June 05 , 2026
Bezos created Amazon in 1994 selling books out of his garage on the newly created internet. There were lots of big companies at the time that should have crushed him, like Wal Mart, Costco, Sears, Macys, Barnes and Noble, Borders Books (went bankrupt), but he beat them all to create an online retailer that provides immense convenience to its customers – Inc Magazine
Are Billionaires Evil?
Alexandria Ocasia Cortez, usually known as AOC, is a Democratic Representative from New York City known for her far-left views on economics. She most recently declared that an individual “can’t earn a billion dollars”. In her views, anyone who is a billionaire did something immoral or illegal and their wealth is illegitimate. But where does she draw the line? If a billion dollars is immoral how about 100 million or just 10 million? Over two million households in the US have a net worth over 10 million dollars, are they all criminals?
One of the richest men in the world is Jeff Bezos, who has wealth in excess of 250 billion dollars. That seems way out of proportion to any work he did with the sweat of his brow. But what did Bezos actually do? He founded Amazon, and his wealth is based on his ownership of that company. Did Amazon hurt or help people in order to make Bezos so rich? How much money would the average person pay to give up Amazon and other online shopping for the next 12 months? How much is it worth that one can go online and buy rain ponchos or dog food or printer ink or an obscure book and have it delivered to your home in under 24 hours? And do this in many countries around the world?
Elon Musk is also worth about 250 billion dollars, but he created PayPal, SpaceX, and Tesla. Tesla on its own created the modern EV over a decade ago. Before Tesla, EVs were ugly, had ranges less than 50 miles, and had little technology in them. The current Teslas can self-drive in most conditions. I have done that and it’s kind of spooky how good they are. Most billionaires earned their money by building businesses that provided tons of value to customers. Taylor Swift is a billionaire, she did that by providing 10 dollars worth of musical entertainment per year to tens of millions of fans for 20 years. Does she not deserve to be a billionaire?
To be sure, Bezos and other billionaires benefit from public goods like education of the workforce and healthcare and roads and bridges, etc. If one looks at the 10 richest or the 50 richest people they are mostly self-made due to creating very successful businesses. Often, they beat the odds to win out. Bezos created Amazon in 1994 selling books out of his garage on the newly created internet. There were lots of big companies at the time that should have crushed him, like Wal Mart, Costco, Sears, Macys, Barnes and Noble, Borders Books (went bankrupt), but he beat them all to create an online retailer that provides immense convenience to its customers. Amazon currently sells about 800 billion dollars worth of goods each year, pays 25 billion dollars in taxes, makes net profit of 90 billion dollars, and employs over 1.4 million people around the world.
Through Amazon Prime it provides unlimited entertainment to an average family for less than 10 cents per day per person. The stock market says Amazon is worth about three trillion dollars. Bezos owned the entire company when he founded it but over time he had to sell off his ownership to get money to finance expansion (kind of like how the investors on Shark Tank take an ownership share of the startup being pitched). As a result, he now owns only 8% of Amazon but that comes to 250 billion dollars. Apple was founded in Steve Jobs’ garage. Microsoft was started by a Harvard dropout to write software code for new microcomputers that could sit on a desktop, unlike the older mainframes that took up an entire room. Facebook was founded in Harvard dorms, and Google was created by two Stanford grad students. Dell Computers was started in a dorm at UT Austin. Netflix started by renting DVDs through the mail by connecting with customers over the brand-new internet.
It’s really hard to win at creating a new company. Half of Stanford grads want to found the next Google or Uber. Almost all will fail. A company can look like a huge success but then turn around be beaten by the competition. Facebook entered a social media industry dominated by MySpace (remember that?) but was able to beat them to a pulp. Yahoo used to dominate search engines before Google. America Online was once so powerful it acquired Time Warner, now no one uses AOL anymore.
Young people have all grown up with online shopping, so they don’t appreciate what a great invention it is. It obviously has immensely improved our lives and saves several hours a week of time spent on running errands and shopping for hard-to-find goods.
We all benefit from the success of new technologies. Many Americans through their 401k, IRA, pension and insurance policies have money invested in Amazon and get a profit as the company succeeds. But there are no guarantees in business, if one looks at a list of the 50 largest American companies in 1980, most have fallen way down or been merged and some have gone bankrupt (Kodak, Sears, Woolworth, etc.).
The concentration of massive wealth in the hands of a few is a problem, and the current tax system lets them off too lightly. The Republicans always want to cut taxes for the richest, that is the real purpose of the party. It is imperative that Democrats win and make the system more fair. But there should always be an incentive for new products and inventions and ideas, and it is reasonable for some people to get really rich as the price we pay for that. That’s why America is such a rich country.
A truck driver in Oklahoma makes more than a doctor in Lisbon. There will be a specific proposal in November to tax California billionaires 5% of what they own, but that law will not apply in the other 49 states. A law like that will drive billionaires to leave California, and I think that would make us worse off. Taxes should be done at the national level and apply in all 50 states. It’s like the old fable: you don’t want to kill the goose that lays the golden eggs.
My view is that if someone creates a great company that provides a new service or product that the whole world wants, then the fortune they earn from doing that is legitimate. But I also think that vast fortunes should not be inherited. Bezos or Musk’s children do not deserve to be billionaires. When you die large fortunes over a billion dollars should be subject to extremely high taxes, perhaps 90%. If you don’t want to pay taxes on that money then you can use it instead to set up a charitable foundation, something Bill Gates has already done with his Microsoft fortune, and it has played a hugely positive role around the world for the last 25 years, for example, by funding the first effective malaria vaccine through research and clinical trials.
