It was bound to happen eventually: Elon Musk has become the planet’s first trillionaire. Until recently, economists who spoke about “trillions” were describing the GDP of the largest economies or the accumulated value of bequests on their way to the heirs of today’s billionaires. The term is not often used in daily conversation, let alone to describe the wealth of an individual.
But now we have entered a new phase of the oligarchic era. Previously, when we described the wealth of the world’s richest billionaires, it was understood as a few hundred billions. Three years ago, the value of Musk’s total assets was estimated to be about $250bn. The pace at which it has increased is mind-boggling – and so is what it represents.
We need to know two things about trillionaires: what a trillion dollars exactly stands for, and why this level of wealth concentration is dangerous.
A trillion is $1,000,000,000,000 – or “12 zeros”. Macroeconomists may understand the significance of this number, but most of us don’t. That’s why, when I wrote about a book about the need for a cap on personal wealth, or “limitarianism”, I proposed the concept of “an equivalent hourly wage”, the wage that one needs to earn to accumulate a fortune. In other words, in the case of Musk, what wage would he have to be on to amass a trillion dollars? The answer is that, even if he worked 70 hours a week from age 20 to 75 and took no holidays, his pay rate would need to be about $5m an hour. By way of comparison, the median hourly wage in the US is just under $25.
Why is such wealth concentration a problem? One reason is fiscal fairness. The economist Gabriel Zucman has shown that billionaires pay much lower effective tax rates than others. This is because our legal systems contain so many possibilities for tax avoidance – for instance, by shifting financial flows between the different countries in which their companies are active, by making use of loopholes in the law, or by putting their wealth in tax havens.
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For decades, neoliberal economic thinking has urged us to accept cuts in the tax rates of the richest on the basis that eventually their wealth will trickle down. The claim has been that everyone benefits from the rich becoming billionaires – and now trillionaires. But even the IMF has by now accepted that this is not true. It is an optimistic ideological myth to ensure we stop worrying about widening inequalities.
A second argument against billionaires and trillionaires is wastefulness. There is no point in an individual having so much money, and it is scandalous, given that many people die prematurely or live stunted lives with very few opportunities, simply becausethe richest take the lion’s share of the wealth that we as societies produce together. A less unequal distribution of wealth in the world would allow humanity to address crucial global challenges such as global heating, while 99% of the global population would live better lives (and perhaps the 1%, too, given the corrosive mental health effects and social isolation that tend to come with extreme wealth). And the richest would still enjoy very nice lives.
But perhaps we should focus most of our attention on the third reason against billionaire and trillionaire wealth, and that is the harms it creates. Extreme wealth concentration undermines democracies. It comes with massive greenhouse gas emissions and environmental harm that are not needed to live a dignified life. These harms lead to social problems, and even economic damage because disproportionate corporate power risks making the economy less fair and competitive.
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A focus on harm is alien to the dominant thinking about money, which is built on the assumption that when it comes to wealth accumulation, the sky is the limit. But we need a paradigm shift when it comes to thinking about the negative effects of extreme wealth concentration.
As the world’s richest person, Musk is a clear example of these dangers. He made the largest donation in history to a presidential campaign, spending around $290m on Donald Trump’s 2024 presidential campaign. He then used the power and influence to create the “department of government efficiency” (Doge), wreaking havoc in the US civil service. Musk has dismantled USAID, the agency that funded and operated a wide range of humanitarian and development programmes, including rapid interventions to prevent famines. Scientists have estimated that due to the closure of USAID, more than 14 million lives will be lost by the end of 2030, including 4.5 million children under five.
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Extreme wealth concentration stands for extreme power. And Musk is using that power, including via his social media platform X, to amplify racist and xenophobic sentiments. He enables the spread of fear and violent rhetoric, thereby fueling irrational anxieties that drive voters to the radical right. He has meddled in Europe’s internal politics, boosting the far-right AfD in Germany, for instance, and calling the UK prime minister a criminal.
The ultimate danger is the so-called oligarchic endgame theory, whereby power is concentrated among the super-rich. Governments, captured by the richest, then do everything to protect the privileges of this group and its supporters. Democracy itself is at risk if the rigid social hierarchy implied by this concentration of power among the wealthiest comes to pass.
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If we want to prevent this from happening, we will have to find ways to curb current levels of wealth concentration. And not just Musk’s trillion. We need initiatives such as the extreme wealth line project that aim to find out, based on the available scientific evidence, the threshold at which wealth begins to cause harms, and where to place the “wealth line”, just as we use the “poverty line” to determine what an adequate income is for people to live on.
But it starts with understanding why billionaires and trillionaires are not a sign of success, but of a dysfunctional system that is harmful to all our lives.
