You reach for the Greeks. Pleonexia. The unbounded greed that validates itself through the eyes of others. You are right to do so.
But you stopped too soon.
Aristotle's akolastos—the intemperate man—does not commit excess because he reasons poorly. He commits excess because his character has been deformed by habit and environment. He cannot see his condition because the condition itself has blinded him. Shame requires self-awareness. The intemperate have none.
Two cages, not one vice.
The modern billionaire is not merely victim to his own appetites. He is prisoner to a Nash equilibrium that punishes defection.
If every other billionaire extracts, hoards, and fights taxation, the one who voluntarily pays more is not a hero. He is a sucker. His shareholders sue. His board demotes him. His competitors devour his market share. His peers mock him at Davos—behind his back, then to his face.
Socrates understood: the polis does not produce just men by lecturing them. It produces just men by arranging rewards so that justice pays.
So arrange the rewards.
Tax the activities that harm.
Land speculation. Unrealized gains. Financial extraction. Rent-seeking dressed as innovation. Price the externalities. Make extraction less profitable than production.
And reward the activities that help.
Multiplier effect. Not tax credits for fake charity pledges. Tax credits for verified productive reinvestment: wages above a certain threshold, domestic supply chains, long-term R&D, workforce housing built and held, not flipped. Make the man who builds things richer than the man who extracts them.
You want behavior change? Change the payoffs.
The golden bridge they are already standing on.
You might not be aware that some of them want this.
The Patriotic Billionaires—they exist, they sign letters, they mean it—are standing at the edge of the river, waiting for a bridge. They have been waiting for years. No one builds it. No one even points to the other side. The press covers their pledges for one news cycle and forgets. Politicians take their money and pretend not to hear their public statements. Their peers ignore them.
These men do not need shame. They need an exit ramp that does not require them to confess that the last forty years were a sin.
Aristotle again: habituation works in both directions. Reward justice, and men become just.
What to do instead.
Not a pedagogical tax. Not shame.
Tax extraction. Land speculation. Unrealized gains. Financial engineering. Price the externalities.
Reward production. Wage multipliers. Domestic investment. Long-term R&D. Workforce housing. Make building things pay better than moving money around.
Restore the referees. Campaign finance reform. IRS enforcement. Prosecutorial independence. Sever the line from private fortune to public power.
Build the bridge. Let the willing cross first. Call it legacy. Call it the Buffett Rule. Call it whatever saves face. Their peers will follow.
A pedagogical tax says: You are bad.
A Pigouvian system says: This activity costs society; that activity benefits society. Choose accordingly. give the carrot and the stick.
The addicted do not quit because they are shamed. They quit because they see someone else do it and survive—and profit.
The Greeks knew that justice is not a sermon. It is an architecture.
Spain's gov of socialists and Marxists tries hard to get media censorship laws passed (if passed a few years ago we'd heard nothing about all the financial scandals Spain's progressives are involved in).
Germany and the UK both prosecuted over 10.000 citizens last year over tweets.
The EU has canceled EU member state elections and allowed the Dutch ministry of interior affairs to be the official 'neutral' monitor of the 2023 election. While the minister and deputy minister of that department were obviously both rather 'involved' in the election's outcome.
The EU is also working hard to introduce mandatory software on every European-used smartphone. Officially to track child-porn (yet police detectives will tell you that paedophiles ((obviously)) share material via usb sticks). But when in effect it will be able to completely undo any form of EU 'citizen' online privacy.
It's Europe's center and left who are introducing this. (It's the European right which is resisting this).
Should we therefore not add to Milanovic' lifestyle-modesty monitoring, and to Muslims' sexual lifestyle-modesty monitoring, the concept of thought-modesty monitoring?
Policy, including taxes, should for that reason be directed against rentier incomes in particular, with the aim of extinguishing them completely, or next to.
