Why "x% of people have y% of the wealth" is irrelevant.

[Borodog]

I've seen this tired old horse trotted out so many times it's pathetic. It's time to finally put it out of my misery.

A) The pie is getting bigger. It does not matter if 3% of the people own 90% of the wealth (numbers from another thread which I will not bother to investigate or dispute, since it is irrelevent regardless of what the numbers actually are), if the standard of living of the individuals continues to go up, which it does in a capitalist society. It doesn't matter if the "Gini" coefficient, a measure of "wealth concentration" continues to go up, because the standard of living of all individuals in society continues to go up. Anyone who doesn't believe this is invited to compare the standard of living of a modern janitor in the United States to kings and queens of prior centuries. The standard of living of the janitor is higher in practically every respect, with the exception of the ability to command servants.

B) Wealth turns over. As pvn has pointed out before, empirical studies have shown that 90% of affluent families lose their fortunes within 3 generations. Under capitalism, fortunes can only be build by continually innovating and pleasing large numbers of customers. Once that process stops, say when dilletant children take over the family business, poor decisions accumulate and that capital stock is lost, spent. It finds it's way into the hands of other capitalists better able to provide consumers what they want.

C) Concentrated wealth is good for consumers. Henry Ford started out with a capital investment of $25,000. By 1947 he was worth $1 billion. The reason he was worth $1 billion is because he provided consumers with what they wanted, a high quality inexpensive automobile. Better yet, he could provide high quality inexpensive automobiles because of the high productivity of his plants, which was only possible because of, you guessed it, a large capital accumulation; i.e. the factories and machineries whose value represented most of his $1 billion of "wealth". I.e. the vast majority of the "wealth" that all those evil capitalists have is the capital stock that they put to work for YOU. I don't have to own Ford to benefit from all of that capital. I don't even have to be a stockholder. All I have to do is buy a car, at far higher quality than I could build myself, and at far lower cost, and I gain the MASSIVE benefit of all that accumulated capital and productivity. I don't have to own Exxon's oil derricks, refineries, pipelines and trucks to gain the benefit of all that accumulated capital. All I need do is buy the gallon of gas at far lower cost and higher quality than I could ever hope to provide myself.