The ramifications of someone being a trillionaire (in today's dollars)

In My Humble Opinion
1

The pandemic has gotten me thinking about an old hypothetical; namely, what the ramifications would be if some individual happened to be a trillionaire (in today’s dollars, that is, not future-inflated dollars.) Basically, someone like Bill Gates or Jeff Bezos, but orders of magnitude wealthier.

Discussion of things like private jets, yachts, mansions would be pretty meaningless; such an individual could buy just about any luxury known to man. What would be more pressing, I think, is that such an individual would essentially wield quasi-governmental power. His or her wealth would be so immense that it would have national or international implications, and hence, would figure into governmental policy. Governmental decisions would have to take this Individual X into account.

In addition, in times such as a national epidemic (like the coronavirus in America right now,) such an individual would be heavily pressured to donate or spend money to stimulate the economy. People would regard him/her more as an unofficial arm of government than a private individual. The government would probably try to cut taxes and cajole this individual into donating money instead.

Such an individual could also wield considerable influence in elections (i.e., “I promise that if such-and-such a candidate is elected President, I will then spend $500 billion on helping rebuild highways, schools, infrastructure,” etc., but not if the opposing candidate wins,) although that might be considered illegal election tampering.

Finally, since such an individual would have to essentially command the equivalent of Amazon + Microsoft + Apple + Boeing + Facebook + ExxonMobil + Google all at the same time in order to get such wealth, there would be intense pressure to pass laws to split up his wealth and prevent any one such individual from having so much power in his hands. Maybe more antitrust laws.

2

THis is just my opinion, but I don’t think it’ll matter that much.

I mean, people like gates, Buffet and Bezos have 100 billion each. But if your goal for example is to influence politics you don’t need nearly that much. Tom Steyer is worth 1.6 billion and he donated about 80-100 million in both 2016 and 2018, who knows how much he spent in 2020. But at a 4% growth rate, 1.6 billion produces 64 million in revenue a year. The Koch brothers network spends about 400 million in midterm years and about a billion in election years. Thats small change for either a trillionaire or a 100 billionaire.

We already have governments like China where if Xi wanted to, he could probably devote a trillion dollars to a project. He couldn’t do it all at once but neither could a trillionaire who owned a company as it would take time to sell all the shares. If Xi said ‘I want to put a trillion dollars into researching AI, or a cure for all cancers, or alternative energy’ he probably can assuming he has 10-20 years to do it.

But when it comes to influencing things like politics, scientific research, philantrophy, I’m not sure what difference there is between 100 billion vs 1 trillion. At the very least, domestic politics in the US wouldn’t require that much money. A steady ~500 million a year is enough to buy a political party outright, and that is affordable at both 100 billion and 1 trillion in net worth.

As far as your scenario about that billionaire being an unofficial arm of government, thats already true in a lot of ways. Republicans have their billionaires and democrats have their billionaires. The parties try to serve their rich donor base. In an age when billionaires are becoming very reviled, the democrats had 2 billionaires on stage in the debates.

Also to be a trillionaire you wouldn’t need to own Amazon + Microsoft + Apple + Boeing + Facebook + ExxonMobil + Google. Those companies combined are worth something like 5 trillion dollars. John Rockefeller was supposedly worth around 400 billion in todays dollars. His legacy isn’t much different than other far less but still rich people who invested in philanthropy.

Alphabet/google, amazon, microsoft, apple and a few oil companies in China and Saudi Arabia are each worth over a trillion dollars (or at least were before the economic collapse). A single individual owning all the stock in one of those companies would make them a trillionaire.

3

But a single shareholder doesn’t own any of those companies.

Realistically, for there to be a trillionaire, they would need to own a stake in a $10 trillion company. And I think an economy that has companies of that size would be very different from our current one.

4

Or stakes in 100 $100 billion companies.

There might be a limiting factor on that, however. To get a really big share of a big company requires a high degree of dedication. Diluting that dedication among companies may not work. So some of Future Trillionaire’s investments/companies do amazingly well, most don’t.

I like how the OP thinks. Yeah, the influence on elections would be gigantic. Look at the Koch brothers and multiply. The media would portray him as a demi-god. (Shoot, based on recent political events, drop the “demi-”.)

5

OP specified in today’s dollars. But whether or not it’s in today’s economy is important. Because the economy and wealth grow faster than inflation. A trillion dollars today is a larger part of overall net wealth than a trillion (in 2020 dollars) in 2040, if the usual trends apply.

6

The Koch brothers are rich because they own Koch industries. That isn’t the largest company in the US, but its one of the largest privately held companies.

