Well, yes, thank you for the cite.
I believe both Bill Gates and Warren Buffett have plans to give the Gates Foundation essentially all of their wealth. (Not sure what Melinda French plans to do with her money.) They’re each worth something like $100 billion. The foundation currently has about $50 billion (and is one of the richest foundations in the world). So its endowment going to be roughly $250 billion. That is an insanely large amount of money. Even if current leadership has all the right intentions, who knows if the next leader will? In short, that much wealth concentrated in one place is a problem.
I’d say that the billionaire with the greatest claim to have earned their money is probably J. K. Rowling. She still had the benefit of a great deal of luck, but the product that propelled her to the big times was entirely her own creation (and then she got even richer by collaborating with others to make the movies, of course, but she had a good negotiating position for her share of that by virtue of the success of the books).
I’d agree that Rowling probably has the best claim to the lion’s share of the wealth her invention produced.
I think the biggest problem is the axiomatic assumption that billionaires are always evil, that it’s a zero-sum game, and therefore everything that someone wealthy does has to hurt the poor. I see this nonsense on Reddit all the time spouted by Gen-Z people, and some Millennials who should know better by now.
It’s not very good thinking- it’s NOT a zero sum game, and there are lots of things that can create wealth or build wealth that don’t automatically by definition hurt the poor. I mean, I’m saving for my retirement- how does that hurt the poor? There’s not really any difference between that and being a billionaire, except for degree.
Four of them - Andrew Lloyd Webber, Jay-Z, Paul McCartney, and Rihanna - are billionaires.
For the record, pun intended, I believe that people who build trillion-dollar companies are more entitled to tens or hundreds of billions than these mere paupers.
No one said Bill Gates created all the value at MSFT. But he did create, build, and run the company for a long time. And all those 500k people who worked there got paid. Some got paid very well and became millionaires themselves. Not to mention other investors who earned a profit from MSFT stock.
By some accounts, MSFT has created three billionaires and over 12,000 millionaires.
Really the error in thinking is that somehow the existence of rich people screws poor people. Poor people would still be poor if companies like Microsoft didn’t exist. There would just be more of them.
I assume Rowling had an editor, and that her publishing house had experts in publicity, production, and distribution to get her books into shops. If those people don’t do their jobs right, we may never have heard of Harry Potter.
I’m sure Rowling’s editors did a fine job, but there are thousands of fine editors out there that would have done just as well. You could swap them out and not tell the difference. But you could not have swapped Rowling for someone else.
Risk-taking also deserves reward. Suppose Rowling, before she was rich, shopped around for an editor that would do the work for a cut of the future proceeds. The editor would be taking a risk–maybe they don’t get paid at all, maybe it takes off and they get a portion of the riches. The editor that just does it for a fixed paycheck isn’t taking the same chance.
Likewise, there’s minimal risk associated with my job. I will get paid for the work I performed yesterday, absent wage theft or the payroll company or bank having IT issues. I can and have taken the risk of converting some of that pay into equity in my company, which makes many financial planners twitch. If I were to get fired after showing up today, I’d be out the fuel and vehicle wear/tear, and maybe buying a house near that job will have paid off less than anticipated.
I find it odd how some people are considered completely fungible within the economy, like cogs in a machine, while others are considered special, irreplaceable, one-of-a-kind talents. In Rowling’s case it may be true, but I don’t think it always is.
Imagine the following conversation in the board room of a tech company:
“We’re going to fire all our U.S.-based engineers and offshore those jobs to Bangalore, India. That will save the company $5-million a year. One engineer is as good as another.”
“Why don’t we also fire the executives in the C-suite and hire replacements for them in India? That would save us an additional $20-million.”
“Are you crazy? No one else can do the job our CEO does. We’re giving him a raise.”
Competition is good, but only for some jobs. One of the lessons of the modern economy is “don’t be in one of those jobs”.
That’s really it. It’s the Big Man school of history, but applied to business.
Admittedly some roles are higher leverage than others. But that cuts both ways. Such as
Whose bad management all but destroyed Home Depot.
Although he did get a nice $210Mil going away present for screwing most of the employees and all of the stockholders.
Just as small increases in temperature eventually leads to a phase change from solid to fluid, so too do small increases in investments lead to meaningful differences.
