In the 14 months since April 2020, as the planet reeled from the COVID crisis, the number of world billionaires increased by 660 to 2,755 (24 new ones in the UK alone). Sandeep Sachdeva writes that billionaires can and should be doing much more to help solve the humanitarian crisis of hunger and poverty exacerbated by the pandemic. He classifies billionaires by the type of reaction they may have when asked to share more of their wealth.
At the age of six, my father had to resort to stealing food to feed his siblings. They had just arrived as refugees in the small town of Saharanpur in North India after the India-Pakistan partition. As they journeyed to India with a large caravan of migrants, separated from their parents, they were protected until the border by a gentleman who bartered his personal car in exchange for their lives. They chose Saharanpur, as they knew, and had hoped to receive help from, a few people there. But that did not materialise, resulting in their fight for survival. This, of course, became family folklore—and it always made me wonder why some are so generous and others not as much and what a world rich in generosity of the heart would look like.
It was this thought—reinforced by the inequalities exposed by COVID-19—that prompted me to pen the ‘What else can billionaires do?’ blog in April 2020, during the early days of the pandemic. In it, I recommended, perhaps naively, ideas for the billionaires of the day to not only individually and collectively support the immediate COVID-19 relief efforts but also ‘not to let crisis go waste’ and drive transformational change.
I had optimistically envisioned a world where the extremely wealthy would start leading by example and decide to choose to live their lives differently; make their business and personal decisions in the interest of the world’s people and the environment and not myopically only for the highest return on capital; and also share much more of their wealth with the people who work for them. Surely forcing a higher tax, necessary though that is, which many will game the system to avoid, can’t be the only way to reduce inequality?
COVID-19’s impact on the billionaires and the poor—one year on:
- The number of billionaires increasedfrom 2,095 to 2,755.
- Their wealth increased from USD 8 trillion to USD 13 trillion. In the US, the top 0.01% now hold almost 10% of the national wealth compared to the bottom 50%, who hold less than 2%. In India, billionaire wealth is the equivalent of over 17% of the country’s GDP, one of the highest shares in the world. In the UK, the number of billionaires increased by 24 to 171.
- Several billionaires stepped up to help but compared to their resources and the scale of the pandemic, the stories appear insignificant. Their total donations likely do not add to the riches of the wealthiest of them all – Jeff Bezos, with USD 177 billion.
- At the same time, the monthly income for labour workers in India fell 62%,from INR 9,500 per month (USD 125) in pre-pandemic times to INR 3,500 per month (USD 45).
- In a series of surveysof mostly migrant workers in Gurgaon, India, conducted by our team at the Safe in India Foundation, we found 52% unemployment (May 2020); a 34% reduction in income even among those back into employment; and 82% had to borrow to survive, their top concern being money (June 2020). In May 2021, we called to check on 100+ injured workers we had assisted; 44% of them were back in their remote villages without work.
The five types of billionaires, their soliloquies, and a thought experiment with you:
In preparation for this blog, I shared a survey to gauge public opinion on whether the wealthy have truly done enough. Here is a summary of the results, with the full results accessible at this link.
Although 7% of the respondents to the survey shared that it was no one’s business to judge whether billionaires were doing enough to help, a majority—62%—stated that they can and should do a lot more. I, of course, agree with the majority.
In fact, I wonder, with as much empathy as I can muster: What do these billionaires think, in the wee hours of the night, of their extreme wealth? How do they justify this absurd imbalance in wealth distribution to their families—especially their young children, who hopefully still have some idealism left in them? Does it need a certain amount of arrogance to justify their disproportionate material success and not share its fruit generously?
When I imagine their soliloquies, I imagine them falling in one or more of the following five categories, not rigorously mutually exclusive and laced with my own biases, but indulge me here:
1. The “James Bond of Philanthropy” billionaire: “I am good, but I realise that I also got very lucky. I really see no reason I should have earned, year after year, hundreds, or thousands of times the annual income of my own staff or say a good doctor, teacher, nurse, soldier, or farmer. I must do something about it by redistributing my wealth NOW. I may not live long enough to see real change happen, and so I am in a hurry.”
Chuck Feeny, a ‘former billionaire’ who has given all his wealth to charity, may be one of them. In just the last few months, MacKenzie Scott has distributed over USD 4 billion in gifts to 384 organizations. Jack Dorsey famously created a USD 1 billion relief fund early in the pandemic.
