Posts Tagged ‘wealth’
“Always create more value than you capture”*…
There are, of course, myriad ways to rank people. Increasingly these days, the preferred scale seems to be one’s wealth. The Forbes 400, which ranks the richest Americans by their wealth, has become the scorecard of our zeitgeist. But one of its denizens (currently #4), Jeff Bezos, suggested in 2024, “somebody needs to make a list where they rank people by how much wealth they’ve created for other people.”
Sakshyam Patro has obliged…
… this is that list: [It ranks] founders by Wealth Created For Others (WCFO): the dollar value their companies generated for shareholders other than themselves…. every number traceable to an SEC filing, an academic dataset, or a named data source — refreshed every fifteen minutes while markets are open. Each figure is the shareholder wealth a founder’s company created, now held by index funds, pensions, employees and co-founders, minus what the founder kept. It’s not a claim that one person built the company alone…
See the list here. (Teaser: as of this writing, Bezos moves up one slot, from #4 to #3); the current Forbes #1, Elon Musk, drops to #28 (his wealth is $798B; his investors have lost $243B). And see the details of the methodology here.
Patro adds some important context– the first point especially:
- It is the Forbes billionaires list, re-sorted — not a ranking of humanity’s benefactors. The universe is living billionaires with a trackable public company. Norman Borlaug, Linus Torvalds, vaccine developers, and public-sector reformers created enormous value and belong at the top of a different list; they are absent here because they are not billionaires with public equity, not because the metric judges them small. This list answers exactly one question Bezos posed: among the people Forbes already ranks by personal wealth, who created the most for others versus kept for themselves?
- Not a measure of consumer surplus, wages, or societal value beyond shareholders (those are larger still — Nordhaus [see here] estimates innovators capture only ~2.2% of the social surplus they create — but they are not reliably measurable per person, so we do not headline them).
- Not a moral scoreboard. It measures one thing: dollars of shareholder wealth created beyond a risk-free benchmark, minus dollars kept.
- Not affiliated with Forbes or with any prior ranking site.
Ranked by the wealth they built for other investors: “The Anti‑Forbes List.”
To observe the obvious, the numbers at play here are big… so big as to be hard to understand. Amanda Shendruk urges us to make the effort and offers some helpful tips: “Understanding large values: It’s our ethical duty.”
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As we re-evaluate, we might recall that it was on this date in 1598 that Shakespeare’s The Merchant of Venice was entered on the Stationers’ Register. By decree of Queen Elizabeth, the Stationers’ Register licensed printed works, giving the Crown tight control over all published material. In those days, “copyright” mainly meant “the right to make copies”; secondarily, it conferred intellectual property rights (though in those days, mainly to the guild printers who got the permissions).
In some cases, the companies of actors appear to have registered plays through co-operative stationers, with the express purpose of forestalling the publication of a play when publication was not in their interest. This seems to have been the case with The Merchant of Venice and Shakespeare’s company, The Lord Chamberlain’s Men: the copyright was granted to James Roberts, who printed the company’s playbills and held copyrights on five of their plays (two by Shakespeare). But Roberts transferred the copyright to fellow stationer Thomas Heyes in 1600, and Hayes published first quarto edition of the play before the end of the year.
“It’s the economy, stupid”*…
Many Americans take pride in having the largest economy in the world… which, per the chart above, by one measure we do.
But then, if we adjust for population– calculate per capita– the picture changes…
And we note both that, on a PP basis, the U.S. would be lower and, more fundamentally, that the standing of the U.S. is slipping over time.
If we dive more deeply still, the picture complicates further…
This last chart illustrates the wealth inequality in the U.S., which drops from 2nd to 28th when wealth is measured by the median instead of the average… a wealth gap that has been growing since 1985 (and that is combined with an income gap that has been growing since 1980). For more, see World Inequality Database.
* James Carville
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As we search for the source of that smell, we might recall that it was on this date in 1549 that Robert Kett agreed to head a group of rebels in the English county of Norfolk during the reign of Tudor king Edward VI. The rebels were incensed by enclosure (the fencing off of common lands by wealthy landlords, as a product of which many peasants lost access to grazing, fuel, and small plots they had long used), along with rising rents, inflation, unemployment, and declining wages; as a response, they began destroying fences. One of their early targets was yeoman Robert Kett who, instead of resisting the rebels, agreed to their demands and offered to lead them.
Kett and his forces, joined by recruits from the city of Norwich and the surrounding countryside and numbering some 16,000, stormed Norwich and took the city at the end of July. They were besieged by, then routed, a Royal Army detachment led by the Marquess of Northampton who had been sent by the government to suppress the uprising.
But what became known as “Kett’s Rebellion” ended on August 27, when the rebels were defeated by an army under the leadership of the Earl of Warwick at the Battle of Dussindale. Kett was captured, held in the Tower of London, tried for treason, and hanged from the walls of Norwich Castle on December 7.
“A billion here, a billion there, and pretty soon you’re talking real money”
See how the amount donated by Americans to charity per year compares to the size of outstanding student debt. Or how Walmart’s revenue measures up against Elon Musk’s wealth. Or how the U.S. military budget stacks up against China’s… and so much more.
From the estimable David McCandless and his wonderful site Information is Beautiful, an illustration of how expenses and wealth that run to over a billion dollars compare.
Then peruse “$Trillions.”