You’re saving for your retirement. That’s wise! Having enough wealth accumulated to retire to a comfortable, pleasant lifestyle is good. Let’s say you get more and want to help your family, so your children can retire as well. And even more? Help out all your living descendants, and maybe cousins, and so on. But if you get more than that, then what? You’ve helped every living person you have a family relationship with.
Of course, maybe helping your family is not the purpose of your hypothetically vast wealth. But do you see how there’s a point where wealth above some amount is qualitatively different than less wealth?
People have moral agency. Without considering how the wealth was accumulated, the wealth itself is a moral burden. With great capability comes great responsibility. And a billionaire has a lot of capability and thus an enormous responsibility to do good with it. Accumulating more and sustaining existing wealth are not a moral ends in themselves.
The immorality comes from over-charging. Part of the “worth” of the company comes from profits (realized and prospective). Had they charged less, less profits earned, less worth. If, in your scenario, the average electric bill goes from $100 to $70, the average citizen has gained $30 they can spend on… whatever, and the “paragon of morality” made enough to invest in their company and other companies and still rack up a worth of trillions. Had they lowered their profit goals, the average electric bill may have gone down to $50. The average citizen had $50 to spend, and the paragon of morality would only have racked up a worth of billions.
I meant in the sense of if I retire with a round million dollars and 40% of that is from investment income, I’m failing to see how merely making money from investments hurts anyone. From there, it’s just a matter of degree up to a billion dollars.
I guess where I struggle is that people always say billionaires have this greater responsibility… to something because of their great wealth. But nobody ever defines what that responsibility is, who it’s to, what is expected, and so forth.
Without that definition work done as something to verify whether a billionaire is living up to that responsibility that people lay on them, it all seems very sour-grapesy to me- unless they’ve literally impoverished themselves, someone can always come along and say they have more to give.
Let’s say a billionaire worth 10 billion liquidates 9 billion of his holdings and donates it all to worthy charities and progressive causes? Is that enough? He did just give away 90% of his wealth. But he’s still a billiionaire. What if it was 95%? He still has 500 million.
That’s the problem- there’s no way to say “Yes, he’s done his part.” because people are so resentful that he’s still got a half-billion dollars. Or a quarter of a billion dollars. Or 25 million. Or even 2.5 million. There’s probably some asshole out there who thinks that someone who has 250k in assets needs to be donating that.
You think a billionaire gets that way by socking away 10% of his annual salary in a mutual fund and just happens to have a bigger salary?
They don’t earn 50,000 times what you earned for your million dollar retirement the same way you earned your retirement. They are active players in the game that you are passively participating in. As are the people making 50-500x what you earned.
They use their wealth and power to change the rules in ways that benefit them.
The problem is the system that allowed him to become that wealthy in the first place. So at a minimum he has a responsibility to work to dismantle the oligarchy and regressive tax policies and push policy that will be of the most benefit to people of lesser means. He has to become, in the words of a former professor, a “traitor to his class.” The idea that anyone deserves or earned all that wealth is pure delusion. Putting money into accounts to make more money is not work, it’s benefiting from a system made for you and people like you. It’s a scam more than anything else.
People who have to work three jobs at places that line the pockets of billionaires who are bankrupted by a major medical event, who can never get far enough ahead to make money without working, people who can never retire, who face crippling physical problems due to hard labor, those people absolutely deserve to feel “sour grapes” toward people who live with undescribable wealth and the delusion that they earned it.
What’s expected? This:
It’s not a matter of resentment. (Certainly, some people are resentful, but that ignores other points of discussion.) It’s a matter of purpose. What is the purpose of having a billion dollars?
Do you have similar struggles with the adage “With great power comes great responsibility”?
Instead Jeff Immelt won the GE job and all but destroyed the company. He got a $211 million golden parachute.
Maybe Nardelli should have stayed at GE and Immelt gone to Home Depot. Couldn’t have turned out worse. For the companies. The CEOs did well.
But now that he’s gone, there’s been a reappraisal of Jack Welch as well.
Welch made GE, already one of the largest corporations in the country, grow even more. He was much lauded for that at the time. That was the era of the superstar CEO, a notion that’s mostly faded. Successful founders are typically more to be admired than the lifetime managers who take over from them. Yet most Silicon Valley success stories contain a chapter in which the founder is way over his head when the business grows beyond his direct control and an adult needs to come in and manage rather than rule. The ending never has a moral than others can apply.