2. The retiree-philanthropist billionaire:
: “I have been chasing profits for so long! My family and I can now afford to give away a few billion and still live comfortably. I will set up a foundation with most of my wealth and when I retire in my old age, I will spend my time at that foundation giving back.”
There are many billionaires who have pledged their riches. Some of them are reminiscent of this category.
3. The self-righteous billionaire: “Look how smart I am! When COVID hit, I knew exactly what to do to make the most of it. I deserve it! No sane sensible fellow has any right or reason to complain about it or tax me more. Don’t forget the number of people I employ. The government and the common folk can’t change the goalposts just because I am so good at what I do.”
4. The God’s-gift billionaire: “God gives us all only what we deserve! I am just an instrument in His hands. I will share some of it when God wants me to. Until then, He wants me to keep it and no ungodly man or man-made institution has the divine duty to increase taxes on my riches.”
5. The not-illegal billionaire: “I am part of a system that was not created by me, and it allows me and in fact encourages me to make billions. I do nothing illegal; my lawyers and accountants are paid to ensure legality and do what is needed (wink wink). It is the government’s responsibility to do whatever is needed for society, not mine. But it is my job to protect my business and my wealth at any cost.”
Which billionaires come to mind when you read these categories? Feel free to critique the rigour of this classification but also do try answering it to yourself or discuss with your friends and family, if not here in the public domain. If you have two minutes, please take this single-question survey on the top 10 billionaires and I will share the findings with you in the next blog. And if you find it a thought-provoking exercise, I also welcome you to share the survey.
There is another category of philanthropists that the global media would be hard-pressed to see: During the first wave of COVID-19 in India, when our teams at the Safe in India Foundation were distributing essentials, we met many poor people sharing their meagre resources generously. An old lady, Kashmira Devi, had given away half her cash of INR 1,000 (USD 13) to a young boy who needed the money to buy an extortionately priced bus ticket to get back to his family.
Do we, dear readers, know anyone, even among ourselves, who have given half their cash (forget half of wealth) to those that really need it, even at the time of a crisis? Would the world’s billionaires be able to do that, even though they would still be left with several billions? (The lack-of-liquidity argument is bunkum; investment bankers can structure that for a good fee.)
To me, the Sanskrit word for the riches ‘Sampannata’, has been about the bounty in our hearts as much as it has been about material wealth. Its opposite, ‘Daridrata’, has been, to me, not only about material poverty but also of the mind and heart. I vacillate on this spectrum myself. As the world gets materially richer, are we becoming poorer in our hearts and minds? Or is there still hope for us—billionaires or otherwise—to feel Sampann, complete, integral?
- If you are interested, the single-question survey on the top 10 billionaires can be found here.
- This blog post expresses the views of its author(s), and do not necessarily represent those of LSE Business Review or the London School of Economics.
- Featured image courtesy of Sandeep Sachdeva, NOT under Creative Commons. All Rights Reserved.
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I think there are almost no billionaires who really share with people who really need it. Attached list does mention a number of people who, often through foundations, do something for the poor but this is usually not related to the wealth they have.
Thanks Erik. Agree. There needs to be a step change in this given the huge and accelerating concentration of wealth.
Deeply insightful article . If one thinks about Indian billionaires a very rare soul will qualify for type 1 or 2 whereas one can think easily of many that fit the last category. I have actually seen in this second wave ordinary citizens (and of course the medical frontline) and the underprivileged stepping up to help even total strangers; so much more than the government (s) bureaucracy or the rich and entitled lot. Eg lower middle class women getting together to send free food to those under home isolation without any discrimination. It’s perhaps true that the real character of a person is how he/ she behaves in a crisis – in that context the rich and the well to do (like me) have failed in our civil and humane responsibilities .
Thanks Salil. You could be right that most wealth is justified not by any values other than the (often borderline) legality of such wealth-generation/concentration.
I hear this all the time from friends who find nothing wrong with the current state of capitalism and/or wealth concentration. In fact, it’s difficult to argue with them that laws were/are made to deliver to values that we, the human kind, want them to deliver and need to change. The latest efforts by EU/US governments to tax the global tach are in the right direction. UK’s judgement on Uber’s desire to keep its drivers as contractors and not as ‘workers’, ultimately losing at UK Supreme Court.
Sandeep v nice article ..but the real question is not how much they donate but where they donate..
Ash. Thanks. Thats a air challenge.
