Advice: How To Be A Good Billionaire
Scrambling towards the Pareto frontier
The media loves to remind us that billionaires are evil. That their money is the result of actions both nefarious and greedy.
There are some 2500 billionaires around the world. I think they can skip out of that pigeonholed box and do better. I've written in the past about how billionaires are somehow all too reticent to become modern Medicis, despite it being easier and of higher benefits than Medici could've ever envisioned. So today I'd like to have a look at how billionaires can become good.
But Rohit, I hear you asking, look at Bill Gates and the giving pledge and Warren Buffet and Givewell.
All great, and with good results. And not exactly what drips with favourable public reception or eyecatching benefits that change the course of history. "Evaluate all possible areas I can give capital to by analysing them carefully, creating a cost benefit analysis, and then funding a few" turns out to feel soulless, and act mostly as an efficient way to do the basics - get malaria pills, mosquito nets, vaccinations, large green energy projects. It's better than the bleeding heart give-money-to-seemingly-useful-but-actually-meh version, for sure. But is this the best we can do?
Considering the sheer god-like prowess of the donors shouldn't we be trying to actively move the world forward? To do the things that are hard? Rather than just focusing on shoring up the bottom, to try to actually experiment and win together?
For instance, even if we were to believe the theory that large-scale donations are the way, there are giant blind spots. Billionaires love to talk about the future. How it should be clean and safe and unpolluted. But we rarely see enough effort to tackle the problem sideways. Lobbying seems stuck in the dark ages and could sure use a white knight to shake it up.
Example: the fossil fuel lobby is supposed to be one of the strongest. They've spent a fortune to get their views across and decredit the climate scientists. They have the ear of senators and several governors. And the cost of all this influence? Around $300m in lobbying over an election cycle. Even Manchin, said to be in the pocket of Big Coal, gets only paid $500k a year. Sounds like a lot, but less than what a mid-level Google engineer makes.
Apparently Sinema, the other supposed thorn in the Democrat's side, was influenced by a donation of less than a million bucks. Can you see how crazy the ROI is here? I know there's dark money in almonds but even Nick Clegg got multiples of that to go join Facebook.
Michael Bloomberg, on a failed presidential bid (which wasn't exactly a surprise) spent $500m of his own money! Are we seriously saying the guy who spent half a billion on the longest of longshots and banned giant sodas couldn't buy out the fossil fuel lobby? Or fund a credible opposition that's better?
But maybe politics isn’t your cup of tea. You don’t want to get all grimy. You instead want to give large gifts to spread welfare amongst the people. The option is if you want to give your name to giant buildings or monuments. You could fund entire schools or buildings. But if you want to do this, go local. Spend that same $500m, but spend it on 100 state schools. Do what MacKenzie Scott did, who gave away $2.7B in record time, including to 31 colleges and universities! Make them all incredible.
According to the latest annual survey by the Council for Advancement and Support of Education (CASE), nearly $50 billion (£36 billion) a year is donated to colleges and universities, and the trend is still upwards.
“The super wealthy in America send billions of dollars each year to the most prestigious institutions of higher education in the nation and the world – and receive large tax deductions for their efforts,” says Robert Reich, Carmel P. Friesen’s professor of public policy at the University of California, Berkeley and a former US secretary of labour.
Or instead of universities, because you feel education is a sham, you want to fund culture. The Sacklers in a way had the right idea. If your name is synonymous with the highest cultural icons of the land, you probably won't be seen as evil. And that holds true for museums and concert halls as much as for building a new center for biology.
One of my professors at Berkeley used to say the biggest benefit of winning a Nobel was the parking spaces, at the least surely we can at least knock up a few more of those? The idea that the benefactor basks in the reflected marble glory of the donation seems kind of pointless considering how much can actually be done with the right amount at the right time.
Or, ok, you don't want to necessarily give money to existing institutions, or plaster your name in giant letters. You want to dream bigger. The options here are also vast. For instance, you could become the benefactor of entire industries. The knowledge that you could affect the entire futures of whole groups of talent.
Find a hundred starving aspiring artists and give them lifetime scholarships. Help introduce them to each other and fund their work. It'll pay hefty dividends. Sure, you might have to endure a few one-man-shows, but that's a small price to pay to fund the next generation of cultural icons. Actors and directors and writers and painters would be forever in your debt, and think about the sheer impact this would have! You could be the true Medici of our times.
