Brief evaluations of top-10 billionnaires
As part of my work with the Quantified Uncertainty Research Institute, I am experimenting with speculative evaluations that could be potentially scalable. Billionaires were an interesting evaluation target because there are a fair number of them, and at least some are nominally aiming to do good.
For now, for each top 10 billionaire, I have tried to get an idea of:
How much value have they created through their business activities?
How much impact have they created through their philanthropic activities
I then assigned a subjective score based on my understanding of the answers to the above questions. Overall I’ve spent in the neighborhood of 20 hours (maybe 7 to 40 hours) between research and editing, so this is by no mean the final word on this topic.
Elon Musk (B)
Elon Musk changes the world through:
His businesses: Tesla, SpaceX, The Boring Company and Neuralink. Tesla makes better cars, SpaceX advances interplanetary expansion.
His cultural influence: Twitter shitposting, conceiving and pushing for brighter futures, etc.
His philanthropy: Little of it is publicly known so far. He will probably end up buying Twitter, partially with the intention of making it a better public good. OpenAI, which he helped found, might end up having greatly positive or greatly negative impact.
Overall Musk seems like has produced large amounts of value, and might produce even more through SpaceX. But he also seems to be oddly nonstrategic at times.
Bernard Arnault (D-)
I see myself as an ambassador of French heritage and French culture. What we create is emblematic. It’s linked to Versailles, to Marie Antoinette. -- Bernard Arnault, as quoted in Forbes
His business produces little counterfactual value, and instead serves as a vehicle for conspicuous consumption. That is, if his luxury brands didn’t exist, his customers would simply buy from the others, and the world would look extremely similar.
His company describes its philanthropy as “an ideal expression of financial success”, and supports art installations, or students attending concerts. Thus his philanthropy seems non-strategic, aimed at the display of wealth rather than at the firm pursuit of improving and fortifying French culture. He also donated $200M to restore the Notre Dame, which probably saved French tax-payers a similar amount.
Jeff Bezos (B)
The market value of Amazon is circa $1T, meaning that it has managed to capture at least that much value, and likely produced much more consumer surplus. His other ventures, like Blue Origin, are as of yet nowhere as valuable.
Gautam Adani (B?)
Adani seems to be a skilled manager, administrator, and deal-maker who, working in a developing country, has unlocked heaps of value.
He has ties to Narenda Modi, and their fortunes have risen together. From the outside, it’s hard to say to what extent he has created his wealth:
The governor of Gujarat announced managerial outsourcing of the Mundra Port in 1994, and Adani got the contract in 1995, after which he set up the first jetty, which was originally run by Mundra Port & Special Economic Zone but was later transferred to Adani Ports and SEZ (APSEZ).
Adani decided to turn it into a commercial port, building rail and road links to it by individually negotiating with over 50 0 landowners across India to create the largest port in India.
Mr Adani’s friendship with Prime Minister Narendra Modi is time-tested. Their friendship goes back to 2003, when none of the country’s leading businessmen publicly stood by Modi’s side because of the handling of the Gujarat riots. But Adani broke ranks with the old business elite, potentially risking his future. And this gamble paid off.
Gautam Adani is today one of the most visible tycoons in the country, whose prominence has accelerated in the years since Narendra Modi was elected prime minister in 2014. Since Modi came into office, Adani’s net worth has increased 17.5 times in less than eight years, from $7 billion to $125 billion
Bill Gates (A)
It’s unclear whether Microsoft itself has had a positive or negative impact on the world over what would have counterfactually happened (e.g., Apple and Linux would be more popular). However, Gates’ impact-focused philanthropy has helped millions. He moreover started the Giving Pledge, which probably multiplied his impact. Too bad that he couldn’t prevent the covid pandemic.
Warren Buffett (A)
Berkshire Hathaway is probably a force for good in the capitalist ecosystem. He has also contributed $32+ billion to the Gates Foundation. In addition, Buffett created the Giving Pledge, which probably multiplied his impact.
Larry Ellison (C?)
Ellison has made his wealth by selling universally-reviled database software and other products that work at Fortune 500 and government scale.
He has signed the Giving Pledge, though his giving may have been erratic at times. It’s also possible that his closeness to Trump at times improved the quality of Trump’s decision-making while in office.
