[wyre]

You're misapplying the broken window fallacy. I'm not arguing consumption is good because it creates value, I'm arguing that it is not "taking from society" as the OP claimed. Consumption is the entire point of production.

Wrt your points about wealth holding and investment, you're assuming the allocation of a billionaire's wealth is efficient and productive. This ignores that private returns are not social returns, it assumes that growing capital is what is best for society, and frames the question as investment vs consumption, when the question is "who controls investment decisions?" Your argument smells very similar to Reagan's trickle-down economics which has been disproved through decades of data showing tax cuts don't generate promised growth. Inequality continues to increase, while median wages stagnate.

I agree invested capital finances production, but I disagree that extreme concentration optimizes for this. Broad and diverse investment mechanisms would allocate capital more effectively than a small number of individuals basing their decisions on private returns.

Consider the equation of exchange: MV=PQ (money supply x velocity of money = nominal GDP). As wealth concentrates, velocity in the real economy decreases. Billionaire capital cycles through financial assets instead of cycling through the real economy (wages buy goods and services which pay wages). A lower velocity means either lower GDP or central banks must increase the money supply, risking asset bubbles (hmm, sounds likes whats happening right now ). Evidence suggests a dollar is stronger in the hands of the working class creating immediate economic activity and supporting local businesses, compared to a dollar in an asset portfolio.

[czl]

I agree that consumption is the point of production in the long run, but that does not mean consumption is neutral in terms of tradeoffs. When someone consumes, the underlying real resources are gone and cannot be used for other purposes. That is the core of the broken window point: activity can rise while net wealth falls if resources are used in less productive ways than the alternatives. Saying consumption is not "taking from society" skips over the opportunity cost of what could have been built with the same labor and capital.

On who controls investment, it is fair to worry about political influence, but it does not follow that highly concentrated private wealth is mostly idle or socially useless. Large fortunes are usually claims on productive assets that employ people and produce goods and services. Capital markets already involve broad and diverse mechanisms like index funds, pensions, and institutional investors that pool the savings of millions of non wealthy people and allocate them based on expected returns. That is not perfect, but it is not simply a handful of billionaires directing everything according to whim.

The equation of exchange point also overstates the role of velocity in judging what is good for the economy. A dollar that flows into an asset is not disappearing from the real economy. It is funding someone else who is selling equity or debt and who will use that for wages, R&D, or capital spending. Lower velocity at the cash register can be consistent with higher long run output if more of today’s income is channeled into projects that raise productivity tomorrow. High velocity tied to fragile consumption and low investment can look good in the short term but leave people poorer over time.