Amazon.com Inc. founder Jeff Bezos has seen his net worth soar by $ 63.6 billion this year.
Jeff Bezos’ message: Big Tech is not that powerful.
The message of his personal fortune: Oh yes.
As Bezos and three other tech moguls prepare to defend their businesses at a Congressional hearing on antitrust concerns on Wednesday, their rapidly growing wealth provides a breathtaking measure of their businesses’ economic strength. The founder of Amazon.com Inc. has seen his net worth soar by $ 63.6 billion this year. In one day this month, it surged an unprecedented $ 13 billion. The richest man in the world is now on the cusp of another record: a fortune exceeding $ 200 billion, according to the Bloomberg Billionaires Index.
Another CEO ready to testify, Mark Zuckerberg of Facebook Inc., has made $ 9.1 billion richer this year, putting his fortune within reach of the centibillionaire status already held by Bezos and Bill Gates.
The mind-boggling amount of money going on in technology is unmatched in speed and scale. No other group of executives has prospered to such a degree. Indeed, the world‘s richest people are getting richer, even faster, as the coronavirus pandemic disrupts the global economy and drives more and more activity online.
Online economy
“We have shifted the brick-and-mortar economy to an online economy dramatically,” said Luigi Zingales, professor of finance at the Booth School of Business at the University of Chicago. “Probably the same thing would have happened in a longer period. Now it is happening in weeks instead of years.”
The hearing will be held by videoconference and will also feature Tim Cook and Sundar Pichai, CEOs of Apple Inc. and parent company of Google Alphabet Inc. It is set to be a combative affair as lawmakers express increased frustration with the way the industry exerts its influence.
Bezos’ position will be that his company is an American success story that has achieved its position through risk taking and a constant focus on customers, according to his prepared testimony. He will tell his personal story and that of his parents, who invested in what would become the world‘s largest online retailer.
The collective wealth of tech billionaires in the Bloomberg Index, a ranking of the world‘s 500 richest people, has nearly doubled since 2016, from $ 751 billion to $ 1.4 trillion today. It is faster than in all other sectors.
Seven of the world‘s 10 richest people get most of their fortunes from tech funds, with a combined net worth of $ 666 billion, up from $ 147 billion this year.
Big winners so far in 2020 include Elon Musk, whose net worth has more than doubled to $ 69.7 billion thanks to the surge in shares of Tesla Inc.
Microsoft Corp. co-founder Gates and former CEO Steve Ballmer also exploded, long after leaving the company. Indian billionaire Mukesh Ambani, whose fortune is tied up in the world‘s largest oil refinery, has also taken advantage of the online shift. Shares of Reliance Industries Ltd., the conglomerate he controls, have risen 45% this year as the company expanded into digital and retail businesses, making it the fifth richest person in the world. world.
Among the top 10, only two saw their wealth decline in 2020: luxury mogul Bernard Arnault and Warren Buffett of Berkshire Hathaway Inc. As technology increased, more than 200 of the 500 billionaires Bloomberg tracked lost money. money this year.
The giant tech companies control the infrastructure of the digital economy in the same vein as how the Gilded Age Trusts monopolized the American industrial economy at the turn of the 20th century. Yet by 1900, America’s five largest firms had combined market values that represented less than 6% of the nation’s economy, according to estimates by Massachusetts Institute of Technology economist Daron Acemoglu.
Currently, five of America’s biggest tech companies – Apple, Amazon, Alphabet, Facebook, and Microsoft – have market valuations equivalent to about 30 percent of U.S. gross domestic product. That’s almost double what they were at the end of 2018.
The economic power of the Robber Barons created a fiery backlash, in violent labor unrest and the passage of once-sweeping reforms, like the Sherman Antitrust Act and a federal income tax. Compared to the political difficulties faced by John D. Rockefeller and other industrial tycoons of the early 20th century, the government’s actions against Big Tech have been relatively moderate. At least so far.
On the left, politicians, including Alexandria Ocasio-Cortez and Bernie Sanders, have launched sweeping attacks against widening inequalities and the growing wealth of billionaires. Protesters gathered outside Bezos’ Manhattan penthouse demanding a wealth tax. Facebook employees spoke about their employer’s role in spreading disinformation and hate speech.
New golden age
Monopolists like Rockefeller and Andrew Carnegie have helped repair their public images through large-scale philanthropy, a movement that has echoed in this new golden age.
The Giving Pledge, a pledge to give away the majority of your wealth in your lifetime, was founded by Gates and Buffett. Zuckerberg also entered the field of philanthropy, creating the Chan Zuckerberg Initiative, or CZI, in 2015 with the aim of “advancing human potential and promoting equality”.
But even these acts drew criticism.
“The modern ultra-billionaire is someone who feels entitled, in many cases, to privately rule the people of the United States,” said Anand Giridharadas, author of “Winners Take All: The Elite Charade of Changing the World, ”a critic of billionaire philanthropy.
Gates’ generosity and activism during the pandemic earned him praise, but it also attracted conspiracy theorists wary of his motives. A YouGov and Yahoo News poll found that 44% of Republicans and 19% of Democrats believed Gates wanted to use vaccines to give people follow-up implants.
Bezos’ criticism has not stopped either, even as his donations increased recently with a $ 10 billion pledge in February to fight climate change and a $ 100 million donation in April to the organization. Feeding America nonprofit. When he made the announcements, his wealth had already grown by far more than these amounts this year. He did not sign the pledge to give.
Commitment signed
MacKenzie Scott, Bezos’ ex-wife, signed the pledge shortly after the two announced their separation. Scott said Tuesday she has since donated $ 1.7 billion to several causes, including racial equity, climate change and public health.
“There is no doubt in my mind that the personal wealth of anyone is the product of collective effort and of social structures that provide opportunities for some people and obstacles for countless others,” she said. .
Big tech companies have earned some reluctant respect, even from critics, during the pandemic.
“We were fortunate to have these digital technologies,” said Acemoglu of MIT. “Without them, the fallout from lockdowns and social distancing would have been worse.”
It can come at a cost: “It will worsen the dominance of tech companies over the economy and our social life, and it will dramatically accelerate the trend towards greater automation,” Acemoglu said. He warns that the rapid rise of technology can worsen inequalities, reduce the number of good jobs and weaken democracy.
Such concerns could help Big Tech and its billionaires in the crosshairs of governments whose finances have been devastated by the pandemic. In the run-up to this year’s U.S. presidential election, Elizabeth Warren and Sanders have proposed wealth taxes for billionaires, an idea that has polled voters well.
Former Vice President Joe Biden, the alleged Democratic nominee, has not passed the wealth tax, but he is campaigning for higher rates for the rich and for businesses, as well as for closing tax loopholes. inheritance tax.
In the absence of a wealth tax or any other new kind of innovative taxes, it will be difficult to tax the fortunes of Zuckerberg, Bezos and other tech billionaires. Much of their fortune comes in the form of rising stocks, which are not taxed until they are sold.
“Billionaires accumulate a huge amount of unrealized capital gains, on which they pay little, if any, in tax,” said Gabriel Zucman, professor of economics at the University of California at Berkeley, who helped Sanders and Warren develop their wealth tax. proposals.
(Except for the title, this story was not edited by GalacticGaming staff and is posted from a syndicated feed.)
