Of Bernie, Bloomie, and Adam

If my Twitter feed offers a reliable picture, like many people watching the 2020 Democratic presidential debate Wednesday night, I was both perplexed and disappointed by Mayor Bloomberg’s defense of his personal fortune against an attack by a millionaire socialist with three houses. After Bernie Sanders suggested that Michael Bloomberg’s wealth was “grotesque” and “immoral,” Bloomberg responded that he had gotten “very lucky” and had “worked hard” to build his wealth. Now, there are many obvious problems with the exchange: Sanders’ preening self-righteousness, the implied notion that government can rightfully seize wealth and effectively redistribute it, and the not-quite-right, “I built that” defensiveness of Bloomberg’s response to name a few.

Bloomberg would have been much better served by shifting the focus from his personal wealth to some questions for Bernie: “Do you have any idea how much work by how many people has gone into generating that net worth? Do you understand how many salaries are paid and families supported through a business that has yielded, over decades, a personal fortune of $64 billion? When you attack business owners as ‘greedy’ you’re basically arguing that everyone, not just the wealthy, should be poorer, have fewer opportunities, and be less secure than they are right now. And maybe that’s what democratic socialism actually aims for.”

In 2018, it is estimated that all Bloomberg L.P. entities generated about $10 billion in revenues with a net profit of about $2 billion. This suggests that the company is spending roughly $8 billion per year on its operations. Labor is typically the biggest operating cost as businesses pay workers to deliver the products and services that customers demand. Bloomberg L.P. directly employs 19,000 workers and presumably many more indirectly via contract work. Everyone, from the janitors that clean the Bloomberg offices to the vendors that deliver the morning pastries, to the accountants, marketing professionals, technologists, recruiters, up to the top executives, all draw their sustenance out of that $10 billion revenue stream. Because Bloomberg L.P. is privately held, what’s left after expenses reverts to those who have an ownership stake in the company, including Michael Bloomberg. Over a career spanning 40 or 50 years, with careful management and reinvestment, Bloomberg has secured a magnificent fortune of $64 billion. But his company has spent many times more than that on the wages and benefits of those who work for his companies and, as he noted, the part he has retained is now being given away with the balance probably winding up in his foundation, Bloomberg Philanthropies (the nation’s 12th largest) that will continue his giving after Bloomberg departs earthly life. This is the same pattern we see in people like Warren Buffet, Bill Gates, Jeff Bezos, and the other titans of American commerce who are really better thought of as leaders in employment and charitable giving.

What kinds of people create this kind of wealth?

At the very top end of the ranks of corporate executives, we find some truly astonishing qualities. CEOs like Bloomberg are individuals of immense intelligence and talent with capacities that go well beyond ambition. They are leaders, strategists, and builders in the truest sense with tremendous intuitive sense that allows them to see around the corners of market demand, generating ideas, services and products often before consumers know they need them. In their restless energy and dynamism, we see vocation—the sense of calling to shape the world around them that is a shared human endowment—raised to a form that approaches art in its creativity, diversity, and impact on our lives.

What is hidden from our view until it bursts forth on Page Six, are the sacrifices associated with this kind of excellence. The single-mindedness required to build, manage, and maintain large businesses and vast wealth is often soul-crushing. The individual who enters commercial life with Bloomberg-sized ambition takes on a burden that few of us would envy if we could see what it requires. We see the cars and houses and yachts, but not the unrelenting toil or the way it often warps personalities and wrecks human happiness.

Given those kinds of costs, why would anyone aspire to it?

It is not because business owners are more virtuous than the rest of us. In the Theory of Moral Sentiments, Adam Smith argues that we are built to want prosperity and status. By nature, humanity is striving and acquisitive—Bernie Sanders no less than Michael Bloomberg—seeking to secure those trappings that brings us “honor” among our peers, in the form of money, property, fame and power. Smith’s “poor young man… whom heaven in its anger has visited with ambition” believes his life would be better and easier with a palace, carriage, and servants. He labors, “night and day” to acquire an “artificial and elegant repose… for which he sacrifices a real tranquility” that he could more easily obtain without great wealth. At the end of his life, with his bodily powers spent, wracked by memories of the losses that were part-and-parcel of his gains, he finally understands that “wealth and greatness are mere trinkets of frivolous utility” no more useful than so many toys. Steve Jobs, were he able to speak to us, would probably testify to this penultimate truth.

Though our envious imaginations struggle to conceive it, the great business figures of American history—names like Carnegie, Ford, Rockefeller, Mellon, Buffett, Gates, and Bezos—like Adam Smith’s poor young man, have often traded personal happiness for wealth and prominence. Like all of us, they will approach the end of life weighed down with the “what-ifs” and regrets born of the trade-offs they’ve made. The difference between these few and the rest of us is that their choices have inadvertently freed countless millions, and through globalization, unknown billions more, from poverty and disease and delivered living standards our best-off ancestors could scarcely imagine. Those who toil in the world of commerce, though it may have never entered their minds, work far less for themselves than towards ends they never intended and for the benefit of people they will never know.