Notes on The Rich
Willingness: There are 1226 rich people in the United States, of which 840 belong to the category of "starting from scratch". Indeed, today's top rich are hardly born poor, so that they have nothing to do with opportunities-a good early education is a prerequisite, and a rich full-time father helps a lot-but their great wealth usually comes from hard work, intelligence and great luck. Generally speaking, they are not nobles, but economic elites; They focus not only on consuming wealth, but also on creating wealth.
Education background: John Quirkin, an economist at the University of Queensland, said in a recent paper that according to his statistics, the total number of freshmen in Ivy League schools (about 27,000) only accounts for nearly 1% of the college-age population in the United States (about 3 million). In an economy driven by education and winner takes all, this group of 1% 18-year-old people has great advantages in joining the future 1% adult rich group.
Quilkin wrote, "It is not surprising that the competition for admission to prestigious schools is so fierce. Although tuition fees have been rising steadily and are much more expensive than a generation ago, parents and students still think that entering a "right" university is a crucial event in life. 」
The globalization of super elites began as early as in school. You don't need a passport to enter the top rich circle, but there is one way, that is, the alma mater, the American Ivy League School, plus Stanford University, Oxford University, Cambridge University, and the world's top business schools.
In this world, where you get your MBA degree is more important than where you come from. Many top billionaires are educated in their own countries-remember, this is basically a self-made group-but almost all their children go to these top schools in the world.
Today, four out of every five entrepreneurs in China will consider sending their children to study abroad. Billionaires in China prefer to send their children to secondary schools abroad, and private boarding schools in Britain are popular choices. Millionaires in China send their children to universities abroad so that they can integrate into political economy, while Ivy League schools in the United States gather the most elites.
Associate with excellent people. Robert Morton, a sociologist, found in the study of Nobel Prize winners in 1968 that Nobel Prize winners have a remarkable similarity, that is, they are gifted at a young age, devoted to a field, and then they can enter the laboratories of famous scientists in their respective research fields-"Among the 55 American winners, 34 are qualified to work under 46 Nobel Prize winners when they are young. 」
Second, the circle of the top rich tends to be global and homogeneous.
The top rich are forming a multinational society, and they have more in common with each other than with their compatriots in their hometown. Whether they live in new york or Hongkong, Moscow or Mumbai, these contemporary top billionaires are jointly forming a new world.
Ultra-high-net-worth people (investable income at least 50 million US dollars) are mainly concentrated in specific countries and regions, and their lifestyles are more similar. Even high-net-worth people scattered in other regions will participate in the same world market and buy high-yield consumer goods. Their wealth portfolio is also very similar, mainly financial assets, especially the shares held by listed companies trading in the international market.
Director Wang, the founder of China and Globalization Center, told me, "We have experienced the globalization of trade, we have experienced the globalization of capital, and now we are experiencing the globalization of talents. 」
"The landowner must be a citizen of the country where the property is located. But shareholders are actually citizens of the world and do not necessarily belong to a certain country. 」
Third, the demand of contemporary charitable capitalists: change the world.
Marx famously said that previous generations of philosophers tried to describe the world, but he intended to change it. Gates and other top billionaires are having an equally great impact on philanthropy. They don't want to fund social sectors, but want to change them. Their influence on American education is an example.
The way these charitable capitalists run enterprises is to have the greatest influence through the least effort (the leverage of capital households and the scale of technical experts), and they believe that charity should also use the same way.
Change education: Gates and other billionaires who care about education focus on measurable results and lead a data-driven reform. The first step is to put the exam at the center of education so that the output of students' learning can be measured; The next step is to make teaching work more driven by data or rewards.
Change the direction of state funding. Foundations often give more support to cutting-edge research. We play the role of partners in material distribution, but government funding still accounts for the largest part. This is a measure of the financial and intellectual strength of the top rich in the world economy, and their goal is to guide the whole country.
Change ideology: Some farsighted top tycoons not only try to use their wealth to become government officials, but also try to use their wealth to change the existing ideology in the region, the country and even the world. Soros's "Open Society Foundation" had a strong influence on the emergence of democracy and pluralism in Eastern Europe and the Soviet Union.
