This weekend I read Forbes' new special edition on billionaires.
In his introduction, "They succeed by meeting your needs," Steve Forbes writes: "The overwhelming majority of these people have moved ahead through meeting the needs and wants of other people, not through inheritances or crony capitalism. Their successes didn't come at the expense of everyone else. Free-market capitalism is not a zero-sum system."
As someone who has studied the nuts and bolts of government policy engineering the centralization of wealth, I have to question Forbes' grasp of reality. Sometimes it is hard for a beneficiary to understand the covert means that helped to produce the blessings coming his way. I also disagree with Forbes' comment implying someone who inherits is somehow less useful to society. The freedom to leave an estate to our heirs is a blessing. And many heirs are as useful, if not more useful, than the entrepreneurs who created the original fortune. Indeed, Forbes himself is an example of such a phenomenon.
What a detailed study of the list shows is a wide range. There are billionaires who have created fortunes from innovation and hard work. There are billionaires who have created fortune with lots of luck. There are families who have continued to build in powerful ways through the generations. There are billionaires who moved into the category through inflation of the currency, which they knew how to play. There are billionaires who wouldn't know a free market if they saw one – they only know how to manipulate government rigged deals, rules and contracts. There are billionaires who have been the beneficiary of war, organized crime and covert operations – including billionaires who govern and engineer them. There are billionaires who have inherited their fortunes and have been good stewards. And there are some who have not.
As I say with the Solari Model, some achieved or managed their fortunes creating a positive Total Economic Return and some achieved their fortunes by creating a negative Total Economic Return (see The Solari Model – Total Economic Return).
Good and evil are all around us. They run through every class, every nation, every religion, every sex, every income group. If you want to see a billionaire who risked (and I believe gave) his life to help us build a world where private profits aligned with a positive Total Economic Return, please watch Sir James Goldsmith's personal plea to stop the passage of the Uruguay Round of GATT and the creation of the World Trade Organization.
We want a society in which building real wealth is honored and supported. We want a society that shares a commitment to free markets. That starts with being realistic about reality.
Each man or woman deserves to be respected for who and what they are and for their unique contribution. How much money we have is no more a sign that our contribution to society is good than it is that our contribution is bad.
In Steve Forbes' defense, the glorification of billionaires, however, is what sells.