Take a wild guess at the amount of money the world's 2,189 billionaires lost over the last few months of Covid-19 lockdowns? If you said "zero" you're on the right track. In fact, while a pandemic brought the world's economies to a screaming halt, the collective wealth of those billionaires grew by 27.5% to $10.2 trillion.
The "up and to the right" trajectory of the billionaire rocket ship is pulling at the fabric of society, stretching the gap between the classes and tearing us apart at the seams.
The distance between us has never been so wide, and it takes a lottery-like event to cross the chasm.
Does it matter that 1% of the population owns almost 50% of the wealth? Is there a billionaire-led conspiracy at play? Can we change the trajectory? Read on.
The Class Chasm
For discussion, I've grouped the human population into five economic classes and considered four defining characteristics: wealth; primary method of generating wealth; a mobile app as metaphor for their occupation; and the type of lottery they need to win to move up to the next class.
Note: “wealth,” is measured here in US Dollars and is defined as the value of financial assets plus real assets (principally housing) owned by households, minus their debts.
Under class
Yuval Harari worries that this group will become the Useless Class - an entire group of humans who won't be able to contribute to society due to a "shortage of jobs or a lack of relevant education but also of insufficient mental stamina to continue learning new skills."
Population: 3.26B
Wealth: $10K - $999K
Sweat: The Under class sweat their own labour to generate extra income. That used to mean working overtime, then a second or third job. Now, it's the gig economy.
Symbolic app: Uber. Sweating their labour to generate more income.
Crossing the Chasm: Their best bet, to cross the chasm into the Business class, is to win the Inheritance Lottery.
Business class
Population: 45M
Wealth: $1M - $9.99M
Sweat: This group sweats their own assets to build wealth. Houses, capital assets, small businesses. The Business class live comfortably, supported by executive roles or small businesses that deliver a lucrative living wage + generous profits.
Symbolic app: AirBNB. Sweating their assets to generate more profits.
Crossing the Chasm: They need to win the Business Lottery, a product/service/market with hockey-stick growth, to get an upgrade.
Investor class
Population: 1.83M
Wealth: $10M - $999M
Sweat: Investors sweat their investments to gild the lily. Most of their wealth is available to invest in highly profitable businesses and investments. They have access to better information, more opportunities and the luxury of diversifying investments to maximise gains and minimise risk.
Symbolic app: Private bank apps used to track and sweat every dollar invested.
Crossing the Chasm: There are two proven paths to billionaire status. Insider trading or winning the Unicorn Lottery.
Billionaire class
2,189 billionaires just experienced an unprecedented boom. As Ben Evans points out, lockdowns have given us five years of ecommerce growth consolidated into a few months. Most of that growth has gone to monopoly owners.
Wealth: $1B+
Sweat: To get ahead, billionaires sweat the foundations of earth and ideas. We’re already witness to the consequence of sweating the earth's foundations. And while unleashing the forces of network effects, algorithms and automation has created a new era of wealth consolidation, we are far from understanding their long-term effects.
Symbolic app: None. They own all of the apps.
Crossing the Chasm: The system is naturally structured to support holding and growing wealth. There are only two types of people that fall from the billionaire's perch - those who inherit the wealth, and those who deliberately choose to give it away.
Forgotten class
I almost forgot. There's one more class - the Forgotten class. The majority of the world's population fall into this category due to poverty, homelessness or another debilitating malady.
Population: 4.36B
Wealth: < $10K
Sweat: Their daily effort is used to meet their physiological needs.
Symbolic app: WhatsApp, relied upon to access support.
Crossing the Chasm: Those without investments, assets or labour to sweat are placated with bare minimums. Too often, the weight of downward envy keeps them in place. Their best chance of traversing the chasm is a hand-up from someone who cares.
Billionaire Bogeymen
I should point out that I'm not a conspiracist. I don’t assume malice on the part of the billionaires. My baseline assumptions generally include Occam's and Hanlon's razors.
Occam's razor: when presented with two explanations that account for all the facts, the simpler one is more likely to be correct.
Hanlon's razor: Never attribute to malice that which is adequately explained by stupidity.
You could say that, when it comes to conspiracies, I like to shave with both razors!