Fourth, the inequality of the super-rich circle
Low tax rate: In 2009, among the 65,438+0% rich people, the richer you were, the lower the effective tax rate was. The income tax rate of the former 1% rich group is 23%, while the income tax rate of the former 0. 1% rich group is only 2 1%. The top 400 taxpayers who pay the most taxes account for less than 17% of the total tax revenue. Capital gains are an important source of income for the top rich. The lower your position on the income distribution map, the less important it is-the capital gains tax rate in 2012 years is only 15%. Winters believes that American oligarchs can enjoy such a low effective tax rate because a group of professional lawyers, accountants and lobbyists are providing services for them. He called this group of "courtiers" income security practitioners. In the past few decades, they have been staying in some think tanks funded by the top rich, racking their brains to carefully plan anti-tax plans, and they must have benefited a lot from it.
Low proportion of women: 20 12 Forbes Billionaires List. 1226 billionaires only have 104 women, and this number is even smaller if the wives, daughters and widows of billionaires are excluded. Most notably, the vacancy of the female rich is extremely inconsistent with the trend of other social classes. In the 99% group except the former 1%, women earn more and more money, receive higher education and gain more and more power.
Although the number of women in 99% group has steadily increased, the top 1% group is still a male club. We can understand the gap between others and the former 1% rich group in this way: the world is divided into the middle class dominated by women and the rich class ruled by male elites.
Once Harvard girls graduate, the probability of entering the top rich circle becomes smaller because of their chosen jobs. Finance and management are the most profitable industries with overwhelming advantages. The financier earned the above-mentioned 195% ultra-high wage premium. In 2007, the proportion of women who worked in finance or management immediately after graduation rose to 43%, while the proportion of men who made the same choice was surprisingly high, reaching 58%. You can look at their income gap: in 2005, 8% of men who graduated from Harvard earned more than $ 654.38+0 million, while only 2% of women crossed this threshold.
The richer a family is, the more likely it is that a man will be in charge. In 2005, only 1/4 of the spouses of taxpayers in the top 0. 1% group had jobs, and most housewives of the top rich were graduates from top schools such as Yale Law School. Ambitious geeks in the super elite marry classmates instead of secretaries, and their equally highly educated wives are likely to give up their jobs.
The problem is not that women are not as clever as men, nor that they are not as good at math: they have no killer instinct, and they don't want to fight or attack each other's key points. 」
Fourthly, the superstar effect under the new technology.
The so-called "superstar" effect of economists-technological revolution and globalization will often produce an economic competition in many fields and companies. If you become a leader in your field, you will bring rich returns, but if you win the second place, your economic value will be greatly reduced.
1. Supergeeks in the field of science and technology: Supergeeks who are mainly technical talents not only rule Wall Street, Silicon Valley, Bangalore and Beijing, but also take power in Washington-no matter which party wins the election.
2. The new technology has eliminated the old technology and expanded the overall scale of the market.
Live performance-Mrs Billington's lifelong career, Jobillin's original career-only accounts for a small part of the entertainment cake. Due to the birth of movies and radio, people spend more time on commercial entertainment activities, which creates a bigger market for top actors. ?
Once the Internet becomes a mass media, we have every reason to believe that this new technology will end the "superstar economic phenomenon".
In the Internet age, the income gap between superstars and others is bigger than ever before. We find that the top 1% high-income earners have about 17% of the total income in the national distribution map.
Why is Lady Gaga worth four Mrs Billington? In fact, the answer is not so mysterious. They are all the top queens of their respective times and are world-renowned. But the only way to hear Mrs Billington sing is to see her live performance in person, and now Lady Gaga's performance can only be heard and seen through the Internet. Globalization and technological revolution have spread Lady Gaga's music to a wider audience, so she has become a more dazzling star.
Although the film studio was seriously injured, the film star still achieved unprecedented success; Although the team has become worthless, sports stars can still earn millions of dollars.
We also find that in some industries-banking, law, sports, entertainment, and even general industries such as dentists, those at the top are widening the gap with others. This "superstar economic phenomenon" is one of the reasons for the emergence of global super elites.
