Lifestyles of the Rich and Infamous

A couple of times in this series on degrowth I've talked about billionaires - about how economic growth is actually fueling increases in rich people's yacht money, not the basic needs of ordinary people, and about how our social fragmentation and the control of our media by similarly rich people means we are largely unaware of this fact and frightened to challenge the status quo for fear of losing our precarious security.  In this post I'd like to talk in a bit more detail about our billionaire problem.

I consider myself wealthy.  After over four decades of professional careers and now in our 60s, Lois and I are debt free, own the house we live in and have a healthy superannuation balance.  We can look forward to a secure, comfortable retirement.  We are better off than 80% of the world's population.

Now, we have simple tastes, we don't need a vast amount of money to live on.  I understand that some people have more expensive hobbies than we do - they want to travel the world, eat out at fancy restaurants or buy fine wines, own an expensive car or two, or a boat.  I don't know, what expensive things do people like to do?  Lets say that some people might feel they need (or at least, would like) twice as much as what we have, or three times as much, or five times as much?  Surely nobody could really need more than about $10m in wealth?  $15m?  $20m?  

I find it hard to imagine what I would possibly do with such sums of money aside from give it away.  This is, presumably, why I was never motivated to climb the corporate latter or switch professions to something that would pay me more money.  This is also why I have so much trouble understanding billionaires.  Honestly, what would you do with a billion dollars?  Yet there are, according to Statista, over 3,000 billionaires on the planet.  80% of them are men and 90% are 50 and over.  Fifteen people, including 12 Americans, have wealth over $US100b, led currently by Elon Musk whose wealth was estimated at $US242b in July 2024.  Australia's mega-oligarchs are poor by comparison - we have about 150 billionaires here according to the Australian Financial Review and the richest of them, mining magnate Gina Reinhart, is worth a measly $A40b.

These numbers need to be read with a large dose of salt.  After all, your average billionaire's financial affairs are not exactly transparent.  Their wealth is hidden in dense forests of companies owned by other companies, trusts, offshore entities and so forth designed by highly paid lawyers and accountants to ensure they pay the least possible tax.  Why do they need to do this, when they could easily afford to pay?  You would need to ask them that, but they wouldn't tell you.  Hence Forbes lists only 50 Australian billionaires and Gina's wealth is 'only' $30b according to their estimate.  Clive Palmer is 6th on the AFR's list with $22b, but 13th on the Forbes list with a mere $4b.  

Is your mind numbed by these numbers?  Mine certainly is.  Perhaps this glorious graphic will help!  Once we get up to the number of zeroes involved in this kind of wealth we are generally out of our depth - we understand how to do the sums, but can no longer compare them to anything tangible in our experience.  Even a single billion dollars is enough to make an incredible difference in the world.  There are people on this list who could single handedly solve world poverty and not even notice the dip in their own funds.  Yet they don't.  In fact, they fiercely resist any efforts to force them to make even a miniscule contribution to such social goals.  

Whether someone has $30b or $40b makes little practical difference to that person's life.  If it was one or the other, would they even notice?  What do they get for their troubles by raking in more and more billions, and continuing to do so into their old age?  Rupert Murdoch, whose net worth is estimated at over $US20b, finally stepped down from active management of his media empire in 2023 at the age of 91.  Yet even now he is trying to ensure he can control the business from beyond the grave, joining forces with his son Lachlan in a court-case to try to alter the conditions of a supposedly irrevocable trust to exclude his other three older children from the running of the company when he is gone.  He seems unlikely to succeed but why would he even want to?  Surely his children are old and smart enough to sort out their differences and make their own decisions about the future of the business?

The only conclusion I can come to is that billionaires are not really like the rest of us.  Having a billion dollars, or $20b, or even just a lousy $500m, rewires their brains.  They are no longer working to support their families - that was well and truly covered after the first $10m or $20m or (lets be extravagant here) $100m.  After that it doesn't seem to be about the money at all, it's about the power.  It's about being able to fly from country to country at the drop of hat, see something you like and buy it on the spot, pay lawyers to silence any critics, pick up the phone to any world leader and have it answered.  It's about being accountable to no-one while thousands of people are accountable to you.  

