“How do you become a billionaire in 2021?” Kathryn Kvas and Vignesh Seshadri had some ideas. Eleven, to be specific. Suggestion number three: “Be one of Elon Musk’s sons. Turn eighteen. Take ten billion dollars out of your trust fund. Lose ninety per cent of said funds on careless investments. You are now a self-made billionaire! Congratulations.” Suggestion number six: “Stop buying overpriced lattes. Become a billionaire overnight.”
Kvas and Seshadri are a husband-and-wife duo who sometimes write comedy together. Kvas, who is originally from Canada, met Seshadri, who is of Indian origin, at advertising school in Miami. They were drawn to each other by their shared sense of humor—she leans satirical, and he leans dark. As visitors to a country that they hoped to call their own one day, Kvas and Seshadri were determined to make a go of it in America. Tired of being cooped up in their cramped Brooklyn apartment during the pandemic, the couple moved to Los Angeles. America’s pitch as the “best place to go for opportunity and money” was a compelling one, Seshadri said. Kvas, with dark brown hair grazing her shoulders, and Seshadri, sporting a full black beard, both speak thoughtfully about the work they do and what they see around them. To two millennials, the belief that if only people saved and budgeted and worked hard, they too could become extremely rich, was incongruous. Kvas and Seshadri are on a relatively secure financial footing. Neither carries student debt; they have health insurance. “We’ve gotten to a place where we are pretty successful in our careers,” Kvas said in a video conversation. “There is definitely opportunity here to be your own successful person. It’s not a complete lie.” Yet, the remarkable wealth accumulation by the top tier of the population and the impossibility for most people to get there, struck a nerve. Everywhere around them was googly-eyed talk about billionaires. In particular, the unqualified adulation and worship of billionaires, and the propaganda that goes into amplifying their image—something they saw up close in the advertising industry—sickened them. “It feels medieval in so many ways,” Kvas said. “They are kings and overlords.”
The enormity of inequality struck Kvas when she happened to come across an online post charting the wealth of top billionaires. “It literally takes you twenty minutes to visualize [the wealth of] Bezos,” she said. “It’s scary to think about the amount of lifetimes it would take to spend that kind of wealth.” Kvas was particularly taken aback by the meme stock mania of 2021. That year, millions of small traders, stuck at home during the pandemic, launched an online campaign to buy the stock of GameStop, a video-game retailer that had been a mall mainstay in the 1990s. A big Wall Street hedge fund bet that GameStop shares would fall because of the company’s dying business model; the “Redditors,” as they came to be called because they coordinated via messages on the social media platform Reddit, decided to stick it to the fund manager by buying up the company’s shares instead. It was an odd expression of wanting to take down a symbol of wealth—the hedge fund—by banding together, desperate to claim some of that wealth for their own wallets. The idea that “if you bet ten dollars on the stock of GameStop, you too had a chance of making it big” confounded her.
They turned their observations into a satirical piece for The New Yorker magazine, listing the ways one could become a billionaire.1 (Suggestion number eight: “Buy four truckloads of water. Realize that this isn’t what they meant when they said, “Keep your assets liquid.” The next day, the world runs out of water. You are now the only source of water within a two-thousand-mile radius. Elon finds out, tweets about it. You accidentally become the next messiah. Make billions.”) Their contribution to the “Daily Shouts” blog, an offshoot of the magazine’s regular “Shouts and Murmurs” column, was a way to make fun of the idea that people could become supremely wealthy if they got lucky, or if, as they wrote, people stopped “buying overpriced lattes” or “paying for extra guac.” The humor was deliberately absurdist, to underscore just how off-base the constant messaging about the American dream had become.
Americans appear to be growing increasingly uneasy about billionaires. While most people don’t think that accumulating billion-dollar fortunes is a bad thing, many polls in recent years show that there is a heightened awareness about the excessive wealth accumulation by those at the very top, and the ways in which that wealth allows them to wield influence. A 2021 study by the Pew Research Center, an independent nonprofit, concluded that Americans have viewed billionaires in a somewhat more negative light since the pandemic, when a rising stock market lifted already enormous fortunes by billions of dollars. Roughly three out of 10 Americans agreed in July 2021 that having billionaires was a bad thing, an increase from about a quarter in January 2020, the poll found. It also found that adults younger than 30 were more likely than other age groups to look at billionaires more critically. There were differences in attitudes based on the political leanings of the respondents—liberal Democrats are more likely than moderate Democrats to find that billionaires are bad for the country—but both Democrats and Republicans have soured on the impact of billionaires on the economy, the study found. One poll found that 46 percent of American voters considered billionaires a threat to democracy, although those who identified themselves as Republican saw them as less of a threat than Democrats did. Polls have also found widespread support among Americans for higher taxes on the mega rich. In 2021, a survey by Data for Progress, a progressive think tank and polling firm, found that more than two-thirds of likely voters, including 53 percent of Republicans, thought billionaires should pay more in taxes. A majority of Americans, by a 3-to-1 margin, or 66 percent, thought that billionaires shouldn’t have the ability to contribute unlimited amounts of money to politics, while 23 percent said it was okay, and the rest were undecided, according to a June 2022 poll by RealClear Opinion Research.2 “This isn’t to say that Americans don’t respect or admire the super-wealthy,” John Della Volpe, who ran the poll, explained in an accompanying article. “They just don’t believe that billionaires should be able to exert outsized influence or have the ability to corrupt a political system that needs to work for everyone.” The preponderance of such polls itself suggests that billionaires loom large in the sociocultural and economic milieu.