3. A comfortable global village has been formed within the top rich economies.
How the richest economy became a self-sustaining global economy under the influence of Marshall effect, thus isolating everyone else.
The demand for luxury services exceeds the demand for low-income services. Remember, this is also the theory carefully described by the proponent of Citigroup's "Top Rich Economy": Gucci's performance is better than Wal-Mart's, excellent oil paintings appreciate faster than well-painted ones, and the demand for David Boyce exceeds the demand for assistant lawyers.
Russian oligarchs have created French superstar dentists, Wall Street bankers and Arab sheikhs have created superstar interior designers. Whether you are good at filling teeth or weaving, once you join the superstar alliance, you can benefit from the wealth accumulated by a few global business elites. On the other hand, whether you start your career in Western Siberia or the Midwest of the United States, as long as you are a member of the super elite, you will become a frequent visitor to the same dentist, interior designer and museum curator with other super elites. This is why a comfortable global village has been formed within the richest economy.
Marshall effect, Rosen effect and Martin effect all involve the way that superstars get higher returns for the value they create-richer customers (Marshall effect), more customers (Rosen effect) and better trading conditions with financial supporters (Martin effect). The accumulation effect observed by St. Matthew makes the above-mentioned factors contributing to the birth of superstars so powerful: the phenomenon of superstars can self-reinforce.
The scientist who can best embody the self-strengthening power of fame is Einstein. Einstein was a real pioneer physicist. His theory of relativity led the nuclear age and changed our way of thinking about the material world. However, why didn't James Watson, the discoverer of niels bohr and the double helix structure of deoxyribonucleic acid (CDNA), who made an important contribution to quantum mechanics and put forward an effective atomic structure model so far, become a household name like Einstein?
After World War II, Americans have a strong fear of foreigners, and anti-Semitism is on the rise. In this political climate, American public opinion controllers concluded that Dr. Einstein and his theory of relativity were not only evil, but also destructive. It is universally acknowledged that only "12 people" can understand the theory of relativity. Experts worry that this foreign secret clique can use knowledge to bend time and space, thus entering the "fourth dimension" and achieving the goal of "ruling the world". The New York Times even warned that Einstein's discovery was "anti-democratic": "An assertion on earth or interstellar space can only be understood by a few selected people, which is a violation of the Declaration of Independence. 」
? Weizmann's delegation arrived in America. At that time, Zionism was gradually welcomed by Jews in new york, and thousands of people came to the dock to meet the delegation. But the media believe that this group of people is Einstein's fanatical followers. Washington post reported, "Thousands of people are waiting to meet Einstein at the dock." The New York Times wrote, "Thousands of people waited for four hours to welcome Einstein and his team. Einstein aroused the interest of journalists, and they all focused on him. Journalists thought Einstein was an unruly and indifferent European who would look down on a somewhat rude American, but on the contrary, he was a humble and lovely guy. " He smiled when taking pictures, and his answers to unreasonable questions raised by reporters were full of humor and wit. Einstein no longer poses a threat to the Declaration of Independence. The New York Times declared, "The more familiar you are with Einstein, the better your impression of him will be. Prose writers also like Einstein. They like to subvert readers' expectations and experience pleasure. A legend in science was born.
Fourth, how the super-rich were born.
1, economic transformation, old system reform
The Soviet Union overthrew the old system, or changed from a centrally planned economy system to a market economy system. In these areas, the response to change has brought particularly considerable profits. The most amazing change-and the biggest opportunity to make a windfall-happened in Russia. Twenty years of capitalism has produced about 65,438,000 billionaires, accounting for 8% of the total number of billionaires in the world. The personal wealth of these Russian rich people is equivalent to 20% of Russia's annual economic output.
Soros has achieved remarkable success because the "radar" he used to detect changes is a way of thinking about the world, not a fool's algorithm. This is the real secret of emerging markets. If you are not afraid of things changing or leaving your hometown, it is much easier to make money in these underdeveloped economic fields than to win the market share of 1% in developed countries.
The smartest big companies in the world, such as General Electric, Google and Goldman Sachs, are looking for ways to profit from the great economic transformation of our time. However, the biggest winners are individuals, not institutions: globalization and technological revolution have greatly lowered the barriers to entry, and the beneficiaries are those who are smart enough and lucky enough to achieve their goals independently.
