When Philanthrocapitalism was first published in September 2008, some of our critics thought that the economic meltdown would mean the end of superwealth and supergiving. We argued then that the wealth would certainly bounce back, since the rich would be able to weather the storm more easily than the rest of us, and that mega-giving would continue despite the downturn.
The newly published annual billionaires list in Forbes magazine confirms the first of those predictions. The super-rich are bouncing back faster than the global economy – the world’s billionaire count has jumped from 783 in 2009 to 1,011 now. The philanthrocapitalists have also continued giving, as demonstrated not least by Bill Gates’s recent $10 billion pledge at Davos.
The big “news” from this year’s Forbes list, however, is that the richest person in the world today is neither Bill Gates (number one on the list for most of the past decade) nor Warren Buffett (his partner in philanthropy, who once knocked Gates off the top slot) but the Mexican telecoms tycoon Carlos Slim. This is not such a huge surprise, since Slim has been catching up with Gates and Buffett over the past few years – though given the fact that estimating the wealth of the superrich is more art than science and Forbes found less than a 1% difference between the fortunes of Slim and Gates, it may be no coincidence that the magazine’s choice as top dog happened to be the one likeliest to generate the most headlines. (How boring if Gates had been the richest yet again.)
That said, the Forbes ranking provides a great opportunity to test the new number one against the ‘good billionaire guide’ that we set out in the book.
The first rule for a good billionaire is to earn your money fairly in competitive markets (some think that Gates falls foul of that rule since Microsoft has had a few run-ins with the antitrust authorities, although one could argue that since Microsoft was forced to pay some substantial fines as a result it has paid its dues ). Critics have certainly slammed Slim for his iron grip on the Mexican telecoms markets, which he won when they were privatised (his BBC biography says that he controls 90% of the country’s landlines).
The second rule is the billionaires should pay their taxes. We do not have any evidence to go on with this one. Mexico is known as the major economy with the lowest rate of tax revenues relative to GDP. But we have no information regarding Slim’s own contributions, and whether he bucks that trend. If you know, please do tell us.
The third rule is that billionaires should be disproportionately generous, to reflect their substantial wealth, and the fourth, that they should be thoughtful about giving in a way that maximises its positive impact. The good news is that when we wrote the book, Slim had just pledged to give away $10 billion, which is not Gates-like or Buffett-like generosity, but is a decent showing. He has also appeared alongside Shakira as a show of support for her philanthropic work in Latin America, to which he has given an unspecified amount of money (almost certainly small change to him). However, we have heard very little about his philanthropy since. It may be that Slim is giving it away in secret but, on the whole, we think that well-known philanthrocapitalists should be talking about their giving – to encourage others and to be transparent.
Slim has certainly spoken sceptically about philanthropy in the past and has argued that “poverty is not fought with donations, charity or even public spending, but that you fight it with health, education and jobs.” This argument seems rather feeble to us. Yes, investing his money can create jobs and wealth but that’s not the whole answer to the world’s ills – his philanthropy could have a massive impact on poverty.
Our advice Carlos, for what it’s worth, is to give giving a chance. In fact, we even predicted you would in our start of the year forecast for philanthrocapitalism in 2010. If you’re too busy for now making money then why not let someone else spend it, say by matching the Gates donation for vaccines, or, perhaps even better, adding to the endowment of some other foundations working in global health to create a bit of competition for Gates. Go on, you might even enjoy it.