A very controversial and emotional issue is whether there should be a cap on individual net worth. On one hand, it seems like the whole "wealth cap" idea would make for a much more equal society, and keep the inequality down to a minimum. After all, how can it be fair for a tiny fraction of the population to collectively own more wealth than the rest of the world combined? Something has to be wrong with a society that allows for such gross economic inequalities of power and opportunity.
However, at the same time, the idea of placing a hard cap on individual earnings seems like a gross violation of personal liberty and the inherent right to strive for financial success. And the proponents of the system will argue that the unfettered creation of wealth is the engine of innovation, of economic growth, of upward mobility. However, if we start capping incomes, doesn't that kind of kill ambition and entreprenuership.
I guess in the end I believe that there is good reasoning to both sides, and it is a choice that should not be taken lightly, but should be balanced with great care on the scale of cost and benefit.
The moral and ethical argument for a cap on wealth is very strong. When a tiny elite amass unimaginable fortunes while millions struggle in poverty, it seems to violate the basic principles of fairness and human dignity. But money like that accumulated so much becomes political power and so those at the top stay at the top and those at the bottom have a harder time on that economic ladder. But looking at it from this point, a cap on wealth would balance the scale and see a more equal distribution of resources.
Then there's the practical matter that massive income disparity has a tendency to erode the social fabric and stability. If the fruits of economic progress are so disproportionately divided it foments resentment, separatism, and even outright civil disorder. A more equal system, that is everyone has an equal opportunity to succeed would most likely be better in the long run for the sustained prosperity and growth.
But the response to that would be that any kind of wealth limitation would be a totalitarian supression of personal liberty and the free market. Those who support pure capitalism believe that unrestrained creation of wealth is what leads to technological strides and business and job creation. However to cap income is to endanger the very same force that helped bring billions out of poverty throughout the world.
And how would u realistically put that into affect and enforce it. What's the right level for the cap? Who gets to decide? How do you stop them from finding loop holes or better yet relocating their assets and operations overseas.
I guess ultimately that is the sort of thing, complex and full of values, that good, thinking people can disagree on. Personally, I'm somewhat torn. I am very concerned by the tremendous inequality that exists in the world and I believe that there is a strong ethical argument for attempting to equalize the playing field. On the other hand, I'm hesitant about putting a cap on wealth, because I'm afraid that this would have unforeseen consequences, and it could end up doing more harm than good.
Or perhaps somewhere in between that would involve a bit more closing of tax loopholes, a little more strengthening of social nets, funding education and job opportunity for the poor. Then we won't need to take blunt, clumsy steps that would crush innovation and dynamism in order to achieve a more equitable society. But then again I know there is no easy answer to this.
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