Jesse Walker, an assistant professor of marketing at Ohio State University’s Fisher College of Business, decided to study the apparent contradiction between people’s love of individual billionaires and their dislike of the billionaire class. As a doctoral student, he and his thesis advisor, both lifelong tennis fans, got to talking about Roger Federer and how “it seemed weird that people don’t get tired of seeing him win,” and how that was different from what you see in team sports, where people get tired of seeing the same teams win. After Walker and his advisor, Thomas Gilovich, turned those observations into a paper, Walker decided to test his hunch that people seemed to be more tolerant of inequality when it was expressed in terms of individual success, than when it was described in groups. Walker, along with Gilovich and another academic colleague, found what appears to be a central contradiction about American life: People react positively to individual success stories, but success appears rigged when successful people are clustered together. “We really love individual success stories,” Walker said. “It’s easier to attribute the success of individuals to their person, because they’re talented or hard-working or have some quality that made them succeed.” But when groups or teams win, people put it down to benefits they have had as a group. Similarly, Walker found, when you lump people into a class, such as a billionaire class, people are more likely to believe that there is something wrong with the system that allows so much wealth accumulation for a few.3 Their study concluded that people are unlikely to support high inheritance or wealth taxes if they’re thinking of an individual billionaire’s success, but they are much more likely to support higher taxes on the same for the wealthy as a group. That, Walker said, is an important policy takeaway for any politician advocating for higher taxes.4
People’s growing distrust of the billionaire class comes from two interrelated occurrences: Not only has their wealth ballooned in the past decade, but it has increased at a rate well beyond what seems fair or equitable to many, especially on the left. In 2010, after the financial crisis, America had 404 billionaires whose combined fortunes stood at $1.4 trillion, according to estimates by Forbes. A decade later, the number of billionaires had risen to 614, and their collective net worth had more than doubled to $2.9 trillion. Although it’s hard to make direct comparisons between estimated fortunes and income data, it’s still helpful to look at the median income of American households between 2010 and 2020 for context. Adjusted for inflation, that number rose from $58,627 to $67,521, or about 15 percent, according to data from the Federal Reserve.5 In 2017, Bezos became the first billionaire to cross the $100 billion mark since Gates, who had crossed it once in 1999. Billionaire fortunes only increased during the pandemic, as financial markets rallied after an initial dip. Globally, the wealth of billionaires grew by $2.7 billion a day from March 2020 to November 2022, according to calculations by Oxfam International.6 The U.K.-based charitable organization, which works to fight poverty and inequality around the world, also estimated that $26 trillion of the $42 trillion in wealth gained since the pandemic had gone to the richest one percent.
More than a decade of mounting frustration at the ever-widening chasm between rich and poor has contributed significantly to the fracture of American society that will not mend, as people—fed on misinformation, exploited by politicians, searching for villains—become more and more polarized, the fora for civil debate disappear, and the opportunity for a meeting of minds narrows drastically. It is a diffuse but festering anger—of nativists who see immigrants as stealing jobs and changing the racial makeup of America, of the left at the right and the right at the left, of women toward men in power, of individuals against institutions—spreading across a rapidly altering landscape where people no longer know if they are failing or the opportunities for success are shrinking. There are signs of sociocultural reckoning and myth busting, and more trenchant demands for action, especially as the new generation of Americans, Gen Z, finds its political voice. Billionaires have become the target of ridicule and loathing from some quarters of society, especially given their soaring wealth and growing influence during this time of widening inequality. Efforts to create more welcoming environments for women and people of color in STEM show less tolerance for the brilliant nerd myth. A push to rein in unbridled profit-seeking by including ESG, goals indicates the demand for a more inclusive corporate sector. There is disgust about the behavior of powerful men toward women. Individuals and institutions are increasingly calling out systemic racism. The war ignited by the Hamas attack on Israel on October 7, 2023, has resurfaced painful historical conversations involving religion, colonization, and the pointlessness and inescapability of war. At the same time, there is more concern about the harmful effects of technology, a more urgent call to action on climate change, a recognition that decades of economic inequality have fed polarization with devastating consequences, and more scrutiny of the influence of billionaires on politics and how tax policies have helped the wealthy. In July 2022, YouGov polled Americans about whether the American dream still exists. Of the 1,000 adults surveyed, 65 percent of Democrats and independents responded either that the dream doesn’t exist or that they’re no longer sure if it does. The number was lower among those who identified as Republicans, but still 38 percent of the pool. Perhaps the late comedian George Carlin summed it up best: “The reason they call it the American dream is because you have to be asleep to believe it.”
The global financial crisis of 2008 plunged the U.S. economy into the deepest recession since the Second World War.7 For four straight years, median household incomes tumbled faster than rocks tumbling downhill.8 As the rate of unemployment rose from under 5 percent to more than 10 percent, people were seething at Wall Street. Banks and other financial firms were directly responsible for the crisis; they had recklessly lent money to borrowers who could not afford to repay their mortgages. The banks had then packaged those subprime mortgages into securities and sold them to investors. When housing prices peaked and then went into free fall, the banks that had created the securities teetered and financial markets swooned. In 2008, the federal government was forced to rescue some banks and extend credit to others to avoid a potential collapse of the entire financial system. As people reeled from the impact, the anger directed at the so-called one percent was palpable.
In July 2011, inspired by the protests in Cairo’s Tahrir Square where a popular uprising had overthrown Egypt’s leader, Hosni Mubarak, just months earlier, Adbusters, a small, independent magazine in Vancouver, British Columbia, in Canada emailed subscribers urging them to “deploy this emerging stratagem against the greatest corrupter of our democracy: Wall Street, the financial Gomorrah of America.” They set a date—September 17, 2011—and asked that 20,000 people gather in lower Manhattan to demand that President Barack Obama set up a commission tasked with “ending the influence that money has over our representatives in Washington.” To go with the protests, it created a hashtag: #occupywallstreet. For a two-month period beginning in September 2011, people from different backgrounds—academics, intellectuals, students, left-wing radicals, activists—landed in Zuccotti Park, in Manhattan’s financial district, to begin their protest. “Occupy Wall Street” became a catchall slogan for the outpouring of resentment, and a cry against injustice by thousands of protesters calling themselves the “99 percent.”
The punch of the movement eventually fizzled out as activists hived off and people went back to their daily lives. But it was a tipping point, an inchoate expression of the frustration that many Americans were beginning to feel about a system that protected the wealthy at the expense of the rest. In the decade since, some of the early frustrations have only become more entrenched, as the conversation about income and wealth inequality has become mainstream. Those factors have driven the search for explanations, as academics, politicians, pollsters, journalists, and activists seek to understand the ways in which the structures and systems upon which our economy rests have tilted toward the wealthiest. There is argument among economists, the public, and even billionaires themselves about the degree to which they have harnessed favorable tax policies and market forces, including the imbalance of power between corporations and labor created by offshoring, along with their social, cultural, and racial advantages, enroute to their financial success.