Personally, I think they are two separate issues – both quantity and quality are important. I agree that if they donate to ‘wrong’ causes (subjective of course and thats whole new debate), then the amount is not just immaterial but could be counter-productive. So, to me, personally, donations to NRA are worse than not at all.
Well said Ash! Political donations – there spelt out!
Very well written and a truly thought-provoking piece. Since the focus is on billionaires, I agree with your assessment of how little most of them have done for humanity during this pandemic…….. though on a related note, I still believe that the world has a lot of kindness and that is why the human race is still around. Thankfully, we are not dependent on billionaires for kindness….
Thanks Nav. That is indeed true and we see this kindness all around us and they sustain our spirit. Sadly, the billionaires are not setting enough of an example for the rest through real demonstrated action.
This obscene concentration of wealth and power at the top cannot end well. Their leverage over the legislative process , at least in the US, has led to vastly weakened employee bargaining powers and a tax code which favors the ultra wealthy. Their refusal to equitably share the wealth of their companies with their rank and file workers has also worsened the already stark inequalities . Amongst employee shareholders , a lion’s share of the growth of the market cap of these companies has gone to these folks and their cronies. We have one worthy billionaire who does not allow bathroom breaks for his workers but till recently was paying them poverty level wages leading many of them to be on government assistance. The sad part though , with all their wealth and power, these folks will also be unable to prevent the impending climate disaster even if they want to- an issue most of them actively contributed to or at best been largely blind to- this is too big to be resolved through these champions of shareholder capitalism
RKB. Thanks. Indeed the climate change challenge can not be addressed only by these individuals, but if they could come together, and work with large governments and multi-lateral institutions, it could be a game-changer.
Will they ever? I doubt that too as so many have their wealth dependent on exploitation of natural resources and either ignore/disparage the threat or conveniently leave the job of finding solutions to the government(s) and/or future tech by others. I just don’t understand why so many of them don’t get excited about taking on the challenge. Would it be not much more fun than doing the same old stuff making money, which can be done by their underlings?!
There is growing evidence that charitable donations add a warm glow to the donor’s personal brand and enhance their social recognition – both of which can influence the decisions of socially conscious investors and consumers. There are billionaires who give to be seen, and to reap the reputational effects of donations. Another motivation to donate comes from the received example of other billionnaires who have donated large amounts of money. The Giving Pledge is an example of such a bandwagon effect in donations. I’d call them ‘FOMO billionnaires’. A third category, possibly unexplored by the author, are billionnaires who want to leave a bequest or a legacy of their name for future generations (e.g., Vanderbilt, Rockefeller, Carnegie). Do these motivations fit into the typology described in this article?
Thanks Arun. Good points. Three new categories you state are worth thinking about:
“Look how kind I am”, FOMO and Legacy Seeking billionaires. I think you are hitting on something interesting. My sense is that it’s a different way of looking at their motivations. My typology is driven by ‘how they justify their wealth’ .
Personally, I have no problem with any billionaire of your three categories, as long as they do substantial change and give a lot lot more back both in philanthropy and changing the way businesses are run today.
Do let me know please if I am missing your point and then may be I can add more categories. Many thanks for the thoughts.
2. FOMO billionaires: Again the same argument as above. It wont be too bad if a few billionaires do this but do he right things.
3. Legacy seeling
I stand with Sandeep Sachdeva in my dream of a just, humane society which is free of discrimination due to caste, gender, ethnicity, religion. Discrimination, abuse, exploitation , hatred robs mankind of “peace”. Peace is crucial for social, economic progress and development.
Humanity needs a different life philosophy.
I have come across such a life philosophy which , named Nichiren Buddhism, which honours life & dignity of each being, not just human beings.
It’s a philosophy which invigorates self and works for world peace through the Soka Gakkai international ( SGI.org )
Thanks Ashok. Indeed most religions have a set of humane values built in. I wish people really followed the spirit of their religions. Instead, we see the opposite among so many who claim to be religious. I doubt any religion in the world, in its true sense, would not only condone extreme wealth but not actively ask to give it all.
Resonated with it as even though I work in the not-for-profit sector, I still struggle with the guilt of privelege though I am very very very far from being a billioanire 🙂
My mum always used to say, the ones who have wealth can never have enough of it and so the increase in daridrata that the writer mentions.
Jyotsna. All power to you for even acknowledging your guilt. That can only bring good IMHO. I wish more billionaires felt as guilty and recognised the daridrata of their hearts and minds, and moved from the last three categories to the first two, and hopefully to the first one – James Bond of Billionaires.
