The decline of the rags-to-riches tale

America’s self-made men were well-to-do to start with. And they still need to learn how to blow it.


Zuckerberg with his wife Priscilla Chan: just at the start of their charitable project
(Image credit: Copyright (c) 2016 Shutterstock. No use without permission.)

We pine for the days when American robber barons wore top hats, smoked cigars lit with $100 bills and signed their cheques with Xs. These days the tycoons are all baby-faced whippersnappers like Mark Zuckerberg.

Earlier this month it was revealed that Zuckerberg "has leapfrogged Warren Buffett to become the third-richest person in the world, and is now said to be worth around $81.6bn (£61bn)", as Hannah Boland puts it in The Daily Telegraph. The Facebook founder is now only behind Amazon's Jeff Bezos and Microsoft's Bill Gates in terms of wealth.

It's not just the industry in which the rich make their money that has changed, says Anne Vandermey on Bloomberg. "Earlier generations' formative experiences revolved around paper routes and pathos."

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Oil baron Harold Hamm, for example, born in 1945 as the youngest of 13 children of Oklahoma sharecroppers, drilled his first oil well at age 25. Recently deceased casino and movie magnate Kirk Kerkorian faked documentation of a high-school graduation in order to join the military as a pilot. Even Goldman CEO Lloyd Blankfein "grew up in Brooklyn housing projects and at one point served concessions at Yankee Stadium to earn extra money".

Today's prototypical founding story, in contrast, involves "an upper-middle-class childhood, early access to a computer, and an elite education even if that education was abandoned".

The self-made man "has always played a profound role in the American imagination"; today's captains of industry "are long on brilliance, but short on hardship". And given that the likelihood that a child today will rise from the lowest to the highest quintile of earnings is less than 10%, true American rags-to-riches stories are getting rarer.

Leapfrogging Buffett

Interestingly, Zuckerberg has leapfrogged Buffett only because the latter has started to give away large chunks of his wealth, as Felix Salmon notes on Slate.

Indeed, Buffett has given away some 290 million Berkshire Hathaway B-shares since 2006, many of them to the Gates Foundation (Bill Gates has also donated shares now worth $71bn). If you add the $54bn off the donated shares to his current net worth of $81.2bn, Buffett would be worth roughly $135bn today, way more than Zuckerberg, and getting very close to Bezos.

Although both Bezos and Zuckerberg have made charitable donations, they have been too small to have had any visible effect on the respective net worth of the pair. Zuckerberg "has promised to give away 99% of his wealth within his lifetime", but he is "currently only at the very beginning of that project; Bezos, meanwhile, has barely started his giving".

This implies that the two technology titans need to realise that "capitalism is not a game where the person who dies with the most money wins", as Salmon puts it. After all, wealth is just deferred consumption. If you die without having spent your money or given it away, that suggests that you may have "deferred that consumption a bit too much".

Tabloid money the NHS is being run into the ground

Singers Beyonc and Jay-Z reportedly demand that their six-year-old daughter Blue Ivy must have a private dressing room in each arena they play at, says Vanessa Feltz in the Sunday Express. Her playhouse, a replica of the £300,000-a-month Malibu mansion the family is renting, must be pride of place, while aides unpack the rest of her toys before every show; Bey and one of her team of four nannies survey proceedings from a VIP section in the wings.

"So far, so unsuitable." What a six-year-old really needs is love, security and early bedtimes, preferably in their own beds, along with lumps of Play-Doh and chums to play with. Of course, Blue Ivy is bright enough to know she has been born into a world of privilege. But why the heck can't the parents give the whole family a break and stay at home for once?

"There was no doubt in my mind, as the NHS turned 70, that it's the best health service in the world," says Karren Brady in The Sun on Sunday. One reason for that is because it is so accessible. That, however, is also its downfall. "People are as likely to turn up to A&E with a broken nail, earache, or because they are too drunk to find their way home, as they are with actual accidents or emergencies."

To illustrate the point, £80m-worth of paracetamol prescriptions are claimed a year when a packet costs as little as 19p in the shops. If people had to pay more to use the NHS, they would think twice before abusing it. But because it is "free", we are running it into the ground. Something has to change radically.

I'd give my eyeteeth to go to one of the gala events on the occasion of Donald Trump's four-day visit to Britain, says Rachel Johnson in the Mail on Sunday; "or to be a fly on the wall on the date between the two wags, Melania Trump and Philip May.

"Others, however, seem not so keen. Baroness Lane Fox of Soho, the founder of Lastminute, said wild horses couldn't drag her to a dinner organised by the prime minister, with business leaders and the US president at Blenheim Palace. Declining the invitation, she said "We can agree this is a new career low. Imagine the guest list if I'm on it". Well, "if you have some other last minute' pressing engagement, I'll go in your place, Martha"!