Of course not all of them handle this situation the same way.  For instance, in 2008 Bill Gates stepped down from his active role running Microsoft to focus instead on running the Bill and Melinda Gates Foundation, to which he and Melinda had contributed $36b by 2018.  They didn't impoverish themselves to do this - Gates is listed at number 8 on the Statista list of billionaires - but at least he is trying to use some of his wealth to benefit poor people.  Warren Buffet, who is about as rich as Gates, has said he will leave 99% of his wealth to charity when he dies (he is now 94, although the money will be vested in a charitable trust managed by his three children) and founded the Giving Pledge with Gates, encouraging billionaires to pledge to give away 50% of their wealth.  Yet in 2024 he was still as wealthy as Gates.  How does that work?  

If you dig, you find that most billionaires have charitable foundations they put money into.  These foundations can do a lot of good things.  The key similarity with their business dealings is that they retain control.  Like in business, they have staff and advisors who do the work, but they set the agenda and pull the strings.  At the same time, they fiercely resist paying more tax - in fact, one of the joys of these foundations is that donations are tax-deductible.  They substitute charitable donations for paying tax and they, not our elected governments, get to decide what is in the public interest.  Whether it's a fleet of yachts or a fleet of charities - indeed, why not both? - they are running the show and the governments and NGOs of the world can only kiss their ring.

***

A little while ago I read an article about Mark Zuckerberg's Hawaiian estate (it's now behind a paywall but you can get the gist here).  Apparently since 2014, Zuckerberg and his wife Priscilla Chan have been progressively buying land on the island of Kauai and now own about 1400 acres (around 560 ha).  In the process they attempted, unsuccessfully, to dispossess a substantial number of locals who held traditional title to land within this envelope - not sure where that stands now and how these people get access to their land which is enclosed within a secure boundary wall.  

The details of what they are doing on the site, which they call Koolau Ranch, are a little murky because the large number of people who have worked on the estate over time are bound by strict confidentiality clauses, and the area itself is surrounded by a six-foot wall and protected by security guards.  However, details have leaked out, people have surreptitiously flown drones and looked at satellite imagery, filled in the blanks with a certain amount of gossip and speculation, and it seems the estate includes the following.

• Two massive mansions surrounded by around ten other buildings, which between them have over 30 bedrooms and various other luxury facilities.
• A forest area which includes 11 treehouses connected by rope bridges.
• A 450 sq m underground complex which may or may not be appropriately referred to as a 'bunker' but it has it's own food and power supply, an escape hatch and a blast-resistant door so you decide.
• A dense network of security cameras covering everything on the site.  
• A network of tunnels which connect the mansions and the bunker/not-bunker, as well as a number 'blind doors' on the surface designed to look like parts of the walls.
• Its own herd of cattle and diverse array of food crops.
• A large part of the site left as 'natural landscape'.

It's not clear what all this is for.  Perhaps it's not really for anything, just that when your net assets are over $100b you can afford to indulge every momentary whim.  Apparently they have spent something north of $US350m on this piece of real estate alone which is about what I might earn in a few hundred lifetimes but which they would barely miss if it was washed away in a tsunami tomorrow.  

On the other hand, it's not hard to read this as a kind of billionaire doomsday prepping.  There is a bunker, hidden inside a secure compound, with its own power, a large food supply, and a set of agricultural resources onsite.  It could well be that the Zuckerbergs are getting ready to ride out the apocalypse in their secure bunker, then emerge cautiously into their walled and guarded compound to live off the produce of their farm.

