Why Jeff Bezos should push for nobody to get as rich as Jeff Bezos 

Wealth


Jeff Bezos, the founder of Amazon and the world’s wealthiest man, has been publicly agonizing over a vexing problem: what to do with all his money.

Last week, more than a year after asking his Twitter followers for philanthropic ideas, Mr. Bezos and his wife, MacKenzie, announced an initial plan. They said they would donate $2 billion to a new foundation meant to address homelessness and improve preschool education. The gift is a tiny portion of the Bezoses’ total wealth — estimated by Forbes Magazine to be $162 billion — but the foundation’s name, the Bezos Day 1 Fund, suggests there will be lots more to come.

The question of how Mr. Bezos should spend his money is a good one, but a better place to start might be: Why does he have so much money in the first place? What does his fortune tell us about the economic structure and impact of the tech industry, the engine behind his billions? And, most important, what responsibility comes with his wealth — and is it any business of ours what he does with it?

The answer: Of course it’s our business.

More from The New York Times:
Parts of a ‘Virtual’ Border Wall, Built With the Tech Behind Driverless Cars
The iPhone XS and XS Max Review: Bigger Is Now Definitely Better
Facebook Accused of Allowing Bias Against Women in Job Ads

Mr. Bezos’ extreme wealth is not only a product of his own ingenuity. It is also a function of several grand forces shaping the global economy. One is the unequal impact of digital technology, which has reduced costs and brought conveniences to many, but whose direct economic benefits have accrued to a small number of superstar companies and their largest shareholders. There is also the effect of labor and economic policy, which in the United States has failed to keep up with, and often only aggravated, the problem of tech-driven concentrations of wealth.

Once you understand the forces pushing Mr. Bezos’ fortune ever skyward, one strategy for how he might spend it emerges above all others. “I think the most important thing he can do with his money is to become a traitor to his class,” said Anand Giridharadas, author of a new book, “Winners Take All.”

In the book, Mr. Giridharadas argues that the efforts of the super-wealthy to change the world through philanthropy are often a distraction from the planet’s actual problems. To truly fix the world, Mr. Bezos ought to push for policy changes that would create a more equal distribution of the winnings derived from a tech-driven economy, Mr. Giridharadas said.

“He should address himself to America’s deepest problems in ways that would demand sacrifice from the winners of our age — making a difference at the expense of their opportunity to make a killing,” Mr. Giridharadas said.

There’s another way of putting this: Jeff Bezos should spend his vast fortune pushing for a society where no one can ever become as rich as Jeff Bezos is now.

An Amazon spokesman declined to comment on Mr. Bezos’ philanthropic plans.

Those who are fans of Amazon may argue with the notion that Mr. Bezos’ wealth represents a problem and a responsibility. After all, the 54-year-old is an uncommonly gifted businessman. He acquired his wealth legally and in the most quintessentially American way: He had a wacky idea, took a stab at it, stuck with it through thick and thin, and, through patient, deliberate, farsighted risk-taking, created one of the most innovative companies of the modern era.

But Mr. Bezos isn’t just rich. He is growing unprecedentedly rich — rich enough that his wealth, by itself, illustrates a new economic reality.

A year ago, when he first called for philanthropy ideas, Mr. Bezos’ fortune was estimated at only $80 billion, putting him an embarrassing second on the rich-person list, behind Bill Gates. The ideas rolled in, but the money came in faster. As Amazon’s stock price sailed ever higher, Mr. Bezos’ fortune eclipsed Mr. Gates’s — and then kept climbing.

“The only way that I can see to deploy this much financial resource is by converting my Amazon winnings into space travel,” Mr. Bezos told an interviewer in April.

In July, Mr. Bezos’ wealth surpassed $150 billion, a record; even if inflation is accounted for, he is almost certainly the wealthiest human being in modern history. Only John D. Rockefeller, whose fortune once exceeded 2 percent of the total American economy, might plausibly have been richer. (Mr. Bezos would need to double his wealth again to beat that standard.)

Most of Mr. Bezos’ wealth is tied up in Amazon’s stock, so he could well lose billions if Amazon flails. But if he does, there will probably be someone else just as megarich to take his place, because extreme concentrations of wealth are baked into the dynamics of the modern tech economy.

Tech-powered businesses are often driven by an economic concept known as network effects, in which the very popularity of a service sparks even greater popularity. Amazon, for instance, keeps attracting more third-party businesses to sell goods in its store — which in turn makes it a better store for customers, which attracts more suppliers, improving the customer experience, and so on in an endless virtuous cycle. Digital businesses are also characterized by tremendous economies of scale — Amazon can create a robotic assistant once and deploy it to everyone — that further entrench concentration.

“We have technology that has allowed us to create vastly more wealth for society,” said Erik Brynjolfsson, director of the M.I.T. Initiative on the Digital Economy. “But there’s no economic law that says that these benefits will be distributed evenly — and it’s worked out that some people have gotten most of the benefits and a lot of other people have been left behind.”

But economics isn’t destiny, he said.

“Technology has led to some of this concentration, but since it makes the pie bigger, you could make everyone better off simultaneously — you could make the poor better off and the rich better off — and whether we do that is a matter of policy,” he said.

As Annie Lowrey pointed out in The Atlantic last month, economic policy is currently tilted toward benefiting people like Mr. Bezos far more than the hundreds of thousands of people who work in his warehouses. Among other policies, Amazon has capitalized on a weakened union movement and a low minimum wage, which has allowed it to expand by hiring an army of workers for its warehouses.

Amazon said that on average, its full-time warehouse workers made $15 an hour, including wages and other compensation; the company also said it provided full benefits, including tuition for career skills, to those workers. A $15 wage is higher than at some other retailers, but it is lower than estimates for what a family in the United States needs to meet its basic needs, known as a living wage.

“They’re not providing the sort of high-wage, middle-class jobs to a broad swath of individuals that we used to associate with corporate success,” Lawrence Katz, an economist at Harvard, said of Amazon and other high-flying tech firms. “What we’re seeing is not the sharing of the productivity benefits that we used to see in the past. And that may be even more galling than the concentration of wealth.”

How could Mr. Bezos address these issues through philanthropy? Mr. Giridharadas suggested several liberal economic policy ideas, among them efforts to strengthen unions, equalize how we pay for education, increase minimum-wage laws and push for a more progressive tax system. Both Mr. Gates and Warren Buffett — the second- and third-wealthiest people in the world — have said they should pay higher taxes.

Those ideas strike me as unlikely; Mr. Bezos is a far-thinking innovator, but he has expressed little interest in near-term political questions.

On the other hand, Mr. Bezos’ most attractive quality, as a businessman, is his capacity for patience and surprise.

“This is guy who was willing to buck what everyone else thought for so long,” Mr. Giridharadas said. “If he brings that same irreverence to the question of how to give, he has the potential to interrogate himself about why it is that we need so many billionaires to save us in the first place — and what we could do to build a society that would not require Jeff Bezos to help us so much.”



Source link

Products You May Like

Articles You May Like

Cramer talks sell-off, blesses some careful stock-picking
Tailored Brands, Oxford Industries and more
Education Department cancels $150 million in student loans
Slower IT spending could reveal Cisco’s ‘imperfections,’ analyst says
Jim Chanos says there’s something wrong with the stock market when rates this low cause panic

Leave a Reply

Your email address will not be published. Required fields are marked *