The growing conversation about inequality is perhaps why Capital in the Twenty-First Century, the academic tome by French economist Thomas Piketty, resonated so widely when it landed on U.S. shores. The sweeping analysis of inequality had been translated into English for an American audience and published in 2014. Packed with charts and figures, Capital in the Twenty-First Century, which came in at around 700 pages, was hardly expected to become a popular hit. Yet, there it was, climbing up The New York Times bestseller list. For a time, it was the top-selling book on Amazon.com. Summaries and cheat sheets abounded. It has since sold some two million copies in multiple languages. Much to the surprise and delight of executives at Harvard University Press, the publisher, Capital in the Twenty-First Century became its best-selling book ever. In 2020, Netflix produced a feature documentary based on Piketty’s core arguments.
Piketty makes the point that over time, the return on invested capital will outpace the growth in income, creating the conditions for dynastic wealth. He put the weight of an entire history of capitalism, with its propensity to make the rich richer, on a simple equation: r>g. The “r” stood for the rate of return on private capital while the “g” stood for the rate of economic growth. Redistributive policies, which taxed capital on a progressive basis, were the only solution for reducing wealth inequality, he argued. Specifically, Piketty called for a global tax on wealth. Piketty’s argument resonated with many, especially those on the left. Writing in The New York Times, Justin Wolfers pointed out that based on Google data, searches for “Piketty” came largely from coastal, liberal states.9 In other words, the book was a hit in places where you’d expect it to be a hit. It’s easy to see that Democratic lawmakers and liberal elites embraced the book because it placed inequality within an easily graspable analytic framework. The book’s message also resonated with the wider public by articulating a feeling among many Americans that the country was no longer a pure meritocracy. Instead, with every massive CEO pay package and every new billionaire, it seemed to be moving to a plutocracy, where the gains from wealth accrued to a small class of people at the top, while incomes stagnated for those in the middle and lower rungs. In comparing Capital in the Twenty-First Century to Piketty’s 2019 book, Capital and Ideology, one reviewer pointed out that Capital in the Twenty-First Century struck a nerve because it “perfectly fit the post–Occupy Wall Street ethos, providing empirical rigor for the upswell in anger.”10
But perhaps it is the work of two liberal economists on inequality in America, and their proposals for a wealth tax, that has captured the attention of Democrats in recent years as the conversation around billionaires became more pointed. So much so, that the idea of a wealth tax became a central talking point in the Democratic presidential primary in 2020. The previous year, the economists Emmanuel Saez and Gabriel Zucman had published The Triumph of Injustice, a historical study of the American tax system that highlighted how taxes for the wealthiest have fallen, while middle-income and lower-income groups have been forced to pay more. The duo, professors at the University of California at Berkeley, estimated that as of 2018, fewer than 250,000 adults at the very top of the income ladder held almost one-fifth of all wealth. That share had steadily increased over the decades. The professors, who have collaborated with Piketty on other studies, also called for a wealth tax. Their findings led to a raucous debate among economists—insofar as economists are raucous—on Twitter and in the opinion pages.
Nearly a decade earlier, Saez and Zucman had published research that showed how vastly inequality had risen since the 1970s.11 “Wealth inequality, it turns out, has followed a spectacular U-shape evolution over the past 100 years. From the Great Depression in the 1930s through the late 1970s there was a substantial democratization of wealth. The trend then inverted, with the share of total household wealth owned by the top 0.1 percent increasing to 22 percent in 2012 from 7 percent in the late 1970s. The top 0.1 percent includes 160,000 families with total net assets of more than $20 million in 2012,” the authors wrote. They updated their study once again in 2020.12
The simmering public resentment of billionaires has provided progressive politicians with the opportunity to bring the conversation about inequality center stage—and burnish their populist credentials. For much of his long career in politics, Bernie Sanders, the independent U.S. senator from Vermont, had been urging for redistributive policies as a way to reduce income equality. But it is only in the past decade that his message has resonated, particularly with young voters disillusioned by politics as usual and worried about inheriting a future with nary a social safety net, stagnating incomes, and a worsening climate, even as the top one percent continues to accumulate wealth. Sanders, with his white hair and fiery delivery, has become an unlikely hero for them. Other politicians on the left have also promoted several plans to tax the wealthy, encouraged in their stridency by the current political moment, which shows that their positions have a measure of public support that was difficult to imagine a few decades ago. Alexandria Ocasio-Cortez, a Democratic politician, activist, and the U.S. representative from New York’s Fourteenth District, has been an outspoken critic, inserting a moral gravity into politics by arguing that a few people shouldn’t accumulate so much wealth when so many parts of society are poor. Her former policy advisor Dan Riffle coined the phrase: “Every billionaire is a policy failure.” Never one to shy away from a message—especially one fashionable to progressives—Ocasio-Cortez wore a gown to the 2021 Met Gala emblazoned with the words “Tax the Rich.” Ironically, the move led people to accuse her of being a “sellout.”
In her run for president, Elizabeth Warren, a Democratic U.S. senator from Massachusetts, not only proposed a wealth tax for those with assets over $50 million, but also picked public fights with billionaires. Following her central message as she ran for the Democratic candidacy for president, Politico and Morning Consult conducted a poll in 2019 among registered voters about whether the wealthy should pay more in taxes. The poll found that more than three out of every four voters said yes.13 Other Democrats too have put forth proposals to increase taxes, but they have met with little success. During the negotiations over President Biden’s infrastructure bill, which passed in 2022, U.S. Senator Ron Wyden, who chairs the Senate Finance Committee, specifically pushed for a billionaire income tax, which proposed to treat billionaire wealth as income. “Two tax codes allow billionaires to use largely untaxed income from wealth to build more wealth, while working families struggle to balance the mortgage against groceries, and utilities against saving for the future,” Wyden said in his proposal. The money raised would help pay for the infrastructure bill. Wyden’s proposal for taxing so-called unrealized capital gains had significant support from likely voters, according to the 2021 Data for Progress poll. President Biden also proposed a billionaire minimum income tax in 2022, which would impose a tax of at least 20 percent on all income on all households worth more than $100 million, including unrealized gains that are currently untaxed. How such proposals would work is a matter of debate. Aside from the politics of levying higher taxes on the wealthiest, a basic problem is that wealth is largely estimated, based on billionaire lists.
