Why Democracy Needs the Rich: John O. McGinnis on Wealth, Power and Pluralism

Summary

Podcast Summary

Episode Overview

Podcast: Merryn Talks Money (Bloomberg)
Episode: Why Democracy Needs the Rich: John O. McGinnis on Wealth, Power and Pluralism
Host: Merryn Somerset Webb
Guest: John O. McGinnis – Law professor, author, and former U.S. Justice Department official
Date: June 8, 2026

In this episode, Merryn Somerset Webb engages John O. McGinnis on the arguments in his new book, “Why Democracy Needs the Rich.” The discussion centers on the societal roles of the wealthy: how their influence, diversity of opinion, and independence are critical not only financially but as providers of pluralism, a counterweight to dominant intellectual and bureaucratic classes, and as catalysts for innovation and reform. The duo dig into the ongoing debates about taxing the rich, entrenched power, and democracy’s inherent tensions, all while challenging conventional wisdom about wealth and its effects on politics and society.

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Key Discussion Points and Insights

1. The Financial Role of the Rich in Democracy

• Merryn sets the stage by laying out the fiscal reality: in countries like the UK, the wealthy—particularly the top 1%—pay a disproportionate share of taxes, funding much of what the majority votes for ([03:48]).
• Quote:
  “If you look at it in the UK, for example, the top 1% of our taxpayers pay 28 to 29% of all our income tax… So if you look at it like that, we say, how could you manage without the rich? They actually, they are the ones who pay for what we vote for.”
  — Merryn Somerset Webb [02:13]

2. The Rich as Catalysts for Pluralism

• McGinnis argues their key function is fostering pluralism—independent, varied viewpoints—in contrast to the professional influencers (academics, journalists, bureaucrats) whose thinking tends to be uniform and left-leaning ([03:48–06:06], [09:45]).
• He draws on Coleridge’s “clericy” concept to compare today’s influencers to historical elites, suggesting the rich break up the homogeneity of thought.
• Quote:
  “The rich are not all to the right, but they have a very wide variety of views... In the United States, they’re quite balanced in their views. But what’s important is they give a voice to the right and indeed often rather eclectic views that might not otherwise get heard…”
  — John McGinnis [05:30]

3. Why Do Influencers Lean Left?

• Merryn probes why academia, journalism, and the charitable sector skew left ([06:06–07:59]).
• McGinnis suggests it’s partly self-interest (they benefit from a large state), envy (elite influencers disappointed not to have become wealthy themselves), and an affinity for structuring the world with central (“romantic”) ideas rather than market-driven pragmatism ([06:43–07:52]).
• Quote:
  “Because they’re professional influencers of the state, they like a larger state that raises them in status as opposed to people in the market.”
  — John McGinnis [06:43]

4. The Independence and Diversity of the Rich

• The rich are not a monolith; instead, their wealth is market-tested, they come from various backgrounds, and they do not “gatekeep” each other ([10:33–12:15]).
• This fosters independent thinking and makes them natural non-conformists, in contrast to professions where ideological uniformity is enforced by peers.
• Quote:
  “How do people become rich? Well, it’s when someone likes their product... It’s a market test. Appointments here [in academia] are controlled by other academics and people’s political views make a difference in those appointments.”
  — John McGinnis [10:33]

5. Contribution to Checks and Balances

• McGinnis argues the independence of the rich makes them valuable in constraining democratic excess, mediocrity, and “soft despotism,” as well as supporting excellence in the arts, innovation, and national greatness ([15:38–17:54]).
• He uses historical examples—like the wealthy’s support for abolition and funding of think tanks—as evidence.
• Quote:
  “If you’re wealthy and your house is burned down, well, you can build another house. But if you’re not wealthy, you’re not likely to speak up against something the majority wants.”
  — John McGinnis [16:23]

6. The Myth of Pure Democracy and Influence

• They discuss how no democracy is “pure”; rather, influence is always uneven, shaped by special interests, resources, and eloquence ([17:54–19:49]).
• Quote:
  “So once you have that kind of representative democracy, it really is a fantasy to think that people are going to have equal influence.”
  — John McGinnis [18:49]