Mukesh Ambani (B?)
His wealth originally came from a vertically integrated commodity business, but has since expanded. Although skilled at navigating government bureaucracies, he also ate his own brother alive in the competitive communications business, providing millions of Indian consumers with cheaper internet access. Overall most of his impact is going to come from his contribution to Indian economic growth, and that contribution is probably highly positive.
Larry Page (B)
By making a better search engine and providing other Google products for free to millions, he has provided heaps of value. However, in recent times, he has disengaged from Google, and Google has abandoned its “don’t be evil” motto. His philanthropy, while large, is somewhat secretive.
Sergei Brin (B-)
Like Larry Page, by making a better search engine and providing other Google products for free to millions, he has provided heaps of value. However, in recent times, he has disengaged from Google, and Google has abandoned its “don’t be evil” motto. He has donated at least $1.4 billion to his family foundation, and seems to donate to left-of-center causes.
Comparisons with other alternatives
Forbes’ Philanthropy score
To see how philanthropic the ultrawealthy are, Forbes dug into their known charitable giving and assigned a philanthropy score, ranging from 1 to 5, to each member of The Forbes 400. If we couldn’t find any information about a person’s giving and they declined to provide details, they received a score of N/A.
To calculate the scores, we added the value of each person’s total out-the-door lifetime giving to their 2022 Forbes 400 net worth, then divided their lifetime giving by that number. Each score corresponds to a range of giving as a percentage of a person’s net worth. We once again counted only out-the-door giving, rather than cash sitting in billionaires’ private foundations or tax-advantaged donor-advised funds that have not yet made it to those in need. We reached out to every list member for feedback
This is already fairly sophisticated. If I had to suggest one improvement, it would be to incorporate whether billionaires have signed the Giving Pledge.
Personally, I would also:
Score individuals on the amount of money donated, rather than on the percentage
Possible further work
If I had access to a legion of researchers, I would try to move first towards a legible rubric and then to a quantified impact estimate.
An initial rubric
An initial rubric might incorporate:
Some subjective estimate of how much value the individual has created through business
Are the business activities more like value creation or like resource extraction
How much value has the individual created?
Some mechanistic estimate of how much value the individual will create through philanthropy
How much money will the individual end up donating?
How much has the individual donated so far?
Has the individual joined the Giving Pledge?
Are the individual’s donations done with some reference to impact?
This would require some finesse in order to incorporate different philosophical stances. But there is certainly a substantial difference between Bill Gates’ and Bernard Arnault’s giving.
Possibly, some estimate of additional sources of impact, like cultural influence or using a position of prominence to positively impact the world.
Crucially, the above categories could be complementary. For instance, a skilled administrator and industrialist like Mukesh Ambani is already creating heaps of value through business in India, and he probably creates more value through deploying his capital through business than he would through philanthropy. So an individual could get top marks by being excellent in any one domain.
A quantified estimate
Eventually, a quantified estimate might move beyond being a rubric and directly attempt to estimate each part of an individual’s impact, and then put them all together in a common linear unit.
For example, in the case of Elon Musk, I would estimate how valuable each of his ventures is, either in an impact unit like Open Philanthropy dollars—$1 dollar given to someone earning $50k a year—or in terms of relative values—where you compare how much each element is worth to other elements, and you don’t need a unit or can easily construct one once you’ve done that.
Things I personally struggled with
Some billionaires were harder to estimate than others. I particularly struggled with Gautam Adani and Mukesh Ambani. I’m probably lacking a whole lot of context there. Thanks to Chinmay Ingalavi for giving me some context.
The whole exercise took longer than I was expecting.
I’m also unclear on whether to use gossip and private information, and ended up not doing so.
I was also unclear on which philosophical assumptions to use. For instance,
I’m partial to Patient Philanthropy
I think it’s plausible that most of a billionaires impact could come from business rather than from philanthropy.
I think that Amazon’s union busting is an evil practice but not nearly enough to move the needle on my overall evaluation of Amazon overall having produced very large heaps of value.
I didn’t incorporate Mackenzie Bezos’ giving into Jeffrey Bezos’ estimate, although one could argue that he created a big chunk of that wealth.