If this is the case, and doomsday actually does come with the sort of sudden cataclysm that this type of facility is designed for, then I hope that in the meantime they are being super-nice and generous to the Kauaians, because they will find a completely different world greets them when they crack open the bunker door.  Come the apocalypse, their billions will vanish in a puff of smoke.  The security guards on the gates will no longer have reason to stay at their posts once the wages stop, and they are likely to be letting their family and friends in to eat the local produce to ward off starvation.  Whether or not they let their former bosses live and share the food when they finally open the door will depend entirely on what they think of them as human beings, and on their own level of compassion, and not at all on the billions the Zuckerbergs once owned.

***

All this makes me wonder: does being a billionaire change your brain?  Once you have all that money, do you forget what it's like to not have any?  Do you lose the ability to imagine being poor and homeless, and to empathise with those who are?  Or is this lack of empathy - or perhaps lack of imagination - what it takes to become a billionaire in the first place?

Of course part of the answer is that many of them have never been without money.  Zuckerberg's parents didn't have the kind of wealth he has acquired since but his mum was a psychiatrist and his dad a dentist and they could afford to send him to Harvard.  Elon Musk grew up in a wealthy South African family, Bill Gates' parents were bankers, Gina Reinhart inherited a booming mining business from her dad, Clive Palmer's dad had travel, retail and media interests, Harry Triguboff's father made a fortune profiting from WW2 in China, and so it goes on.  Of course there are exceptions - Jeff Bezos' parents were penniless teenagers when he was born, although it doesn't seem to have made him in the least bit sympathetic to the workers in his warehouses who have to accept minimum wages and having their toilet breaks monitored as if it were a prison - but the 'rags to riches' story is usually bullshit.  The true archetypal story is 'riches to more riches'.  

This leads naturally to the question of why we, as ordinary citizens, should allow this situation to continue.  Perhaps you might like to think, 'well, good luck to them, live and let live'.  That would be fine, except that their actions have consequences for all of us.  Consider this, from a recent report by Oxfam:

• The richest 1% of the world's population (around 77m people) are responsible for 16% of all global emissions, more than the poorest two thirds.
• The richest 10% are responsible for over half of global emissions.
• The transport choices of our billionaires alone (their private jets and super-yachts) chew up obscene amounts of the world's carbon budget - Elon Musk's two private jets alone are responsible for emitting as much greenhouse gas in a year as the average global citizen emits in 834 lifetimes, and as a member of the poorest 50% emits in over 5,000 lifetimes.

Of course we all have responsibilities for our part in the climate crisis, but while you are busy riding your bike and taking the bus remember what Musk and his cronies could save just by decommissioning their jets and flying business class.  Then wonder to yourself, are these people paying a carbon tax to mitigate this obscene pollution?  You know very well they are not, because they have used their obscene wealth to lobby and spread disinformation  to make sure such things don't exist.  Do they pay any tax on their obscene wealth whatsoever?  Once again, the answer is 'probably not', because they have worked hard to manipulate tax laws and then exploit them to hide their wealth.  

Much of the efforts of these people - the business model Rupert and Lachlan Murdoch are desperate to perpetuate, Musk's purchase of Twitter and the US election, Bezos' purchase and muzzling of the Washington Post, Gina Reinhart's extensive funding for the IPA and Advance, Clive Palmer's obscene spending on election advertising - are explicitly aimed at sustaining and extending this unfettered privilege. All at the price of such a small proportion of their overall wealth that they barely notice it's gone.  

These people are literally parasites, using up scarce global resources, giving little or nothing in return and fighting to keep and grow every tiny scrap of privilege.  This is the world our politicians are enabling when they say 'I won't take climate action (...raise taxes...increase social security payments...limit rent increases...any other justice initiative you think of) if it harms the economy'.  It's rich people's yacht money and it's literally trashing the planet.  If we want to fix the climate crisis before it gets out of hand, we need to urgently right-size our billionaires.

So let me return to where I began.  Our challenge is not to bring about degrowth.  Degrowth will bring itself about as we use up more of the earth's resources than she can replace.  Our challenge is to ensure that as we de-grow the losses come out of the pockets of the rich, not the bellies of the poor.  We should never again fall for the line that 'a rising tide lifts all boats'.  This is only helpful if you happen to own a boat, and we all know who owns those.