The world is lucky to have billionaires

A surge in the Amazon share price briefly made Jeff Bezos the world’s richest man in July 2017, when his fortune surpassed USD 90 billion. As the share sold off from the highs, the crown passed back to Microsoft’s Bill Gates, who has been at or near the top of the list for more than two decades. The industrious pair forms part of a vilified octet which in January ’17 was called out by Oxfam as being worth the same as the poorest 3.6 billion, or half the worlds’ population. According to the charity, ‘this concentration of wealth at the top is holding back the fight to end global poverty’.

The irony, undoubtedly lost on the authors, is that the report would almost certainly have been written on a Microsoft powered PC or maybe on an Apple computer, the brainchild of the visionary Steve Jobs, who passed away in 2011 worth in excess of USD 10 billion.

It should be obvious that men like these, in the creation of their companies and fortunes, have certainly not impoverished, but enriched the world. In a free market, fortunes are not made by accident or luck, nor by nefarious dealings with corruptible politicians; businessmen get rich by serving the consumer, by selling better products at a cheaper price.

Bezos’ Amazon has put retailers under intense price competition, benefitting consumers worldwide. His latest venture into food retail, with the purchase of WholeFoods, will make a premium store with premium products accessible to Joe Bloggs. Gates, Jobs, Mark Zuckerberg and Larry Ellison have played instrumental roles in the technological revolution which has improved productivity not only in the Western world, but is transforming economies in developing countries also. Shrewd investors like Warren Buffet, by directing capital to successful companies, play an instrumental role in efficient resource allocation. Spain’s Amancio Ortega got mega-rich by clever supply chain and inventory management, allowing him to offer great value clothing through his Zara stores worldwide. Offering great customer value is hardly ‘holding back the fight to end global poverty’. In a capitalist economy, the rich get their fortunes by servicing their customers.

Rich as today’s billionaires are, they all pale in comparison to John D. Rockefeller, who is estimated to have been worth a grand total of USD 367 billion in today’s money, as his company Standard Oil dominated the oil refining and sales market in the second half of the 19th century – and like his present-day peers, his financial success was brought about by creating value for his customers. By producing ever better and cheaper kerosene products, Standard Oil made artificial light affordable and in the process helped save whales from extinction – by providing a cheaper alternative to whale sperm oil – and changed the industry habit of dumping gasoline (a by-product of kerosene) in the rivers – by using the gasoline to fuel his machines.

Back in the present, Bill Gates is now primarily concerned with disposing of his fortune to various charitable projects. He joined 139 fellow billionaires, with a combined 2016 net worth of $731 billion, in a pledge to give away at least half of their fortunes to charity. In fact, he has pledged 99% of his fortune to the Bill & Melinda Gates Foundation. Here he and his rich chums also follows in the footsteps of Rockefeller who, inspired by Andrew Carnegie – the first American billionaire – donated the bulk of his fortune to charitable causes. Contrary to the usual caricature, being rich does not equal being selfish – and as a charity, Oxfam really ought to be acutely aware of the history of philanthropy. Claiming that Bill Gates, while donating close to USD 100bn to poverty alleviation in the poorest parts of the world, is ‘holding back the fight to end global poverty’ requires an impressive degree of delusion.

In short, the world is lucky to have billionaires. Vast fortunes are often made by those who propel mankind forwards through enterprise. The next person to revolutionize an industry or invent a technology that turns out to be indispensable may very well become a billionaire in the process. We should wish those people luck and welcome their success. They deserve everything they get.

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