Hello everybody! On this platform we talk a lot about what we as consumers can do to be more sustainable, we also talk about what industries we’re best to avoid supporting, we talk about certifications, supply chains, materials, and waste management systems. As a natural result, you guys have been requesting that we talk about the impact of the “not so average consumers”, but rather the environmental and political power of the ultra-rich and how, or if, (no definitely how) excessive wealth affects the planet. If you at any point feel angry with me for coming for these people, you are free to get off the ride, I really don’t care at this point, now let’s get into it.
There are currently 2755 billionaires in the world, and according to Forbes, their shared net worth is valued at 13.1 trillion dollars. Billionaires’ wealth is twice as large as the bottom 60% of the world’s population combined. That is more than 4.6 billion people who combined have less money than that of 2755 people. (now of course this commentary is going to be primarily about the environmental impact, but just let it be known that this level of economic inequality is absolutely disgusting, just saying).
But how do you earn a billion dollars?
I often have a hard time really understanding how much a billion actually is, it is not a number I dabble with on a daily, and I often see other people having trouble understanding the vastness of this number. I often see millionaires and billionaires cramped into the same box, and while having a million of anything is also a lot, these two numbers are not related. To illustrate: 1 million seconds are 11 days, 1 billion seconds are 31 years.
If you make the US federal minimum wage of $7.25/hr (Roughly $14,500/year), you’re looking at about 69,000 years of work to earn a billion dollars. That’s about 1/4 of the time humans have existed on earth.
As such, you don’t make a billion dollars by active labor, even with a bigger salary it would take thousands of years. No, you profit off other people’s labor, you invest, and you patent inventions, or sell them (and it also helps if your family has a lot of money to get you started, about 1/3 billionaires were born wealthy).
Not that all billionaires came from money, some of them didn’t, but the rule of wealth is generally that some wealth generates more wealth quicker than if you build a business from the bottom. This is due to the profits made from investments, real estate, inheritance, connections, and networks, etc.
also check out: HOW TO INVEST SUSTAINABLY // green stocks guide
Here is how the world’s billionaire as of 2019 earned their money:
- Finance & Investments: 306 billionaires aka 14% of the list
- Fashion & Retail: 230 billionaires aka 11%
- Real Estate: 223 billionaires aka 10%
- Technology: 214 billionaires aka 10%
- Manufacturing: 188 billionaires aka 9%
- Diversified: 188 billionaires aka 9%
- Food & Beverage: 171 billionaires aka 8%
- Healthcare: 135 billionaires aka 6%
- Energy: 85 billionaires aka 4%
- Media & Entertainment: 71 billionaires aka 3%
This is also why it is basically impossible for many consumers to not support these people because they own small bits of basically everything, check out what companies are owned, or invested in by Jeff Bezos for instance, the list includes Amazon, Whole Foods, Audible, IMDB, Twitch, Good Reads, Business Insider, Twitter, Alexa, etc. The bottom line is definitely that if you want to earn a billion dollars you should get other people working for you.
also check out: THE IMPACT OF BANKS // the green guide to banks and investments
Outsourcing and cheap labor
Those billionaires have made their wealth by selling products (to some extend there is a type of manual labor involved in the supply chains of all the industries that made billionaires, but some involve more outsourcing and manufacturing than others). They have all one thing in common, they have all to some extent or another outsourced the production and manufacturing of their products to countries where the minimum wage is lower, where work is cheap (and environmental restrictions sparse).
However, lower production costs do not necessarily mean cheaper items, there is often a huge difference between the cost of an item and the price, just see fast fashion for reference, producing a t-shirt costs a few cents, but it sold for 20 dollars. Where does the rest of the money go? The rest of the money will typically go towards advertisements, and people in higher positions on the company, including the CEO, investors, board members, etc.
Rafael Badziag, author of “The Billion Dollar Secret” said that” Almost all of billionaires’ wealth lies in the companies they own, in stocks, or in real estate and other assets: “Billionaires don’t see money as something to spend on themselves. Money is there to invest and create. It is a form of universal energy in a business that allows them to make things happen, to turn their visions into reality.” As such, billionaires often don’t go around spending money as a consumer, unless they’re buying a rocket, but more on that later, they create new things for other people to consume. And while overconsumption of the ultra-rich is a problem, billionaires constantly inventing new ways to make us buy products is honestly even worse.
