To celebrate the annual meeting of the World Economic Forum, Oxfam releases a study of how much of the world’s wealth the ultra-rich own. This year’s was a doozy. The five richest men in the world were revealed to have doubled their wealth in the years since 2020. Seven of the 10 biggest corporations in the world have a billionaire as their CEO or principal shareholder. Combined, the value of these companies – which include Apple, Microsoft and Saudi Aramco – exceeds the GDP of every single country in Africa and Latin America combined. That’s 87 countries: virtually everything bought, sold, consumed produced and dreamed up by two billion people in a whole year.
The charity also reported that, within a decade, the world will probably see its first trillionaire. A trillion is a number (it’s one followed by 12 zeros) to numb the mind. Even Ronald Reagan – a friend and ally to the ultra-rich if there ever was one – could not wrap his head around it. “A few weeks ago I called such a figure, a trillion dollars, incomprehensible, and I’ve been trying ever since to think of a way to illustrate how big a trillion really is,” he said in 1981 when talking about the US national debt. “And the best I could come up with is that if you had a stack of thousand-dollar bills in your hand only four inches high, you’d be a millionaire. A trillion dollars would be a stack of thousand-dollar bills 67 miles high.”
But what does it mean for a society to mint its first trillionaire, and how is it different from the wealth of oligarchs in the past?
John Jacob Astor, a German-American businessman, is believed to have been the first American millionaire. He made his fortune in the 18th and 19th centuries by buying and selling stuff: namely fur, New York real estate and opium smuggled into China. Astor predicted trends and took advantage of geopolitics to get rich; he sold lots of things to lots of people; and his wealth generated more wealth. So far, so straightforward.
Then came John D Rockefeller, the world’s first billionaire. Rockefeller built and invested in oil refineries just as the world was getting hooked on kerosene and gasoline. He came to preside over a vast monopoly, choking the competition, which made him and his firm, Standard Oil, even richer. What Rockefeller sold to the public was more ephemeral than Astor’s furs and houses – the very nature of energy is that it gets used up. But you could still see, smell and touch it, and you could see when it was gone. For better or worse, Standard Oil’s products existed in the real world. We are all paying the environmental price.
There are about 2,640 Rockefellers in our world today, according to Forbes. They all got their start in their own unique way: founding companies, buying buildings, inheriting assets from family and so on, though young billionaires mostly work in the finance and tech sectors, profiting less directly from material things than knowledge, ideas and gambles. The way that many of these fortunes reached such dizzying proportions is through investments and speculation. The billionaire class doesn’t just work: it puts its money to work, too, and the market rewards it well.
The Bloomberg billionaires index, which ranks the world’s 500 richest people, is updated at the end of each trading day, revealing how dramatically that wealth can rise and fall. On 24 January, Elon Musk, who tops the list, lost $937m, just like that. Life is tough for the men and women at the bottom, too: the Wall Street financier Carl Icahn, No 497, was down $17.9m from a day prior. The aristocrat Hugh Grosvenor, whose fortune is in real estate, lost and gained nothing that day. He ranked No 157.
These fluctuations are instructive: they show us that the budding trillionaire’s lucre looks to be of a more speculative, more abstract, often less liquid nature. The actual sum of money they control isn’t the point – not when it can rise and fall so quickly.
The earnings of the ultra-rich are literally unearned. This isn’t a value judgment: it’s the US tax agency’s term for money made through “investment-type income such as taxable interest, ordinary dividends and capital gain distributions”. While Astor and Rockefeller surely followed the wealth-maximising maxim of buy low, sell high, and put money in trusts, charities and other vehicles to minimise taxation, we’ve seen this logic taken to the next level, without policy changes to correct for it.
Most of us pay tax on our incomes at double-digit rates; if we’re fortunate enough to own assets, we pay tax on the profits when we sell them. Billionaires, on the other hand, “can borrow against their growing investments year after year without owing a dime in taxes, allowing them to pay lower tax rates on their income than ordinary Americans pay on theirs”. That statement doesn’t come from Bernie Sanders, by the way, but from the achingly centrist White House, which in 2022 proposed a 20% minimum tax on households worth more than $100m. It went nowhere, in part because its subjects so strongly opposed it.
The impending arrival of the trillionaire signals another step backwards in the fight for a more balanced economy and healthier democracy. The billionaire class, after all, skews the balance of power in the marketplace, in politics and in society. Its members own newspapers that shape public opinion. They donate to politicians who pass the laws that they want. According to one study, 11% of the world’s billionaires have held or sought political office, with the rate of “billionaire participation” in autocracies hitting an astounding 29%. Another study shows they tend to lean to the right: positions that typically help them keep their own wealth, and that of their peers, intact.
Historically, the most significant reductions in economic inequality have come after wars, plagues and widespread immiseration. We are living through an era marked by all of those things, yet are coming out of it none the wiser: the proof is that we will soon enter the age of the trillionaire. Raising taxes, bolstering democratic institutions and seeking to redistribute resources to those who need them are all excellent initiatives worthy of widespread public support. And they should be envisioned not just nationally, but globally: inequality between countries and peoples matters, too.
But governments shouldn’t rule out more radical measures, such as limitarianism – that is, capping how much wealth a person can legally have. Once you reach a certain number of zeros, those digits on a screen are just that: digits of increasing abstraction. They don’t correspond to security, lifestyle or even pleasure. It’s time to knock a few of them off.