It’s an excellent blog … it very clearly articulates your views on your expectations from billionaires which are very similar to the views expressed in Sanatan Dharma texts – Gita and Upanishads.
In my view giving has no linkage to your wealth, only to your mindset.
That also fits with your views about different types of billionaires. They come from cross section of society with different attitudes to giving. Some could be givers, some not. A combination of wealth and a strong attitude of giving make a very fortuitous combination for the benefit of society.
Well said Sampat. It’s indeed the mind-set that we need to find a way to challenge and change it to align with these spiritual values. Personally, the society needs to challenge this extreme concentration before a revolution of some kind (or war over resources) becomes an inevitability.
I like the central thought. However, do not agree with almost insisting on it in a moral kind of demand. Such thoughts and emotions arise in people not from their resources but from development of their inner self. It is a resource agnostic deed as you yourself cited in the example of an old lady.
Also, we need a category to fit in a middle of the roader or even bits and pieces of everthing kind of billionaire. There may be quite a few in there.
Anyway, good job. Keep at it.
Thanks Anand for agreeing to the central point of wealth re-distribution. Good challenge.
Is this a moral demand? Yes it is. I think its times we, the beneficiaries of the same system, stop being shy of demanding human-value based demands from extreme wealth holders and start judging harshly the process and holders of such extreme wealth concentration which is clearly not acceptable.
Middle of the road category is a good point. Let me rethink that. Avoided it to force choice:-)
Nice article! We may not be billionaires, but relative to some person somewhere, we must be like one! So maybe the question to ask is why do we not give away most of our wealth? Strictly speaking, most of us could live quite comfortably with some fraction of what we have. So why don’t we? There may be some interesting answers there through some honest introspection!
True that! The fact that you chose to apply these categories to yourselves speaks to your own personal integrity and conviction. Kudos!
Sir Nice Article ! Proud of you ! I am Journalist in Maharashtra . Salute you !
You are very kind Ashok. Do spread the word. Let’s see what people say in the survey. We could well be wrong and majority may not have a problem with this issue.
Billionaires are inclined to be greedy and most selfish. A few like Narayan Murthy have felt the pain of the poor along with questioning their own luck and need for retaining their wealth or passing it on in the family.
Sadly, we have made greed a desirable trait! I say ‘we’ as at 50+ year of age and having been in several leadership positions, we have encouraged greed ourselves. The billionaires are just at the top of the pyramid, greediest of all. I just hope that their greed is satiated now and they move quickly to repairing this system based on excessive greed. Short of a revolution, I don’t expect governments to be able to do that.
Great job on the article which is thought provoking. I have followed the exploits of Gates and Buffet and their involvement with initiatives like clean water, healthcare and climate change that will ultimately have a positive impact on the poor. Zuckerberg paid for a brand new wing of San Francisco’s General Hospital which is used primarily by those in the lower income bracket. However, he also saved a favorite local neighborhood restaurant by funding it during the pandemic. The only people that eat there are those for whom money is not an issue. Somewhat contrasting examples but I guess in the end these people pick and choose their targets based on a number of factors that go beyond the wealth gap. I tend to favor Gates and Buffet over Zuck in that regard. The others you listed I know little of them. Keep up the good work Sandeep!
Thanks Chris. Those are great stories I was not aware of. Personally, I still think they are small compared to their resources, ability and power to create change. Each one of them has the power to change so many business practices that are detrimental to humanity and nature. I struggle to find those examples.
Agree re Mark Z, who apparently wants to change education but his foundation is doing relatively marginal stuff while he is busy growing a business model which is doing more harm than good for people. Why is he waiting to get old to do more or just not hand over a large part of his wealth to specialists in education is beyond me. What makes him think that he will need to drive education improvement personally after he retires, which is a few decades away!
The rise in wealth of the billionaires during the pandemic is a good example of how the capitalistic world is designed to help the rich. Government pumped in money Trillions of dollars in the US and lakhs of crores of Rupees to ‘support’ the industry which landed straight into the pocket of the wealthy businessmen who got richer while the poor got decimated. It is time to think of trickle up rather than trickle down, where the poor is given money directly which they spend in these times and eventually benefitting the rich. That is the only sustainable and equitable way of development.
Roy. I agree. We have to challenge the current form of capitalism. If only a number of billionaires joined in to do that. They have the power and they are a tide against which small men have to daily fight for the quality of their life. Amazon’s workers are a case in point!
