The Trouble with Trillionaires: Mordecai Kurz on Capitalism, Democracy, and the Second Gilded Age

“Between 1980 and 2019, the billionaires gained $25 trillion. By today it’s probably $35 trillion. The question is who will pay for reform? You go where the money is.” — Mordecai Kurz

Keynes observed that in the long run, we are all dead. The nonagenarian Stanford economist Mordecai Kurz agrees. Which is why he has no patience for the tech utopians’ promise of abundance for all of us in the long run. And his new book, Private Power and Democracy’s Decline: How to Make Capitalism Support Democracy, is amongst the most urgent cases yet made for a fundamental reform of American capitalism.

Kurz compares our billionaire-infested times with the Gilded Age of the late 19th century, which eventually ended with sharp progressive reform. We are now in a second Gilded Age, he argues. Between 1980 and 2019, the top billionaires gained $25 trillion. By today, he estimates it’s $35 trillion. Meanwhile, workers without college education gained essentially nothing in income between 1980 and 2010. The result is both Trumpism and the world’s first trillionaire.

Kurz lays out a three-fronted reform strategy. First, reduce market power through patent and antitrust reform. Second, redistribute the gains from technology through a 65% top marginal income tax rate and a 45% corporate rate. Third, guarantee the livelihood of every worker displaced by policy-supported technological change with retraining, full wage support, tuition, healthcare, and even relocation.

Wouldn’t the billionaires simply leave? The spirited Kurz, who has taught economics at Stanford for sixty years, isn’t worried. “Others will come instead of them,” he says. And in response to Sam Altman’s argument that AI will free humanity from labour, Mordecai Kurz retorts with Keynes’s remark about death in the long run. And this particular long run, he says, could be many millennia.

Five Takeaways

•       The Second Gilded Age: Same Dynamic, Different Technology: Kurz’s central historical argument: the first Gilded Age — 1864 to 1914 — produced extreme inequality, rising economic monopolists who became centres of political power, and democratic decline. It ended with progressive reform. The second Gilded Age, beginning in 1980, follows the same logic: technology used as a weapon of market power, market power converting into political power, political power undermining democratic institutions. The difference is scale and speed. Between 1980 and 2019, the top billionaires accumulated $25 trillion. By 2026, Kurz estimates $35 trillion. The reform that ended the first Gilded Age took fifty years. He is not sure we have that long.

•       The Three-Pronged Reform: Market Power, Distribution, Livelihoods: Kurz’s proposed reform has three components. First: reduce market power through patent reform, antitrust reform, and reform of acquisition law — the legal structures that allow technology firms to entrench monopoly positions. Second: redistribute the gains from technology through a 65% top marginal income tax rate, a compulsory minimum 15% tax on incomes above $400,000, and a 45% corporate tax rate. Third: guarantee the livelihood of every worker displaced by policy-supported technological change — retraining, full wage support, tuition for children, healthcare, and relocation assistance.

•       The 1980 Mistake: Where It All Went Wrong: Kurz is precise about the origin of the problem: 1980. The turn to unregulated free-market capitalism under Reagan, combined with the information technology revolution, created what he calls a techno-winner-takes-all economy. Workers without college education gained essent