Of course, productive capitalism seems to lead automatically into rentier capitalism. This has happened several times in history, for example in Iraq in the 10th century, in Italy in the 15th century, in Holland in the 18th century, in Britain in the 20th century and now in the whole North Atlantic sphere. It will probably happen in China to in a hundred years or so, even if they seem to fight atgainst it now.
So there should be a kind of inbuilt guarantee against rentierization even in iindustry. The only one I can think of is producer cooperatives. But there are perhaps others I haven't thought of?
Thank you for this pedagogical note…. Very good. That said please keep in mind that Zucman’s tax is also important from a fiscal standpoint. It may help European governments frenzy to cut cut cut. Except defense of course. How idiotic can one be? No limit it seems Also, in parallel to the zucman tax income taxes at the higher levels are essential. Don’t let them accumulate obscene amounts of wealth!
In this age and time the juxtaposition of benevolent greed-limiting taxation for the betterment of mankind and psychopaths like Epstein, Gates and who knows, is intellectually charming and - sorry to put it bluntly - incredibly naive.
Here is a related idea that seems to aim for the same outcome Mr. Milanovic is proposing (https://neofund.sk/node/16). It works somewhat in reverse: instead of raising or establishing new taxes and creating a social credit score to enforce compliance, it focuses on the power of the score itself — its public recognition — to motivate individuals to transfer their wealth voluntarily. It may seem far-fetched to expect people to exchange wealth for a signal, but this behavior is everywhere once one looks closely. The same score points should also be possible to earn through volunteer work and philanthropic contributions. Philanthropy in this context is discussed in Michael Spence’s proposal: https://www.project-syndicate.org/commentary/wealthy-support-for-public-goods-through-philanthropy-by-michael-spence-2024-07
As a practical matter, some countries (perhaps small island nations) will be havens for the super-wealthy, not only for allowing them to escape wealth taxation, but also to provide them isolated and gated existences. An unwritten code of plutocracy is a notion of escape velocity, which endows this class separation from lower forms they arose from, and from many inconveniences or friction of existence.
I learned somewhere that the two reasons we imprison humans are (1) hatred for what they are or what they have done, and (2) fear of what they will do if not imprisoned. Branko points to a third, the value as warning to the rest of society not to behave in certain ways. Will this really work? From what I read, this was Xi's policy in the "common prosperity" campaign, though not by taxation. The US used to have anti-trust laws to limit some oligarchy (OK; still on the books, but lax enforcement). Recently I read that Jack Ma has been somewhat rehabilitated.
Is the argument for wealth tax on billionaires doctrinaire (or more extreme, Jacobin)? What about celebrity billionaires such as Taylor Swift, Rihanna, Michael Jordan, and Oprah? Should they be penalized for greed? I read an obituary last year, of Junior Bridgeman, who made his fortune after retiring From basketball, apparently a billionaire. A shrewd and hard-working businessman; at least from the obituary, he did not seem motivated by greed.
As suggested by others, such taxing must be implemented concurrently with all other nations, otherwise the wealthy will simply move to nations without such taxes. And if such universal taxing is somehow miraculously implemented, many could easily buy their own islands or as some have suggested, build their own nation-at-sea aboard a mega-yacht or larger construct. For such taxing to succeed it would have to be minimal enough that efforts to avoid it would cost more than paying the tax. Then one must ask if such a pittance would be worth the cost of collecting it.
If the ultra rich leave, then presumably they will not be able to effectively donate monies to political campaigns or swing elections. Then maybe governments can get back to representing the rest of us(90%).
There are a lot of very wealthy people in other countries who by devious means donate considerable amounts of money to politics in the USA. Super PACs are required to publicly disclose all of their donors, including the name, amount, and date of contributions. However, they may use "dark money" nonprofits to obscure the ultimate source of funds, which can lead to a lack of transparency. This means that while Super PACs must report their donors, the true sources of the funds can remain hidden, potentially allowing wealthy interests to influence elections without public scrutiny. If the ultra-wealthy leave this country, it is conceivable they would continue to continue to put money into politics here for a variety of reasons. But what would happen if their citizenships were revoked?