7. The Changing Nature of Wealth and Elites

• Modern economies, through technology and social change, create new fortunes and churn among elites, meaning we are no longer living in a static aristocracy ([20:02–21:19]).
• Which makes inherited wealth less socially useful than entrepreneurial wealth, though McGinnis notes inherited wealth can benefit the arts and philanthropy ([21:19–21:57]).
• Quote:
  “Our world is one of churn of the next new technological thing... The rich people who come up have different ideas from the old money, and that’s a good thing as well.”
  — John McGinnis [20:44]

8. Implications for Tax Policy

• Merryn asks if inheritance taxes might be preferable to wealth or income taxes, since entrepreneurial wealth brings more value to society ([21:19–21:57]).
• McGinnis argues taxing inherited wealth is less damaging than wealth taxes on self-made fortunes, which would only further empower the already-influential professional class ([21:57–23:44]).
• Quote:
  “Wealth taxes now, I think, would be a terrible mistake... It means that the influencers, the clericy, would just become more powerful.”
  — John McGinnis [23:26]

9. Inequality, Technology, and the Experience of Wealth

• The conversation turns to “how rich is too rich?” and the role of tech in reducing meaningful lifestyle differences ([24:17–27:02]).
• McGinnis asserts increased access to technology means the gap in lived experience between the rich and the rest is shrinking, and that poverty, not inequality per se, is the true social problem ([24:17–27:02]).
• Quote:
  “Information is free. Even I can summon up a chauffeur with Uber when I need to. And that’s because the technology is dematerializing our world...”
  — John McGinnis [25:11]

10. Public Perceptions and Political Realities

• Despite these arguments, McGinnis notes that political discourse often defaults to “tax the rich” (and removing them) as a panacea, but that democracy eventually corrects course when policies have negative real-world effects ([27:02–28:55]).
• Quote:
  “When people tax the rich into oblivion and the economic consequences are really bad, there are revolts of people. Democracy, sometimes works slowly. I'm just trying to speed it up a little.”
  — John McGinnis [27:22]

11. On Being a Contrarian

• McGinnis credits a family tradition of skepticism towards authority and being raised among the children of billionaires for his contrarian mindset ([29:09–29:45]).
• Quote:
  “My family has had a long tradition of difficulty with authority. And so the authority that is represented by the clericy in my profession has rubbed me the wrong way and has actually moved me to be more contrarian over time.”
  — John McGinnis [29:15]

12. Risks and Downsides of the Rich

• McGinnis acknowledges traditional criticisms—their potential to be disconnected, self-serving, or decadent—but argues that the alternatives to a society with a wealthy class are generally worse ([31:42–33:34]).
• Quote:
  “There have been books that actually have shown that the only way really to get rid of the rich is to have a war or a vast depression. And where I think the antidote, whatever you think of the rich, is worse than the disease.”
  — John McGinnis [33:20]

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Notable Quotes & Memorable Moments

• Pluralism through Wealth:
  “There are so many other groups and they act as a counterweight... the most important influencer in democracy are what I call the professional influencers... and they all have one thing in common, political views that are quite homogeneous.”
  — John McGinnis [04:16]

• Market Test vs. Gatekeeping:
  “The rich make their money in all sorts of different ways... Even beyond ideology, they have a different way of thinking about the world. And in a commercial democracy, like really all modern democracies, that’s important.”
  — John McGinnis [11:12]

• On Technology and Equality:
  “Even I can summon up a chauffeur with Uber when I need to... the technology is dematerializing our world and so making some things just less scarce and so people to be able to enjoy them in common.”
  — John McGinnis [25:11]

• Practical Politics:
  “When people tax the rich into oblivion and the economic consequences are really bad, there are revolts... eventually people do wake up to the bad consequences, but alas, democracy sometimes works slowly.”
  — John McGinnis [27:22]

