Friday, Oct. 9
Posted 2 p.m. EDT
When individual capitalists of the late 19th century Gilded Age amassed their personal fortunes at the dawn of industrialism, they were given the unfortunate tag of "robber barons." It seems they laughed in the face of some rules, and neatly sidestepped others, leading to their nefarious reputation. Yet the list of reviled industrialists included names we know and benefit from to this day: real estate magnate John Jacob Astor, railroad visionaries Henry Flagler and Andrew Carnegie, banker J.P. Morgan, and oil magnate John D. Rockefeller.
Who are today's richest profiteers? According to the Forbes 400 list of the wealthiest Americans, they again include titans of finance -- trader Steven Schonfeld and banker Andrew Beal, who tripled his net worth by buying cheap loans and assets as the market fell -- as well as today's builders of tech infrastructure, like mapping-software entrepreneur Jack Dangermond and top-of-the-list perennial Bill Gates.
Much as capitalism has been maligned during the recent recession -- and it's true that part of the reason we're in this mess is that rules were shunned in favor of greed -- the exchange of goods and services where both parties benefit will always be a way to enrich society as a whole. Simply put: We need wealth creators to fuel the engines of growth. The government is not a wealth-creator and won't single-handedly restore our economy.
The Forbes list is full of examples of wealth creation in a free-market economy. One is real-estate entrepreneur Donald Bren -- No. 16 on Forbes' list -- who built his first home in 1958 with a loan of $10,000. Today, his California firm, Irvine Co., owns 475 office buildings, 115 apartment communities, 41 retail centers, resort properties and various new housing communities. That type of initiative can only spring from capitalism.
And typically, wealth doesn't flow one way; it comes back to us in the form of philanthropy. Bren, for example, has protected more than half of the 93,000-acre Irvine Ranch for public parks and trails. Gates has donated $3.8 billion this year of his personal money toward his foundation dedicated to fighting hunger and illness and improving education.
Take another look at the Forbes list. Aside from the previously mentioned Gates and Bren, you'll find Lawrence Ellison of Oracle; the Walton family, founders of Wal-Mart; as well as the founders of Google, Dell and Nike. Whatever your opinion of them personally, in their quest for personal wealth they all provided jobs in their own industries and in ancillary industries, and made a lot of people rich along the way.
Think about how often you use their products and services, and whether these companies are strong enough to stand the test of time and be household names a century from now.
How long until you become a millionaire?
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