But fine, all this seems like like a giveaway. You're not fond of that, you'd like to engender some competition. Let's do it! Another overlooked area here you could dominate is prizes. We have so few prizes for amateurs to compete for. Right now there's an X prize and a DARPA challenge but in general prizes seem on the wane for anything remotely revolutionary. Despite the occasional announcements by Elon and Bill Gates.
But why not have prizes for everything? More importantly why not have prizes that help the recipients more than the donors? Right now billionaire prizes seem an excuse to hang out with Nobel winners rather than actually engender that spark!
For instance, in 2012 Yuri Milner tried kickstarting nascent innovation through Breakthrough Prizes.
The same can’t be said for the Breakthrough Prizes, which are an extension of an award called the Fundamental Physics Prize, which was created out of the blue, in 2012, by a Russian Internet entrepreneur, billionaire, and former physics graduate student named Yuri Milner. That year, Milner awarded nine Fundamental Physics Prizes, each worth $3 million, to an eclectic group of theoretical physicists—mostly string theorists—many of whom were located at the Institute for Advanced Study, in Princeton. There were no stated criteria for the awards: some awardees received prizes because of their accomplishments, while others received it because of their originality, intelligence, or promise. Without any specific criteria, the choice of awardees and fields was open to interpretation.
Over time though this struck a chord with a few others who joined the funding group.
[The prize] was sponsored by 23andMe CEO and cofounder Anne Wojcicki and four tech billionaires: Facebook CEO Mark Zuckerberg and his wife Priscilla Chan, tech investor Yuri Milner and his wife Julia, Google cofounder Sergey Brin, and Pony Ma (also known as Ma Huateng)—the CEO of Chinese tech giant Tencent. ... Nine scientists in the fields of life science, fundamental physics and mathematics were awarded a total of $22 million in prizes.
First of all, that is an insanely small number considering the net worth of the people involved. While its awesome that Breakthrough Prizes are a thing, it should really be front and center and publicised everywhere. We should 5x this and do it every year!
There's also the Kavli Prizes, started by the eponymous philanthropist, who tried to learn from the Nobel prizes to do the same again in science. The Nobel prizes of course have a very long history, 126 years by now, and the attempt to create more competition here is good, but the very foundation of these prizes is fallacious.
The idea behind these prizes is that scientists are toiling in obscurity and there's value in promoting examples of good work. The value being that this would encourage others in the field. And this is done through finding and rewarding science that's already done and acclaimed. For instance, the mRNA pioneers including Katalin Kariko got a breakthrough prize this year. I'd argue that 20 years ago would've been far more appropriate, even if the quantum was 20x smaller.
But the bigger problem is not that once science has credible results we don't have faith in them. Science has an institutional sclerosis problem where the path for junior scientists to even attempt those breakthroughs seem to be disappearing by the day. That's why new science organisations have to be set up to find ways around the existing establishment and its myriad byzantine contradictory rules.
Instead, a lot more of these prizes could be to encourage the younger scientists, postdocs or newer research institutions. They're the ones that need the money! This would be an easy place for a self-aware good billionaire to make her mark. Find the 1000 most promising researchers and fund them for half a decade. Do it in literally any field you care about.
Or even if you were solely motivated by curiosity, there are so so many experiments you could run. On almost anything you felt was worth knowing. You want to know about history? You could literally run experiments to map, annotate, dig up and create information about anything that's ever happened. Same for philosophy, or scientific discoveries, or economics. You can literally create datasets that most academics would give their liver for just because you're bored. Anyone not doing this is literally refusing the gift of synthesised knowledge which is insane!
Or do you care about making something that makes your home that much closer to Tony Stark's? Sure, you could do it as your goal for the year and actually build curios that become whole industries. Space races are cool, but you could just as easily create a domestic appliances revolution! Or better modular homes. Or create better forms of architecture. Or …
There exists so many opportunities to do so much more that the lack of attention can only be seen as a lack of imagination or an abundance of laziness. If you're already a billionaire, surely the benefit is that you get to now use that wealth to do things. Just try, and see how good you feel!
Barring all of these, you could always get a cape and a cowl, but that way lies heartbreak. Meanwhile if you're a billionaire reading this, I'm happy to help.