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Timestamps for Key Segments

• [02:13] – Fiscal reality: who really pays for democracy?
• [03:48] – Why the rich are essential, beyond just financial contributions
• [05:30] – Pluralism and the homogeneity of thought
• [06:43] – Why state-linked influencers lean left
• [10:33] – Diversity of views among the rich vs. influencers
• [15:38] – The constraint role of the rich: mediocrity and soft despotism
• [17:54] – The myth of pure democracy
• [20:02] – Churn in the elite ranks & the problem of entrenched wealth
• [21:19] – Inheritance tax vs. wealth/entrepreneurial tax
• [24:17] – How rich is “too rich”? Inequality and lived experience
• [27:22] – Can democracy “wake up” to anti-rich sentiment?
• [29:09] – The roots of contrarian thinking
• [31:42] – Negative externalities and traditional critiques of the rich
• [33:20] – Why eliminating the rich is historically catastrophic

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Conclusion

Merryn and McGinnis deliver a rich, nuanced conversation that challenges the demonization of the rich in popular discourse. McGinnis’s thesis is that modern liberal democracy needs a dynamic, diverse class of wealthy individuals—not only because of their financial contributions but as a bulwark against the excesses and stagnancy of majority rule, professional elites, and bureaucratic homogeneity. The episode is a must-listen for anyone wrestling with the evolving debates on taxation, pluralism, and the real-world functioning of democratic systems.

Transcript

[John McGinnis]

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[Maren Somerset Webb]

Welcome to marantalks Money, the podcast in which people who know the markets explain the markets. I'm Mirren Somerset Webb and this week I am Speaking with John McGuinness, law professor, author and former U.S. justice Department official. John has just published his book why Democracy Needs the Rich, which I suspect some of you will find slightly controversial. We are speaking at a time when everybody, possibly on both sides of the political divide, are being fairly critical of the rich, of billionaires trying to find a way to make them pay more tax one way or another and perhaps they maybe to talk less. So we are gonna get into how John feels. The rich are essential to improving society and are even essential to the continued existence of democracy. John, welcome to Marion Talks Money.

[John McGinnis]

Delighted to be here.

[Maren Somerset Webb]

Now John, when we talk about the rich being vital to democracy on this podcast, which by the way, we do quite a lot, we take it from the angle that it is the rich who supply the finance the to pay for the things that the not so rich vote for. So that is how the very rich support democracy. If you look at it in the UK for example, the top 1% of our taxpayers pay 28 to 29% of all our income tax and if you add their capital gains tax on top of that, they're up to about 33% of the entire tax take comes from 1% of the people you go to the top 10%, 60% of all income tax. And even if you go to the top 50%, it's 90% of all income tax. So over 50% of households in the UK don't contribute anything at all when it comes to tax. In fact, they mainly a negative impact on tax revenues. So if you look at it like that, we say, how could you manage without the rich? They actually, they are the ones who pay for what we vote for. And that's how democracy works. And then we look on the other side and we have this constant dynamic in the UK of rising taxes, particularly rising taxes on the very rich. Our tax base is very narrow and a lot of our rich are now moving abroad. They're saying, basically enough, I'll go somewhere else. And then a lot of our demos, our voters say good riddance to them, we didn't need them anyway. And your premise is not that it's not that it's only the money, it's that there's something else that they offer, a democratic society. So why don't we start there with that broad overview?

[John McGinnis]

So what I begin with is what they offer is essential to democracy is pluralism, a variety of views, a variety of independent views. And the rich are extremely important in that respect. I begin by turning on its head the argument the rich are a problem for democracy because they have too much power in democracy. And my point is there are many groups with lots of power, and therefore the question really isn't do the rich have more power than the average person? They do. But there's so many other groups and they act as a counterweight or a balance to that. Because the most important people in democracy, the most important influencer in democracy, are what I call the professional influencers, the people for whom influencing our culture and our democracy. That's their job. They're the journalists, the academics, the entertainers, and to some degree the bureaucracy. And they all have one thing in common, political views that are quite homogeneous, at least in the United States, and I think in most other industrial democracies, they lean pretty sharply to the left. And that's a problem because that means you might not get a wide enough variety of views. And this idea that there is some group who really have a lot of influence in democracy other than the rich. And they're really the essential thought leaders in democracy, and is a very old one. It goes back to one of your poets, English poets, Samuel Coleridge, who calls them the clericy. And his recognition was that after the decline of the nobility and the clergy, there were going to be Other people who were going to be very influential. And what it turns out is just like the clergy and the nobility, they're very tightly networked and therefore they have very similar views. And what the rich do is they're not all to the right, but they have a very wide variety of views. In the United States, they're quite balanced in their views. But what's important is they give a voice to the right and indeed often rather eclectic views that might not get otherwise heard in a world where the professional influencers held more unified sway.

