Bill Gates shouldn't be listed as someone who inherited his wealth: he did not inherit it.
The $100 billion he'll give away was of his own creation, spurred from effort of his own mind, from a company born of his own fingers and imagination.
We're having this conversation thanks to the Internet, probably via relatively inexpensive tools/gadgets. Which means we've all inherited an extraordinary privilege - courtesy of the immense efforts of countless others and countless invested wealth - that I would argue is drastically beyond anything Gates had the benefit of despite his family. What have you done with it? (rhetorical)
The privilege we're all enjoying right now - all of this easily accessible, relatively cheap, amazing technology - is beyond anything being born to a successful Seattle lawyer is worth. Why aren't we all millionaires N times over? If you understand that point, then you understand why Gates deserves credit for his wealth.
His mother didn't make the deal with IBM (in fact Ballmer was arguably most instrumental in the nuanced legal structure that gave Microsoft its position), and his mother didn't execute and build software for 30 years against tremendous odds and competition either. Is your theory that Bill Gates should be penalized for being born into a family and situation that was not of his own choosing? Such that you pretend his wealth wasn't of his own creation and is null and void, because his father was a lawyer (remind me again what making $100k a year as a lawyer in 1970 has to do with your son generating a $100 billion fortune in 2000, seems to me there are a lot of extraordinary steps required to get from one to the other no matter how good your first step is, whether you're Steve Jobs or Bill Gates).
There are 9 million millionaires in the US currently, and this country has been rich for a long time now. Why aren't we drowning in Bill Gates clones? The answer is obvious.
Any idea how many successful lawyer sons didn't generate $100 billion in wealth the last 40 years? All of them but one. Gates is one in a million even by that narrow-down.
I'd counter argue that Buffett would have been successful regardless of his father being a Congressman (it's absurd to think that a one term trip to DC is what made Buffett what he is). Indeed, using Buffett as an example is the absolute worst thing you could do: the market doesn't care if your daddy was a Congressman, it was his massive results that spoke volumes, got people to invest with him over time, and made him rich. Some of his shareholders held for decades. It was his understanding of how to make money, and his ability to sell that vision, that scored his first investments. Even doctors don't like to lose $100k to some idiot kid, no matter who their father is (his father wasn't that important, and his grandfather's stores weren't that wildly successful).
Or did you think people were buying Berkshire at $100 because his daddy was a a borderline irrelevant Congressman for one term?
Buffet made his initial nut by raising a sort of "Friends & Family" round for a mini-hedge-fund type thing. You can read about his wealthy Aunts and extended family in Snowball.
He was doing this on the side while working at his daddys Buffett-Falk & Co as an investment salesman. He did well and after stalking Graham was able to get a gig in NYC for a few years before returning to running "mini-hedge-fund" type partnerships in his hometown.
So being a son of a congressman surely helped in raising many many millions of dollars from the Nebraska elite. I would even argue its almost a necessary but insufficient condition for making his initial fortune - he got dealt a great hand but he also played it very very well.
Connections aren't results. Getting an introduction won't help you one iota if you can't deliver.
The only thing that ultimately matters in investing is results. Buffett is the absolute worst example you could use to claim privilege results. Unless your theory is that his father's friends made all those investment decisions for him.
Just about the hardest thing to do in business would be to generate a $300 billion company on the back of one man's dozens of investment decisions. Trying to rob Buffett of that stunning success because his grandfather owned some tiny stores in Omaha, is beyond ridiculous.
There are four grid squares here, and you're ignoring two, and insisting that they are not important to consider.
here are the variables:
father is a congressman (yes/no)
took good advantage of opportunities (yes/no)
to combine them we have:
yes/yes, yes/no, no/yes, no/no.
so you are saying that it didn't matter that his father was a congressman because he took advantage of his opportunities.
But imagine a warren buffet who didn't have a well positioned family, and didn't have the opportunities he had- Still a wiley person- our no/yes.
Where is he on the forbes 400?
Warren Buffet is not exactly a rags to riches story. It's more of a riches to unimaginable riches story.
Buffett is a perfect example of the problem: to be in the position to have those opportunities, you need a base and you need seed money. Having a family and friends round means you don't have the same type of pressure (they are generally far more willing to tolerate risk, give more room for experimentation, and are willing to write off lots of losses)
How is it "robbing" Buffett of his success to accurately describe the conditions of his success? When he writes about his own biography, it's along similar lines; he doesn't try to portray himself as a poor kid who pulled himself up by his bootstraps with nobody's help.
I wouldn't dream of robbing Buffet of his success - I'm describing the lengthy period of his life that occurred prior to his irrational obsession of buying a small textile company by the name of Berkshire. :)
The Snowball I read said that Buffett had a difficult time raising money because no one took him seriously. Once word started spreading around that "the kid" knows what he is doing that is when people started approaching Buffett.
Buffett was running his own business even when he was a kid and was earning more than his teachers.
> Bill Gates shouldn't be listed as someone who inherited his wealth: he did not inherit it.
