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Billionaire is defined as “a person with a net worth of at least $1 billion.” As a word, Billionaire has crept so completely into our lives that we see, hear, and read the term everywhere. If today’s headlines are to be believed, then Billionaire is the new millionaire, and ‘everyone who’s anyone is joining the ranks of this elusive group.
Like many other overused words, Billionaire has lost its meaning even as it became a household word. Today, it describes any person who is really rich. Yet, a billionaire is not merely really rich. Most of us don’t have a mental picture of even one million of anything, so wrapping our heads around a billion is near impossible. We rarely see more than thousands of any object (leaves on a tree or people at a sporting event), so it’s hard to get a feel for just how large a big number really is.
Making it even harder, billionaires only came about relatively recently. No human had a net worth of a billion dollars before 1913, with John D. Rockefeller either reached or came very close to reaching billionaire status. It wasn’t until 1957 that Jean Paul Getty’s fortune eclipsed the mark and was verified by a third party. By 1970, more humans had visited outer space than had a net worth of a billion dollars.
We read the headlines such as: ‘Jeff Bezos could buy everything in Amazon and Wal-Mart’s inventory’ or ‘buying a $145,000 Patek Phillipe watch would only feel like spending $0.09for Jeff’. Since few people have ever bought a $150k watch and fewer have ever bought everything Amazon sells, articles like these only reinforce the idea of being really rich without ever putting Billionaire into a usable context. This lack of context and rigor leads the press to regularly reference Billionaires as “the 1%”. While technically accurate, this description is imprecise and misleading.
There are 7.7 billion people on earth today and nearly 330 million in America. The one percent (1%) of either of those populations would be either 77 million or 3.3 million people. There are less than 2,200 billionaires worldwide and roughly 500 in America. So describing a billionaire with the ‘1%’ moniker would be like a yacht company bragging that “our yachts cost more than $2,200” when their boat’s actual price is $77,000,000. Seventy-seven million is indeed more than twenty-two hundred dollars, so the ad would technically be correct, but $2,200 is so far from $77 million that it’s useless.
To get a feel for a billion, let’s consider an example more common in our daily lives — time. A person ‘spends’ one million seconds every 11.5 days. If you are paid every two weeks (like many of us are), then each time you receive a paycheck, then you spent just over a million seconds of your life since the prior paycheck. So, how much time would pass before a person spends one billion seconds?
Every 31.7 years, we spend a billion seconds of our lives. Stated differently, if you are a billionaire and spend $1 every single second, it would take you nearly 32 years to spend your fortune. You will have worked long enough to retire before spending a billion seconds but spend a million seconds every two-week pay period.
The widespread condemnations of billionaires are so prevalent that Howard Schultz (former Starbucks CEO) doesn’t even want to be called one anymore. But, the arguments condemning billionaires for the concentration of wealth often ignore three important considerations.
First, today’s billionaires did not create income inequality. They are no more individually responsible for wealth concentration than Tommy Wiseau is for the lack of quality in modern Hollywood film. As stated earlier, there was at most only one Billionaire in the world before 1957, so billionaires could not then have created the tax and economic structures which power the creation of billionaires today.
Today’s billionaires were created by a complex system that we are all, in part, responsible for creating. That system is capitalism. The vilification of billionaires is generally wrong and can be dangerous. There are certainly kleptocrats and dictators that should be opposed and there are certainly wealthy people who are not doing their fair share giving back. But, portrayals of the Koch brothers or George Soros as James Bond super villains, is wrong.
Despite conspiracy theories to the contrary, 540 people are not capable of swaying the minds and hearts of society (or federal elections) this way or that. If it were easy for billionaires to sway the public for their economic benefit then why would the billionaires of the brick and mortar retail industry allow public and government support for Amazon’s rise if they could have easily lobbied Washington to declare Amazon a monopoly on a whim or tax its sales earlier.
Warren Buffett, as but one example, has very publicly spoken out against regressive US taxation policies. He has publicly advocated changes in tax policy, famously saying that his secretary pays a higher tax rate than he does. His comments were so impactful that they even reached the US Presidential debate stage. Yet, US tax policy hasn’t changed because America’s 3rd richest person wants it to change.
The second problem with vilifying billionaires: many billionaires do more than their “fair share” of good in our society and make outsized contributions that are often ignored. In 2010, Bill and Melinda Gates established The Giving Pledge, a commitment to give away at least half of their fortunes to philanthropic causes within their lifetimes. 189 billionaires have signed the pledge and the Gates family and Warren Buffet continues to ‘put their money where their mouths are’ and lead the way.
As a society, we are obsessed with money. Having it, counting it, spending it, and envying how much others have. Forbes even provides a real-time fortune tracker so the public can gawk at “so and so made $1.4 billion today.” Corporate profit is the #1 (Friedman would argue the ‘#only’ goal) in business today. Money is how our society has chosen to ‘keep score’ in our Horatio Alger-inspired game of life. The Forbes World Billionaire List is the scoreboard. We are obsessed with winning and winners and don’t care how you play the game.
How we keep score, or more accurately — the behaviors that society rewards versus those it penalizes have an outsized influence on what our best and brightest choose to pursue. If there’s ever going to be constructive change on the issues of inequality, then we need to find new things to celebrate beyond money and stuff.
Until philanthropy and public benefit are portrayed to be as cool as making money and having stuff, then we will continue to chase the numbers on the wealth scoreboard. Discussions of philanthropy should celebrate what those dollars actually accomplish, rather than the number of dollars donated. What if doing public good was cooler than owning a sports car?
Finally, the many condemnations of billionaires ignore the definition of the word: “a person that has a net worth of at least $1 billion dollars.” Billionaires, like all of us, are both flawed & fantastic; they can be brave and cowardly and are brilliant on certain topics while ignorant of others. Billionaires are people who were born into a system and did well in it. If the system is broken and needs to change, fine, but blaming those who ‘won the game’ that society demands we play (capitalism) is the wrong path. There are billionaires working to change the system and give back while other billionaires don’t do enough. Billionaires then look much like the rest of us — some good people, some bad, but people nonetheless.
There are very real, very tough questions that must be asked and answered regarding income inequality. We cannot ask the right questions or create solutions until we understand that referring to people with $1 million or $10 million in income in the same breath as billionaires makes no sense from a policy perspective. The 1% ≠ 0.0000003%.