If someone single handedly founded microsoft, apple or alphabet but kept it as a private company, wouldn’t their net worth be a trillion dollars?

Also in theory someone who is extremely good at business could found two highly profitable companies. Elon Musk has founded a wide range of companies, so if someone founded multiple companies and 2 or more ended up in the fortune 50, that could make someone a trillionaire.

7

Right - in today’s economy, and in today’s dollars. Suppose some fictional individual (could be American, but not necessarily) who were the equivalent of Gates, Koch, Bloomberg, Buffett, Zuckerberg, Bezos, Musk, Ballmer, and a few dozen other billionaires rolled into one.

8

There is much speculation that the first trillionaire will get their money from asteroid mining.

9

Or it could be someone who owns a company that makes robots with enough dexterity and cognitive skills that they can replace huge swaths of the labor force.

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In addition, looking at the nationality angle, such an individual would already, in his own right, be worth about 1/25 of the entire American GDP. But if he were a citizen of some smaller nation, he might have more wealth than the entire nation’s GDP itself.

11

[Bolding mine]
Only on paper. The entire assets of the company might be worth 1 trillion dollars, but there is no way that you could extract that much cash out of it. First of all, you would need to find a buyer, and it’s very, very unlikely that anyone (or any group of people) would pay anywhere near that much for it. Secondly, and more practically, if you single-handedly founded Apple, and didn’t even have shares (or, had 100% of them), then your value would only be worth what the assets of the company were, and your profit margin. The extraordinary valuation of Apple (and Google, and Microsoft) is because shareholders think that the value of their stock will increase in the future. If there are no shareholders, that valuation evaporates.

12

I suppose. But Koch Industries is only about a $100 billion (sales) company. Some of the Big-4 accounting firms are up there too, but they have thousands of “partners”.

Elon Musk owns around 22% of Tesla.

I think it is typically very difficult for companies to grow beyond a certain size unless they go public.

13

Andreas Eschbach discussed the issue in his novel One Trillion Dollars

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I think Jeff Bezos has a decent chance of being the first trillionaire. He’s easily got several decades of life left and has consistently shown an impressively astute amount of strategic foresight. He only needs fairly average returns at this point to get to $1 trillion in net worth in 30 years.

Of course he might get bored or find a calling for something else. Gates might have done it (adjusted) if he stayed at the helm of Microsoft, but he found other things to do with his time.

There are a variety of ways to evaluate privately held companies, but the above is mostly incorrect.

Even if it were correct, someone with 100% of Apple could sell 1% of it, and then the normal market valuation rules could come into play and the 99% owner would still be approximately as rich.

15

It’s very very difficult to grow a company to be worth $1 trillion, full stop. I’m not sure that going public makes it appreciably easier, although it’s almost certainly a good idea to take on outside investment and dilute your share.

The other thing to realize is that people capable of running a $1 trillion company are generally pretty financially savvy, and generally financially savvy people don’t take on excessive risk. If you have a serious shot at starting a company worth a ton, it generally makes way more sense to try to own 50% of a (hypothetical) $2 trillion company than 100% of a $1 trillion company.

16

I would say I hope this isn’t true, but then I realized how much sheer stupidity exists on Earth. This is less likely than speculating that the first trillionaire will get their money from raising unicorns because their farts are aphrodisiacs.

As for the overall premise, people had talked about the first billionaire and then hundred billionaire as having world-changing power. (GM was the first billion-dollar corporation and that didn’t occur until the 1950s.) But by the time they appeared in real life, the world economy had grown so huge that a billion wasn’t what it used to be. A world economy that could support the makings of a trillionaire wouldn’t be totally destabilized by one.

17

That was fairly uncalled for for someone expressing their opinion.

FWIW, Goldman Sachs is one of the groups pushing the idea.

18

Right, but I mean in today’s world and economy - what would it be like if someone had over $1 trillion of wealth in the current 2020 world?

How would governments treat him, what measures might they take to curry his favor or tax his wealth, in what aspects might he face pressure or influence in ways that Gates, Buffett and Bezos currently don’t? What sort of things would it be worth it for him to spend his time/money doing?

19

Music and the Arts.

After the first trillion dollars, I think you’d kind of loose interest in mere accumulation: see Buffet, Gates and some of the Arabian princes. Sure, you could own a small country, but so what? Who wants to own a small country? If your heart lies in a larger country, you could run for president, but I think that the evidence is that is a small ambition: none of the rich people are interested.

20

Billionaires are vastly overrepresented presidential candidates. We (arguably?) have one for president right now and had two others in the democratic primary until recently, so I think the evidence shows exactly the opposite.