In 2007 Forbes magazine gushed:
“While inheriting a billion dollars is still the easiest way to land on our list of the world’s wealthiest, it certainly isn’t the most common. Almost two-thirds of the world’s 946 billionaires made their fortunes from scratch, relying on grit and determination, and not good genes.”
Fifty of them, it goes on to say, are school or college dropouts.
The unwritten argument the magazine is making is obviously its usual billionaire-worshiping. It’s a propaganda claim. It would be interesting to investigate this and find out the reality behind this very unlikely statistic, for someone who has the time and resources. For me, here and now, I’ll just ask a few questions.
What does “from scratch” mean in this instance?
All it seems to come down to here is that the billionaire in question did not inherit their billions from their parents. If they inherited millions, or hundreds of thousands, or tens of thousands, is this “starting from scratch”?
Or forget inheritance. If a person grows up in a relatively well-off family that has the ability to put them through school and college without them having to work and disrupt their studies, they’ve got a massive head-start on most of the human race. If the parents have money or, maybe even more importantly, if the parents have the connections that come with having money, then the head-start gets even bigger.
Take even a real rags-to-riches case like that of Joanne Rowling, Harry Potter author. It’s often said that she went from being on welfare to being incredibly rich in a few short years. But she had social welfare to support her while she wrote The Philosopher’s Stone. She also had an excellent education in English, French, German and Classics to stimulate her imagination, and her knowledge shines through on every page of the series. Rowling had head-starts. I have the laptop I’m writing this on not because of the sweat of my brow, but because of head-starts that relied 90% on luck.
So what does Forbes magazine mean by “from scratch”?
Second question: If “grit and determination” are what won these billionaires their billions, then why are there so few of them? (1,210 at the last count, in March 2011.)
Surely there are more far, far more people in the world than this who have “grit and determination.” Maybe if we add “exceptional luck”, “great talent”, “rich parents”, “willingness to trample on other people” and “not born in a squalid hovel in the Horn of Africa”, we can narrow it down a bit.
Of course Forbes doesn’t comment on the nasty things any of them might have had to do to get there. Profit comes from somewhere, even for the most “ethical” of all businessmen. There’s no getting around the fact that putting up the money for a project does not give you the right to run away with the profits of other people’s labour. Each of these people is standing on the peak of a pyramid of workers, of necessity not getting paid for all the work they’re doing.
But let’s just assume everyone is fine morally speaking, just for the sake of argument. Look at Rowling, she just wrote a book, did she exploit anyone?
Well, there’s a big issue here still. What exactly does she plan to do with her estimated $1 billion? Great books, I loved them. But how is it in any way OK for one person to control so much of the world’s wealth? And Rowling is, as we’ve stressed, on the innocent end of the scale as far as billionaires go.
HSBC had a series of ads in airports and the London Underground where they relate fascinating statistics about the world, mostly propaganda. “Almost two thirds of the world’s billionaires made their fortunes from scratch” was one of them. They should run another ad campaign with the following, for a start:
-Between £13 and £20 trillion sits untaxable in offshore bank accounts.
-In 2008 the assets of the world’s richest 225 people was equal to the income of the poorest 2.5 billion.
-In Europe and the USA almost $5 trillion lies un-invested in the bank accounts of the rich.
But that would be a bit of a downer, wouldn’t it…