1.     I am sure every reader have heard of short sales, i.e., selling a stock you do not own (by borrowing the actual stock from someone) and hoping to buy it back at a lower price later. Hence you make a profit in a declining market. To do this you must actually borrow the stock from somewhere. When you open a brokerage margin account to do short selling, you agree that others may “borrow” stocks you own when they want to sell short as a reciprocating measure. But the proceeds of this short sale were kept by the brokerage house and not accrued to you as when you actually sell a stock. The rationale is that the brokerage must keep the proceeds in case you wanted your stock back and they have to buy it back somewhere. However, with big account like the Harvard investment, things are different. When Harvard lends her stocks to others for short selling, she actually receives the money from the short selling. In turn she can invest the proceeds in interest bearing accounts and earn money. The monthly income alone from such money totals a couple of million dollars. The only risk Harvard bears is that if and when she wants her stocks back, there is a seven day waiting period. With the huge investment portfolio Harvard has, this is never a problem. Such incomes are never available to ordinary people and investors

2.     Suppose you were one of the original Google employees and received Google stock at $1/share. Now the stock is worth 400 dollars/share. If you needed money to built you dream mansion,  then when you sell the Google stock you have to pay a capital gain tax between 15-25%. This can be a huge amount and may seem unfair to you. What you can do it to sell Google stock short. Note you actually own the stock but you borrow Google stock from someone else to sell. This way you did not sell your stock in the eyes of the tax office. There is no capital gain tax to pay. The brokerage office who borrow the stock from somewhere for you to sell does not worry since they have your Google stock in the account just in case the other owner want his/her Google stock back. In the mean time you have full use of the proceeds of the sale (since you are a big customer, the brokerage office wants to be nice to you for fear you take the business elsewhere if you are unhappy). You never sell you shares of the original Google stock and kept it until you die. At that point, in your estate the stock receives an adjusted cost basis, i.e., the cost to your heir becomes the value of the stock on the date you died which is 400 dollar/sh and not the 1 dollar/sh cost you originally acquired the stock with.  If you heir later sells the stock at 400 dollars/sh, there will be no capital gain tax because of the  adjusted  cost basis. Now you may say, the government gets cheated out of some tax money  she is entitled to. Possibly but not totally. Inheritance or estate tax on the deceased may recapture some of it if the estate is valued over two million dollars. But that is another story.

My point here is that in a free market society the Rich has access to many ways of making more money that are simply not available to ordinary citizens. The rich does get richer which is why we have various taxing schemes/laws and socialism in some form to restore some form of equality and the existence of an industry to help the rich to avoid legally various kind of taxes (there are numerous other tactics and legal loopholes invented by tax experts benefiting the rich too many to mention ) . The battle never ends.