"Who Wants To Be A Trillionaire?"
by Joel Bowman
“Look, we’re probably gonna fail, but you know, we should give it a try, because if we don’t, if there’s not a new company that enters space, we will never be a truly space-faring civilization.”
~ Elon Musk on the prospects of SpaceX
Buenos Aires, Argentina - "When J.D. Rockefeller became America’s first billionaire, in 1916, his net worth was equal to roughly 2.5% of the nation’s entire GDP. When Elon Musk became the world’s first trillionaire just last week, his pile stood equivalent to about 3.4% of the world’s largest economy. And it’s since rocketed higher, if you’ll pardon the pun, to about $1.4 trillion as of this writing, closer to 4.2% of America’s GDP.
Of course, times were different back in Rockefeller’s day...For one thing, the days were fewer. The average life expectancy for men was just 49 years. Women were still expected to outlive their husbands, but only until they turned 54. Penicillin, generally considered the very first antibiotic, was still a decade away from discovery. And modern comforts like air conditioning, dishwashers and commercial flight still seemed like futuristic, pie-in-the-sky dreams. As for color television... sushi trains... and Artificial Intelligence... they remained augmentations of a reality beyond the wildest imagination of mere human intelligence. They were simpler times. And yet, then as now, the politics of envy was alive and well.
Trust Busting: Long before the Bernie Sanders and Elizabeth Warrens of the world promised to “eat the rich,” there was Theodore “Teddy” Roosevelt. The so-called “trust buster,” Roosevelt was deeply suspicious of what he saw as “bad trust monopolies,” viewing Rockefeller’s businesses as abusive and predatory, and the man himself as the archetypal robber baron. “No man should have such power as Rockefeller has,” he once decreed, “without being held accountable to the people.”
Indeed, it was Roosevelt’s administration that laid much of the ideological and legal groundwork for vigorously enforcing antitrust laws which, in 1911, under President William Taft, eventually resulted in Rockefeller’s Standard Oil being broken into smaller, state-sized pieces…Standard Oil of New Jersey later became Exxon… Standard Oil of New York became Mobil (then the two became ExxonMobil)…Standard Oil of California became Chevron…Standard Oil of Indiana became Amoco… The Ohio Oil Company became Marathon Oil…Continental Oil Company became ConocoPhillips… and so on.
That most of the Standard Oil companies have since merged and coagulated into the Big Oil blob we see today is one irony. The larger irony, however, is that as Rockefeller’s shares in the various spin-off companies increased in value over time, the original Standard Oilman grew ever richer. Indeed, when Rockefeller became America’s very first billionaire, prefiguring Bernie’s worst nightmare decades before the sleeper Soviet was even born, he proved that the unwieldily federal government is an expert in one thing above all others: creating unintended consequences.
One may be grateful Rockefeller’s enterprise was “only” broken into smaller parts and not seized outright, turned over to the feds to administer “in the public’s interest,” lest it be turned into the Amtrak of oil companies. (Consider that, at current deficit levels, Washington burns through the equivalent of an entire SpaceX every 17 months. Hardly the prudent stewards of capital you’d want commanding your spaceship into the great beyond.)
The Path to Prosperity: And yet, among the socialists and green-eyed collectivists of the day, there were calls for nationalization, all in the name of “public good,” of course. Eugene V. Debs was one such voice of unreason. A prominent labor organizer, socialist politician, and five-time presidential candidate, Debs argued that, along with railroads, telegraphs, utilities and “natural monopolies,” oil was simply “too important” to be left to private hands. Only the government, by multiplying individual ignorance into collective wisdom, could be trusted with such a critical industry. Thankfully Debs never got his way... although he typified much of the anti-intellectual claptrap of today’s expert expropriators, political parasites and managerial moochers.
By many measures, we’ve come a long way from the days of the so-called “robber barons,” who laid the groundwork for what would become the American Century. Thanks largely to America’s leading role in global industrialization, a baby born in the US this year can reasonably expect to live for 80 years and longer. Moreover, his parents can plan his first birthday with a fair degree of confidence he’ll actually get there. In Rockefeller’s day, roughly one in every ten babies were “gone with the wind,” even before blowing out their first candle. Today, 199 in every 200 infants reach that happy milestone... many of whom go on to build and create astonishing things the rest of us take for granted.
In Rockefeller’s America, most homes lacked electricity and only a small minority enjoyed indoor plumbing, both essentially universal amenities today. In fact, the average family home in 1916 stood at a “cozy” 1,000-1,200sq/ft, less than half of today’s spacious (and climate controlled) 2,500sq/ft average build.
The same goes for advancements in practically every area of modern life. From MRI scans, to GPS navigation, modern dentistry, airbags, organ transplants, satellite internet and so on down the line. Automobiles, considered a luxury item for “early adopters” in Rockefeller’s time, are now a common consumer good, with on demand chauffeurs (ride sharing apps) for those who live in cities, couldn’t be bothered driving or simply had a little too much vino at lunch.
Over the past century, the US population grew by about 3.3x (from 102M to roughly 340M)… while the broader economy, even after adjusting for inflation, exploded by a massive 20x (from $1.7T in today’s dollars in 1916 to a mind-boggling $33T presently). In other words, the average American today produces and consumes about six times as much economic output as the average American in Rockefeller’s day.
Milk, Honey & Big Macs: Even with his considerable wealth and power, Rockefeller himself could not have afforded modern refrigeration... a commercial flight to Europe... blueberries in January... a pocket calculator... or even a Big Mac. Not because he didn’t have the dough, mind you, but because inventors, visionaries and entrepreneurs like him had not yet brought these products, and a wave of other gizmos and gadgets, to market. They simply didn’t exist yet. In other words, the men and women who said, “We’re probably gonna fail... but heck, let’s give it a try anyway!” had not yet brought their ideas to fruition.
Today, there are an estimated 26 million millionaires in the United States of America, far more than in any other country on the planet (with quadruple the population, China comes in second, with just 6 million.) There are also between 2.5 and 3 million decamillionaires ($10M+), more than 100,000+ centimillionaires ($100M+) and, much to Bernie’s grumbling consternation, over 1,000 billionaires... about 30% of the total global supply, despite the US having only 4% of the world’s population.
All that didn’t happen because politicians like Elizabeth Warren tsk-tsked the nation into prosperity with her “If you have a company, you didn’t build that” blabbering. It didn’t happen because Zohran Mamdani taxed the rich out of the greatest city in the world or because Bernie thinks “billionaires should not exist.”
It happened thanks to visionaries like Messrs. Vanderbilt and Carnegie and Rockefeller... because of Henry Ford and Walt Disney and Sam Walton... because of the Wright Brothers and Thomas Edison and Nikola Tesla, who left the backwater of European empire and moved to the center of electrical innovation and market dynamism.
The conditions that enabled these and other entrepreneurs to create and to flourish delivered us the Age of Abundance we so blithely enjoy today. That is, robust private property rights, rule of law and political stability, and the advent of limited liability companies and scalable capital formation.
What marvels will mankind experience a hundred years from now, we wonder, when they’re standing on the shoulders of this century’s giants? And who will safeguard the conditions that will help empower them? In other words, in the not-too-distant year of 2126, will our space-faring progeny be minting the world’s first quadrillionaire... or squabbling in the dirt and the muck, bickering over whether such people should be “allowed” to exist in the first place? Stay tuned for more Notes From the End of the World..."
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