For bucks’ sake: the rise of self-made billionaires
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What is the main topic discussed in this episode?
The Economist.
Hello and welcome to The Intelligence from The Economist. I'm Rosie Bloor. Today on the show, a new crackdown on scam compounds in Cambodia and lessons for Britain's Prime Minister from Larry the Cat. First up, though.
Billionaires have never exactly been popular. Today, they're positively loathed.
The American people are standing in opposition to oligarchy.
Do you think that billionaires have a right to exist? I don't think that we should have billionaires because frankly it is so much money in a moment of such inequality.
Why is anti‑billionaire sentiment rising and who is interviewed about it?
We need a tax system that truly accounts for the fact that there are people who have amassed huge wealth.
And not just by us ordinary folk, but many politicians too. Some talk about their mere existence as a policy failure. But just as the political class thinks it's hit on a winning message, something unexpected is happening. Billionaires are becoming more legitimate.
There is clearly a very big surge in anti-billionaire sentiment.
Callum Williams is our senior economics writer.
But what we have found is that there's a growing number of billionaires that are deriving their wealth mainly by providing genuinely useful goods and services or employing millions of people rather than by taking advantage of the system.
So there's a lot of anti-billionaire sentiment, but not all of it's warranted. How did you reach that conclusion?
Okay, so the first thing to say is this bit of research was not about whether billionaires are good or bad. We're just looking at whether they're getting better or getting worse over time. And to do that, we look at where billionaire's wealth comes from. And broadly speaking, we divide the source of their wealth into the worst kind and the better kind. Now, the worst kind is when someone's made a lot of money from, say, for example, being in the mining industry or being in natural resources, being in casinos, that kind of thing. The kind of industry where you need political favors to get stuff done. And we also in that bucket include people who've inherited most of their wealth. Then in the other bucket, we have the good or the better billionaires.
And now these are the billionaires who have made their money by creating goods and services and companies that people genuinely like and do deliver some good to the world. You can think of it as, on the one hand, uncompetitive wealth, the oligarchs, the heirs. And on the other hand, the competitive billionaire wealth, so people like Taylor Swift, Lionel Messi, the founder of Uniqlo. And basically what we find is that the competitive sector is becoming more and more important over time, and the uncompetitive sector is becoming less and less important over time.
So these competitive billionaires, those who have made the money for themselves, hopefully without ties or gaming the system, where have they made their money from?
So it's a bunch of different sectors. You might think it was all to do with tech. And yes, there are a lot of people in tech who've made billions of dollars. I mean, Elon Musk being the most obvious example, but there's loads of them. But what I found quite surprising is that actually the tech share of billionaire wealth is not at an all-time high. It's actually slightly lower today than it was in the early 2000s. So what is actually happening is that it's a range of different sectors that people are making vast fortunes in. Yes, you do have the people in entertainment, broadly defined in music and sports. They're one sector. You have a lot of people in finance who've done extremely well. But then you have a bunch of people who have made vast fortunes in industries that don't get a lot of attention.
So, for example... The founders of Panda Express are multi, multi billionaires. Panda Express is a place that you get noodles and rice for $10, $15. The founder of Uniqlo has tens of billions of dollars. So it's lots and lots of people like this rather than it all being tech or all being oligarchs.
So if it's not the system, why are we seeing such a rise in the self-made billionaire?
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:03–1:07
2
Why is anti‑billionaire sentiment rising and who is interviewed about it?
1:07–12:50
3
How did researchers classify 'good' versus 'bad' sources of billionaire wealth?
12:50–20:20
4
Which industries are creating more self‑made billionaires beyond big tech?
20:20–24:54