COMMENT - The bashing of the super-rich leads astray: Europe does not have too many, but too few billionaires.

The bashing of the super-rich leads astray: Europe does not have too many, but too few billionaires—and not to mention the wrong self-made billionaires like Elon Musk or Jeff Bezos deserve recognition. The European super-rich are not in a good position: most of them inherited their wealth. Europe is experiencing difficult economic times. In the global competition, the continent is increasingly being pushed around. However, an export industry is growing strongly: football. Specifically, the worldwide success of the British Premier League is impressive. Up to 700 million viewers watch a top match each time—that is three times as much as the Super Bowl in American Football. This success has attracted financially powerful investors, often American billionaires. Not long ago, Amazon founder Jeff Bezos—considered the second richest person in the world—bought shares in Liverpool FC for a billion dollars. Out of the twenty Premier League clubs, only four are now majority-owned by the British. The United Kingdom needed better billionaires, lamented the "Economist," and wrote with British humor: "Our billionaires are so broke that they can barely afford the prestige objects of the country." The business magazine concluded that the inability of domestic billionaires symbolizes Britain's stagnation. The diagnosis of the "Economist" applies not only to Great Britain but to all of Europe: the continent needs more and moreover more potent billionaires. Billionaires as "System Errors"? The finding may be surprising, but billionaires are often treated as scapegoats in public discourse. Left activists accuse the super-rich of accumulating their wealth at the expense of the poor. "Every billionaire is a system error" is a popular slogan of capitalism critics. Such sayings sell well, but they are wrong: whoever brings wealth is not a system error, but on the contrary, the fruit of a powerful economy. A multitude of billionaires testifies to a vibrant entrepreneurship. A look at the names of the ten richest people on this planet is sufficient for illustration. They are: Elon Musk, Jeff Bezos, Larry Page, Michael Dell, Sergey Brin, Mark Zuckerberg, Jensen Huang, Larry Ellison, Steve Ballmer, and Warren Buffett. All of them have changed the world as founders of corporations such as Amazon, Google, Microsoft, Facebook, Nvidia, SpaceX, or Tesla. If you look at this list more closely, it is apparent: it is dominated by Americans. This is on the one hand an expression of the fact that the famous inventions and company foundations of recent times have been produced predominantly by the American economy. On the other hand, it is apparent that the ten richest people have all earned their wealth themselves. None have inherited their money. This distinction is essential: because it reveals how well the principle of meritocracy functions in an economy. Performance Should Determine Success It makes a significant difference how these billionaires came to their possessions: Did they profit from family background, a corrupt state, or an economic monopoly, as is usually the case with oligarchies? Or did they owe their rise to personal diligence and talent? Jeff Bezos, for example, was born into simple circumstances and adopted by his stepfather of Cuban descent. Jensen Huang spent part of his youth in an orphanage. Larry Ellison, in turn, was born to a single, 19-year-old mother. Warren Buffett, the investor, presented in a memorable comparison why an oligarchy rather than meritocracy in the economy is detrimental: "It is as if you were trying to assemble an Olympic team by selecting the oldest sons of the gold medal winners from the last generation." But which countries have a high share of meritocratic billionaires and which have a deep one? The USA stands out again: According to a worldwide survey by the firm Datapulse Research, 73 percent of American billionaires earned their wealth themselves, only 27 percent inherited it. "Old money" Prevails in Europe Conversely, it appears in most European countries: In Switzerland, a slim majority of billionaires, 52 percent, inherited their wealth. In France, it is 56 percent, and in Italy even 64 percent. Among the more than 30 countries surveyed, the share of self-made billionaires in Germany is the lowest: it reaches only a quarter, whereas 75 percent are heirs. The fact that talented entrepreneurs achieve their rise more easily in the USA than elsewhere is not just true for billionaires, as a study by Eric Zwick and Owen Zidar shows. The two economists investigated the origins of the company owners with assets of at least 25 million dollars—whom they call "everywhere millionaires." The result: a clear majority achieved their rise by their own efforts, only one in four inherited their business. How Dynamic American Entrepreneurship Works The dynamism of American entrepreneurship is also shown in so-called Unicorns. These are future-oriented, unlisted startups valued at over a billion dollars. If the USA currently has around 2000 such unicorns, there are only a quarter as many in Europe. Innovative startups prove to be particularly valuable in today's time. The reason is digitalization. If a company manages to achieve digital industry leadership, it can exploit its advantage globally. These superstar companies achieve enormous growth thanks to the "winner takes all" effect and operate extremely profitably. At the same time, they displace old, traditional business models. "Go to hell, richer idiot!" The USA owes this technological change largely to its bold entrepreneurs—who were able to earn wealth for themselves. In contrast, "old money" dominates Europe, meaning dynasties that manage wealth from previous boom periods. However, it is precisely the few European billionaires who have earned their wealth themselves who are judged most critically in their countries. This applies, for example, to the architect of the French luxury goods group LVMH, Bernard Arnault. The left-wing party La France insoumise launched a campaign against him personally and pulled Arnault onto their election posters. The newspaper "Libération," in turn, headlined on the front page "Casse-toi, riche con!" ("Go to hell, rich idiot!"). What this polemic hides: It does not make the poor any richer if the rich are made poorer or even driven away. The economy does not work like a static zero-sum game where the cake always remains the same size. Instead, the entire society benefits when innovative entrepreneurs bring success and wealth. Adam Smith, the Scottish moral philosopher, laid out over 200 years ago how the individual striving for personal advantage can become a motor of prosperity for all. Economists like the Nobel laureate William Nordhaus also showed that only a small share of the generated benefit falls to the innovators. The public and consumers profit the most in the form of falling prices, better products, or more efficient processes. Nordhaus explained this by saying that the extra profits of the pioneers quickly evaporate through market competition. California Debates a Wealth Tax Of course, this requires suitable state rules of the game. These must prevent the innovators from reaping excessive profits due to a monopoly position. Equally important is a high level of equality in society, to which a good education system contributes. Furthermore, billionaires, like all citizens, should pay their share in taxes. In Switzerland, the richest person pays one percent almost a quarter of all income taxes. The share is even higher for wealth taxes. Nevertheless, the demand for a special tax for super-rich is currently flourishing. A corresponding vote is upcoming in California. Such tax debates quickly lead to a war of faith, as shown by the vote on the inheritance tax in Switzerland. From a socialist perspective, all wealth is considered illegitimate. Although only a small minority thinks so radically, these discussions nonetheless contribute to making the bashing of the rich and billionaires acceptable. One may find Elon Musk or Jeff Bezos unsympathetic. But this is not about personal sympathy. Rather, it is about the question of whether those who have accumulated wealth through ambition and achievement also receive the necessary social recognition. Because the growing resentment towards the rich undermines the foundation of our prosperity. An economy can only flourish if new entrepreneurs constantly drive their own business forward—and for that, in the best case, are rewarded with good profits.