Are billionaires bad? Is a system that allows billion-dollar fortunes to be created and exist inherently unfair or corrupt?
As the Presidential primary process kicks off on the Democratic side, a fair amount of the rhetoric thus far has involved the term “billionaire.” The candidates, both announced and unannounced, have thrust this concept into the fore, so I thought I’d spend a little time getting informed on the subject.
According to Forbes, there were 585 Americans with a net worth over $1 billion dollars in 2018. At the top of this small list, of course, is Jeff Bezos, the creator and CEO of Amazon. The guy at the bottom of the Forbes 400 list (I know there are 585 in total, but the unfortunate souls below 400 can’t even get into the paper) created Ashley Home Furniture.
Without going through every name on the list, when I simply reviewed the top and bottom of the list I thought, “hmm, I really like both those places.” Amazon.com has literally changed the life of my family. It's redesigned our consumption habits, and allowed us to spend more time together at home. And, as I look around my house, a good amount of the stylish stuff we lounge around on came from an Ashley home store. That’s two for two, not bad.
With this simple billionaire sample, maybe we’ve already answered our questions. No one gets paid a billion-dollar salary in America. To achieve a net worth of this size requires ownership of an enterprise of some sort. This enterprise is then valued in the billions by a market (aka investors), typically the stock or real estate market, based upon the revenues it generates by serving its customers (aka us), and, wallah, you're a billionaire.
Much to the chagrin of some vocal contingents on the left side of the political spectrum, is the truth that in order for an individual to own enough of a given enterprise to reach billionaire status, it is very likely the individual actually conceived of and created the enterprise that made them wealthy.
When reviewing the top 10 Americans on the billionaire list there is a visible trend. The majority created or harnessed technology to impact the way the we as Americans live, work, communicate and play. Others took existing businesses and made them better. All of them, to an individual, endeavored to provide the rest of us with goods or services that improved our lives.
In doing so, all of these individuals and enterprises also created something else: Opportunity for others. Opportunity in the form of jobs and careers, and opportunity in the form of investment possibilities.
Case in point, in the process of Jeff Bezos becoming the world’s wealthiest man, Amazon also provided my daughter’s former college roommate with a spectacular first job right out college. Closer to home, by investing in Amazon many years ago myself, the wealth created by the ingenuity of this entrepreneur will help me pay for the education of my own kids, further improving the future of my own family.
Does this mean every billionaire on the list got there without compromise? Did every person on the list accumulate wealth by enhancing the human experience? Of course not. Life is rarely that simple. But the universal truth of the free market is that, in order to create wealth, one must first, and above all else, provide value to others.
I for one appreciate a system that enables an enterprise to provide so much value and opportunity to so many of us, that its creators and owners actually become billionaires. The beauty of America is that no one has to agree with me, but let’s all agree to be very careful about disrupting the free market system that serves as the foundation of our nation's prosperity, and yes, even enables some among us to become billionaires.
