Yes
NoThis book review of ‘Limitarianism’ by Ingrid Robeyns argues that extreme wealth is a structural problem that actively corrodes democracy, creates poverty, and should be limited. The author even suggests a cap on individual wealth and a prohibition on large inheritances.
What are your thoughts on the idea of a maximum wealth limit, and do you think it could ever be a viable solution in South Africa or globally?
If you implement a personal wealth limit, wouldn’t the most wealthy people leave/invest elsewhere/move money offshore/etc? Perhaps set up a million trusts and split the wealth? At least currently there is an incentive for the obscenely wealthy to actually “show off” their wealth and spend it (hopefully locally) thus putting the money back into the economy. There are a few individuals who are greatly motivated by their unlimited greed, and those tend to be the individuals who take risks and start risky ventures, etc. Take away that motivation, and we might just end up with mediocrity.
I haven’t read the book, so this may already be addressed, but the ultra-wealthy often reach that status through the valuation of businesses they own—sometimes early on, when their role is critical and little equity has been sold (as with unicorns). Much of this wealth is in untradeable equity, making an arbitrary cap like USD 10 million hard to apply.
Capping net wealth may sound appealing, but it risks stifling wealth creation. A simpler tax system with fewer loopholes may be more effective than adding another tax that lawyers, accountants, and tax havens will find ways to exploit.