[Maren Somerset Webb]

Yeah, John, can I take you back a little bit? Because the key point here is this idea that academics, civil services, journalists, et cetera, tend to lean left. And so a balancing voice is required. And I know that this is definitely the case, for example, in US Universities. One of the things you quote is that nine out of ten academics will say that they are left leaning in their political views. But we should start by questioning why that is. So can we start there by going back a little and saying why is it that all these groups that are very influential in our democracies.

[John McGinnis]

I think there are a variety. There's just not one answer. But one answer is actually that precisely because they're professional influencers of the state, they like a larger state that raises them in status as opposed to people in the market. And I think that's a very important aspect. I think a second aspect is very old problem, envy. Most of these people grew up with the people who become wealthy. They were also very good students. And sometimes they're the better students. They become academics because of that, and that's upsetting to them. And then finally, I think there is just an idea, because if you're an influencer, you think the way of structuring the world is with central ideas, an idea of equality and not a sort of trial and error, more empirically based ideas. So more top down enthusiasms that naturally come to you. So all of those reasons, I think put people who want to influence the world as their profession, largely on the

[Maren Somerset Webb]

left, and journalists aside, most those people will have an income that is one way or another state sponsored.

[John McGinnis]

Yes, I think that's true. Of course entertainers don't, but it's absolutely true, bureaucrats do. And in the United States, most of our academics, most of our important universities, like my own, are private. But still they become more dependent on the state. So I think there's something to that.

[Maren Somerset Webb]

And I suppose the other part is the charitable sector, or the third sector, as you might call it, which again is very Heavily state sponsored, both here and in the US and obviously leans to the left.

[John McGinnis]

Yes, that's true. Although in the United States things are a little mixed and I don't know whether it becomes differences in law. One of the actual advantages of the rich is that they send up actually some charities that push against the left liberalism, for instance, our university system. And you quite correctly pointed out how left leaning professors are conservative. Billionaires have actually set up centers that are somewhat counterpoints and that's been very important. And I myself am on the board of something called the Federalist Society. Here is a conservative group of law students and practitioners and they've had enormous influence on our legal education system, which before the rise of the Federalist Society was almost totally left wing. It's obvious the professors still are very left wing, but they give a voice and they are a presence on campus that really wouldn't be there but for the wealthy. So one important point about this book is that, well, a lot of billionaires are left wing and they give to charities. The money on the right makes more of a difference at the margin because already the professional influencers are on the left. So each marginal dollar spent by the right wing billionaire, either on politics or on culture makes more of a difference.

[Maren Somerset Webb]

Yeah. Okay. So one of the key ideas in the book is that the left leaning influences or that side of the equation, there is this homogeneity of opinion that is really full on. But yet when you move across to the, to talking about the rich, you can't talk about them in terms of having a homogeneity of opinion because they don't. They're very, very different. So when you look at, for example, the political donations of the left, you will see in the US lots of billionaires contributing to the Democrats in the same way that as they do to the Republicans, you're not seeing any homogeneity. And you see that in the UK as well. You see some of the very rich supporting labor and lots of the very rich of course, supporting the right. So there's a divergence of opinion among the rich in a way that I suspect most people don't really think about.

[John McGinnis]

Yes, that's right. And one of the reasons for that is they have a kind of independence, I think, that most professional influencers don't. Because one other important difference between the rich and professional influencers is they, the rich are not gatekeepers of the other rich. How do people become rich? Well, it's when someone likes their product or someone likes the way they put together companies. It's a market test. And people aren't thinking ideologically in that specter. But let me tell you, I've been in academics a long time. Appointments here are controlled by other academics and people's political views make a difference in those appointments. And that's I think, true at journalism as well. And so one aspect of the diversity of the rich is that there's no gatekeeping function that they play. And another is that the rich make their money in all sorts of different ways. Some are entrepreneurs, some are financial people, others are inventors. And that's another advantage of theirs. Even beyond ideology, they have a different way of thinking about the world. And in a commercial democracy, like really all modern democracies, that's important. They know something about the economy. So it's not only they bring a variety of views, they bring a variety of perspectives about the market that are extremely helpful. And so that goes a bit, a bit back to the point you began with. It's something different version of that point is democracies do need to be economically successful. To have an increasing pie is extremely important for their health. And how that happens depends on policies. And the rich bring a useful perspective to those as well.