On the right, the defense of billionaires has largely been crafted around the idea that their numbers reflect a flourishing society, and that they deserve their wealth because their companies have created jobs, improved lives, spurred economic growth, and made America the world’s envy. Their wealth reflects the value they brought to society, so the higher their value creation—providing jobs, increasing innovation, and improving society—the greater their fortunes. Taxes would destroy incentives, the reasoning on the right goes, sending taxes to the government would be inefficient, and philanthropy is a better way of doing the government’s job.14 Innovation and incentives for that innovation are necessary so that social wealth and value can be created—and personal wealth is the by-product of that.
A lot of billionaires have expressed support for higher taxes or acknowledged that such extreme wealth should not exist. Some, such as Warren Buffett, have agreed that the system is indeed unfair and that he shouldn’t be paying taxes at a lower rate than his secretary. In an op-ed piece for The New York Times in 2011, the Omaha investor argued that a higher tax rate on investments wouldn’t necessarily deter the mega rich from making investments, because they were likely to judge a deal on its merits rather than the tax rate.15 More recently, Marc Benioff, the chairman of Salesforce, penned an op-ed for the same newspaper, calling for a fairer and more equitable capitalism that reduces inequality, equates doing well with doing good, and asks the wealthiest to pay more in taxes.16
Gates too has said he would pay more in taxes if the system were amended and has expressed support for estate taxes, which are levied upon death. Gates told the journalist and anchor Andrew Ross Sorkin in 2019 that he wouldn’t mind paying $10 billion more in taxes. The wealthiest Americans have banded together through groups like the Patriotic Millionaires to call for more taxes. In 2019, Mark Zuckerberg, in response to a town hall question about Sanders and his attack on billionaires, said that the enormity of wealth that billionaires have accumulated is unreasonable. “I don’t know if I have an exact threshold on what amount of money someone should have,” he was quoted as having said, “but on some level no one deserves to have that much money.”17 For the most part, though, billionaires have remained silent on taxes, or quietly funded politicians sympathetic to their point of view. At least one billionaire stuck his neck out.
In October 2019, as Elizabeth Warren was stepping up her campaign, the hedge fund billionaire Leon Cooperman told Politico that there was nothing wrong with billionaires, and that one became a billionaire by making products and services that people paid for. Cooperman, a former Goldman Sachs executive who started Omega Advisors and had a net worth of $2 billion at the time, was one of the many people watching Warren’s ascendance in the Democratic primaries warily. In the Politico interview, he said that he believed in a progressive tax system, but that Warren was “shitting on the American dream.”18 Cooperman is one of the few billionaires who has publicly expressed his surprise and bewilderment at the level of resentment against the ultra-wealthy. In 2022, he told The Washington Post that he couldn’t understand why politicians like Sanders, Warren, and Ocasio-Cortez came after billionaires. After all, “he’d always imagined himself as the rags-to-riches hero, only to now find himself cast as the greedy villain in a story of economic inequality run amok.”19 Cooperman also cast his success as the result of his choices, comparing himself to his brother, who had the same opportunities but chose not to work 80-hour work weeks and died with only a modest amount of money to his name. “Different choices, different outcomes,” he said in the Post article. “The world isn’t meant to be totally even.” Not one to back down, Warren responded on Twitter: “Leon, you were able to succeed because of the opportunities this country gave you. Now why don’t you pitch in a bit more so everyone else has a chance at the American dream, too?”
Did Gates reach the economic stratosphere solely on the jet fuel of his brilliance? His father wasn’t so sure. Of course, his son was blessed with incredible talent and worked extremely hard, but Bill Gates Sr. often questioned whether Gates could have reached the levels of success and fortune he did had he been born without the privileges he had. His family could afford to send him to Lakeside, Seattle’s most prestigious private school, where Gates was introduced to computers as a preteen, well before many children of his age or even their parents had seen one. He forged close bonds with his parents, who provided him and his siblings with a stable home atmosphere. Laurelhurst, the neighborhood where he grew up, was safe and family friendly. It was also a short walk from the 24-hour computer laboratory at the University of Washington, allowing the young prodigy to come and go as he pleased, and spend endless hours tinkering with the new machines.
Would a different child, with roughly the same raw material as Gates, be able to achieve the same level of success? Gates Sr., a prominent Seattle lawyer and civic leader who died in 2020, would often ponder these issues with Chuck Collins, an activist and author with whom he wrote a book about the dangers of repealing the estate tax.20 Collins, a great-grandson of Oscar Mayer, the founder of the company best known for its hot dogs, gave up his inheritance at 26 to make fighting inequality his life’s work. He is the director of the Program on Inequality and the Common Good at the Institute for Policy Studies, a progressive think tank, and coedits a blog on the topic.
“Gates Senior would debunk the great-man myth at every corner,” Collins said, referring to the idea that great leaders are born, not made. He was “pretty tuned in to the web [and] matrix of multigenerational advantages that propel some people forward.” Their book, published in 2003, argued in favor of reforming the estate tax rather than repealing it, because society played a far larger role in individual wealth creation than was acknowledged. In 2000, President Bill Clinton vetoed a bill sponsored by Republicans that would have repealed the estate tax, but George W. Bush, then the governor of Texas, made it the core of his presidential campaign. Between 2001 and 2003, Bush announced a package of tax cuts that included phasing out the estate tax. Collins and Gates Sr. launched a campaign arguing that removing the estate tax—also known as the death tax or inheritance tax—was harmful to society because it allowed wealth to be transferred from generation to generation without taxation, compounding economic inequality. Their plank was that wealth creation was a collaborative effort with society, and taxation was the right way to return some of that wealth to society. “ ‘You earned it’ is really a matter of ‘you earned it with the indispensable help of your government,’ ” Gates Sr. told PBS. Gates has always acknowledged his father’s point of view, but he chose philanthropy as the way to address it.
