THE FRENCH NOVELIST HONORE DE BALZAC once said, "The secret of a great success for which you are at a loss to account is a crime that has never been found out, because it was properly executed." His point being that while success can be the product of obvious hard work, diligence, and good judgment, great success requires something more than that. People may feel it is naturally arrived at because the questionable source is hidden. Great success tends to justify its own existence. 

Representative Alexandria Ocasio Cortez has said, “Nobody earns a billion dollars.” It was Dan Riffle, her senior counsel and policy adviser who said, “Every billionaire is a policy failure.” This takes the issue out of the realm of moralizing about extremely wealthy individuals and puts it in the realm of policy and an economic system that produces overly concentrated pools of wealth and personal fortunes through policy choices. 

This is a Pro-Market Argument

Most of us want businesses and entrepreneurs to succeed through innovation, creating great products and services that improve lives and sell them at a profit. That's pro-social behavior in the marketplace. That's what we want, even those who think wealth and power are far too concentrated in America in 2026.

What economists call rents, anthropologists call negative reciprocity. Economists use "rents" to describe income that comes from market power or special privilege rather than productive activity. Anthropologists describe negative reciprocity as an exchange in which the strong exploit the weak or the clever conceal the true terms of the exchange.
If someone can become wildly wealthy from innovating a better product or service and exchanging that in the open, fair market, then more power (and wealth) to them. The vast majority of us would love to see it (though the implications for democracy are the subject for another essay). That's not what's at issue here.

Nor is this to say that many people who become billionaires are not talented and hardworking. Many people have access to the conditions I will list without leveraging them into unimaginable wealth. To reply that billionaires are often smart, talented, hard working people is to insist on missing the point. 

7 Conditions of Great Fortunes

IN MY OBSERVATION, BEHIND EVERY BILLIONAIRE are some combination of the following conditions:
1. INHERITED WEALTH, EDUCATION, AND SOCIAL CAPITAL
2. CRONY CAPITALISM
3. SUCCESSFUL ANTI-COMPETITIVE BEHAVIOR
4. LEVERAGING OVER-FINANCIALIZATION
5. LABOR EXPLOITATION
6. TAX PREFERENCE FOR WEALTH, TAX FRAUD AND AVOIDANCE
7. CRIMES, ACTUAL CRIMES

I’ve never come across a billionaire who hadn’t made their way to the pinnacle of wealth and power without at least two of these playing a substantial role. Usually, if you scratch a billionaire’s story of success, you will find more than two. 

"In a democracy we get the society we want while the rich try to buy the society they want."

Breaking Down the Policy Failures

Let’s unpack the legal and institutional failures that enable great fortunes:

1. INHERITANCE LAW AND EDUCATIONAL OPPORTUNITY

It's not a surprise to anyone that Bill Gates, Mark Zuckerberg, and Elon Musk all had rich parents and access to elite outcomes, open doors, a grand sense of possibility at the outset of their fortunes. It's rare that billionaires don't have very affluent parents. You don't have to inherit the whole ball of wax when your parents die to have a huge leg up over everyone else. Much of that inheritance takes the form of private school tuitions. And those are further bolstered by endowments, where the rich turn their money into tax free donations, transferring more money across generations. Houses full of books, money for tutoring and test prep, endless, often expensive extracurricular activities, schools with an existing pipeline to elite colleges and guidance counselors with connections. Marriages that come with a gift registration and wind up bequeathing a completely outfitted household of luxury goods and appliances. Friends of parents hiring interns and for first jobs. Good references. Zero-interest loans or outright gifts of down payments for first houses. This is part of how fortunes are handed down from generation to generation under the color of hard work and meritocracy.

2. CRONY CAPITALISM

Crony capitalism can take many forms. The key is that the government makes benefits available to some businesses but not others. There are many examples. Government subsidies (government loans to Tesla for example), policy arbitrage (no sales tax on  internet sales through 2017), leveraging publicly funded innovation (the mouse, the GUI, GPS, the internet), special access to public goods, like the public airways and publicly funded stadiums, mining and drilling rights... all of these are often part of what has been leveraged to create great fortunes. For many people this is obvious in the case of Elon Musk and Bill Gates. But it also attaches to entertainers and athletes like Taylor Swift and Lebron James who have leveraged the internet, public airwaves for radio and TV broadcast, publicly funded stadiums and more to turn their talent and efforts, not into great affluence, but fortunes beyond the imaginations of pharaohs. 

3. BREAKDOWN OF COMPETITION POLICY

Whether it is actively violating antitrust law or just benefiting from our lack of meaningful antitrust law in the United States from the 1980s up through the Biden administration, we find market concentration behind many great fortunes. It's the companies that don't have to compete that really, really succeed. New forms of anti-competitive behavior develop in the market but we no longer address them with new laws. 

