Capitalism: Dueling Legacies

Originally published in The Korea Times on January 19th, 2020.

One of the issues I have been writing about is the issue of capitalism in the modern world. Probably because it is the driving force in society. Whatever the answer, it’s a topic that deserves to be thought of and discussed.

The specific issue I want to address in this article is the excess wealth capitalism has created. Bob Iger, CEO of Disney, received over $65 million in compensation for his work in 2018. This amount is 1,424 times the median pay of a Disney worker. In the 1950s, CEOs made an average of 20 times more than the average worker.

Capitalism, the system which basically runs our society, has done well for society. It has produced great winners and generally lifted the wellbeing of people all around the world. One of its side effects, which is becoming more pronounced, is the concentrated accumulation of wealth in the highest stratum of society.

The way I see it, there are dueling legacies concerning what to do with this wealth. For one, there are those like the Koch Brothers, the Walton family of Walmart, whose desire is to pass money down to their offspring and their vested interests. Their legacy would be limited to ensuring their descendants were comfortable rather than having a legacy which benefits mankind as a whole.

On the other hand are people like Warren Buffett, Bill Gates and Robert F. Smith, recent benefactor to the 2019 Graduating Class of Morehouse College. The legacy they aim to hand down is the legacy of their gratitude, monuments, donations for the betterment and benefit of society and leaving their name in a positive light as their legacy ― a la the Carnegies or Alfred Nobel.

In Carnegie’s case, his wealth helped the building, creation and financing of a number of institutions, buildings and schools. All bear his name and his contributions to his fellow man. His generosity and foundations continue to bear fruit for the benefit of humanity.

Nobel saw an obituary written for himself after his death was falsely reported. The obituary castigated him for being an agent of death and destruction because of his invention of TNT. This negative legacy prompted him to put the wealth he derived from TNT to finance the Nobel Prizes which continue on to this day.

Today’s capitalist winners face a different problem. Capitalism has produced great wealth but also resulted in the rumblings of discontent. Today’s uber-wealthy face two choices: spread the wealth to limit the excesses of capitalism or try to perpetuate their exalted status to their children.

The way I see it, there are two outcomes. A, we continue along our merry way as is, with average people getting more and more upset as the inequality gap widens, running the risk of social upheaval. Maybe the uber-rich, being secluded from the struggles of average people in their cocoons of wealth, think they can ride out any upheaval due to their privilege.

Or B, use some of the vast wealth created by capitalism to ensure a modicum of living standards for all.

What I find especially appealing is the route Gates and Buffet have taken with their fortunes, the Giving Pledge. In this pledge, uber-rich individuals pledge to give away over half of their money. I love it because it marries capitalism with the wellbeing of society.

These guys didn’t make their fortunes through blind luck or stupidity. They are incredibly intelligent individuals whose main concern is creating a better world. That means, these guys are not going to throw their money away in ineffectual pursuits. Rather, they will use their money wisely, see what works and what doesn’t and continue to use money in a wise manner rather than the government which can spend money in an inefficient manner.

As successful businessmen, they have more wealth than they know what to do with. They can look around the world and see which issues need to be addressed and pledge money to researching and solving or alleviating these issues. They will look at and attempt to solve but in a pragmatic fashion. The problem with governmental approaches is they are too slow to turn the ship around because there are so many vested interests.

On the other hand, you have uber-rich individuals whose main focus is to ensure their offspring retain an exalted status. It seems their idea is to perpetuate a permanent class of idle rich who have absolutely no relation to the struggles of regular people. Maybe they think the ills of society don’t affect their wellbeing because of the sheer amount of wealth.

However, if they think they can escape catastrophes such as plagues, famines, global warming or the increasing rate of species extinction around the world, then they have another thing coming. As the poet John Donne once said, “No man is an island.” The more the uber-rich attempt to escape their responsibility to society, which created the foundation for their wealth, the worse it will eventually be for all members of society.

One just needs to look at the development of the British political system compared to France before the French Revolution. The British elite gradually extended the right to vote and other benefits to all stratums of society while the French king and nobles attempted to keep benefits solely for themselves. One monarchy survives while the other lost their heads.

Sure the uber-rich could escape off the sinking boat of society to a life raft. However, they would just be stranded at sea alone with no recourse and no safe harbors. Society functions when all members work together, and depends on all members living and working together in a mutual fashion.