Please please don't use the tax system for social credits. Every time you draw a line in tax policy a mini-industry of lawyers, accountants and lobbyists develops to keep their clients on the right (no tax) side of the line. Otherwise the point is well-taken. For Jeff Bezos to cover the $100 million loss of the Washington Post instead of laying off 300 journalists his net worth would go from 248.7b to 248.6b.
It is tempting to put together your reflection on pleonexia with your earlier reflection on equality. It seems that we have two externalities feeding each other: the drive for equality is largely driven by envy for those who have more (ie, one’s utility is a function of the others’ consumption); in turn, pleonexia is driven by the desire to be the object of others’ envy (ie, one’s utility is a function of the others’ utility being a function of one’s consumption). Does the externality really revolve around consumption? Elon Musk reportedly lives modestly. Should he be taxed less than Jeff Bezos?
Very good point about externalities in the utility function (envy & greed). I have not thought of that until today when I wrote this piece. It came just a few days after I re-posted the Substack on envy, and suddenly the two things came together.
Musk genuinely does appear to currently live in a smaller, simpler home and avoids many traditional luxury trappings - typical of a workaholic who wants his home to be close to his office. But:
- His lifestyle is still supported by billionaire‑level resources. He has access to other properties, guest houses, and corporate accommodations. He travels almost constantly by private jet, which is one of the most resource‑intensive forms of personal transportation.
- The “modesty” narrative is selective and sometimes strategically amplified. Media and Musk himself highlight the modest‑living angle. The tiny‑house narrative is repeated because it’s compelling.
- His frugality is more about minimalist philosophy than about living like an ordinary person. Think of it this way: he lives modestly for a billionaire, not modestly in absolute terms.
In addition, things are never static with Mr. Musk. Recent reporting indicates that Musk is actively working to bring most of his children and at least two of their mothers into a cluster of adjacent properties in Austin, Texas. This is a major shift from the earlier “I live in a $50K prefab house” narrative. The plan centers on a $35 million, three‑mansion compound in Austin. One report describes it as a “three‑mansion compound” intended to house his 11 children and their mothers. Another source says he is building a 14,400‑square‑foot mansion for himself, with two of the mothers living in adjacent properties. A third report confirms the same: Musk wants his children and two of their three mothers to move into two properties near his own Austin mansion.
Realtor.com - Elon Musk 'Buys $35M Compound' To House His 11 Kids and Their Moms
Some countries extend too generous tax payers for a period and then they move to tax fifth percent with ‘many’ deciding to leave. Countries that depend on taxes to keep pensions and welfare state. There is need for more targeting when it comes to taxes because not all rich are equally rich or contribute the same way. Not easy…
Dear Branko,
You reach for the Greeks. Pleonexia. The unbounded greed that validates itself through the eyes of others. You are right to do so.
But you stopped too soon.
Aristotle's akolastos—the intemperate man—does not commit excess because he reasons poorly. He commits excess because his character has been deformed by habit and environment. He cannot see his condition because the condition itself has blinded him. Shame requires self-awareness. The intemperate have none.
Two cages, not one vice.
The modern billionaire is not merely victim to his own appetites. He is prisoner to a Nash equilibrium that punishes defection.
If every other billionaire extracts, hoards, and fights taxation, the one who voluntarily pays more is not a hero. He is a sucker. His shareholders sue. His board demotes him. His competitors devour his market share. His peers mock him at Davos—behind his back, then to his face.
Socrates understood: the polis does not produce just men by lecturing them. It produces just men by arranging rewards so that justice pays.
So arrange the rewards.
Tax the activities that harm.
Land speculation. Unrealized gains. Financial extraction. Rent-seeking dressed as innovation. Price the externalities. Make extraction less profitable than production.
And reward the activities that help.
