November 04, 2007
Unlike Taki, I understand the fascination with the very rich. For the first time in 2007, all of the Forbes 400 richest persons in America are not just rich, but are billionaires to boot. In the world at large, Forbes calculates that there are exactly 891 billionaires. We are talking about a staggering amount of personal wealth. A billion dollars is a thousand million in the English language. How does one go about earning a thousand million? It is stupefying.
In going over the list, I noticed that I am on a first name basis with three of the world’s billionaires. Each of them has a fortune in excess of $5 billion; one is European, and the other two are Americans. I will not name their names. Of course, I know them only socially, not from doing business. And in a casual way. Basically, from the tennis courts and the world of tennis. They love the game, but play less of it lately, for all the obvious reasons. It gets harder with every passing year.
None of the three is retired. A few years ago, the richest (according to Forbes) complained that he didn’t have time to play tennis. I suggested the obvious. Why not relax and stop working? With nearly ten billion to his credit, why not call it quits? The thought never occurred to him. Why not? “I love the action,” was his response. He was on a merry-go-round and could not get off. That is the key to making a thousand million. The money is merely a byproduct. The action is the key.
H.L. Hunt said basically the same thing in his Playboy interview in 1966. Playboy: “What ambition drove you to amass such a vast fortune?” Hunt: “I just like to do things. When I got to transacting business for myself, I just wanted to do more of whatever I was doing.” Playboy: “You mean you acquired a fortune because you like to keep busy?” Hunt: “Well, it’s been interesting and a diversion. I don’t have many hobbies.” In the article, Playboy quoted fellow oil tycoon J. Paul Getty as stating, “In terms of extraordinary, independent wealth, there is only one man—H.L. Hunt.”
Ten years later, with Hunt, Getty and Howard Hughes having left the stage—Hunt died in 1974 and both Getty and Hughes died in 1976—Fortune ran a fascinating article entitled “The Last Billionaires”. Guess how many billionaires were alive in the entire world then, in 1976? Exactly two: Daniel K. Ludwig and John D. MacArthur. According to the article, both dropped out of school after the eighth grade.
Ludwig ended up in the oil tanker business and, according to Fortune, “showed the Greeks how to do it.” It was Ludwig in 1936 who dreamed up the idea of getting the oil companies to sign up for a charter before the ships were even built. He then took the charter contracts to the banks to get financing to build the ships. “This, quite literally, revolutionized the tanker industry and gave independent owners a way to amass huge personal fortunes. Among other things, the new financing method was responsible for the success of the ‘golden Greeks’, Onassis and Niarchos.”
As for MacArthur, he was a salesman and dealmaker whose cash cow was Bankers Life & Casualty of Chicago. But insurance was not, according to Fortune, MacArthur’s real business. “For while he became rich selling insurance, he became a billionaire by using his insurance company as a financial base for an enormous real estate investment.” At the time of the article, MacArthur was conducting business out of a coffee shop in a second-rate hotel he owned north of Palm Beach. “MacArthur sits down at his corner table, lights a cigarette, pours the first of a dozen cups of coffee, and begins to deal with the constant stream of visitors…. His definition of a phony is anyone who offers to sell him something for more than its worth.”
How did we get from five eccentric billionaires in the United States in the 1970’s to almost 900 worldwide today? Inflation must certainly be one factor, but that would be looking on the negative side. The explosion of wealth, prosperity and progress as represented by these mega-fortunes is authentic. I conclude that we are living in extraordinary times, by any measure. Whereas politics, both domestic and international, have gotten worse, and there is more mendacity and hypocrisy than ever, on the other hand, the quality of life for humanity at large could be said to have catapulted at a pace equal to the growth of the billionaires, whose fortunes must reflect the physical workings of the real world.
Look at your automobile, your personal computer, your mobile phone, the inside of your grocery store, and at the exterior of midtown Manhattan, among other things. Compare them to what you observed in the 1970’s. In some cases, there is nothing to compare them with, because comparisons did not exist. The cell phone and the personal computer, the internet and e-mail are now ubiquitous. They are advancements. They created billionaires. It is difficult to imagine getting along without them.