According to a part-time economist and full-time member of Congress, no one can honestly earn a billion dollars. Rep. Alexandria Ocasio-Cortez (D-NY) has said that “You can get market power, you can break rules, you can abuse labor laws, you can pay people less than what they’re worth, but you can’t earn that.”There is much wrong with this claim.First, consider “market power.” Either no one has such power, or everyone does. Under free enterprise, each person can set a price for what he or she owns. I can offer my pen for $1 million if I choose. That does not mean I can force anyone to buy it. In that sense, market power means only the freedom to set one’s own terms, not the power to compel others.
SOCIALIST NEW YORK CITY BITES THE HAND THAT FEEDS IT
If “market power” means the ability to exclude competitors or dominate a market, then that is not a feature of capitalism but of government privilege. True monopoly depends on state support. The post office, patents, and old taxi licensing regimes are examples. Companies such as IBM, Standard Oil, and Ford were not true monopolies in this sense. They were simply dominant sellers for a time.
Second, what about “breaking rules?” Yes, people can become billionaires by stealing, as dictators and criminals do. But such people are not examples of free enterprise. By contrast, many billionaires have earned their wealth honestly through voluntary exchange. They made customers better off, at least in expectation, and usually in reality as well. If Bill Gates sold a computer for $500, a buyer must have valued it at more than $500, or the purchase would not have happened.
