moneyFYI
Financial Freedom Is Merely Organized Common Sense
Wealth Goes Away
Mid 20th century Canadian business tycoon, Sam Bronfman reputedly said, “Turning nothing into $10 million is hard work. Turning $100 million into $110 million is inevitable.”
While the idea is likely true in general, it does not imply the continuous ownership of great wealth. History shows that most great wealth does not remain concentrated for long and a large share of it ends given away. It seems that wealth gradually evaporates. That fact makes one wonder about the current concern over disparity.
Forbes first published a list of wealthy people in 1918. As you might expect, John D. Rockefeller led the list. Who was number two? Henry Clay Frick. Got that wrong, didn’t you? Andrew Carnegie was number three.
Fourth was George Baker. It is okay that you don’t know much about him. No one knew much about him in 1918 either. Closely connected to JP Morgan and head of National City Bank. (Now CitiBank.)
Not much of the 1918 big money is still visible.
- The Rockefellers still hold big chunks but well dispersed and only a few with even a hundredth of the purchasing power of John D.
- Henry Clay Frick is almost unknown outside Pittsburgh.
- Andrew Carnegie gave almost all his money away. Carnegie libraries for instance.
- George Baker provided most of the seed money for the Harvard Business School and other grants to Columbia and Dartmouth
- The Fords, the Guggenheims, the Schwabs and the Harrimans remain wealthy but not in proportion to the founders
1918 was almost 100 years ago so maybe things became different.
1982 was the first of the familiar Forbes 400 listing. Who led the list in 1982? Who was second?
Daniel K. Ludwig and Gordon Getty. Hmmm!? Not very familiar. When he died, most of Ludwig’s money went to the Ludwig Institute for Cancer Research, while Gordon Getty is still alive and still trying to give money away.
In recent years, Bill Gates and Warren Buffet have donated vast sums to the betterment of humankind. They have encouraged others to make the same commitment. The Giving Pledge. You will recognize many of the names on the list of those who have made the pledge. Gates, Buffet, Ellison, Branson, Turner, Bloomberg, Zuckerberg, Musk, Perelman, Bronfman, and more than 100 others.
Wealth is required if we wish to have society flourish. The more wealth, the more flourishing. How to create the wealth society needs seems clear. Important tasks should be given to someone who knows how to do it.
The obvious choice is not the currently popular political choice.
Politicizing wealth disparity for advantage requires the idea that very wealthy people are greedy and selfish. Based on the evidence of philanthropy, it seems that idea may be false.
That some people are interested in gaining power and rely on uninformed voters to support them in that quest, is easily supported.
Perhaps we are choosing the wrong villain in this discussion.
Those who seek power ahead of service should be condemned to follow Gore Vidal’s idea. “Any American who is prepared to run for president should automatically, by definition, be disqualified from ever doing so”
Do not expect much of a change in the future. Politicians need poor people who are dissatisfied with that condition. Politicians know how to polarize the uninformed voters in their favour. Beware!
H.L. Mencken has said, “The urge to save humanity is almost always a false front for the urge to rule.”
There is no substantial evidence that contradicts him.
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Don Shaughnessy is a retired partner in an international public accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario. Contact: don@moneyfyi.com
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