Forbes just published my favorite issue of the year – its annual “jerk detector”. The financial magazine just released its annual “Billionaires” edition. It says the world has 1,810 billionaires. Their combined net worth is $6.5 trillion. I always look forward to the Forbes “Billionaires” issue even though it’s not full of hints and tips about how to become one. (For that, you have to read the Stansberry Digest.)
What’s great about “Billionaires” is how people react to it. Some people see the magazine and frown and say, “It’s wrong for a few fat cats to have so much money when there’s terrible poverty in the world.”
The people who say that are jerks. This edition of Forbes is a jerk litmus test. If you want to avoid jerks, carry a copy with you everywhere you go.
Yes, there’s terrible poverty. And yes, $6.5 trillion is a bunch of money. But the jerks – and if you have a “Feel the Bernie” sticker slapped on your car, I’m talking to you – can’t do the math (or don’t want to face the facts the math will prove). If we take all the money away from every billionaire and divide that $6.5 trillion by the world’s population of 7.125 billion, we each get a check for $912.28. Once. Because now all the money is gone. And if any of the 1,810 impoverished, former billionaires ever make any more money, I doubt they will let Forbes or the rest of us know.
Also, we never got our $912.28. We forgot to figure in “confiscation costs.” The expropriation of $6.5 trillion would require an enormous, expensive international legal and bureaucratic system. Also, the police probably would need to get involved. Such a project would end up costing about – I’m just making a guess here – $6.5 trillion.
Furthermore, we didn’t get our $912.28 because it doesn’t exist. The world’s 1,810 billionaires are worth $6.5 trillion on paper. They’re not worth $6.5 trillion in gold, silver, diamonds, rubies and pearls. It’s not like they have pieces of eight and Spanish doubloons stuffed under their mattresses. (A very lumpy mattress that would be.)
The wealth of billionaires is in negotiable assets – stocks, bonds, certificates of deposit, real estate, etc. The price of negotiable assets is … negotiable. It varies. (Forbes notes that due to market woes and currency fluctuations, there are 221 fewer billionaires this year than there were in 2015.)
Dumping $6.5 trillion in negotiable assets on global markets would cause those markets to crash. Markets would go down by about – I’m making another guess here – $6.5 trillion. Anyway, what the matter with a few people having money when a lot of people don’t? The jerks are acting like the rich people took the money from the poor people. How?
Did Warren Buffett (the third richest man in the world) come over to my house and snatch $912.28 from each member of my family? Good luck with my 17-year-old daughter who’s been saving up for a pair of Manolo Blahnik high heels. She would have bonked Warren on the head with her iPhone.
Maybe the rich got rich by “exploiting the workers.” Three of the six richest people in the world created industries from scratch. Those industries never had any workers before because these industries weren’t there in the first place. It’s hard to exploit workers who don’t have any place to work. The world’s richest man pulled Microsoft out of thin air. (The mathematics involved in computer programming being “think air,” as far as I’m concerned. All Bill Gates exploited was a long string of 0s and 1s. Now, Microsoft employs 118,000 people.
Number six on the rich list, Mark Zuckerberg, created Facebook out of less than nothing. All Mark had was a dumb idea that everybody wants to tell everything about themselves to everybody else. Current net worth of the person with that dumb idea: $11.2 billion.
The world’s second-richest person, Amancio Ortega, used to be an example of global poverty himself. He dropped out of school at 14 to go to work to help feed his family. His chain of Zara clothing stores was founded on the opposite of exploitation, by organizing thousands of poor Spanish women into sewing cooperatives.
Maybe the rich got rich through “unfair business practices.” Hard to say that about Berkshire Hathaway unless you consider it unfair that some people have patience, prudence and intelligence. Should we pass a law against it? What kind of legislation would make the world’s third-richest person, Warren Buffett, hasty, impulsive and stupid?
Owners of brick-and-mortar retail outlets may criticize Internet store Amazon for being unfair. But stores don’t exist to benefit owners (even if Amazon has benefited Jeff Bezos to the extent of making him the world’s fifth-richest person).
Stores exist to benefit shoppers. And we love shopping on Amazon. Would it be better for America to have my daughter drive 75 miles to Boston to buy her Manolo Blahniks and then come home and fall off her new high heels and drive 75 miles back to return them? You wouldn’t think so if you had ever seen my daughter drive.
I suppose monopolistic accusations might be leveled against Mexican telecommunications magnate – and world’s fourth-richest person – Carlos Slim. On the other had, he brought working telephones to Mexico. Anybody who tried to make a phone call in that country before the 1990s can tell you it was like talking to the donkey, but you were less likely to get through.
The jerks aren’t just wrong about how the rich make money. They’re wrong about money itself. It’s not a zero-sum game. Money isn’t a pizza where, if I gobble too many slices, you have to eat the California Pizza Kitchen box. We can make more pizza. And we can get it for a bargain price at Wal-Mart, thanks to Jim Walton, Alice Walton and S. Robson Walton, the 15th, 16th and 17th richest people in the world.
Keep carrying that copy of the Forbes “Billionaires” issue around with you. It’s not only a jerk detector – it’s a good-person detector, too. When somebody sees it and smiles and says, “Hope you make the list this year!” that’s a good person.
[AOA: When politicians talk about going after the top 1% or the rich, they are talking about people like YOU who own more housing than what you use for yourself. When they talk about the government providing a bunk of freebies like rent control, health care, college, food stamps and Section 8 housing, you and I have to pay for it!
Are these people “jerks”?? You decide. With certainty they are socialists who now call themselves “progressives”!]
A version of this article by P.J. O’Rourke first appeared on March 28, 2016 in the Stansberry Digest, published by Stansberry & Associates Investment Research, an independent investment research firm. You can visit them at www.stansberryresearch.com