As of December
10, 2020, according to NPR, there were five people on Earth whose personal
wealth exceeded $100 billion.
Amazon founder Jeff Bezos topped the list with a personal net worth of $182
billion, followed by Elon Musk at $147 billion, Bill Gates with $129 billion,
French businessman Bernard Arnault with $110 billion, and Mark Zuckerberg with
only $105 billion. Together their fortunes total more than $673,000,000,000.
Exactly how
much is $100,000,000,000?
Americans—even well-educated Americans who consider
themselves literate in other areas—are notoriously innumerate, so let’s put these numbers in some perspective.
How long does
it take to earn $100,000,000,000?
If you found a
very lucrative job that paid $500 an hour and you worked 50 hours per week, you
would make about $1,250,000 per year. At that salary, it would take you 80,000
years to earn a hundred billion dollars.
If you made
$100,000 a year—about $40 per hour assuming you worked 50 hours per week—you
would have to work for a million years to make a hundred billion dollars.
If you made a
more modest $15 per hour—the federal minimum wage proposed by a number of
liberal politicians—and worked 50 hours per week, you would make about $37,500
per year. That means you would have to work for about 2.6 million years to earn
a hundred billion dollars, and it would take you over 26,000 years just to get
to one billion dollars.
In fact, if you
had managed to earn $10,000 a day for the last 500 years, you would only have
about $1.8 billion. And of course, that’s only the money you’ve earned;
it doesn’t factor in the money you would have to spend to survive, so it
doesn’t actually represent your net wealth accumulation.
If it’s
impossible for a human to earn $100 billion through their labor, how,
then, have these men amassed these fortunes?
Their wealth
doesn’t come primarily from their salaries; the highest paid people in the world—mainly
corporate CEOs and professional athletes—make salaries in the hundreds of
millions per year, but even these salaries would take several lifetimes to add
up to $100 billion. Instead, their main source of income is investments, such
as stock ownership. Bezos made about $90 billion in 2020
during the pandemic due
to Amazon sales increasing by 40% over the previous year and Amazon stock prices increasing by 70% from March to
December. Tesla stock
prices increased eight-fold from January 2020
to January 2021, and
Musk’s net worth quadrupled over that period.
Stock prices,
of course, increase as a result of labor done by people who make far less than
the CEOs in the top salary tiers. Tesla stock prices rise because engineers
design Tesla vehicles; factory workers assemble them; marketers advertise them;
custodians and electricians keep factories running; IT technicians keep
everyone connected. Musk himself has almost nothing to do with the process of building
a car, testing it for safety, advertising it to the public, or selling it to a customer.
It’s difficult
to obtain exact salary numbers for low-level workers because companies
typically discourage or even ban employees from discussing pay rates, but a June 2020 proposal by Tesla to build a manufacturing plant in
Travis County, Texas estimated that it would create 5,000 jobs using
“approximately 65% unskilled labor” at a “[l]iving wage of $15/hour” for
“construction and permanent labor force.” It also claimed an “[a]verage annual
salary [of] $47,147,” which, of course, is inflated by six- and seven-figure
salaries for administrators and bosses in those top salary tiers.
Even assuming
the figure of $47,147 accurately represented the salaries of a majority of
those 5,000 employees, those salaries combine for an annual cost of less than
$236,000,000. Those 5,000 employees would have to work over 400 years,
collectively, to earn $100 billion.
The centibillionaires
also pay a lower tax rate than most of their own employees. Long-term capital
gains—profits from the sale of an asset like stock that you’ve owned for more
than a year—are taxed at a maximum rate of 20% for single filers, whereas anyone
making over about $40,000 per year is paying at least a 22% federal income tax
rate. In other words, the money you earn with your own labor is taxed at a
higher rate than profits that result from someone else’s labor.
It’s certainly
valid to argue that Musk, Bezos, Zuckerberg, and other founders of huge, highly
successful businesses such as Tesla, Amazon, and Facebook deserve to be
well-compensated for their work, that they deserve to profit from their
ingenuity and investment. My purpose here is not to dispute that point. But
money is by definition a finite resource; otherwise, it would be valueless. It
is also a finite resource that is necessary for survival in the modern world,
and our current economic system has enabled a small number of people to hoard a
massive amount of that resource. What could we do with that amount of wealth if
it were not concentrated in so few hands? What can a hundred billion dollars
actually buy?
Housing, for
one thing. HUD reports that in their 2019 single night count, 567,715 people in the U.S. experienced
homelessness. These
include families with children, but even assuming each was a single individual,
what would it cost to house them all?
To build a
modest $100,000 home for 567,715 people would cost about $57 billion—less than
a third of Bezos’s personal net worth. In fact, he could build all of these
homes and would still be a centibillionaire and the fourth richest person alive
when he was done.