I don't believe that there is a cabal of billionaires maliciously plotting to tear our world apart at the seams. Rather, I think we find ourselves at the mercy of unintended consequences.
More often than not, billionaires have discovered ways to unleash the exponential benefits of industrialisation, scale, network effects, algorithms, machine learning, artificial intelligence, etc.
Like most explorers before them, they assumed ownership of their discoveries and gave no consideration to the cascading effects.
They may have superhuman wealth, but the billionaire's inability to control the forces they put into motion is a stark reminder that they are indeed human. It should also give us pause when we contemplate the unintended consequences that may follow the unleashing of artificial intelligence and human enhancement.
Wealth, technology and humanity
We’ve all heard anecdotes of how today’s average westerner lives a far more comfortable life than the world’s richest man, J.D. Rockefeller, did 100 years ago. I prefer the comparison to Bill Clinton, who, at the time of his presidency (1993 - 2001) was the only person able to have on-demand video calls with anyone across the globe! Today, there’s half a billion people who are tired of using video calls every day.
Everett Rogers’ theory, the Diffusion of Innovation, sought to explain “how, why, and at what rate new ideas and technology spread”. These days, it feels like the rate of diffusion is increasing exponentially.
Take a moment to consider the world’s richest man, Jeff Bezos ($187B). If we were to get a glimpse of Bezos at work, we’d likely see him chatting on Zoom using a MacBook Pro, or wearing AirPods to listen to the Quration podcast on the latest iPhone. The world’s wealthiest man uses the same tools that are readily available to us all.
The length of time it takes for the best tech to go from King, President and Oligarch to the mass audience is now trivial.
So, what does it matter if the billionaires keep getting richer? If the gap between classes continues to grow? We all put our pants on one leg at a time, right?
It’s easy to identify outlier examples to the contrary. Trump’s coronavirus treatment (24/7 access to world experts, personal hospital, million-dollar experimental drugs) vs Average Joe’s experience (self-isolation, public hospital, bed rest). Royal families who send their kids to Switzerland’s Institut Le Rosey for bespoke education. Or Mukesh Ambani building himself a 27-storey, $2B home in the middle of Mumbai.
However, if you look at the data, it seems that disparities between people living in the same country continue to shrink when it comes to longevity, health, and education. It’s great news and a trend that we must continue to support with government investment and progressive policy.
There’s a case to be made that the gaps between the classes are not, in themselves, an existential threat. Rather, it’s the forces that enable runaway wealth that are the threats to the planet and our society. How do we keep them in check?
A Solution?
Before you tire of all of my hand-waving, let me propose a theory for improving this divisive trajectory.
Hold billionaires accountable for the consequences (intended or not) of the forces they unleash and use to their own benefit. Here’s a few examples:
📋 Restitution for the environmental and human damage of fracking for gas, oil and water.
📋 Commitments to improved conditions and living wages for all workers, and genuine abolition of all anti-competitive behaviour. Yes, increased costs and lower profits will slow investor returns, but society will realise far greater benefit by giving the spread of competitors a fighting chance.
📋 Responsibility for the effects of disinformation, promoted and distributed by social media algorithms.
When billionaires are held accountable for the consequences of their endeavours, intended or not, they will immediately sharpen their focus on the long-term effects. Moving forward, an exploration of cascading effects should be included as a key element of any serious pitch deck, business case or shareholder report.
Government investment in disruptive technology that provides opportunity for upward mobility.
📋 Conditional investment in the best of disruptive tech. The condition: the initial implementation of the product/service must be provided to benefit the Forgotten and Under classes.
📋 The government’s investment isn’t for equity or revenue sharing, instead successful ventures will return a percentage of time and profits into ongoing service of the Forgotten and Under classes.
📋 Rather than penalising existing commerce, this all-boats-rise approach will encourage innovation that addresses real needs (e.g., health, housing, food supply, training) and builds infrastructure for a better collective future.
We can continue to ignore the Forgotten, and the keep the Under and Business classes quiet with alcohol, prescription drugs and streaming content. Or we can take basic steps to hold the privileged accountable and cause all boats to float. I choose the latter.
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