The idea of a “self-made” individual is a potent one, and foundational to America, a country formed by those who rejected aristocracy and beckoned all who wanted to build a fortune as opposed to merely inherit it. People came from nothing and made it in America. In their research, Walker, the Ohio State professor, and his colleagues found that people in more collectivist cultures, including China and other Asian countries, equate wealthy groups with the circumstances of their birth and existence. But because of the rugged individualism that has defined the country from the very beginning, Americans find it easier to believe that it is a person’s talent that gets them where they are. In 2014, Forbes magazine began giving America’s top 400 billionaires a “self-made” score, grading them from one to 10 depending on whether they had simply inherited their fortunes and done little to enhance it (a score of one), or had built their empires from scratch, overcoming economic and social adversity to do so (a score of 10). The magazine used as inputs such things as socioeconomic background and upbringing. Those in the middle of the pack were described as billionaires who “inherited a small- or medium-sized business and made it into a ten-digit fortune.” Under its definitions, the magazine found that America’s billionaires are overwhelmingly self-made. What’s most interesting, though, is that of the 400, the largest group of “self-made” billionaires came from moneyed households or middle- and upper-middle-class backgrounds. In 2022, there were 184 of them, compared with 51 billionaires who came from working-class backgrounds and 28 who came from poverty. White men made up the largest group of billionaires. There were 56 women billionaires, few of them “self-made.” Most of them inherited their wealth, like the Waltons, the Pritzkers, and the granddaughters of the Estée Lauder fortune. There are those who inherited their wealth from their spouses, like Laurene Powell Jobs, the widow of Steve Jobs. Divorcées like MacKenzie Scott and Melinda French Gates are recent additions. Oprah Winfrey, with a net worth of $2.5 billion, is one of the few self-made women who came from poverty. Only a handful of Black billionaires made the list, including Winfrey and Robert Smith of Vista Equity Partners, a private equity firm. To some extent, the racial makeup of billionaires mirrors the racial wealth gap between Black and white Americans. In 2019, the median net worth of Black Americans was $24,100. For white Americans, the number was $189,100.21 Forbes also created a separate list of America’s 100 richest self-made women, many of whom are not billionaires. In 2023, only 22 of them came from poor or working-class backgrounds. The rest were born into wealth, grew up middle class or upper middle class, or were highly trained professionals like Sheryl Sandberg.22 The preponderance of individuals from favorable socioeconomic positions on the Forbes lists are an indicator that the circumstances of birth and upbringing can be important inputs in the creation of a self-made billionaire. Sometimes, children of affluent families also benefit from connections, such as when Gates’s mother mentioned her son’s name to an IBM executive who gave the young Microsoft a chance.
“A lot goes into the making of a success story, from the compounding of advantage over generations to socioeconomic privilege to stable homes [and] social safety nets,” Collins said. “People retell their story through that meritocratic lens.” He called for a more honest accounting from billionaires of their stories—the invisible forces that helped them along, such as “a stable home, debt-free college education, access to healthcare”—rather than reinforcing the self-made narrative. The circumstances of birth and upbringing also confer another significant advantage: the success of future generations, or what economists often call “mobility.” There is plenty of research, including a landmark 1994 study, showing that children from stable homes with married parents had far better outcomes as adults than children born to single or unmarried parents.23 They were at less risk of getting pregnant as teenagers, dropping out of high school, or being idle in adulthood. They had better chances of success. Moreover, the 1994 study found, the advantages of being white are closely tied to family structure and can disappear when parents get divorced. Research also suggests that the number of rungs up the economic ladder that children can climb depends on where they grow up. Intergenerational mobility is much higher in places with less inequality, better schools, less racial segregation, and more stable families.
The late labor economist Alan B. Krueger, a professor of political economy at Princeton who advised both President Clinton and President Obama during their terms in office, showed how the children of wealthier parents have more economic mobility than their parents, which leads to more inequality. “Children of wealthy parents already have much more access to opportunities to succeed than children of poor families, and this is likely to be increasingly the case in the future unless we take steps to ensure that all children have access to quality education, healthcare, a safe environment and other opportunities that are necessary to have a fair shot at economic success,” Krueger once said in a speech. He termed it “the Great Gatsby inequality curve,” which shows the relationship between the concentration of wealth in one generation and the ramifications of that in the next generation.24 He identified the main causes of widening inequality as technology, globalization, and tax policy. Krueger, who died in 2019, also cited research showing that rising inequality has not been mirrored by rising consumption inequality—in other words, even if incomes are not growing at the same rate, spending has continued apace, which suggests that people are taking on more debt to maintain lifestyles. That of course has been encouraged and made easier by the financial industry, in terms of how easy it is to access credit.
Another cluster of economists led by Raj Chetty found that nine out of every 10 children born in 1940 were earning more than their parents, whereas that number had fallen to about half for children born around 1980, i.e., those entering the labor force in the decade preceding the study, which was published in 2017.25 They also found that growth in the nation’s gross domestic product alone wouldn’t change that outcome. Rather, the economists concluded that the fruits of economic growth needed to be distributed more broadly to revert to the levels of “absolute income mobility” that people born in 1940 had enjoyed. The American dream “that hard work and opportunity would lead to a better life” was fading, the authors wrote in their 2017 study. A recent study of admissions into elite colleges led by Chetty showed that they are filled with children of the wealthiest families—not necessarily because they were brighter than the others, but because their resumes were more finely honed to the desires of those colleges.26 That’s an advantage that comes with economic class. Elite private institutions are the gateways to success, the authors argue. The paper argues that if some of America’s most elite private colleges changed their admissions policies to give less weight to the children of alumni and those with extracurricular or sports skills that wealthy families are more easily able to afford, there could be more socioeconomic diversity rather than concentrating “privilege across generations.” In addition to having a head start in life by dint of socioeconomic status, one of the more overlooked aspects of success is the lack of downside risk. A talented individual from a comfortable or wealthy background can pursue far bigger ambitions than they might otherwise want to, or be able to, because the cost of failure is minimized by economic security. Put another way, risk-taking is often easier when it is subsidized by economic security.