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As we ponder the pecuniary, we might recall that on this date in 1989, Exxon Valdez, an oil supertanker owned by Exxon Shipping Company, bound for Long Beach, California, struck Prince William Sound‘s Bligh Reef, 6 mi west of Tatitlek, Alaska. The tanker spilled more than 10 million US gallons of crude oil over the next few days.
The Exxon Valdez spill is the second largest in U.S. waters, after the 2010 Deepwater Horizon oil spill, in terms of volume of oil released. It is the costliest disaster ever with no direct human fatalities. The oil, extracted from the Prudhoe Bay Oil Field, eventually affected 1,300 miles of coastline, of which 200 miles were heavily or moderately oiled; and it wreaked havoc with the habitats salmon, sea otters, seals, and seabirds in its path.
Exxon spent an estimated $2 billion cleaning up the spill and a further $1 billion to settle related civil and criminal charges. Exxon was also assessed another $2.5 billion in punitive damages in a suit (Exxon v. Baker)… but that was reduced by the Supreme Court to roughly $500 million. Exxon remained hugely profitable– the process of payment was drawn out over decades and long term damage continues and is not funded by Exxon. Hence, the Exxon spill is often cited as shorthand in conversations about corporate responsibility as a case of accountability for societal damage inadequately enforced.
“An imbalance between rich and poor is the oldest and most fatal ailment of all republics”*…
The rich in the U.S. just keep getting richer. Over the five decades, incomes have risen materially faster at the very top than anywhere below, and similarly, wealth has accumulated much more quickly at the top than anywhere below. A report from the Stone Center On Socio-Economic Inequality (at CUNY) looks at the mutually-reinforcing relationship between these two dynamics…
Homoploutia describes the situation in which the same people (homo) are wealthy (ploutia) in the space of capital and labor income in some countries. It can be quantified by the share of capital income rich who are also labor income rich. In this paper, we combine several datasets covering different time periods to document the evolution of homoploutia in the United States from 1950 to 2020. We find that homoploutia was low after World War II, has increased by the early 1960s, and then decreased until the mid-1980s. Since 1985 it has been sharply increasing: In 1985, about 17% of adults in the top decile of capital income earners were also in the top decile of labor-income earners. In 2018 this indicator was about 30%. This makes the traditional division between capitalists and laborers less relevant today. It makes periods characterized by high interpersonal inequality, high capital-income ratio, and high capital share of income in the past fundamentally different from the current situation. High homoploutia has far-reaching implications for social mobility and equality of opportunity. We also study how homoploutia is related to total income inequality. We find that rising homoploutia accounts for about 20% of the increase in total income inequality in the United States since 1986…
Note that the report was written in the 2020 (and published in The Review of Income and Wealth in 2023). The dynamic has continued since; the polarizing impact has grown.
“Homoploutia: Top Labor and Capital Incomes in the United States, 1950–2020,” from @stone-lis.bsky.social. (Read the full report here.)
[image above: source]
* Plutarch
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As we evaluate equity, we might recall that it was on this date in 1970 that The Oregon Highway Division attempted to destroy a rotting beached Sperm whale with explosives, leading to the now infamous “exploding whale” incident.
“A man must always live by his work, and his wages must at least be sufficient to maintain him”*…
Nathan Yau is back with a(nother) arresting graphic analysis– this time, of the median salaries of different occupations in the U.S. (based on 2024– so, pre-purge— data from the Bureau of Labor Statistics). The median salary for full-time workers in the United States was $49,500; but salaries vary by occupation. The interactive infographic featured in the screengrab above shows– and allows you to explore– the spread…
Healthcare practitioners, such as surgeons and emergency medicine physicians, sit at the top. Airline pilot is the only occupation with a median salary above $220,000 that is not in the healthcare category. Then there are the CEOs and managers, followed by computer and math jobs. After that, most jobs sit below the $100,000-mark by median…
… The internet tends to skew our perception of how much people make. We see the things that people buy, but that is not always a good indicator for the wages people earn. These distributions are more bottom heavy than you might expect if you based your estimates on social media.
That said, all these jobs have a range of salaries, too. It’s not just variation within job categories, but variation for each job. The above charts, along with median salary, show 25th and 75th percentiles.
For example, construction supervisors make a median salary of $78,690, but 25% made $62,400 or less (25th percentile) and 75% made $100,200 or less (75th percentile).
There are also geographic differences, made more interesting by cost of living, but we’ll save that for another time…
Explore the comparative data: “Salary and Occupation” from @flowingdata.com.
It is, of course, important to remember (in a time like this, when so much attention is paid to the very rich) that this data excludes “unearned income,” the revenue that accrues to wealth (stocks, bonds, real estate, et al.) and the benefits of “contingent” stock/option bonuses. Along with inherited wealth, they explain most of the wealth gap (and economic angst) that plagues the U.S. today.
* Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations
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As we investigate inequity, we might recall that on this date in 1859, Norton I distributed letters to the newspapers of San Francisco proclaiming himself Emperor of North America…
At the peremptory request and desire of a large majority of the citizens of these United States, I, Joshua Norton, formerly of Algoa Bay, Cape of Good Hope, and now for the last 9 years and 10 months past of S. F., Cal., declare and proclaim myself Emperor of these U. S.; and in virtue of the authority thereby in me vested, do hereby order and direct the representatives of the different States of the Union to assemble in Musical Hall, of this city, on the 1st day of Feb. next, then and there to make such alterations in the existing laws of the Union as may ameliorate the evils under which the country is laboring, and thereby cause confidence to exist, both at home and abroad, in our stability and integrity.
– NORTON I, Emperor of the United States.
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