[Maren Somerset Webb]

So to become rich you have, you're automatically non conformist, aren't you?

[John McGinnis]

Absolutely. You see some niche that other people have not yet exploited.

[Maren Somerset Webb]

And so it's more, you could say that, you know, they're more rationalist than romantic, more pragmatic. To become rich, to build a company, to turn yourself into a billionaire, sure you might have a dream or a little romance on the side, but the path is one that is very pragmatic.

[John McGinnis]

Schumpeter, a famous economist, said, to be rich, you just can't talk your way to success. But in a lot of the professional influencers, being a great talker is a way. And of course, as you suggest, that doesn't actually mean you're going to have good results. There's not a connection necessarily between eloquence and consequence.

[Maren Somerset Webb]

Yeah, I mean, I would divide that up into maybe one group continually talking about the world as they would like it to be and people behaving as they would like them to and the other group working with the world as it is. And the way that people genuinely respond to incentives.

[John McGinnis]

Every day someone running a company is faced with a market test of his actions. Let me tell you in academics at least, which I know best. People aren't faced with any kind of market test, or at least not yet. Who knows, AI may start changing that. But at actually an important university. There's no sense that one's in competition. There's no sense that anything is at risk. We don't just invest in cutting edge companies. We look at companies with a history of steady growth and companies whose growth cycle has come round again. Because in the real world you have to look at growth in three dimensions. Monk's Investment Trust. At Oppenheimer we're proven because we're grounded in discipline.

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[John McGinnis]

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[Maren Somerset Webb]

So in that sense, one of the things that you talk about in the book is this idea that democracy tends to mediocrity if you don't keep a close eye on it, or soft despotism, et cetera. And so the richer then a constraint on the natural excesses of majority rule. Exactly. Because they do introduce these ideas, practice them, evaluate them so they are available for public use.

[John McGinnis]

And they also have the independence to stand up against the majority. I talk at least I'm sure there's some analogues in British history. How crucial the rich were as catalysts for abolishing slavery. It's not well known in the United States at least, but abolition of slavery was an extremely unpopular view, not only in the south, but in the North. And so who was able to stand up for that? Well, wealthy people. And they paid for that. People burned down their houses. But note that if you're wealthy and your house is burned down, well, you can build another house. But if you're not wealthy, well, you're not likely to speak up against something that the majority wants. And it turns out, of course, the majority is not always right. And so that's one problem of democracy. And they are. They also sometimes, as Tocqueville says, worship themselves the majority. And they're mediocre. That's a problem of mediocrity. And the rich have therefore been very important in funding what we now regard as the great arts, the great buildings that are lasting monuments to our democracy. And I think democracy is some kind of national greatness, is important in supporting a national democracy. And the rich play a very important role in that. And finally, the soft desmotism point that you raise, which goes back the worry to Aristotle that democracy, the people are just gonna vote themselves benefits at the expense of everyone else points you made at the beginning of this broadcast. The rich are very aware of that. And again, they, at least in the United States, fund a lot of think tanks that worry about that essential fiscal problem which never goes away in democracy. And they're, of course, the people with the incentives to do that and the money to do that. We'd be much worse off. We're not, as you point out, wonderfully off without that constant pressure of people who worry about the fiscal long term

[Maren Somerset Webb]

and who worry about excellence. One of the things that the book really brings out is this idea that there really isn't any such thing as a pure democracy. The whole idea of everyone having a vote and everyone having a similar level of influence is of course always nonsense because there's always really strong pressure groups across the board. There's the endless special interest groups that we've discussed. There's the charities, there's the academics, et cetera. So there is. It doesn't really exist, this idea of a genuine democracy because of the way public opinion is so heavily influenced by different groups.