Michael Dell, the founder of Dell Computers, started his business in a college dorm with $1,000—meeting the requirement of a “self-made” billionaire. But as he describes in Direct from Dell, his autobiography, he was exposed both to computers and to the concept of commercial opportunities from early on. “The discussions at our dinner table in the 1970s were about what the chairman of the Federal Reserve was doing and how it affected the economy and the inflation rate; the oil crisis; which companies to invest in, and which stocks to sell and buy,” Dell writes.27 His math teacher in junior high installed a teletype terminal that students could play with after school. His parents bought him a computer for his fifteenth birthday. “I had grown up with computers. Every paper I wrote in high school had been written on a computer. Computers were already well integrated into my life, and it seemed obvious to me that it was just a matter of time before every business, every school, and every individual started to rely on them.”
Like Gates, Dell too famously dropped out of college to pursue his ambitions—Gates out of Harvard and Dell out of the University of Texas at Austin. When they started their companies as teenagers, both took big risks with their futures with the knowledge they could return to school, or their parents were in a position to help them financially. Had Gates failed to get Microsoft off the ground, he could simply have finished his college degree and twinned his talents with a Harvard education to lead a highly successful, if less famous, life. John Mackey, the famously outspoken, libertarian, antiunion founder of Whole Foods, grew up in a middle-class household with a professor father and a mother who gave up her job to rear her children. His father was also the chief executive of a healthcare company that sold for hundreds of millions of dollars. Mackey dropped out of college to start Whole Foods in 1978, raising $45,000 from family and friends. His father was his first investor.28 While not a dropout, Sergey Brin, one of the founders of Google, also grew up in a university atmosphere; his father was a professor of mathematics at the University of Maryland, and his mother a research scientist.
Those from middle-class and affluent backgrounds have also been best placed to benefit from the tilt of the economy away from blue-collar and manufacturing jobs and toward intellectual labor. The overwhelming spread of technology and the growth of high finance has meant that the biggest gains are captured by people with technical knowledge and analytical skills, who are usually college-educated. Since the 1980s, when the current era of extreme wealth creation began, a key propellent of economic growth has been globalization, a catchall term for neoliberal policies that have reduced taxes, opened markets, supported international trade, and lowered barriers to entry. Essentially, companies have been able to go venue shopping around the world to locate parts of their operations in the cheapest locations. Although the relocation of jobs overseas has helped lift many lower-income countries out of poverty, technological innovation has meant that many of those jobs have not been replaced in the United States, especially those requiring lower skills. The resulting imbalance of power between companies and their blue-collar U.S.-based workers has allowed companies to gain more power to set wages, while reducing the ability of workers to form and sustain unions. As labor unions have weakened or disappeared entirely, workers have lost much of their bargaining power to seek higher wages, contributing to rising inequality, research has shown. Using micro-level data such as polls and household surveys, a 2018 study by economists from Princeton and Columbia found that strong union membership helped the lowest paid workers the most.29 In recent years, efforts by workers at Starbucks stores and Amazon to unionize have been contentious. The relatively slow progress of wage growth, even for skilled labor, has come into even starker contrast because of median pay ratios that companies have begun to publish. The pay of the chief executive of an S&P 500 company compared to a median employee was roughly 300 to 1. Thus, what is marketed as an inexorable result of economic progress can be seen at least partly to be aided by government policies.
Emily Bachel has lived for years on Highway 106, a 20-mile state route that hugs a natural waterway in Washington State called Hood Canal. About two hours west of Seattle, the canal carries water inland from the Puget Sound Basin. The area is fringed by lush forests of elegant Douglas firs, its eerie beauty familiar to fans of Twin Peaks, the David Lynch television drama series. Visitors can catch glimpses of the Olympic and Kitsap Mountains. About 70 miles in, the canal turns back toward Puget Sound; on a map, its 180-degree turn resembles a fishhook, or a bent elbow. Locals call it the Great Bend. For decades, some of Seattle’s wealthiest families—the Nordstroms, the Gateses—have vacationed in Hood Canal, flying in on their seaplanes during the summer months. Gates grew up spending summers with his siblings and extended family at a family vacation compound with five cabins dubbed “Cheerio Camp.”
A lifelong resident of the area, Bachel would often drive past a resort called Alderbrook on her way home. Originally built in 1913, Alderbrook, nestled in the crook of Hood Canal’s elbow, is one of Washington’s oldest resorts and had changed ownership many times. Its current owner, Jeff Raikes, a multimillionaire who was then a senior executive at Microsoft, had bought the building in 2001 from Crista Ministries, a nonprofit that used Alderbrook as a conference center for three years, with the goal of upgrading it into a luxury resort and spa. With interiors redesigned to look like a cozy chalet, the Alderbrook Resort and Spa opened in 2006. That fall, construction workers closed off a strip of the highway that ran in front of the resort, causing a daily nuisance for Bachel and other residents, but also feeding her curiosity. Wondering why a perfectly serviceable road was being dug up, Bachel, then in her mid-fifties, brought the construction to the attention of a reporter at the local newspaper.30 “The rumors are that Bill Gates, who has property adjacent to the resort, is actually having a tunnel put under the road to simplify his access to the road,” she wrote to the Kitsap Sun. “Could you verify this?” Bachel’s information turned out to be mostly accurate. The Alderbrook property was right next to the vacation compound of Gates, one of Raikes’s closest friends. In 1998, Gates and Raikes had tried to buy Alderbrook but were outbid by Crista Ministries, which paid about $6 million for the property.31 Two years after the resort opened, Raikes became the chief executive of the Gates Foundation, a position he held until 2014.
