Billionaires are being vilified with remarkable moral confidence.
A recent video from Congresswoman Alexandria Ocasio Cortez has been circulating in which she argues that no one can truly “earn” a billion dollars. “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.”
AOC’s framing is moral before it is economic. The idea is that there is some level of accumulation that ordinary human activity cannot honestly reach. Past a certain point, wealth becomes suspect by definition. It becomes, in her moral imagination, a kind of theft. That intuition is similar to the one behind California’s “billionaire tax,” a proposed one-time 5% private asset seizure on the net worth of every billionaire in the state. As economics blogger Noah Smith pointed out, you do not build a sustainable welfare program on a tax you collect only once. So the purpose cannot really be stable funding. It looks more like a symbolic act, part of the same politics of resentment. “I am concerned,” Smith tweeted, “that the Dems are becoming the party of ‘millionaires who resent billionaires.’”
In fact, the anti-billionaire argument is not really about distribution. At least not primarily. It is about power, as Mike Solana has pointed out. When the state confiscates 5% of a billionaire’s net worth, what it reduces is not really the billionaire’s consumption. Those resources are not sitting in a bank account. They are tied up in ownership stakes, productive assets, and company capital. Taxing that wealth reduces ownership, and ownership is a form of voice. Anyone who owns a meaningful share of an enterprise has some say in how that enterprise is run, what it builds, what it stops building, whom it hires, what it develops, and what future it tries to bring into being.
That is why Solana argues that billionaires need to fund institutions, media companies, and intellectual efforts that can fight the upstream battle. Lobbying against a specific bill matters, but modern economies need a broader effort to explain how wealth is created and what role extraordinary entrepreneurs and investors play in material progress.
I am sympathetic to that argument. The upstream battle matters. A society that does not understand how wealth is created will eventually turn against the people and institutions that create it. But intention matters, too. As Ruxandra Teslo has argued, institutions created merely as instruments of a narrow PR campaign become hollow. Cultural artifacts made for billionaire public relations almost always reveal the strategy behind them. They look engineered and feel defensive. They produce the opposite of trust.
This is similar, Teslo points out, to what happened to public health credibility during COVID. Scientific institutions allowed their authority to become visibly subordinated to political objectives. Once that happens, people begin to see the institution not as a truth-seeking body, but as a servant of a campaign.
So the answer cannot simply be: let’s build institutions to defend billionaires. That would become part of the wider crisis of institutional credibility. The better answer is the one Heike Larson gestures toward in a Substack post: “My call to billionaires wouldn’t be to found or fund more media companies, but to enable people to understand how they and their companies actually create value.”
Resentment is often misunderstood complexity. It is what fills the void when people cannot see how something works, and this is especially true of entrepreneurship. There is a deep invisibility behind the work of building a successful company, investing in risky ideas, coordinating large systems, and making products affordable for millions of people. We see the final product and the wealth, the stock price and the founder on stage. But we do not see the discovery process. And that invisibility is structural.
Frédéric Bastiat was the philosopher of the unseen. He taught us to look not only at the broken window, but at the opportunity cost hidden behind it. The job not created because of a regulation. The baker who never existed because the soldier was sent to war. The counterfactual good that never comes into being because a different choice was made. Bastiat’s genius was to make the unseen visible. But the unseen of entrepreneurship is even harder than the unseen of policy. Policy negation is at least retrievable through reasoning about what existed. Entrepreneurial negation is about a world that no one has any direct experience of at all.
In The Poverty of Historicism, Karl Popper argued that there can be no deterministic science of historical prediction because such a science would have to predict the future growth of knowledge. But if it could already derive the content of future knowledge, then that knowledge would no longer be future knowledge. It would already be known. The prediction collapses into contradiction. Something similar is true of markets. If you could already describe exactly what a breakthrough would be, you would already possess much of the breakthrough. A large part of entrepreneurial value consists precisely in perceiving the gap between what exists and what could exist.
Friedrich Hayek deepens the point. If markets were merely mechanisms for aggregating information that already exists, they would be very useful. But they are environments in which new information comes into being, which makes them indispensable. Markets are discovery systems. People try things, adjust, fail, notice, imitate, improve, and try again. The price system is not a search algorithm applied to fixed knowledge. It is the medium through which a living knowledge graph grows. The world seen by the entrepreneur is not quite the same world seen by everyone else.