Mikhail Khodorkovsky, the richest man in Russia in 2003, the biggest winner of the privatization reform of "loans for shares", has been imprisoned for 10 years (for fraud, tax evasion and other charges) and spent most of his time in a reform-through-labour camp in Siberia. This turmoil of the top rich class is an important feature of the new top rich circle, which also explains why the top rich have a lot of bank deposits, but their current situation is actually not so stable, and there are great differences between them. The biggest winners of the current economy are those who are good at coping with changes, but it also means that they live in-as a Hungarian (Andy Grove) famously said-"a world where only paranoia can survive".
12 Among the 1226 billionaires on the Forbes rich list, 1 1 are oligarchs from the Soviet Union, 90 are technical experts and 77 are financiers. Compared with the economic scale, the number of billionaires and the gap between billionaires and others are even more striking: the total wealth of Russian billionaires is equivalent to 1/5 of Russia's annual economic output. In the United States, the wealth of 424 billionaires is only equivalent to 10% of the annual economic output of the United States.
Moscow is the city with the largest number of billionaires in the world, ranking first with 78 people, while new york has only 58 people, and London is only half of Moscow. Russian oligarchs have made great achievements, and today's income inequality is more serious than that in the czar period. The sale of assets after the disintegration of the Soviet Union is remarkable not only because it marks a sudden change from state-owned to private ownership, but also because the value of booty after privatization is so high and changes so quickly.
Almost everywhere, the ultimate goal is to get the government out. But the irony of the victory of free economic thought is that the implementation of free economic thought has brought the biggest opportunity of rent-seeking and making a fortune in economic history-in the final analysis, government-led privatization. It is one of the safest ways to join the ranks of the global super elite and occupy a place in the booty that is now or never.
2. follow the trend.
Big data will create a new group of superstars, and their rewards are very high. McKinsey estimates that by 20 18, there will be140,000 ~190,000 talents with "in-depth analysis skills" in the field of big data applications in the United States alone. Big data may create a handful of billionaires, who are the first to understand the revolutionary potential of big data and profit from it-the market value of Facebook is as high as 654.38+000 billion US dollars, which can actually be understood as the market's optimism about big data.
The rise of the former 1% rich group, especially the former 0.0 1% rich group, can be attributed to the rise of finance. Looser financial supervision, more collusion and higher risk pursuit are all important reasons why finance has become a more important field in many western economies, especially Britain and the United States, and are also the key reasons for the rise of super elites. This is also an important reason why financiers earn more than almost everyone else.
3. Know how to turn around in time
"Turning back" means that you realize that you have gone the wrong way and have to take a different route. To be a winner at the moment of change depends in part on the lucky combination of various factors, namely, the right skills, the right personality and being in the right position in society at the right time.
Once the big ones ate the small ones, but now they have quick brains and slow reactions. Sal, a professor at London Business School, believes that mature companies-big companies-can hardly become responsive companies, at least in terms of efficiency. These companies have not changed their behavior, and their typical reaction is "positive inertia"-the company is still conservative, but more active than before.
Firestone company. Harvey firestone, the founder of the company, is very good at coping with change. 1900, Firestone began to produce tires in Akron, Ohio. Henry Ford was a pioneer in mass production of automobiles, and firestone saw its potential. 1906, Ford selected Firestone Company to provide tires for Model T vehicles. 1988, Japanese competitor Bridgestone bought Firestone Company at a low price. Like many powerful century-old stores, Firestone was crushed by this new subversive technology as radial tires entered the American market. The company tried to catch up and began to step up the production of radial tires, which were originally designed for the production of traditional bias tires, resulting in disaster. In the end, Firestone had to recall millions of tires. At the hearing of the US Congress, Congress held that the tire problem caused 34 deaths, and Firestone should be responsible for it.
The direct cause of Firestone's failure is its past success. Firestone has been doing well in the stable post-world war ii era in the United States. As Sal said: "As long as the environment remains unchanged, it is right to follow the success formula step by step. But now many industries, many countries and the whole world economy are in a period of change, and "step by step" is far from enough. At this time, outsiders who are good at coping with change can stand out and overcome the inherent system.