Firstly I think circumstances play a huge role in gain wealth. The ‘self made’ billionaire is a fallacy. AOC said ‘You don’t make a billion dollars, you TAKE a billion dollars’. Certainly obvious with Amazon – which overworks and underpays but less obvious with say a Google – which gains unreal value due to a unique set of circumstances that the human race has created. To illustrate – why should a software developer’s day be worth more than a month of a garbage collector’s wages. Who is more valuable to society? Is demand-supply economics the way it currently works the only way to do things?
I think the existence of billionaires and the concentration of wealth is the end result of a unique set of circumstances that includes some implicit assumptions on what is good, what is fair, what is valuable that have come to be agreed by the human race. We need to re-look at the way business is conducted, how ‘value creation’ happens, how a service or good is priced. None of these rules are God given. Neither is the so called ‘market system’ as we understand it today, the best way to exist. This is not to harken to a communist ideal – this dichotomy is false. There exist many other ideas for how business could be done.
Bhushan. The ‘system’ is surely rigged and it seems to be getting worse. Correction is long overdue. Here is an article that came only today that may resonate with your thoughts. I am not too far from this myself.
Even accounting for the possibility that a few may have donated anonymously (unlikely, but possible), there is no doubt that the top 1 percent could and should have done a lot more. The people who did not have much set a worthy example by sharing what they could and possibly even what they should have, and a big salute to those extraordinary ordinary people. Forget society, many of the billionaires did not do enough even for their staff, the people who have helped them make the money. Without seeming socialist, even if we were to say they deserve their wealth increase during this period, they should have and should look to give back more, even if for selfish reasons. Such a big wealth gap cannot be good for a harmonious society. It builds resentment, and I am sure they do not want the masses at their gates. No one is asking them to give away all their wealth. Let them create jobs, contribute to economic growth and benefit from the effort, stay wealthy as they were before the pandemic hit. But even if they were to give back the wealth they created in this period, it would go a long way for many to just tide over this crisis.
Billionaires are not the personality types that are compatible with philanthropy. The mindset that makes billionaires is antithetical to sharing. When billionaires become philanthropists it is either for tax benefits or for reasons of prestige.
Samir. here is an article that came today that may resonate with you.
Thanks for that read.
This is a great book. https://www.amazon.ca/Altruism-Power-Compassion-Change-Yourself/dp/031620823X/ref=sr_1_1?dchild=1&keywords=altruism&qid=1623721260&sr=8-1
My own observation of myself is that I have been more generous when I have been unemployed. It’s a combination of more empathy and perhaps more spare-time.
There are some altruistic people in my family, which is the source of my curiousity. Uncommonly generous people I have met have included doctors, pharmacists, accountants, bus conductors, scientists, small businessmen. I don’t associate great corporate success or great success in business with altruism. I might be wrong – I just don’t have any examples I know personally.
Well written and thought provoking Sandeep. I will only say the richer one gets more daridra he gets at heart and the poorer one is more sampann he is at heart.
This is a very thought provoking piece. But I wonder if asking billionaires to help solve the humanitarian crises of hunger and poverty isn’t like asking an arsonist to make a donation to the fire-fighting effort.
That is indeed true to a large degree.
While we rebuild the house, currently by design built of tinder, the arsonists are roasting their big fat turkey on it. Will they share most of the turkey or be forced to share it! Think both things need to happen in parallel.
Beautiful piece Sandeep. Excellent comments too. It would be useful to know the split of sectors the billionaires have made their money. This is because I wish to understand how many have made it by exploiting government policy and then one can see that they also donate heavily towards policies that favour them. Personally I do not fit in the envy camp but I fit in the society camp. How you make your money and how you use your money are both important. I abhor donations with conditions attached to them because this is pushing an agenda that may not be entirely helpful. Ethics and trust are two important point for people and society. Thank you for raising awareness.
It is a great point Amit. Can donations be used to make the ‘system’ worse? I am sure that is true in many cases. Political donations are one such great example. It is for this reason that I don’t think these donations should be anonymous. They, in fact, should be transparent, and subject to public scrutiny.
Ultimately, I do believe that this excessive greed needs to be stopped through taxation and controls on winner-takes-all, tax-theft and other such current ills.
The commentariat usually conflates wealth and income possibly to make their comments /insights vowable even though the XYZ billionaire may draw a salary lower than his execs.
The key is to create social and economic conditions so that ALL can experience a pleasant life -” living and being’ :And that is the purpose of Politics. But….