[John McGinnis]

In a representative democracy, it doesn't. Because we made the decision not to have the kind of and really impossible the democracy that was imagined in ancient Greece, where everyone would vote on everything, where in some sense people would have greater influence, was representatives are going to be influenced by a variety of things, including in what works. Because they're going to be worried about what's going to happen to the next election in some sense. One idea about democracy is we give a kind of prize to people who in public office, which they'd like to keep. And that tends to make them focus a bit on consequences. But that also means they're going to look at a variety of views and they're not going to simply look at the everyone individually because they're concerned about what's going to happen next time, not just what people have voted for last time. And that's just inevitable. And people are very different. They have different money, they have different amounts of interest in politics, they have different eloquence. So once you have that kind of representative democracy, it really is a fantasy to think that people are going to have equal influence. And that is that I do think is an underlying fantasy against which people worry about the wealthy have more influence than average. And my book begins with the idea, well, that's true, but that doesn't, it doesn't follow that they have too much influence because there are so many groups that have more influence than the average citizens.

[Maren Somerset Webb]

Yeah, and of course I suppose we should. It's obvious but true that you can only tolerate the rich offering this balance of opinion, as long as you have clear institutions and trusted legal systems that control the excesses of the rich as well.

[John McGinnis]

Right. Only in a market democracy. I do argue that in some sense the rich are better than ever because we move more quickly through different rich people than ever before with our technocracy, because that's always creating a new group of rich people. So you might worry, and Aristotle did worry, I think correctly, that the rich could be a kind of permanent encrusted oligarchy. And that was a real worry in a world where we had a static society where the rich were largely tied to land. And in that world we had people with unchanging views were just really important, very concerned and able to keep a lid on new ideas. But that's not our world. Our world is one of churn of the next new technological thing. And that's shown in our richest people at the beginning of the Forbes 400, which goes back now over 40, I think, maybe 40, 50 years, most people have inherited their wealth. Now a very small, much smaller percentage of people inherit their wealth. And that's because we have a much more dynamic, changing society. And that's great because the rich people who come up have different ideas from the old money, and that's a good thing as well.

[Maren Somerset Webb]

So your theory or ideas wouldn't really support those who have inherited their wealth in the same way as those who have made their wealth. What we're talking about here is people who have created wealth and therefore have these interesting thought patterns, eccentric thought patterns even, that allow them to give value. So if we're thinking about how to tax the rich as it appears everyone pretty much always does. Should we then focus more on inheritance tax than on any other kind of tax? Because the second and third generation rich are of significantly less value to us as opinion balances than the first generation,

[John McGinnis]

which there's a grain of truth in that. But I want to push back slightly against that idea because I certainly agree with you that if most people inherited their money, that goes back to the kind of Aristotelian concern. The people who inherit their money do often have a function, particularly in national greatness and the arts. So you might think there's a kind of interesting alchemy that takes place in the rich. So you begin with someone who's made their money and therefore done a lot for consumers. He hands on money after he dies, and then his children, they're in a different position. They collect art, they do other things that are important. And so I don't want to say the inherited wealth has no function. I do agree that if you're looking to tax things, it's better to tax at the inherited stage than some other stages. For instance, at least in the United States, we have something called tax, a step up in basis, which means that all capital gains disappear on people's death. That strikes me as a mistake, at least for large fortunes. And so I'm not always in favor of any tax break for the wealthy. And that would be one I would certainly want to take look at as opposed to taxing their wealth. Now, wealth taxes now, I think would be a terrible mistake. It would essentially, and that's one of my concerns in writing this book, is try to take away the power of the rich. But that doesn't mean it would go to ordinary people. It means that the influencers, the clericy, would just become more powerful. And so it's not only an economic matter that gwilt taxes would have bad economic effects. I think they would have bad democratic effects at actually entrenching the professional influencers as more powerful.

[Maren Somerset Webb]

Okay, so then I know, then I know the next question everyone listening is asking in their heads, which is how rich is too rich? So when does inequality get out of control? So all the things that we are talking about, you could be rich enough for that to be rich enough to not be beholden to the bureaucracy in any way, to be rich enough to hold whatever opinions you like without having any interest in anyone's opinion on your opinions. You can be rich enough for that when you're into the tens of millions or the, maybe even the hundreds of millions. I don't know, but you don't need much more than that to be able to fulfill that role.