Capitalists have long hated competition. In 2014, the oligarch Peter Thiel famously wrote an opinion piece for the Wall Street Journal entitled: Competition is for Losers. “If you want to create and capture lasting value, look to build a monopoly,” he wrote. It is democracy that keeps injecting competition back into markets while existing capitalists try to minimize it. 

So when Elon Musk gets government money to get Tesla off the ground and creates a closed system of charging stations that only works for Teslas, this was exactly what we figured out that we shouldn't allow when we forced the railroads into an open architecture of gauges and couplers. It’s a combination of crony capitalism and the avoidance of the kind of open architecture we imposed on railroads and electrical systems with uniform voltage, wiring, outlets, and plugs. 

Net Neutrality is the new version of railroads being forced into common carrier laws, charging the same, published rates for all their customers. We call them ‘patents’ but the full name is ‘patent monopolies’ and we’ve let them sprawl far beyond what economists deem necessary to spur innovation, instead they have been designed to impede innovation and concentrate wealth. Copyright law, the same. In the 1790 copyright law, 14 years of protection was granted. Now it has sprawled to the rest of the creator’s life-plus-70-years or 95/120-year terms. 

4. OVER-FINANCIALIZATION

The U.S. finance industry comprised only 10% of total non-farm business profits in 1947, but it grew to 50% by 2010. Over the same period, finance industry income as a proportion of GDP rose from 2.5% to 7.5%, and the finance industry's proportion of all corporate income rose from 10% to 20%. What is important here is the change over time. What I think we’ve seen is the shift from finance serving the purpose of connection, transforming savings into investment to becoming a product in and of itself that provides massive but unproductive leverage in the economy. 

The famous example here being George Soros and The Bank of England. Soros is known as "The Man Who Broke the Bank of England" as a result of his short sale of US$10 billion worth of pounds sterling, which made him a profit of $1 billion, during the 1992 Black Wednesday UK currency crisis. This was not a pro-social exchange of value where everyone involved ended up better off. We can see the results in the transformation of real estate loans into complex financial derivatives that incentivized the issuance of more and more poorly underwritten real estate loans, finally resulting in the Crash of 2007. Famously, almost nobody was held legally liable for destroying billions and billions of dollars in value.

Chart showing the wealth and income share of the top 1% as a percentage of total societal wealth and income in the United States. The Great Compression starts after WWII and ends with Reagan. We can see the impact of the Clinton Tax reform on the incomes at the top as they start to get paid in stocks. 

5. LOSS OF UNION POWER AND THE EROSION OF THE MINIMUM WAGE

This will seem obvious to many. What is missed is that the goalposts have moved. Where the federal minimum wage has lost value since the peak of the American middle class, we have to understand that as a policy choice that has redistributed wealth and power from the bottom to the top. If the minimum wage had kept pace with inflation from 1968 when the gap between the top 1% and the middle class was the smallest, the current minimum wages would be $28 an hour. 

As the power of labor unions has diminished over the same period and the American middle class feels hollowed out from when ordinary Americans could afford homes, vehicles, healthcare, and education, we have to understand that as a policy choice that has redistributed wealth and power from the bottom to the top. US labor union density peaked in 1954 at nearly 35% of the workforce. Today, overall union membership stands at a historical low of just 10.0% of all wage and salary workers. Letting that happen started with the passage of the Taft-Hartley Act in 1947 and accelerated when Ronald Reagan fired the air traffic controllers, signalling that employers could play to the letter of the law, not the spirit of the law. 

As corporate America has become increasingly concentrated, worker power has further diminished. The resulting proliferation of non-compete clauses, even for fast food workers, mandatory binding arbitration replacing access to the courts for workers and consumers, the signing away of our privacy rights and the transformation of our individual data into corporate assets are all the subject of policy choices that redistribute power from the bottom 90% to the top 0.0001%.

6. TAX PREFERENCE FOR WEALTH, TAX FRAUD AND AVOIDANCE

The rich know they can cheat on their taxes and get away with it because enforcement is underfunded when Democrats are in power and just switched off when Republicans are in power. Tax avoidance is legal and abetted. Most people understand this in general but memoryhole it in the specifics or when they want to defend the wealth inequality that is strangling this country. When the tax code was reformed under Clinton, it seemed fairer at first blush but the upshot was that the c-suite started getting paid in stock and their wealth skyrocketed, ending The Great Compression of income and wealth that followed the New Deal after WWII. I won’t go into further detail on this one other than to say, stop pretending that it isn’t happening for real, not just in theory.