Multiplier effect. Not tax credits for fake charity pledges. Tax credits for verified productive reinvestment: wages above a certain threshold, domestic supply chains, long-term R&D, workforce housing built and held, not flipped. Make the man who builds things richer than the man who extracts them.
You want behavior change? Change the payoffs.
The golden bridge they are already standing on.
You might not be aware that some of them want this.
The Patriotic Billionaires—they exist, they sign letters, they mean it—are standing at the edge of the river, waiting for a bridge. They have been waiting for years. No one builds it. No one even points to the other side. The press covers their pledges for one news cycle and forgets. Politicians take their money and pretend not to hear their public statements. Their peers ignore them.
These men do not need shame. They need an exit ramp that does not require them to confess that the last forty years were a sin.
Aristotle again: habituation works in both directions. Reward justice, and men become just.
What to do instead.
Not a pedagogical tax. Not shame.
Tax extraction. Land speculation. Unrealized gains. Financial engineering. Price the externalities.
Reward production. Wage multipliers. Domestic investment. Long-term R&D. Workforce housing. Make building things pay better than moving money around.
Restore the referees. Campaign finance reform. IRS enforcement. Prosecutorial independence. Sever the line from private fortune to public power.
Build the bridge. Let the willing cross first. Call it legacy. Call it the Buffett Rule. Call it whatever saves face. Their peers will follow.
A pedagogical tax says: You are bad.
A Pigouvian system says: This activity costs society; that activity benefits society. Choose accordingly. give the carrot and the stick.
The addicted do not quit because they are shamed. They quit because they see someone else do it and survive—and profit.
The Greeks knew that justice is not a sermon. It is an architecture.
Build better walls. Build better doors.
I warmly invite readers to scroll down to see how the above proposal degenerates quickly into a discussion about patrolling lifestyle 'modesty'.
As a citizen of a western European country where 'progressives', feminists and other Marxists express mucho amor for the Islamic veil (a tool of women's liberation) which covers most of our Islamic female fellow citizens ( whose modesty-entrepreneurs are celebrated article after article by secular female journalists in the 'progressive' press https://www.nrc.nl/nieuws/2025/12/05/mode-ondernemer-nada-merrachi-ik-moest-mijn-stijl-helemaalopnieuw-uitvinden-toen-ik-een-hijab-ging-dragen-a4911410 ), i wonder what other modesty-recipes awaite the ever less free free world.
Spain's gov of socialists and Marxists tries hard to get media censorship laws passed (if passed a few years ago we'd heard nothing about all the financial scandals Spain's progressives are involved in).
Germany and the UK both prosecuted over 10.000 citizens last year over tweets.
The EU has canceled EU member state elections and allowed the Dutch ministry of interior affairs to be the official 'neutral' monitor of the 2023 election. While the minister and deputy minister of that department were obviously both rather 'involved' in the election's outcome.
The EU is also working hard to introduce mandatory software on every European-used smartphone. Officially to track child-porn (yet police detectives will tell you that paedophiles ((obviously)) share material via usb sticks). But when in effect it will be able to completely undo any form of EU 'citizen' online privacy.
It's Europe's center and left who are introducing this. (It's the European right which is resisting this).
Should we therefore not add to Milanovic' lifestyle-modesty monitoring, and to Muslims' sexual lifestyle-modesty monitoring, the concept of thought-modesty monitoring?
Comrades, who else is thinking about emigrating?
It degenerates that way if a degenerate like you goes on a non sequitur racist rant
I believe that the core of our present problems (not of all problems, by no means) is rentierism. I.e. that it is easier to profit from ownership than from organizing production in the classic 19th-20th century way. It is easier to profit from finance, real estate, platforms, raw materials, infrastructure, patent©right, and government contracts than from industry.
Policy, including taxes, should for that reason be directed against rentier incomes in particular, with the aim of extinguishing them completely, or next to.