A hundred
billion dollars can also buy a lot of food. The International Food Policy Research Institute calculates that to end world hunger and
poverty by 2030—not just feed the hungry but eliminate poverty—would cost
about $265 billion per year. That adds up to about $3.3 trillion over the next
nine years. The wealthiest 1% of Americans collectively own over $36 trillion. We could end
hunger and poverty for the entire planet with just 10% of their total wealth.
Money also pays
debts, and Americans have about $45 billion in medical debt in collections right now. Bezos could pay it all, and
build all those homes, and still have $80 billion left.
Musk could give
a $10,000 bonus to every one of Tesla’s 48,000 full-time employees and barely notice a dip in his bank
account; it would amount to less than one third of one percent of his net worth,
and yet it would be life-changing to the thousands of employees making $15 per
hour. A $100,000 bonus would cost him just over 3% of his net worth.
What if the
ultra-wealthy wanted to spend these mega-fortunes on themselves? Is it possible
to spend $100,000,000,000 in a lifetime?
Imagine the
most extravagant lifestyle you can, filled with multi-million-dollar homes, private
jets, exotic vacations, and the indulgence of every whim you could conceive, a lifestyle
that costs $1 million per day. If you spent $1 million every day of your life
and lived to the age of ninety, you would have spent about $33 billion—less
than 20% of Bezos’s fortune.
Of course these
numbers are an oversimplification. These men don’t actually have $100 billion
sitting in a bank account somewhere; the numbers represent their net worth,
which includes their property, stock, and other investments. If they suddenly
sold all their shares in their own companies’ stocks to buy houses for the
houseless and food for the hungry, the effect on the markets and the economy would
be incalculable.
The point is
that perhaps we should not allow a single individual to attain that much wealth
in the first place. I once heard someone compare it to a dragon sitting on his
pile of gold. He can’t possibly use it all himself; he hoards it only because
he can, because it pleases him, and damn the villagers who need it to live. But
because money is a finite resource, the more I have, the less you have, and
when five men hoard more of this resource than everyone else put together—not
just more than they could spend in a lifetime, but more than they could spend
in hundreds of lifetimes—there is far less of that resource in circulation for everyone
else to use.
Some will argue
that these men already donate millions of dollars of their own wealth to
charitable causes—such as the Bill and Melinda Gates Foundation, which combats
poverty and disease all over the world—and invest their wealth in important
scientific ventures, such as Musk’s SpaceX. In fact, CNBC reports that in 2018, Jeff Bezos donated about
$2 billion to charity, and from 1994 to 2019, Bill and Melinda Gates donated $45.5
billion. Zuckerberg has also donated several billion dollars over the last few
years. And yet still—still—these men have fortunes over a hundred
billion dollars.
Bezos’s $2
billion donation is just over 1% of his net worth at the end of 2020. For an
individual with a net worth of $250,000, it is equivalent to donating about
$2,750. For an average American in the bottom 50% of personal wealth ownership,
whose net worth is about $14,300, it’s equivalent to donating about
$157. More significantly, if that individual donates $157, they will have $14,143
left. When Bezos donates $2 billion, he has $180 billion left and is still the
richest man alive by a wide margin. In reality, these charitable
donations—which sound massively generous to average people—are simply good P.R.
for the mega-wealthy, enabling them to appear beneficent while simultaneously
having almost no effect at all on their personal fortunes other than to serve as
convenient tax deductions.
There is no
good reason to allow these few individuals to hoard this enormous wealth when
its redistribution could do so much good. The argument that they earned
this money and therefore deserve to keep it is nonsense. It is simply not
possible to earn a hundred billion dollars through one’s labor. Rather, these
men benefit from being at the top of a system that generates massive profits
through the labor of many thousands of people and then filters those profits
upward, like an hourglass in reverse, so that those at the bottom are forced to
fight over the sparsest remains while those at the top hunch like dragons over
their piles of gold.
What is the
solution?
The idea of socialism
is becoming more palatable particularly among young Americans for exactly this
reason, but there is also a lot of daylight between socialism (whatever you
think that means) and completely unfettered capitalism. And in that daylight
there is room for many small measures, such as higher taxes on capital gains, wealth
taxes, and wealth caps. Some argue that these measures would stifle innovation,
would discourage these overlords from continuing to grow their empires and “create
jobs,” but the evidence indicates that many other factors have a bigger impact on innovation
and economic growth than taxes do. When hundreds of thousands of Americans are
hungry and sleeping on streets, unable to pay for healthcare, and suffering
under crushing burdens of debt, how can we continue to justify the status quo?