Galbraith’s ‘Bezzle' Is The Machine That Props Up Income And Wealth Inequality

CHICAGO, ILLINOIS - AUGUST 14: A sign marks the location of a WeWork office facility on August 14, ... [+] 2019 in Chicago, Illinois. WeWork, a real estate firm that leases shared office space, announced today that it had filed a financial prospectus with regulators to become a publicly traded company. (Photo by Scott Olson/Getty Images)

If every day is an opportunity to learn something, earlier this week offered an opportunity: the wonder of seeing Adam Neumann walk away from the mess of WeWork with a $1.7 billion platinum parachute. (Gold doesn't do the magnitude of the payout justice.)

The vast sum—which still might be challenged in court by investors but gives Neumann a sizeable defense fund with enough remaining for an opulent retirement—was only possible because of the combination of his complete lock on voting rights and the billions of sunk cost that main investor SoftBank contemplated.

As part of the fallout, Merryn Somerset Webb wrote in the Financial Times of how WeWork was an example of a term that John Kenneth Galbraith coined long ago: the bezzle. Galbraith developed the concept when writing a history of the 1929 economic collapse. Here's his description, which seems to pop up every few years when someone writes about the intersection of economics and politicsup:

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