Of course, productive capitalism seems to lead automatically into rentier capitalism. This has happened several times in history, for example in Iraq in the 10th century, in Italy in the 15th century, in Holland in the 18th century, in Britain in the 20th century and now in the whole North Atlantic sphere. It will probably happen in China to in a hundred years or so, even if they seem to fight atgainst it now.
So there should be a kind of inbuilt guarantee against rentierization even in iindustry. The only one I can think of is producer cooperatives. But there are perhaps others I haven't thought of?
This isn’t really a tax proposal. It’s a sign of institutional exhaustion.
When law, norms, and enforcement stop constraining power, systems reach for signaling tools instead, taxes meant to teach, scores meant to shame.
Calling it a “pedagogical tax” gives away the shift.
Once constraint moves from rules to moralized discretion, you’re no longer fixing impunity, you’re replacing law with judgment.
That move shows up when governance is already failing.
Thank you for this pedagogical note…. Very good. That said please keep in mind that Zucman’s tax is also important from a fiscal standpoint. It may help European governments frenzy to cut cut cut. Except defense of course. How idiotic can one be? No limit it seems Also, in parallel to the zucman tax income taxes at the higher levels are essential. Don’t let them accumulate obscene amounts of wealth!
In this age and time the juxtaposition of benevolent greed-limiting taxation for the betterment of mankind and psychopaths like Epstein, Gates and who knows, is intellectually charming and - sorry to put it bluntly - incredibly naive.
Sorry to see you have lost your sense of hope and justice
Now that´s what I call a wild conclusion! ;-)
Here is a related idea that seems to aim for the same outcome Mr. Milanovic is proposing (https://neofund.sk/node/16). It works somewhat in reverse: instead of raising or establishing new taxes and creating a social credit score to enforce compliance, it focuses on the power of the score itself — its public recognition — to motivate individuals to transfer their wealth voluntarily. It may seem far-fetched to expect people to exchange wealth for a signal, but this behavior is everywhere once one looks closely. The same score points should also be possible to earn through volunteer work and philanthropic contributions. Philanthropy in this context is discussed in Michael Spence’s proposal: https://www.project-syndicate.org/commentary/wealthy-support-for-public-goods-through-philanthropy-by-michael-spence-2024-07
philanthropy has never worked. it is complete idealist cope.
As a practical matter, some countries (perhaps small island nations) will be havens for the super-wealthy, not only for allowing them to escape wealth taxation, but also to provide them isolated and gated existences. An unwritten code of plutocracy is a notion of escape velocity, which endows this class separation from lower forms they arose from, and from many inconveniences or friction of existence.
I learned somewhere that the two reasons we imprison humans are (1) hatred for what they are or what they have done, and (2) fear of what they will do if not imprisoned. Branko points to a third, the value as warning to the rest of society not to behave in certain ways. Will this really work? From what I read, this was Xi's policy in the "common prosperity" campaign, though not by taxation. The US used to have anti-trust laws to limit some oligarchy (OK; still on the books, but lax enforcement). Recently I read that Jack Ma has been somewhat rehabilitated.
Is the argument for wealth tax on billionaires doctrinaire (or more extreme, Jacobin)? What about celebrity billionaires such as Taylor Swift, Rihanna, Michael Jordan, and Oprah? Should they be penalized for greed? I read an obituary last year, of Junior Bridgeman, who made his fortune after retiring From basketball, apparently a billionaire. A shrewd and hard-working businessman; at least from the obituary, he did not seem motivated by greed.
As suggested by others, such taxing must be implemented concurrently with all other nations, otherwise the wealthy will simply move to nations without such taxes. And if such universal taxing is somehow miraculously implemented, many could easily buy their own islands or as some have suggested, build their own nation-at-sea aboard a mega-yacht or larger construct. For such taxing to succeed it would have to be minimal enough that efforts to avoid it would cost more than paying the tax. Then one must ask if such a pittance would be worth the cost of collecting it.
