Wednesday, January 29, 2014

Billionaires



We learned from the news recently that - in 2013 - the richest 85 individuals in the world have as much wealth as the poorest half of mankind combined.  This is so interesting that even Fox News reported  it, even though they usually hate to talk about economic inequality, accusing anyone who does  of envy and class warfare. (See the Forbes  article: The World’s Billionaires.


Factoids: There are now 1426 billionaires in the world.  Together their worth is $5.4 trillion. That’s roughly one third of the US annual GDP. This amount is up from $4.6 trillion a year earlier, i.e. up 17%. There are 210 new billionaires.
442 of the 1,426 billionaires  (=31%) are in the US, 386 are in the Asia-Pacific region, 366 in Europe, 129 in  the Americas  and 103 in the  Middle East and Africa.

I totaled the wealth of the top 85 billionaires and  came up with  $1.73 trillion.  This is the same amount as the total wealth of  the bottom 3.5 billion people on earth.  In other words, the 85 super-rich are worth $20.3  billion per person, whereas the bottom 3.6 billion  people in the world  are worth $4,700 per individual. Or put another way, each of the super-rich is worth as much  as FOUR AND A HALF MILLION people in the world’s bottom half, a  population larger than that of many countries.
Here are some of the better known celebrities on the list:

Rank
Name
Business
Fortune
Country
1
Carlos Slim Helu
Telecom
73 billion
Mexico
2
Bill Gates
Microsoft
67 billion
US
4
Warren Buffett
Misc.
53.5 billion
US
6, 6, 329
Koch brothers
Misc.
72 billion
US
9
Liliane Bettencourt
L’Oreal
30 billion
France
11,14,1617,346
Walton family
Wal-Mart
111.3 billion
US
13
Michael Bloomberg
Misc.
27 billion
US
15
Sheldon Adelson
Casinos
26.5 billion
US
23
Michele Ferrero
Chocolates
20.4 billion
Italy
26
Carl Icahn
Leveraged buyouts
20 billion
US
30
George Soros
Hedge Funds
19.2 billion
US/
Hungary
36,37,38
Mars family
Mars candy
51 billion
US
66
Mark Zuckerberg 
(29 years old)
Facebook
13.3 billion
US
94
Charlene Heineken
Heineken beer
11 billion
Holland
131
Georgio Armani
Fashion
8.5 billion
Italy
166
Ralph Lauren
Fashion
7 billion
US
346
George Lucas
Star Wars
3.9 billion
US
423
Donald Trump
Real Estate
3.2 billion
US
1,175
Bruce Nordstrom
Nordstrom
1.2 billion
US

Number of top 85 Billionaires by Countries:

Countries
Number of billionaires
US
32
Russia
10
Germany
6
France
5
Hong Kong
4
Mexico, Brazil
3 each
Italy, India, Colombia, Saudi Arabia, Malaysia 
2 each
Spain, Sweden, India,Canada, Chile, Thailand, Australia, Nigeria, Ukraine, Japan, Philippines, South Korea
1 each
total
85

Sources of Wealth: The usual suspects:
Many:Electronics, Amazon, Google, Dell, Microsoft, Facebook, Samsung, Telecom, etc.
Many: Oil, gas, cement, petrochemicals, mining, steel, coal, metals.
Many : Banking, hedge funds, leveraged buyouts, etc
Many: Real Estate
Some: Chain stores (Wal-Mart, Aldi, Trader Joe,)
Some: Fashion, perfume (Prada, L’Oreal)
Some: Beverages, candy, chocolate.

Gender: 10 women, 75 men.
In 2013, there were 210 new billionaires since the  previous year. Amancio Ortega, Spain, gained $19.5 billion and moved  up to third position. Warren Buffett gained $9.5 billion, yet dropped to #4. The biggest loser was the  Brazilian Eike Batista, who lost $19.4 billion in one year,  =  $50 million per day, and thus fell from #7 to #100. Not included in Forbes’ list are Royal families  and dictators.

Conclusions
Of course, I  have to insert a few socialist commentaries:
The US’ 442 billionaires make up 31% of the total, and  we  only make up 4% of the world’s population. But this is no cause for joy. The US is also experiencing the greatest polarization of income of ANY developed country. Furthermore, contrary to the stereotype (“the American Dream,” “the land of opportunity,” etc.) upward mobility is more limited in the US than  in Europe. In other words, there is more poverty and there are fewer opportunities here than elsewhere. I doubt that THIS is the sort of “exception” jingoistic Republicans have in mind when they harp on that tired old theme of theirs -  “American exceptionalism.”

And another thing: most people learn exactly the wrong lesson from data such as these. Many folks come to the idiotic conclusion that such information shows us the individual characteristics it takes to become successful. Hard work, talent, dedication, etc. In other words, most people believe that these 85 top billionaires, and the other 1341 too,  are somehow BETTER than the rest of us - more talented, with more work ethic, more genius of one sort or another...

Hogwash. The list teaches  us NOTHING at the individual level. Were you to meet these people, you would see that they are not smarter, funnier, better looking, more intelligent, more talented, or more anything than your average neighbor. There is only one thing of which they have more: Money.

Individual characteristics explain nothing  about who becomes a billionaire. Only one thing explains who becomes a billionaire: ADVANTAGE.

And where does advantage come from? CIRCUMSTANCE. In other words: your location in time and (social)  space. Put another way: LUCK.

If you happen to be born in Africa or in the South Bronx, or in the middle of  World War Two, bad luck for you. If you are born the son of the President of American Motors, or the governor of Michigan, you luck out. Is it a coincidence that only ONE of the top 85 billionaires is from Africa?

This is called Sociology, folks. And it’s correct. Get used to it. We are all billiard balls. We are   volleys of  molecules shot into space, or a swarm of mosquitoes.  A few end up on top, a few at the bottom, some on  the far left, some on the far right, and most somewhere in the middle. It’s all about probabilities, randomness, the normal distribution, (the “bell curve”), regression towards the mean. Individual characteristics have very little to do with success or failure. Sorry. leave comment here