[John McGinnis]

I don't entirely agree with that. Certainly you need more than tens of millions to actually fund some great enterprise. Charitably, you may need billions of dollars in our world. Certainly global public goods working on health are extremely important. And also that there's a problem often with charities that people aren't willing to give unless the charities up and running and effective. And what the wealthy can do, the really wealthy is they can just give an enormous amount of money and bring to light a new charity that focuses on some need that people haven't thought of before. So I'm cautious about saying in our world that there's a limit about it. I think the greater concern is not how much any individual has. At some point you do worry that the inequality might become just too much. There's a debate about that. Of course. People like Piketty in France have raised it. I look at that in the book and I just don't think his arguments are really proven, even on his own terms. And people have pointed out that he's missed some technical matters about income. But I also point out in the book that I think people miss out on something really important about the modern world, which is how technology really makes people's living standards and similar in a way they never have been before. And one way I try to explain this is with a thought experiment with some Oxford don and A Duke, though 100 years ago, 200 years ago, they lived completely different lives compared to. Why not? You compare me to Peter Thiel, whom I met. Peter Thiel's a lot richer than I am. Our lives just different and completely. Well, not really, because in some sense we all spend our time on the Internet. Information is free. Even I can summon up a chauffeur with Uber when I need to. And that's because the technology is dematerializing our world and so making some things just less scarce and so people to be able to enjoy them in common. So I think it may be a mistake, particularly when we don't understand how technology is really changing things. I want to be clear. That's about middle class people. There still is a problem of poverty and people who don't have enough. I consider that's not a problem of inequality. And people are often confused. Confused, those problems. I see that poverty of the lowest 10% in income is still a huge issue. I just don't think it's a problem of inequality.

[Maren Somerset Webb]

Okay, so putting that to one side, the key point here is that as our lifestyles begin to equalize thanks to technological change around us, the actual difference in absolute wealth becomes less relevant.

[John McGinnis]

Correct.

[Maren Somerset Webb]

Okay. Now, do you think that you are getting cut through? Because if you look at the political environment across Europe in particular, and certainly across much of the us you do still have this idea that, you know, we can ditch the rich, we can live without the rich, we should tax the rich, you know, tax them into oblivion, et cetera. There's very little understanding or acceptance of what you're saying.

[John McGinnis]

I'm quite confident that my academic colleagues are not going to be listening to me. One thing that gives me hope is that it is democracy. So I do think democracy, and even the great mass of people giving a vote is useful in this respect. That when people tax the rich into oblivion and the economic consequences are really bad, there are revolts of people. It's been pointed out, for instance, that in a real democracy, when people just have the vote, there almost never is a famine, a march. Ascend pointed that out. And so I think that eventually people do wake up to the bad consequences. But alas, democracy sometimes works slowly. I'm just trying to speed it up a little, maybe a few days. The one other thing I think would be hopeful too is that our world, I think is going to be changed by the rise of AI that I think it will scramble some long time political allegiances. And I think that may give more of an opportunity to think through some things again. So I'm cautious about that because of course, the social changes brought on by AI could, could lead people astray as well. But I'm not that pessimistic because I do think so long as we keep. The basic idea of democracy is that the trial and experiments, and some of them are bad experiments of taxing the rich successively are likely to be thrown out, at least after a time.

[Maren Somerset Webb]

Okay, John, you may be a billionaire, I don't know.

[John McGinnis]

Not a billionaire.

[Maren Somerset Webb]

We're only looking at each other across the screen. How do you manage to be such an obviously contrarian thinker?

[John McGinnis]

So while I'm not a billionaire, I grew up among the children of billionaires. So that might be one aspect rubbed off on you. Rubbed off on me. So maybe that's one of the reasons. Of course there are going to be contrarian thinkers in any profession. The question is there a critical mass of them? I think another reason is that my father pointed out that my family has had a long tradition of difficulty with authority. And so the authority that is represented by the clericy in my profession has rubbed me the wrong way and has actually moved me to be more contrarian

[Maren Somerset Webb]

over time when we talk about this outside influence of the rich on opinion and operating as a sort of a healthy tension is one of the phrases you use, creating this healthy tension that amongst you requires should governments be thinking more carefully about the way that they finance the organizations around them, about the way they finance academia, about the way they finance the charitable sector? I mean it feels that there's a responsibility on the state using taxpayers money to finance organizations that should being encouraging diversity of thought and maybe isn't.