What “good” do billionaires do?
Personally, I love the idea of billionaires being illegal, the second you earn your last cent towards a billion, you’re done, you can’t earn more money, the rest will go towards building schools and hospitals, then we’ll name a dog park after you and after 3-4 business days you’ll receive a medal saying “I won capitalism”. I don’t know when I saw this tweet, but it lives inside me forever.
According to the Chronicle of Philanthropy, the fifty biggest billionaire charity donors in the United States totaled $24.7 billion in 2020 — up from $15.8 billion in 2019 — with Jeff Bezos’ $10.15 billion in giving topping the list. However, the wealth of these billionaires keeps increasing and overall they only give out (or should I say give back?) a small fraction of their wealth. And while some of them might want to actually help out, I really doubt that these donations happen out of the goodness of their hearts.
Donations are tax write-offs, and donating some money will make it easier in the future to make more money, while it also creates some positive publicity. As such, the donations of the ultra-rich borders on PR stunts and marketing scams. It is at least hard to think that if they really care about world hunger or deforestation, why not just fix it, many of the billionaires could do that. And because they don’t the charity of billionaires is often described as “philanthrocapitalism”
Only ten billionaires on the 2020 Forbes 400 list have given more than 20 percent of their wealth over their lifetime, and billionaires such as Bill Gates and Warren Buffett continue to see their net worth increase even as they’ve pledged to give half of their wealth to charity. In 2010 Mark Buffet and Bill Gates created the Giving Pledge addressing billionaires in the world to give away large chunks of their wealth, and one couple on the list of people that have taken the pledge is Pricilla Chan and Mark Zuckerberg.
Their charity foundation The Chan Zuckerberg Initiative handed over 3 million dollars in 2017 to solve the Silicon Valley housing problem, however, the social media business boom, that Facebook is primiarily caused by Facebook, owned by Zuckerberg, has also played a significant part in creating the rising real estate prices that have made it exponentially difficult for people to effort their homes in the same area.
Furthermore, the Initiative is not registered as a charity organization, but simply just a company, which means that funds can be moved around, distributed, used for political benefits, and of course, used for tax benefits as well. This is also not a unique instance, the issue of billionaires helping out with issues they themselves have played a key part in creating is a continuous tale.
Billionaires in politics
When you accumulate excessive wealth, you also gain power, companies, and industries use political lobbying to create benefits and more profit for themselves constantly, so an important question to ask is if billionaires hurt or help the economy, from a political perspective. A study from 2015, show that the influence of cronyism and wealth based network is a possible cause for slower economic growth, studies also suggest that that a greater concentration of a country’s wealth in the hands of billionaires reduces the country’s economic growth over time (center on Global Economic Governance, Svejnar, Shotwell and Bagchi, Villanova University, 2015)
The financial sector spent $400 million on lobbying in the United States, and another estimated $150 million in the European Union in 2013. In the last* U.S. presidential election year, the industry spent $571 million, as such it is completely farfetched not to take the political power of these people into consideration.
One thing that really grinds my gear is this idolization of billionaires, where normal consumers look up to them and defend them whenever political actions to tax the ultra-rich are proposed. I have seen and heard countless arguments about “why billionaires shouldn’t have to pay taxes (not that they are) because they already donate, and they create economic wealth for everybody”.
I am sorry but none of this is true, as studies show, and as we can see with our own eyeballs if we stopped treating them like rockstars. As Gravity Payments CEO Dan Price also tells MarketWatch, “In reality, the amount [billionaires] donate is a fraction of what they would pay if their tax rates were in line with the working class.”
According to the IRS Warren Buffet’s reported income in 2018 was 125 million dollars, and of that 0.10% tax was paid, Jeff Bezos earned 4.22 billion dollars, and reported a tax rate just below 1%, at 0.98. Michael Bloomberg reported a total income of 10 billion dollars and paid 1.30% taxes, Elon Musk earned 1,52 billion dollars and paid 3,27% in taxes. In contrast, the average American is reported to pay between 15 and 30% in taxes. In Denmark, I pay 39%. Think about what could be achieved if these people paid a tax rate equal to the average consumer.