This is why the public can often accept the wealth of an artist or athlete more easily than the wealth of an investor or founder. The performance of the singer is visible. The touchdown is visible. The actor’s face is on the screen. The public can connect the reward to the act, but the founder’s contribution accumulates through years of decisions whose value may only become obvious later. The investor’s work involves judgment under uncertainty, speculative bets, timing, patience, and interpretation. The payoff appears long after the act. The wealth arrives after the discovery has become legible. There is an asymmetry of visibility.
This is why so much good economic education is retrospective. It often looks like economic history. We explain the discovery process after it has already happened, because that is when the pattern becomes visible. Heike Larson points, for example, to Brian Potter’s essay on how TVs became so cheap. Potter shows how LCDs went from a niche technology in 2004, with only a small share of the market, to 95% dominance by 2018. He traces the rise of large fabs, lean manufacturing, brutal margin compression, and strategic competition between firms and countries. You cannot fully describe that process in advance. To participate in it, you have to act under uncertainty. You have to invest, build, compete, and bet before the story becomes obvious. But after the fact, we can reconstruct the path. We can show the hidden machinery of abundance. That is the work of economic education, and especially of thick economic education.
And here is where AOC is, in a way she did not intend, almost right. You really cannot “earn” a billion dollars, if by “earning” we mean wages paid for labor over known hours with known inputs. Earning has a clean grammar of hours, contracts, exchange, and desert. You cannot earn a billion dollars in the ordinary wage-labor sense, but you can discover a billion dollars. Peter Diamandis puts it simply: if you want to become a billionaire, help a billion people.
The moral structure of discovery is different from the moral structure of earning. The structure of discovery is not labor for wages. It is judgment under uncertainty in service of needs that cannot be specified in advance. The entrepreneur creates something that did not previously exist, in a context where no one could guarantee it would work, and the wealth that arrives later is the residual claim on the value she released into the world.
Part of the work of economic education is to build a vocabulary for discovery, for agency under uncertainty. If the public does not understand discovery, it falls back into folk economics. As we’ve written in past newsletters, Paul Rubin argued that zero-sum thinking is our cognitive baseline. It is the story we naturally tell ourselves. In small-band contexts, where wealth is easier to imagine as a fixed pile, someone else’s gain can easily look like your loss. If one person has a great deal, the simple explanation is that he must have taken too much.
Positive-sum thinking goes against the evolutionary grain. Zero-sum thinking is more like speech. It emerges naturally from social life. Economic thinking is like writing. It has to be taught. Without economic education, people default back to the folk economics of zero-sum thinking. They fill the unseen with the simplest available story. And the simplest available story is the one we brought from the savanna: someone has more because someone else has less.
To be fair to folk economics, not all billionaire wealth is discovery wealth. Some of it is rent. Regulatory capture creates moats that protect incumbents from competition. Politically negotiated subsidies redirect public resources to favored firms. The intuition behind AOC’s framing is not entirely fabricated. But a wealth tax does not separate discovery from rent. It expands state discretion over private wealth, which is exactly the territory where rent gets manufactured. If you are worried about cronyism, the answer is more competition, not more state discretion. You fix cronyism by limiting the points at which wealth can buy political privilege. The more power over the economy the government gains, the more businesses will spend influencing governmental decisions and less time discovering value.
The wealth tax is a broader symptom presented as a policy proposal. It is a symptom of a society that has lost the cognitive infrastructure needed to understand its own prosperity. Some of the blame belongs to economic illiteracy. But some of it also belongs to thin economics: the kind of economics that begins and ends with allocation under given preferences, given technologies, and given constraints. That kind of economics is important, but it is incomplete. And when it becomes the whole public understanding of economics, it becomes politically dangerous, because allocation is not creation and equilibrium is not discovery.
If someone asks, “Where did this person’s wealth come from?” thin economics often does not give a satisfying answer. To answer that question, we need Popper, Hayek, Bastiat. We need a richer account of entrepreneurship, uncertainty, discovery, institutions, and value creation.
At FEE, we call this thick economics. The educator who teaches a 16-year-old Hayek is doing more than explaining prices. She is helping defend, over the long run, the moral and institutional conditions that make entrepreneurial discovery possible. She is making the unseen seeable. She is teaching them to distinguish the verb “to discover” from the verb “to earn,” because the public tends to associate wealth only with earning, when much of modern prosperity comes from discovery.
We need to rebuild that cognitive infrastructure. A society that cannot understand how wealth is created will eventually punish wealth creation itself.