[John McGinnis]

So I have two thoughts about that. One is that's absolutely true. And we actually see movements in the United States to create for our state legislatures to create some centers within universities that might be more heterodox. So that's an advantage. On the other hand, one has to be very careful I think, for the state to get too involved in choosing who's going to be an academic because that can backfire in a big way and lead of course, depending on who's in control of the state, to actually a hyper orthodoxy. So one thing we've had actually in the United States is dei diversity, equity and inclusion, which has been all the rage. And affirmative action, which are state policies, they were state at least encouraged policies in many respects they actually led to greater a homogeneity of thought. So I'm a classical liberal in the sense that I'm worried about the state always. And if the state wants to add some particular center that will do something or other that's apart from the rest of the university, there's something to be said for that. But actually running the university and making really tamping down on its decision making, I think can have some, even has some short term gains, can have a variety of long term costs.

[Maren Somerset Webb]

Okay. We've talked about all the positives of the rich, the positive externalities they create. And I suppose there is a sort of very long list of books of the negative externalities of the rich. So they come with negatives as well.

[John McGinnis]

So I think the biggest negatives and the negatives have been pointed out, as you say, for centuries is some of the concerns about the rich have been that they especially because of their independence, they lead lifestyles that are really not moral and encourage that in other people. Right. And there also there's a view that there's some, and this goes back to the nobility, they're not really that connected to their nation, they're just unconcerned about their particular place of birth. And then Finally, I think a concern is that they themselves are a kind of interest, that they know how to maneuver the levers of power in their own interest. And there's something, I think to be said for all of those problems.

[Maren Somerset Webb]

It's a very compelling, very compelling story and one that it would be interesting to see if politicians react to it all. I mean, we still hear here, as you know, this endless anti the rich, anti wealth diatribes constantly. And there's constant conversations about new taxes and new wealth taxes and should we have mansion taxes, straight up wealth taxes, which of course never work because of course taxing the rich is very difficult. Taxing them beyond a certain level that is beyond straightforward capital gains and straightforward income. These wealth taxes are very complicated and very difficult to manage and very rarely raise much money. But nonetheless, the conversation is constantly about them.

[John McGinnis]

There have been books that actually have shown that the only way really to get rid of the rich is to have a war or a vast depression. And where I think the antidote, whatever you think of the rich, is worse than the disease.

[Maren Somerset Webb]

Listen, before we end, can I just ask you what you are reading?

[John McGinnis]

So I'm reading two things at the moment. One is Charles Dickens Bleak House, which is about lawyers, his most famous book about lawyers. And I recommend it. It's really, I think, his greatest. And of course it's lawyers who are another group of last professional influencers. And the other is a book which I think is very interesting by I think Sebastian Malaby called the Infinite Machine, which is about the race for AI. And I think he does a very good job in showing not only the players in that race, but what's going on. And confirms my view that the world, even within five years, is going to look astonishingly different from what it is today. And in 10 years, I'm not sure if we came back we would exactly recognize. I'm sure we would be not in the same kind of podcast. I think we'd be much more like we'd be. We couldn't really tell that much different, that we would be talking to one another as if we were sitting on a couch.

[Maren Somerset Webb]

John, thank you.

[John McGinnis]

Thank you.

[Maren Somerset Webb]

Thanks for listening to this week's Maren Talks Money. If you like our show, rate, review and subscribe wherever you listen to podcasts, including keep sending your questions and your comments to marinmoneyloomburg.net. you can also follow me and John on Twitter or X. I'm Erinursw and John is JohnStepeg. This episode was hosted by me, Mary and Zumset Webb. It was produced by Sama Saadi and Moses Andam and Jennifer Seeley. A sound designed by Blake Maples. And special thanks of course to John McGinnis.

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