The average billionaire donates 1 percent of their fortune to charity yearly — which by percentage is less than most non-billionaires. But when you donate $200 you don’t get glowing articles, a hospital named after you, and a massive tax write-off.” However, as a society we collectively celebrate, idolize and support these people by creating economic, cultural, social, and political benefits for them, and these benefits will never benefit the normal consumer and taxpayer. So why celebrate, and defend them? The reason might be that culturally we create a fantasy that everyone can have this amount of success if we just work hard, we want to see our own self-image mirrored in the position of the rich because one day that could be us. Overall, that is a horrible goal to have, being an exploiter of labor and resources, but it is also not true, not everyone can become rich if they just work hard, that’s a horrible thing to teach kids.
I think an important question to ask as an individual in the world today, is does it make sense that a person is celebrated for giving 1% back to what they themselves have taken such a huge part in destroying? I guess it is just important to remember that whenever someone donates 10 million dollars, they benefit from it as well.
Okay we have been seeing a lot about space travel, and billionaires are just yeeting off the planet #pleasestaythere, so I thought I wanted to share my thoughts here as well.
First of all, I am pro-space travel IF THERE IS A SCIENTIFIC PURPOSE that in one way or another will benefit all of us, what I am not even remotely on board with (and not only because I’ll never be able to afford a ticket) is billionaire bobs leisure space travel business.
Both with Elon Musk, Jeff Bezos, and Richard Bransons’ space tourism plans, they proclaim that it will soon be possible to get a taste of space with their upcoming “expeditions”. Branson’s customers will have to pay at least $250,000 for a seat (the company already has roughly 600 booked passengers). And right now, the quarter-million-dollar price tag is the cheapest option on the market. The price for a seat on Blue Origin’s New Shepard rocket could be higher. And if you want to go into orbit for a few days, a ride on SpaceX’s Crew Dragon capsule will set you back at least $55 million.
Let’s not even talk about how an 18-year-old son of some rich dude got to go to space with Jeff Bezos because his dad secured him a seat while Mary Wallace Funk, a trained astronaut waited 60 years to go to space. Richard Branson (worth 5.3 billion dollars) got 220 million from taxpayers in New Mexico (one of the poorest states by average) to start a space travel business that 0,02% of the population can afford tickets for, with no scientific purpose to speak of, we should be really concerned about this industry. There has luckily been lots of critique towards this development and Branson said on The Late Show: “I think maybe they’re not fully educated as to what space does for Earth.”
No Dick, I just think people are concerned that the wealthiest people alive are off to explore space while the problems on the planet remain consistent, and instead of using your huge pile of money to end world hunger, stop deforestation, supply everyone with clean drinking water, build schools, stop child labor and modern slavery, you’re playing Buzz Lightyear. Looking towards space as a solution to climate change is really just pushing the problem in front of us, creating distractions to the fact it is our overconsumption, supplied by the people now taking off the planet, that got us here.
But I guess we should go over the environmental implications of space travel.
Space launches have a massive carbon footprint through the burning of rocket fuels in the atmosphere (1 rocket launch emits about 100 times more greenhouse gas emissions per passenger than that of a long-haul flight, according to the CBC, 2021).
More importantly, rocket engines release soot and trace gases into the upper atmosphere that heavily contribute to ozone depletion (you know the ozone layer is pretty important). Lastly, and this is a big one as well, rocket launches leave behind “space junk” which is a relatively small concern right now because rocket launches are so infrequent, but if we start supporting leisure trips to space for every idiot with a pocketbook, it’s going to be a much bigger problem
Space junk from old satellites and past launches float around the earth, and the more junk that’s up there, the more likely it is that our space trash will crash into our working satellites and that can have huge consequences for global internet connection, weather forecasts, traffic reports, and navigation systems, and we those a whole lot more than rich people need to see the earth from above.
Professor of astrophysics, Renee Hlozek comments on the Bezos launch saying that we don’t actually need to put people into space anymore, the scientific data and discoveries we need we can achieve with robots, and the narrative we are sold with this billionaire space race is one that is not scientifically relevant.
The premise of these trips are to get closer to make space travel more available to the public, but for the foreseeable future you’ll have to be ultra-rich to go to space, and there are many consequences of more widely available space travel, the environmental impact being a very pressing one.
Bezos is also proposing that we can move the heavy and polluting industry of the planet, to protect the earth, however this he admits cannot be done in his lifetime. This is also, as far as I can see from experts and scientists, a very unrealistic and utopic vision that, just like with the idea of moving humanity to another planet removes focus from the actions we can take right now.