7. CRIMES, ACTUAL CRIMES

We barely enforce criminal code against white collar criminals and where we do it is laughable. It’s serious crime for a waitress to steal $10,000 over the course of the year from their employer through taking it from the till and hiding that fact. That could easily land them in jail. But if the chain restaurant that employs her pressures managers to steal $10,000 from her and maybe a million or more from their employees in wage theft, then they get a slap on the wrist. They make everyone whole after going without, pay a fine, and nobody goes to jail, not even close. If this goes unenforced or is negotiated away to lighten the load of courts and underfunded enforcement agencies then they are going to end up richer than they would have been if they obeyed the law. Lots of businesses succeed in part and fortunes are built on crimes they know they can get away with.

This Is Not About Moralizing About Bad Billionaires

WHEN SENSIBLE PEOPLE ON THE LEFT ARE HONEST AND NOT MORALIZING ABOUT GREED, the phrase, “Every billionaire is a policy failure” means that if we had a competitive economy that forced the successful to succeed on profits, not exploitation and wealth extraction we’d have fewer billionaires … perhaps no billionaires. Instead, Elon Musk recently became our first trillionaire.

The phrase, "Billionaires shouldn't be allowed to exist" is a bastardization of "Every billionaire is a policy failure" but it doesn't mean that billionaires should be led to the guillotine, it means that they should be taxed down to size, forced to compete, deal with unions, etc. If we broke up inter-generational wealth through real taxation of wealth and through confiscatory inheritance taxes. If we enforced competition policy properly across anti-trust, common carrier law, open architecture, patent monopoly law, copyright, and the rest, we’d have more millionaires and fewer billionaires. If we treated the wealth created by the public sector as a public asset instead of a gift for a chosen handful of businesses, if we had open, competitive bidding on government contracts, if we stopped allowing Too Big Too Fail, we’d have more millionaires and fewer billionaires. We'd also have a bigger, stronger middle class.

I'm sure that Taylor Swift and Lebron James are fine people.

I am not talking about greed here. I would define greed as the desire for self-enrichment detached from a deeper sense of self-interest or connection to one's responsibilities as a member of the community. This is not about that. It is about the systems the most fortunate among us operate in. Those systems change over time, from state to state, and country to country. Some systems generate better, fairer outcomes than others. Fairer, freer exchanges than others. More thriving citizens and fewer desperate citizens. 

Taylor Swift seems like a nice person, and that's beside the point. She became wealthy because she is an extraordinarily talented and hugely popular pop star. She became a billionaire because she operates within a system of public investments and policy choices that concentrated extraordinary wealth among a handful of winners. Her career benefited from publicly funded broadcast infrastructure, the internet, publicly subsidized stadiums, and platform monopolies like Ticketmaster, YouTube, Spotify, Facebook, and Instagram. Taking control of her intellectual property made her even wealthier, but modern copyright law has evolved into a legal regime that concentrates wealth far beyond what is necessary to reward innovation. Good for Taylor Swift. The question isn't whether she deserves her success. It's whether these institutions should produce billionaires in the first place. Swift became affluent because of talent. She became a billionaire because of policy.

LeBron Jame's value was substantially built on publicly subsidized arenas, public roads and airports getting him to games, and publicly funded broadcast infrastructure delivering his product to eyeballs. The core for James has been elite basketball training feeding the strength of the NBA through public university programs. He may have only taken advantage of high school level training himself but his peers were overwhelmingly getting their NBA versions of a free Harvard MBA at public universities and that is where the bulk of the NBAs talent pool has been built. 

IN A DEMOCRACY WE GET THE SOCIETY WE WANT WHILE THE RICH TRY TO BUY THE SOCIETY THEY WANT

Haunting this entire essay has been the need for democracy and campaign finance reform. If we want an economy that serves the majority, we  need a democracy that is more responsive to the majority. To get the labor, antitrust, estate tax laws, and the rest needed for an economy that spreads wealth and rewards hard work and innovation, instead of concentrating wealth among a handful of lucky winners pulling up the ladder behind them, we need a more responsive democracy. I leave it to readers and their leaders as to which policies to support but I think our direction is clear if we want to address inequality and our billionaire problem as the systemic, policy problem it is. 

The point of saying "Every billionaire is a policy failure" is not to condemn extraordinary success. It is to remind us that extraordinary concentrations of wealth are never simply facts of nature. They emerge from the rules societies write, the institutions they maintain, and the policies they choose to enforce—or abandon. Democracies cannot eliminate inequality, nor should they try. But they can decide whether markets reward innovation and productive exchange, or whether they increasingly reward inherited privilege, monopoly, and extraction. That choice belongs to citizens, not billionaires.