Highway 106 cut through the Alderbrook property, putting its parking lot on the other side of the road. The problem could be solved by rerouting the highway to move the lot to the same side. But that meant the Gates vacation compound, which contained five homes, was going to be split into two. To fix the problem—and avoid the prying eyes of resort visitors curious about the billionaire next door—Gates reportedly paid the State of Washington more than $2 million to have a special tunnel built under the rerouted highway to connect the compound. The project took advantage of a state law that encouraged public-private partnerships, including to “facilitate the safe transport of people or goods via any mode of travel.” It was managed by Watermark, the Gates entity that managed his personal affairs and real estate, and took about four years to complete. Although the state owns it, Watermark has exclusive use of the tunnel because an air space lease gives it right of way. Hidden by a thicket of vegetation, the tunnel is difficult to spot from the highway, but a paved, winding road hidden behind a discreet wrought-iron and wooden gate connects it to the highway. If guests of Alderbrook veer too close to the Gates property, the hotel’s security guards speedily arrive on golf carts to shoo them away.
Bachel—who often saw the Gates children splashing about in the water from the Hood Canal side, while Gates sat in a chair and read, and armed security guards paraded up and down—said it was generally known in the area that Gates had the state highway moved for his convenience and privacy. “Bill was the instigator and he funded it,” she said.
When Musk paid $44 billion for publicly traded Twitter in 2022 before renaming it X, it was one of the largest “take private” transactions in history, right up there with the $45 billion purchase in 2007 of a Texas utility called TXU, later renamed Energy Future Holdings, by KKR and a group of other private equity firms. Musk, ostensibly, had little reason to buy Twitter other than having decided that he could do a better job running the social media platform that he cherished as a way to communicate directly with his fans. He didn’t like the way it clamped down on free speech, calling himself a “free speech absolutist,” so he decided to buy it with his spare cash—plus a few more billions borrowed from banks—and seemingly without a plan. Thus, the company formerly known as Twitter is now a billionaire’s plaything that responded to media inquiries with a poop emoji for a while.
Gates’s $2 million tunnel and Musk’s $44 billion purchase of Twitter are two examples of the ways in which billionaires often appear to be able to bend convention to fit their peculiar needs, feed their obsessions, act on their whims, and impose their preferences—in ways big and small, splashy and covert, dangerous and benign. Displays of wealth are not new among the wealthy. Before Henry Ford reimagined the automobile for the masses, they were leisure toys for the showy robber barons of the Gilded Age. In 1897, a hall of New York’s famed Waldorf Astoria hotel was transformed into the facade of the Palace of Versailles for a ball hosted by the socialite Cornelia Austin. Some of the world’s most expensive art sits in the homes of billionaires—paintings that hang on walls of temperature-controlled, museum-like rooms, and sculptures that were hauled directly from an excavation site. In the fall of 2015, the hedge fund billionaire Ken Griffin paid half a billion dollars to a charitable foundation owned by a fellow billionaire, the entertainment executive David Geffen, for two masterpieces of Abstract Expressionism—a 1955 oil painting by Willem de Kooning and one of Jackson Pollock’s drip paintings. Both paintings were on loan to the Art Institute of Chicago, where Griffin’s firm Citadel was based, but the museum lost the paintings to the Norton Museum of Art, a museum in West Palm Beach, when Griffin moved to the Florida city during the pandemic. Griffin had earlier given the Norton $16 million to fund its expansion, the biggest donation in the museum’s history and one that changed its entire trajectory; Griffin will have a building named after him.
Then, there are the private jets and yachts, de rigueur among the billionaire crowd. They aren’t cheap. A customized Gulfstream G8 runs around $100 million, according to David Friedman, who cofounded a firm called Wealth-X in 2010 to provide wealth data to luxury companies, real estate companies, and others trying to sell products to high-net-worth individuals. An Airbus Corporate Jet (ACJ) can start at $100 million, and a Boeing business jet is similarly priced. Mega yachts can cost as much as $500 million. “It’s a smaller group of people driving more influence through their purchasing power,” he said. “A $100 million price tag means that most likely you will need to tackle someone with greater than a billion in net worth to have that amount of liquidity.” Friedman also cofounded WealthQuotient, which aims to map out networks of the wealthy that can help firms pitching services to them to win referrals.
The frenzy of yacht and jet buying has made billionaires among the world’s top polluters. The world’s 20 top richest people in the world (most of them American) had an average carbon footprint of 8,190 tons per individual in 2018, according to one analysis.32 The estimates included the residences of the billionaires as well as their yachts, planes, and helicopters. By comparison, Americans on average emitted 15 tons of carbon dioxide that year. The average around the world was even lower, at five tons or so per person. Even Gates has been called out for his hypocrisy. The philanthropist, a leading voice on climate change, owns at least two customized jets that fly him around the world, often to deliver lectures on how to combat global warming. Gates has said he buys carbon offsets from a company equal to his footprint.
Unlike private planes, which are often used for business travel, mega yachts—essentially floating mansions—appear to be little more than advertisements for billionaire profligacy. At more than 417 feet in length, Koru, the luxury schooner custom-made for Bezos, is like the average cruise ship you might see lazily skimming the surface of a river, dotted with dozens of tourists, rather than a private boat. It is so massive that a historic bridge in Rotterdam was almost dismantled to let it through, although local authorities decided against it at the last minute, deeming it too risky from the point of view of public opinion. And as if the skies and oceans weren’t enough, billionaires are increasingly pursuing private efforts to explore and even colonize space and planets and push deep-sea exploration.
The past decade and a half has brought intense scrutiny on how big money is spent, and how the rise in extreme wealth allows billionaires to increasingly exert themselves in our society and polity, as well as in culture, media, and civic life. The wealthy have always tried to get their favored candidates elected by contributing to their campaigns. But billionaires appear to have essentially captured American politics. An analysis by the Brennan Center for Justice, a nonpartisan law and policy institute, found that billionaires accounted for 15 percent of contributions for the 2022 midterm elections. What’s more, the 100 biggest donors in that cycle as a group spent 60 percent more than all contributions made by small donors, or those who gave $200 or less to a candidate.33 Billionaires on both the right and left spend enormous amounts of cash on politics.
