Cyberbillionaires are building a dysfunctional economy
One statistic tells the story: According to the United Nations' Human Development Report 1996, the combined wealth of the world's 358 billionaires now equals the total income of the poorest 45 percent of the world's population, some 2.3 billion people.
Earlier this year, Forbes reported that Microsoft co-founder Bill Gates had moved past investment guru Warren Buffet into first place on its annual list of the world's wealthiest people. The 40-year-old Gates is worth an estimated $18 billion. Moving up to number eight on the list was his childhood pal and company co-founder Paul Allen, who weighed in with a net worth of $7.5 billion.
This bit of news was hardly earth shaking. After all, Gates and Allen had been amassing significant fortunes ever since their Seattle-based software company began to dominate the computer industry in the mid-'80s. Their rise to the ranks of the world's richest men was just a matter of time. Indeed, as Victor Keegan notes in The Guardian Weekly (July 28, 1996), digital billionaires, who are making their fortunes faster than anyone else in history, have begun to replace the Rothschilds, Rockefellers, and other 'old money' on the Forbes list as the information economy hits its stride.
But it's not just the speed at which Gates and his cyberpeers have built their billions that confounds conventional wisdom--it's also how they've done it. In the days of Carnegie and Ford, for instance, the rich actually created something--steel, cars, and such--that, in turn, created new jobs in related industries. But, as Keegan puts it, 'All the digital billionaires do is to rearrange the 1s and 0s of computer code into software packages selling for hundreds of dollars each.'
Keegan points to the meteoric rise of Netscape, creator of the world's most popular Web browser, as an example. The company, which is barely two years old, has been valued on the stock market at $5 billion despite the fact that it mainly gives its product away. (You can easily download it from the Internet.) What Wall Street is banking on is that the company, which last year lost $1.4 million on sales of $80 million, will eventually sell a whole host of ancillary products and services to its wired customers. After all, the company's browser is favored by 85 percent of all Internet users, which is a prett