. I am going to fight hard to get up to the top. This is fantastic news and of course I applaud it. What can be wrong with this?”
Stunned Amanda Lang: Really?
Kevin O’Leary: Yes really.
There should be context to every dialogue. That snippet seems to give the impression that Kevin O’Leary is an unfeeling and callous person. When taken into contest with the rest of the interchange something becomes more obvious.
Amanda Lang asks if O’Leary believes some poor kid wakes up in Africa thinking about being the next Bill Gates. He replies that income inequality creates the motivation that everybody needs. Lang made the most important statement that simply flew over his head. She asserts that one cannot pull up their socks if they don’t have any.
O’Leary immediately plays the redistribution card. “Don’t tell me that you want to redistribute wealth again,” O’Leary said. “That’s never going to happen OK.” He further says the stat on income inequality is “a celebratory stat,” O’Leary said. “I am very excited about it. I am wonderful to see it happen.”
A few months ago I wrote this blog post titled “Most Of The Rich Are Undeserving Of Their Wealth & Income.” It received some push back from a few people. O’Leary’s sentiment is currently codified in an ideology that prevents the poor in the aggregate, access to success.
The ideology that says “I did it and therefore you can too” is flawed in the context of opportunity. O’Leary dismissal of Lang’s statement about the poor person not having a sock to pull up in the first place is where those that think like O’Leary fail. There are exceptions where some because of sheer luck and brawn are able to supersede their environment and condition. However in the aggregate one’s station is static and one’s upward mobility is very low. Increasing income inequality makes this worse.
The following snippet from the referenced Oxfam report should be heeded.
Given the scale of rising wealth concentrations, opportunity capture and
unequal political representation are a serious and worrying trend. For
instance:
- Almost half of the world’s wealth is now owned by just one percent of the population.
- The wealth of the one percent richest people in the world amounts to $110 trillion. That’s 65 times the total wealth of the bottom half of the world’s population.
- The bottom half of the world’s population owns the same as the richest 85 people in the world.
- Seven out of ten people live in countries where economic inequality has increased in the last 30 years.
- The richest one percent increased their share of income in 24 out of 26 countries for which we have data between 1980 and 2012.
- In the US, the wealthiest one percent captured 95 percent of post financial crisis growth since 2009,while the bottom 90 percent became poorer.
This massive concentration of economic resources in the hands of fewer people presents a significant threat to inclusive political and economic systems. Instead of moving forward together, people are increasingly separated by economic and political power, inevitably heightening social tensions and increasing the risk of societal breakdown.
O’Leary’s joy in increasing levels of income inequality is at best ignorant. He fails to understand that all forms of capitalism are at risk. The increasing instability that will increasingly come about with exploding income inequality is unstoppable by him or any army. He disregards it at the peril of his own wealth and the world’s current order.