According to Philip Greenspun, Bill Gates started off with a million-dollar trust fund:
"William Henry Gates III made his best decision on October 28, 1955, the night he was born. He chose J.W. Maxwell as his great-grandfather. Maxwell founded Seattle's National City Bank in 1906. His son, James Willard Maxwell was also a banker and established a million-dollar trust fund for William (Bill) Henry Gates III."
Are you suggesting his privilege wrote his software for him? Much less had the vision to start a software company in the 1970s - which his parents thought was a bad idea. They did not like the idea of him dropping out, he did it anyway.
Paul Allen didn't come from any kind of privilege. So is the theory that he should be robbed of his amazing success and effort also, by association with Gates' association with his father and his father's association with Gates' grandfather? He did go to the same school as Gates after all.
Where I live, the wife of an oil & gas billionaire recently started up a donut shop. As for the location of her shop, she casually chose a quaint little shopping center in the heart of the most expensive and historically rich neighborhood in the entire surrounding metropolitan area and possibly the whole state. While having a shop in this area would be a dream for most, for her it was a given.
It's been a nice little success. It might be the most successful independently owned donut shop in the area.
But we all know that her donut shop, despite the significant amount of cash necessary to purchase the building and jumpstart the business, is just a hobby for her, the same way sewing quilts is a hobby to my mom. My mom doesn't fret about the few hundred bucks she may put into her quilts, even if she doesn't make a dime off of them. And the billionaire's wife won't fret if the hundreds of thousands of dollars necessary to even test the business all go to waste because nobody buys their donuts. They will barely notice the money has been spent. If my mom wanted to just start up a donut shop here for fun, well, that would be absolutely impossible--it wouldn't even be an option.
Why do I bring any of this up? Because context matters. Bill Gates is self-made, yes, but you have to interpret "self-made" in context. His little jumpstart, which appears minor in the shadow of Microsoft, constituted more success than most people in America will ever enjoy over the course of their lifetimes.
The privilege of having a well-to-do family gives you the ability to take more risks, knowing that if they fail you have a cushion to fall on.
I worked with someone who failed businesses over and over, each time going back to live off his family's wealth for a bit until trying the next businesses, until finally one of them hit and made tons of money. If you ask him, he'll tell you he didn't inherit a cent, and was a self-made millionaire. Technically accurate, but doesn't tell the full story.
Many people wrote software in the 1970s and started software companies in the 1970s.
He is not suggesting his privilege wrote Gates software for him, but that privilege gave Gates a substantial advantage over the large number of other people writing software and starting software companies at the same time.
His privilege is unlikely to have been a sufficient condition to explain his success, but it is also entirely unrealistic to assume that his privileged background did not provide him with a number of benefits, down to even basic stuff like growing up in an environment where success and ambition is expected and normal.
Something I think often is left out of success accounting is an advantage almost everyone born in a large, well-functioning society enjoys: access to a large, well-functioning society.
If the civilization into which Bill Gates sold software were 1/10th the size, it would have generated 1/10th the value with almost the identical amount of work on his part. There's an enormous lift given to fortunes just by the fact that they are built in the context of a civilization which is large enough to support them.
None of that is to say that either specific inherited status or personal hard work aren't huge contributors to success as well, but it takes an enormous amount of work and attention to make sure that a large, well-functioning civilization remains large and well-functioning, and that's an oft-neglected factor in how big these large fortunes become.
I think you miscategorize the opposition here. The argument isn't that Gates didn't work hard. The issue is that by din of his family's socioeconomic status, he was presented with opportunities that most people didn't have.
If you want to put it in numerical terms: going from 100M to 100B is arguably easier than going from -10K to +100M (even though there is less money involved)
Everyone has unique opportunities. We'll never have perfect equality of opportunity or social connections. Buffett and Gates weren't born into the lower strata of society, but nor were they born into the very upper elite. How many of Gates's classmates at his prep school or at Harvard did nearly as well as he? How often do children of congressmen/women become multibillionaires? We can divy up privilege endlessly (for having a lawyer dad, for having decent parents at all, for being born in the first world, for surviving infancy), but the only point of the article was to show whose wealth was inherited and whose was not.
What was the unique opportunity of that kid some streets down here that got gunned down when he was 10 years old?
What was the unique opportunity of the record amount of slaves worldwide? (by the way, did you knew the world has more "traditional" slaves now than any other time in history?)
Or... what is my unique opportunity? Being in debt? Not having a single important connection? Going to shitty university? Yes, I am intelligent, I make games, but I see lots of people with less skill than me earning millions, just because they were friends of someone somewhere or their dad was the minister of something in the government. Ultimate example: Eike Batista, that CLEARLY is incompetent, since none of the business he started on his own had profits, yet his father that was the mining minister obviously had a hand in Eike 90% accuracy in finding minerals in areas previously surveyed by the goverment during his father tenure while this information is "secret" and private companies should not know, and the government recently happily handed him billions and kicked out thousands of people from their homes so he could make his lastest failure project.
Sure, but the fact that only a tiny minority of highly privileged people have the skill and extraordinary drive to move into the stratosphere doesn't change the fact that people like Gates[1] took advantage of opportunities that don't remotely resemble the opportunities that normal people get. Their billions may be self made in the sense they were unlikely to have been achieved by anyone else in their position, but not in the sense that they were likely to have had comparable success in any position but the one they found themselves in.
