$1b isn’t what it used to be
Spent up on Black Friday? Planning a splurge on Cyber Monday? But where does the money go?
By the time you read this, the richest person in the world may not be the first white man who springs to mind. The prize that has been swapped back and forth between Amazon founder Jeff Bezos and Microsoft founder Bill Gates, is now within the reach of Louis Vuitton head Bernard Arnault, whose personal wealth went up by 1 per cent when his company acquired yet another luxury brand, Tiffany, recently. That’s not much if you’re a per cent, but it’s more than one billion dollars if you’re Bernard Arnault’s bank account.
Elsewhere in the billionaire hot 100, investment doyen Warren Buffet and social media automaton Mark Zuckerberg are at least $20b behind the top three. Google co-founder Larry Page just squeaks into the top 10 ahead of his partner Sergey Brin, although both are nudging $60b. And old favourite the Sultan of Brunei has been out of this race for yonks.
A billion dollars isn’t, for sure, what it used to be. In the Chinese Parliament alone, there are 100 billionaires.
That money doesn’t make you happy is a truism often noted in this space. Less frequently observed is the fact that watching others accumulate wealth doesn’t inspire much in the way of joy either, especially when that wealth is attained by flogging overpriced, monogrammed handbags to people without the intelligence or imagination to think of a better use for their thousands.
Besides Louis Vuitton, Arnault’s company, LVMH, also owns luxury brands Christian Dior, Louis Vuitton, Fendi, Celine, Bulgari, Hublot, TAG Heuer and Dom Perignon.
All of which — with the possible exception of the last, for which there will always be a use while there are ships to be launched and baby’s heads to be dampened — serve no necessary purpose. They do not feed the hungry, shelter the homeless or clothe the poor. They do not heal the sick or bring comfort to the afflicted. They let people show off.
If you are resistant to the smoke and mirror exercise known as luxury branding, and refuse to go into hock to own a $900 pencil case with the instantly recognisable logo twining an L and V, then today’s peddlers of frivolous folderol have other means of separating you from your money.
There was a lively but brief discussion in our house this week when yet another app-type product came through the door. The gizmo was handy enough, but it arrived with yet another charger to add to the dozens already tangled up in various drawers. Why aren’t all devices able to be charged in the same way with the same mechanisms? No reason at all, in most cases, expect that the companies concerned would be sacrificing a revenue stream.
And yet it’s a little-known fact — unless you watch the excellent Netflix series Explained — that today’s billionaires are little better than tatterdemalion urchins compared to the corpulent plutocrats of yore. Jeff Bezos is worth an impressive $131b in today’s dollars. But his predecessor John D Rockefeller was worth $367b and Andrew Carnegie $337b.
Admittedly the careers of Carnegie, Rockefeller and their ilk were marked by environmental exploitation (before it even had a name), political bribery and corruption and unconscionable labour practices. And they lived to avoid tax and used their iron grips to maintain a stranglehold on the markets they had created in pursuit of a monopoly. So not much has really changed in those respects.
But although Carnegie, Rockefeller and their peers were ratbags to a man, they all made things that drove economies, provided infrastructure that encouraged innovation and radically transformed lives for the better. Today, all you have to do to get rich is convince people to pay a stupid amount of money for a handbag.