Stop Bashing Billionaires
Davos, Switzerland— site of the annual World Economic Forum
I heard a claim this week that caught my attention: For every new billionaire, 250,000 people are lifted out of poverty. As you will probably not be surprised to hear, a billionaire said this. And while I didn’t verify the exact numbers, anti poverty policies implemented in China probably make the assertion mostly factual. But the narrative he’s spinning, that the forces that mint billionaires are the same ones that lead people out of poverty, is not correct.
Billionaires exist simply because they, or an ancestor of theirs, successfully exploited the capitalist system. On the other hand, large scale poverty alleviation happens because of government policy. What’s more frustrating, is that billionaires and other ultra high net worth individuals, too frequently use their privileged access to policy makers to advocate for language that accelerates their personal wealth creation, without also meaningfully considering, if at all, ways to also accelerate the wealth creation for the global poor. (I’m sure they would disagree.)
We live in a trickle down economy, but I believe that the right policies, implemented well, can wheedle out a waterfall economy.
The current architects of the international economy met this week in Davos, a quaint village high in the Swiss Alps, for the World Economic Forum where they discussed what might be the most important global issue of our time: the future of capitalism.
This year, its 50th, the W.E.F. decided it was time to update their “set of ethical principles to guide companies.”
Here’s what they came up with:
“The purpose of a company is to engage all its stakeholders in shared and sustained value creation. In creating such value, a company serves not only its shareholders, but all its stakeholders – employees, customers, suppliers, local communities and society at large. The best way to understand and harmonize the divergent interests of all stakeholders is through a shared commitment to policies and decisions that strengthen the long-term prosperity of a company.”
This manifesto is the latest contribution to a growing movement among business leaders to reframe the lenses through which corporations set their priorities. In April 2019, the Business Roundtable adopted a very similar statement. And in his 2018 letter to CEOs, Larry Fink, CEO and co-founder of BlackRock, the world’s largest asset manager with about $7 trillion under management, said that corporations must have “a social purpose in their strategy for long term growth.”
The discussions that are shaping the future of capitalism are happening now, and they’re being led by people who, regardless of their net worth, are leaders of institutions. And those institutions— corporations, governments, international organizations, and everything in between—together control or influence every single person on the planet.
It is irresponsible to ignore, demonize, or downplay their influence, and their potential.
While billionaires and those around them might be problematic, they are not the root of the problem. In fact, I believe they should be part of the solution.
Those who attend the World Economic Forum are professional persuaders. Their value is in their ability to convince other people to believe in their world view, and to help execute on that vision.
Imagine how society would be different if this group of 2,000 people shared your priorities, and used their resources to make them reality. That scenario is possible, but it’s not going to happen if we keep bashing billionaires, just for being billionaires.
Los Angeles, CA, USA
January 2020