If the ultra rich leave, then presumably they will not be able to effectively donate monies to political campaigns or swing elections. Then maybe governments can get back to representing the rest of us(90%).
There are a lot of very wealthy people in other countries who by devious means donate considerable amounts of money to politics in the USA. Super PACs are required to publicly disclose all of their donors, including the name, amount, and date of contributions. However, they may use "dark money" nonprofits to obscure the ultimate source of funds, which can lead to a lack of transparency. This means that while Super PACs must report their donors, the true sources of the funds can remain hidden, potentially allowing wealthy interests to influence elections without public scrutiny. If the ultra-wealthy leave this country, it is conceivable they would continue to continue to put money into politics here for a variety of reasons. But what would happen if their citizenships were revoked?
Please please don't use the tax system for social credits. Every time you draw a line in tax policy a mini-industry of lawyers, accountants and lobbyists develops to keep their clients on the right (no tax) side of the line. Otherwise the point is well-taken. For Jeff Bezos to cover the $100 million loss of the Washington Post instead of laying off 300 journalists his net worth would go from 248.7b to 248.6b.
It is tempting to put together your reflection on pleonexia with your earlier reflection on equality. It seems that we have two externalities feeding each other: the drive for equality is largely driven by envy for those who have more (ie, one’s utility is a function of the others’ consumption); in turn, pleonexia is driven by the desire to be the object of others’ envy (ie, one’s utility is a function of the others’ utility being a function of one’s consumption). Does the externality really revolve around consumption? Elon Musk reportedly lives modestly. Should he be taxed less than Jeff Bezos?
Very good point about externalities in the utility function (envy & greed). I have not thought of that until today when I wrote this piece. It came just a few days after I re-posted the Substack on envy, and suddenly the two things came together.
If he lives modestly, yes.
"Elon Musk reportedly lives modestly." Well . . .
Musk genuinely does appear to currently live in a smaller, simpler home and avoids many traditional luxury trappings - typical of a workaholic who wants his home to be close to his office. But:
- His lifestyle is still supported by billionaire‑level resources. He has access to other properties, guest houses, and corporate accommodations. He travels almost constantly by private jet, which is one of the most resource‑intensive forms of personal transportation.
- The “modesty” narrative is selective and sometimes strategically amplified. Media and Musk himself highlight the modest‑living angle. The tiny‑house narrative is repeated because it’s compelling.
- His frugality is more about minimalist philosophy than about living like an ordinary person. Think of it this way: he lives modestly for a billionaire, not modestly in absolute terms.
In addition, things are never static with Mr. Musk. Recent reporting indicates that Musk is actively working to bring most of his children and at least two of their mothers into a cluster of adjacent properties in Austin, Texas. This is a major shift from the earlier “I live in a $50K prefab house” narrative. The plan centers on a $35 million, three‑mansion compound in Austin. One report describes it as a “three‑mansion compound” intended to house his 11 children and their mothers. Another source says he is building a 14,400‑square‑foot mansion for himself, with two of the mothers living in adjacent properties. A third report confirms the same: Musk wants his children and two of their three mothers to move into two properties near his own Austin mansion.
Realtor.com - Elon Musk 'Buys $35M Compound' To House His 11 Kids and Their Moms
https://www.realtor.com/news/celebrity-real-estate/elon-musk-compound-austin-children/
The Economic Times - Elon Musk: Three mansions, three mothers, and 11 children
https://economictimes.indiatimes.com/news/international/global-trends/three-mansions-three-mothers-and-11-children-all-about-elon-musks-35-million-secret-compound-for-his-big-family/articleshow/114766278.cms
Futurism - Elon Musk Working to Move His Children and Mothers to ...
https://futurism.com/elon-musk-children-mothers-compound
Some countries extend too generous tax payers for a period and then they move to tax fifth percent with ‘many’ deciding to leave. Countries that depend on taxes to keep pensions and welfare state. There is need for more targeting when it comes to taxes because not all rich are equally rich or contribute the same way. Not easy…