[1]and perhaps others like Zuckerberg more so than Buffet, who could probably have somewhat more slowly honed his investment skills and found patrons whilst working the sort of day job people with ordinary middle class backgrounds can easily get.
I don't know, I think the point of the article was to show that the uber-wealthy of America is more of a meritocracy than most think.
While that's somewhat true, the fact remains that almost all of the people on that list might not be there if they weren't born into at least the upper middle class. They took advantage of the privileges given to them, so it's not like they don't deserve it. But there are likely those from poverty and the lower middle class who work their ass off setting up businesses in things they have access to, mainly restaurants/stores, and only ever move into the upper middle class as hard as they try and as gifted/intelligent as they may be.
This is a gross misunderstanding of the concept of privilege. The idea is not that Gates or Buffet's work had nothing to do with their success but that their work got them farther, per unit (if you could define such a thing), than would someone with less access to privileged parts of society.
Someone who's parents can't send them to college will obviously have to work harder than someone for whom a college education is assured. Someone who lives in a connected family will have to work less hard to be connected themselves.
In particular, this:
> The privilege we're all enjoying right now - all of this easily accessible, relatively cheap, amazing technology - is beyond anything being born to a successful Seattle lawyer is worth.
Seems anything but given to me. And you don't really make a compelling argument for it. That said, Bill Gates clearly had access to both technology and connections beyond average means, so I'm not sure what it has to do with anything.
>> His mother didn't make the deal with IBM (in fact Ballmer was arguably most instrumental in the nuanced legal structure that gave Microsoft its position)
Just for the sake of discussion: if his mother and her relation to the IBM top executive had a critical part in IBM's biggest business mistake ever - doesn't it make sense that they won't want to share those details ?
The story that I've read was that IBM had the hardware but didn't think they could make software on time so they went shopping for the OS. First they went to Digital Research who didn't want to do it. Microsoft jumped in and promised to deliver what would become MS-DOS. The rest is history.
In no way was Gate's mother instrumental in the process.
"In 1980, she discussed with then-IBM Corp. Chairman John Opel, who was also on the United Way committee, the business IBM was doing with Microsoft. Opel, some accounts say, knew little about the venture, but mentioned Mary Gates to IBM executives who introduced Microsoft at a meeting of IBM's top-level management committee a few weeks later."
hershel is not claiming Gates mother was involved. He is playing devils advocate and pointing out that there are reasons why neither IBM's CEO at the time or Gates mother might want it known if she pulled strings: IBM ended up getting the short end of the stick; it would not look good for either one of them (or Bill Gates for that matter).
That does not mean she interfered. It's just a reminder that we should be careful about blindly accepting published accounts of events where the full details are only known by a small number of people all with their own agendas. This of course applies to everything.
The $100 billion he'll give away was of his own creation, spurred from effort of his own mind, from a company born of his own fingers and imagination.
We're having this conversation thanks to the Internet, probably via relatively inexpensive tools/gadgets. Which means we've all inherited an extraordinary privilege - courtesy of the immense efforts of countless others and countless invested wealth - that I would argue is drastically beyond anything Gates had the benefit of despite his family. What have you done with it? (rhetorical)
The privilege we're all enjoying right now - all of this easily accessible, relatively cheap, amazing technology - is beyond anything being born to a successful Seattle lawyer is worth. Why aren't we all millionaires N times over? If you understand that point, then you understand why Gates deserves credit for his wealth.
His mother didn't make the deal with IBM (in fact Ballmer was arguably most instrumental in the nuanced legal structure that gave Microsoft its position), and his mother didn't execute and build software for 30 years against tremendous odds and competition either. Is your theory that Bill Gates should be penalized for being born into a family and situation that was not of his own choosing? Such that you pretend his wealth wasn't of his own creation and is null and void, because his father was a lawyer (remind me again what making $100k a year as a lawyer in 1970 has to do with your son generating a $100 billion fortune in 2000, seems to me there are a lot of extraordinary steps required to get from one to the other no matter how good your first step is, whether you're Steve Jobs or Bill Gates).
There are 9 million millionaires in the US currently, and this country has been rich for a long time now. Why aren't we drowning in Bill Gates clones? The answer is obvious.
Any idea how many successful lawyer sons didn't generate $100 billion in wealth the last 40 years? All of them but one. Gates is one in a million even by that narrow-down.
I'd counter argue that Buffett would have been successful regardless of his father being a Congressman (it's absurd to think that a one term trip to DC is what made Buffett what he is). Indeed, using Buffett as an example is the absolute worst thing you could do: the market doesn't care if your daddy was a Congressman, it was his massive results that spoke volumes, got people to invest with him over time, and made him rich. Some of his shareholders held for decades. It was his understanding of how to make money, and his ability to sell that vision, that scored his first investments. Even doctors don't like to lose $100k to some idiot kid, no matter who their father is (his father wasn't that important, and his grandfather's stores weren't that wildly successful).
Or did you think people were buying Berkshire at $100 because his daddy was a a borderline irrelevant Congressman for one term?