I’m just not convinced that value creation and value extraction are well-linked when examining outlier cases. The nature of outliers makes it far more likely that value extraction would be much more likely to exceed net value creation. Even if for the more median percentiles, value creation and extraction are well-correlated.

I wouldn’t suggest a cap, but I would suggest very high tax rates and a more stern eye towards anti-competitive practices and negative externalities.

As a thought experiment:

Celebrating unbounded greed (the most “extreme” option) would be celebrating when politicians steal as much money as they can by manipulating stock markets and Kalshi and taking crypto bribes, taking kickbacks from contractors and blackmailing or strong-arming the other branches of government.

Celebrating unbounded greed would be celebrating selling poisoned food and telling ourselves that its the stupid people’s fault for buying melamine-contaminated milk without getting it tested by their own independent third party before drinking it. And then blaming the stupid people again when their third party testing lab that was trustworthy gets purchased by the same private equity group that owns the milk company and starts watering down or falsifying their tests.

Celebrating unbounded greed would be celebrating people whose wealth increased by neglecting expensive safety protocols, blowing up neighborhoods with gas explosions, and silencing them by intimidation, as well as blackmailing and bribing the judges overseeing any torts.

The more of this you allow and celebrate, the more your outliers grow and become a true bimodal distribution. Where the peak earners are, by necessity, extracting more value than they create.

The thing is, we have had a lot of things like this happen in most developed countries. There is a lot of corruption, and it’s not divided along party lines. Celebrating and glorifying unbounded greed is likely to lead towards a state where there’s less “rule of law” and more “rule by force”.

Relatively unbounded greed can probably work quite well in a society with a strong rule of law to protect against corruption, dangerous/damaging corner cutting and fraud… as well as an economy that actually meets the assumptions of a “free market”: i.e. no individual buyer or seller has enough concentrated power to significantly impact the supply-demand curve all by themselves.