Only if you ignore population growth.

The US went from subsistence farming to industrial superpower before the income tax. The case for high taxes causing greater economic growth needs a lot more work.

The greatest equalized economic growth. Go ahead and ask miserly monarchs how it works to grow the wealth of the few at the expense of the many. The U.S. could not long have tolerated robber barons without major social trials.

> The U.S. could not long have tolerated robber barons without major social trials.

Then, as now, there was a lot of envy/dislike of wealthy people. That doesn't support the idea in this thread that wealthy people are bad for the economy.

There's lots of evidence that the concentration of wealth is bad for the economy, but I suspect from your posting history that you'd ignore it all in defense of the ultra-wealthy (which you're not one of and will never be, of course).

https://www.google.com/#q=concentration+of+wealth+effect+on+...

It's your right to believe whatever you want, but that's what this world-view is, belief, and nothing based on evidence or reality.

Extreme concentration of wealth reduces competition which is bad for the economy. Further, wealthy people tend to spend money on less economically scalable things. A paying a 5 star cook may move money around but you can't turn a 5 star cook into a factory the way you can automate a fast food kitchen.

Sure they invest, but that also tends to hurt the economy by driving up relistate prices etc without actually increasing output. They also tend to do vanity investing which is why VC firms for example average such terrible returns.

> Extreme concentration of wealth reduces competition which is bad for the economy.

There's no evidence of that. The canonical robber baron, Rockefeller, steadily drove down kerosene prices by 70%. They did not go back up. See "Titan" by Chernow.

> wealthy people tend to spend money on less economically scalable things.

This makes no sense to me.

> hurt the economy by driving up relistate prices etc without actually increasing output.

This is claiming that rich people spend more money than non-rich for the same item. There is no "rich premium" paid for things. Even so, the person who gets paid that money then goes and spends it - it doesn't disappear from the economy.

> They also tend to do vanity investing which is why VC firms for example average such terrible returns.

You're asserting that wealthy people are terrible at managing their money. It's like saying an Olympic athlete doesn't know how to train effectively.

Would you prefer to take financial advice from a rich person or a poor person?

>You're asserting that wealthy people are terrible at managing their money.

Or maybe, the assertion is that wealthy people are good at managing money in ways that benefit their entrenched holdings, but not good at finding the Next Big Thing. Or in ways that simply improve the economy overall.

Your entire argument can be countered simply by the example of the Ford Motor Company and its decision to pay workers more than the bare minimum so that they could actually afford to purchase the vehicles they were making. This lead to huge gains over other boutique automobile manufacturers at the time which produced vehicles that cost several times that of the Model T. And improved the economy of the area immensely.

In general, extreme concentration of wealth is bad for the economy because it does not allow enough people to make decisions that cause growth overall and improve the wealth of the nation. The most obvious historical example is that of the high middle ages where all of the land, currency, military power, etc. was in the hands of the few and 90% or more of the population was at a subsistence level. The wealth of the nation was not spent on improving the lives or economy of the people, but on defending the holdings of the rich from other wealthy people.

In contrast, the renaissance started when that wealth was distributed among merchants, craftsmen, and bankers who were able to invest their income and gains back into technology that improved productivity for everyone (but most especially for themselves) and resulted in an overall wealthier nation.

Monopolies are well studied, fungible global commodities like kerosene have complex interactions. But, nothing in Titsan says a more competitive market could not drive down prices by 71%. However a more obvious counter example is Mexican telecom market.

You can't automate million dollar paintings. If you sell 300,000$ watches the cost is part of the appeal, it's just conscious consumption.

Supply demand curve, if someone wants to buy land as an investment there is no new land created which increases prices somewhere. See any city with significant vancant housing stock from foreign investors.

JK Rowling did not become wealthy by being a wise investor. The Walton family includes someone who diversified and guess what they have less money than the others, demonstrating incompetence. I could go on but having lots of money and being a competent investor are very different things.

Does someone pay you to defend billionaires?

US was well past subsistence farming in 1776. Guns and Ships don't grow on trees, and people don't eat cotton. Further with a population of 2.5 million and huge tracts of land there was a lot of low hanging fruit such as fur trapping.

Just track GDP in (1776 vs 1913 / population in 1776 vs 1913 ) / (1913 - 1776). Well don't do exactly that you need to use logarithms because exponential growth. You end up with significantly less than 2% annual growth.

> US was well past subsistence farming in 1776.

Not really. Nearly everything a farm family needed was produced on that farm at the time. Note that Jefferson made his own nails on his plantation. People were short, malnourished, and bone evidence of having worked incredibly hard. There was no farm mechanization.

A consistent food surplus was not produced until around 1800.

That's not what substance farming means. Plantations sold crops for profit to buy thing such as slaves or raw materials. Nails require mining to produce Ore and have nothing directly to do with farming. So, yes plantations may have been reasonably self sufficient, but that has more to do with transportation and transaction costs than everyone working in a field somewhere.

PS: Rememebr prior to the revolution the US was sending a great deal of wealth back to England. The even then the colonies enjoyed a relatively high standard of living at the time.

Not having a consistent food surplus means subsistence farming.

(There's always been some level of trade.)

Your definition of basically spending what you make would end up with subsistence fortune 500 CEO's. People who don't directly farm are by definition not subsistence farmers.

PS: Yes, subsistence farmers can include minimal trade, but not support more than local governments as that would imply a significant surplus.

The more widely used definition of subsistence farming implies literal self sufficiency and living in a simple self constructed dwelling, not sending your children to college while slaves work in the fields or hiring local artisans to construct a grand estate (Monticello).