A new way to count to a billion
On hamburgers, marginal utility, and why it's good that Forbes has created a "rich list" that accounts for charitable giving
Forbes has come up with an alternative to its ranking of the world’s billionaires, estimating what individuals would have had if they hadn’t given portions of their fortunes to charity. Bill Gates and Warren Buffett, both still incredibly wealthy by the strictest accounting terms, look far wealthier in the revised, donation-adjusted figures.
■ It’s funny how status remains a thing that even ultra-rich people feel compelled to chase -- at least, most of them. Money does have diminishing marginal utility: There are only so many hamburgers one person can eat. But esteem matters to us all, and mortality cannot be escaped indefinitely. As Buffett has said, “I mean, I can buy anything I want, basically, but I can’t buy time.”
■ There are two sets of people whom the rest of us should regard with great wariness: One is the cluster who confidently pronounce things like “Billionaires shouldn’t exist”. They arrive at this conclusion by making the indefensible logical leap that great wealth can only be accumulated by some “at the expense of everyone else”. This absurd conclusion is easily dismissed by a simple thought experiment: If someone were to discover a cure for some dreadful disease, like pediatric leukemia, then how much would be too much to reward them? Surely an achievement like that would be worth a reward equal to $3 per resident of the United States, and even if it took a special tax assessment to accumulate such a jackpot, it would be a morally just reward. Some merit most certainly can and should be rewarded at scale.
■ The other people to be avoided are the ultra-wealthy who disregard their fundamental involvement in society. As the Communist Party of China seems intent on reminding its wealthiest subjects, money can only buy so much if the government doesn’t respect the dignity of the individual.
■ Wealth can’t be aggregated very well by exploitation. Some powerful crooks can capture a lot, but there is far more room within a free economy for lots of people to gain massive wealth by delivering goods or services that other people want. And when they do, if they’ve been raised right, they’ll see the virtue in considering generosity to be a luxury good worth spending upon.