A healthy society is marked both by a reasonable distribution of wealth along with an investment focus on productive assets that can help all of society. An unhealthy society is marked by a concentration of wealth in the hands of a few who are focused on preserving their ability to purchase self-indulgent pleasures.
From a societal standpoint, it is preferential to see more households sharing the wealth. As evident in the chart below, times of economic prosperity are helpful in spreading the wealth among more households with economic downturns acting to consolidate wealth into fewer hands – this reveals the truth of the expression that a rising tide raises all boats. This is why many attribute Fed-induced recessions to wealth redistribution, favoring a select few over the collective good.
In any case, it is important to consider what the wealthy elites do with their money. Notably, venture capital (VC) investments have been trending down (to $37.5B during 3Q22) at a time when the Arts & Collectibles market is $1.7 trillion in size (fully half the size of the $3.4 trillion private equity market). A fascination for this asset class among the richest of the rich has helped generate a 14% annualized price appreciation from 1995 through 2020 for contemporary art according to Nomura, handily outperforming both stocks & real estate.
In conclusion, it is better if wealth is spread to more people who are motivated to invest in new ways to grow the economy for everyone’s benefit rather than concentrating wealth in the hands of a few art collectors.