The billionaire brothers Charles Koch and his late brother David have funded a network of political campaigns, nonprofits, and other institutions to promote libertarian causes. One of the goals of their advocacy group, Americans for Prosperity, is to “empower every American to pursue their version of the American Dream.” But the group is better known for its essential stranglehold on Republican politics. During the 2020 election cycle, the group poured $500 million into electing Republican candidates. For 2024, the network is putting money into making sure that former president Trump does not win the Republican nomination, The New York Times has reported.34 In late 2023, the Koch network endorsed Nikki Haley, the former governor of South Carolina, for the Republican primary contest for president, although she ended her campaign in March 2024. The billionaire Peter Thiel, who made his money as an early investor in Facebook and is also a cofounder of PayPal, has spent tens of millions of dollars backing Republican candidates through whom he can reshape policies to fix America. An avowed libertarian with a penchant for launching vicious attacks on left-wing politics, Thiel bankrolled multiple Republican candidates during the 2022 midterm elections, including Blake Masters and J. D. Vance. He is also a backer of Strive Capital, the firm of investor Vivek Ramaswamy, who ran unsuccessfully for the Republican nomination for the 2024 presidential election on an “anti-woke” platform. On the side, Thiel has also pursued a Maltese citizenship and supported “seasteading,” a movement that seeks to build colonies on international waters out of the bounds of national governments. Harlan Crow, the billionaire real estate developer, and his wife, Kathy Crow, have donated millions of dollars to right-wing groups and are said to focus on efforts to shape law and move the judiciary to the right. In recent years, their political contributions went almost entirely to Republican candidates, according to an analysis by OpenSecrets. The extent of their influence in political and judicial circles came to light in the spring of 2023 following a ProPublica report about how Supreme Court Justice Clarence Thomas took luxury vacations on Crow’s dime and flew on his private jet without disclosing the largesse.35
On the left, George Soros is among the best-known political donors, who has contributed millions of dollars to the campaigns of Democratic candidates through his Open Society Foundations, and engaged in advocacy of left and liberal causes, in particular to sustain democracy, civic engagement, and voting rights. Another Democratic billionaire, John Arnold, has spent millions, some through philanthropy and others through advocacy, to promote liberal causes. The hedge fund billionaire Tom Steyer and Michael Bloomberg, the former billionaire mayor of New York, have donated hundreds of millions of dollars to Democratic candidates. The two men also spent around three-quarters of a billion dollars on their own presidential campaigns.
Increasingly, we have come to depend on billionaires to rescue our media organizations, our cities, and even our sports teams, making them seem indispensable to our cultural and civic lives. More than 40 billionaires on the Forbes 400 list own sports teams, including the hedge fund investor Steve Cohen, who owns the New York Mets baseball team, and Arthur Blank, a cofounder of Home Depot, who owns two Atlanta teams.36
In 2019, John Henry, the billionaire co-owner of the Boston Red Sox, asked the city to rename Yawkey Way, a short street leading to Fenway Park, the arena where the team plays. He did so to scrub the Red Sox of its association with Tom Yawkey, a wealthy industrialist under whose ownership the team was last to integrate Black players. Henry has also been a hometown hero in other ways. He paid $70 million in 2013 for The Boston Globe, the illustrious but ailing newspaper. He is also part owner of the Harvard Book Store, the centerpiece of Harvard Square in Cambridge. With his help, the 90-year-old store is undertaking an expansion. Other billionaires have swooped in to buy newspapers too, including Jeff Bezos, who paid $250 million for The Washington Post in 2013, and Patrick Soon-Shiong, who owns the Los Angeles Times.
One of the best examples of how a single billionaire can get deeply enmeshed in a city’s affairs is Dan Gilbert, the cofounder of Rocket Mortgage, one of the nation’s largest mortgage lenders, and a real estate developer. For years, Gilbert’s relationship with Detroit, his hometown, has been one of reciprocity. Through his companies, Gilbert has invested hundreds of millions of dollars in Detroit and received handsome tax breaks. He has been called the “shadow mayor” of Detroit because of the influence he wields.37 With an estimated net worth of more than $20 billion, Gilbert has almost single-handedly reshaped and revitalized Detroit’s downtown neighborhoods through his Bedrock real estate company, earning the area the nickname Gilbertville because of the roughly 100 buildings it owns there. The restored and upgraded buildings have brought big tenants to the area, turning him into a crusader for Motor City and its biggest cheerleader.
Gilbert also cultivated close ties with the Trump administration. In 2019, ProPublica reported that one of the downtown areas where Gilbert owns properties was labeled an “opportunity zone” under a Trump-era program meant to jumpstart economic activity in poor neighborhoods by offering tax breaks, even though the area was too wealthy to be classified as such.38 In 2022, the Detroit City Council approved a $60 billion tax abatement for one of Gilbert’s skyscraper projects, after the billionaire’s company said its building costs had increased. Bedrock made some concessions to obtain the abatement, but the approval came over objections from some residents and community groups who argued that taxpayers were forgoing money that could have been directed to more pressing city needs. Several Detroit news outlets, which follow Gilbert’s entanglements with the city closely, reported that five city council officials to whose campaigns a Gilbert-affiliated political action committee donated to were among those who approved the generous tax break. At the same time, Gilbert, who also owns a majority stake in the Cleveland Cavaliers basketball team, donated $500 million through his family foundation to help erase property tax debt for distressed Detroiters that had led to thousands of foreclosures, working closely with Mayor Mike Duggan, a Democrat.
Inequality is inherent to the human experience, not least of all in market-based capitalism. But the more that billionaires make news for their outlandish purchases and ambitions, their rescues of flailing newspapers and spendthrift cities, their occasionally splashy philanthropy, their personal involvement in decisions of national and global importance, and the selfish hands with which they often direct politics and policy, the more numbed we become to their wealth, their numbers, and their behavior. The danger, then, is that vital socioeconomic and political questions are being effaced from the public forum, and there appears to be little need for debate on how much inequality should exist in a land of opportunity.