How to Tell Good Billionaires from Bad Ones: Trump, Zuckerberg, Gates, and Buffett

How to Tell Good Billionaires from Bad Ones: Trump, Zuckerberg, Gates, and Buffett

 

Ruchir Sharma, head of emerging markets at Morgan Stanley and a longtime columnist for Newsweek, the Wall Street Journal, and the Economic Times of India, is looking at economies in a unique way — he’s studying certain nations’ billionaires. “That really tells you about how a country is evolving, and where income and equality is becoming too big an issue, and where could the population really begin to revolt, in some way, against wrong kind of wealth creation,” he says.

He used three metrics to sort the billionaires: the number of billionaires in a country as a share of the total economy, whether the wealth being created is good or bad, and the number of inherited billionaires in that economy. If any one of these metrics is out of balance, Sharma believes it can hint at trouble on the horizon (if it isn’t present already).

The division of billionaires into good and bad categories is particularly interesting. What makes a billionaire good or bad? According to Sharma, good billionaires, like Bill Gates and Mark Zuckerberg, generate wealth through skill and innovation, which earns them respect. Bad billionaires typically come from industries such as real estate and finance markets, and their wealth is perceived to be a result of gaming the system, good government connections, and other unfair advantages. The balance of good and bad billionaires needs to be even, or ideally tipped towards good, for a society to thrive.

Sharma also points out that some of America’s wealthiest people, such as Warren Buffet, Donald J. Trump, and many a sneaker-wearing tech god, have succeeded in being ‘blue collar’ billionaires, able to speak and appeal to the masses despite the massive income inequality gap. In nations where the billionaires are dominantly bad, like Russia or Mexico, wealth creation is resented and it would be highly unlikely that a billionaire would run for office.

Ruchir Sharma’s book is Breakout Nations: In Pursuit of the Next Economic Miracles.

[BigThink]

August 20, 2016 / by / in , , , , ,

Leave a Reply

Show Buttons
Hide Buttons