Groupon group buying website was originally a platform for collective political action; Paypal (PayPal) website was originally a tool for transferring money between mobile phones, and later "turned around" to become an online payment platform in Yi Bei (Yi Bei). Twitter started as a podcast site, but it failed before it became Weibo.
LinkedIn, which went public on 20 1 1, made Hoffman, the co-founder and chairman of the board, a billionaire. Hoffman understands that although he is good at the wave of change, this wave has created a more polarized society with winners and losers. "Those who know the new rules of the workplace and master the new skills of the global economy have widened the gap with those who stick to the old way of thinking and rely on commercial skills.
Nobel Prize winner Michael Spencer said: "The knowledge and skills you acquire are not as easily replaceable as a portfolio. Soros can cope with the change by reducing or trying different gambling methods. It is not so easy for the public to find a new job at the age of 45, because the previous job has become a burden.
Fourth, the fatal shortcoming of the super rich-short-sightedness.
When you join the super elite and climb to a certain height, your life will change and the people around you will cater to all your needs. "When you get used to being served 24 hours a day for 7 days, you begin to feel that the whole world revolves around you and your needs. You lose your judgment on right and wrong things, have more resources and exist independently of others, which will prompt people to put their own interests above the welfare of others and regard greed as a positive and beneficial thing, which will lead to more and more immoral behaviors.
When Venice reached the peak of its economic strength in 13 15, they began to take actions to "lock in" their privileged interests. The privileged group, which gradually tightened its control over the government, published Jin Dian, which officially ended the social mobility, because it was an official directory for registering Venetian nobles. If your name is not in this booklet, you can't join the oligarchy.
Soon, "political isolation" became "economic isolation". Under the control of oligarchs, the ruling group in Venice gradually cut off the business opportunities of new entrants. The Comanda Contract, the product of legal innovation that made Venice and other Italian city-states rich, was banned. The elite ruling groups in Venice and China act for their own interests at present, and shutting out entrepreneurs and the rich means that those with vested interests can have exclusive control over the lucrative trade routes of the city. However, in the long run, "closing the door" means that the oligarchs in Venice began to die, which means that the whole Venice began to decline from prosperity. By 1500, the population of Venice is less than 1330. Venice used to be the richest city in Europe, but in the 17 ~ 18 century, while the economies of other European countries continued to grow, the wealth of this city continued to shrink.
Warren Buffett, regarded by the public as a nobleman, is the most sacred figure on the altar of American billionaires. In 2008, he described his investment philosophy in a letter to shareholders: "A truly great enterprise must have a stable moat to ensure the super-high return on investment capital. Buffett knows that the "creative destruction" of the open economy is beneficial to the whole country, but a clever capitalist like him prefers to protect himself with an insurmountable "moat", just as the Venetians put their names in Jin Dian.
The modern version of Jin Dian's membership is more vague than being included in the aristocratic list. In our increasingly complex economy, the real Jin Dian is the degree of elite universities, and more and more global super elites occupy the sites of these universities. In fact, statistics show that parents' wealth is more closely related to getting a college degree than their test scores in high school: higher classes are more important than listening carefully.
Different from the elite in Venice, western capitalists are committed to "creative destruction" and competition with newcomers, thus creating an increasingly inclusive economic and political order. Thus, the most dynamic economic development era in human history was born. Marxism makes elites more willing to share the fruits. Concern for the proletarian revolution is a powerful driving force for reform. Instead of risking being completely caught by Bolshevik pioneers, it is better to give the working class an effective political discourse right and social safety net.
As the economic gap between the top rich and others becomes a gap, they begin to live in their own "behind closed doors" global community. The richest 65,438+0% people and the remaining 99% people live in different cultures. "Cultural isolation" is terrible because it intensifies the political shortsightedness of the top rich.
Have a long-term greedy eye. If the top rich were smart enough, they would adopt this philosophy now. However, when Levy's successor took the helm at Goldman Sachs, he gradually realized that this sentence sounded easier said than done.