Last week the Forbes list was released.
The list is an unabashed celebration of wealth accumulation, listing the richest individuals in the world. The list accounted for 1,826 dollar billionaires with an aggregate networth of $7.1 trillion or about twice the total economic output of Africa, population 800 million.
Africa was well represented with Nigerian industrialist Aliko Dangote on top of the heap with other Nigerians, Egyptians and South Africans accounting for most of the continents Forbes listers.
I suspect that for the members of the Forbes list it does not change very much, if anything at all in the quality of their lives. But as journalistic project, now in its 29th year, it is a winner. People like lists. They simplify information in a simple way and what best way to provide context than by presenting from best to worst?
"What is interesting is to go down the list and notice that while the richest man in the world Bill Gates and few other billionaires have made their money in the ICT sector the old economy industries of manufacturing, finance, real estate and even agriculture dominate...
Among other things this means that to make outlandish fortunes one still has to build capital over years, decades even generations before you can even be on the list.
Also interesting is that more than half the people on the list were from the USA and Europe, while resource rich Africa only accounted for 106 or less than a tenth of the total list occupants.
This points to the fact that it is not the abundance of natural resources that produces the wealth of nations. The individual entrepreneurs are key but more importantly is the economic and legal framework they operate in.
The US is a single $17trillion dollar market, Europe is not very far behind with a n economy of about $14 trillion. On the whole the number of billionaires depends on the size of the economy they are playing with.
The love of money is the source of all evil and it interesting to see how when interviewed most of the billionaires are not in it for the money. Even at their most extravagant they cannot consume their accumulated dollars.
Two things come out. That the bigger they get the more people they employ and the more people they serve. Secondly that the growth of their companies is a real survival mechanism. There is no such thing as staying in the same place you are either growing or shrinking.
"The poor convince themselves that such accumulation of wealth is evidence of the supersized greed of the superegos that own it. This thinking probably helps them sleep better at night...
Interestingly billionaires Bill Gates and Warren Buffett have between themselves pledged to give away all their wealth to charity by the time they die. Buffett last year gave away $2.5b ironically however his net worth as individual during the same period grew by $14.5b.
Of course the argument is that the rich are getting richer and the poor, poorer a situation that is unsustainable and bound to cause instability in the future. They are right and they are wrong.
Inequality is inevitable. What is not is the growing chasm between either side of the wealth divide.
This growing inequality is actually an indictment on governments. Either through poor policies that do not allow businesses to create wealth, jobs and taxes or by failing to spread the tax of the surpluses businesses make for the benefit of the rest in terms of security, social services and infrastructure.
Despite our poor mentalities we need more wealthy people in our midst, businesses create wealth not governments. So the more wealthy people you have the better chance your society has of uplifting the general population, especially if government is doing its job well.
Which comes around to how government should aid businessmen. Giving them handouts does not work.
Last week the Economist had an article “Brazil’s business Belindia”, wondering why Brazil while it has a handful of world class companies it has hundreds more mediocre to bad businesses.
As it turns out the winners such as aeronautical company, Embraer or JBS a meat processor (they slaughter 100,000 cows a day) are private companies benefitting from investments in education and progressive policies that allow them to compete on the world stage. State owned oil company PetroBras on the other hand has been brought to its by mismanagement and scandal that have come to light with the fall of global world prices.
So we have to stop looking at the Forbes list as a vanity project, but as a tool, for both individuals and governments, that can point us in the right direction in our efforts to raising te living standards of our people.