In the United States, there is a growing chorus calling for us to grapple with the widening wealth gap between our citizens (okay, okay- at least among Liberals there is). This is a discussion that deeply divides us. How do we balance the conflicting principles that are deeply woven into the American psyche? There is one thread which believes our system “rewards hard work” and that each individual “reaps what he sows,” plain and simple.
The other thread, introduced by the Declaration of Independence with the famous words, “We hold these truths to be self evident, that all men are created equal” is that all people, regardless of the circumstances into which they were born, deserve some basic level of security and opportunity. The belief that in America, *anyone* can make it, that because our society is free, open, and has a thriving capital market- the playing field is level and open to all-comers.
Of course, we have ample evidence that this is simply not true. At birth many factors can immediately handicap one’s chances at realizing the American Dream, the socio-economic status of your family being among the most influential. Warren Buffet has a brilliant metaphor that he uses to illustrate this, that I encourage you to watch, Ovarian Lottery Theory.
When trying to parse through a discussion of wealth distribution, we quickly dive into questions of taxes and social safety nets and that’s when a “talk to the hand” gesture comes out on both sides. Usually you can’t get further than two or three sentences in before the conversation is doomed. I contend that there is one surprising factor that contributes to this and it’s a question of semantics.
We skip an important step in the discussion because of a limitation of our language. When we talk about money, taxes, the rich, the poor, and who “deserves” what, we use words to represent numbers and that makes them sound deceptively and falsely similar. One thousand. One million. One billion. Ten billion. These phrases have the same number of syllables. Million and billion are, in fact, separated by only one letter! It’s like they are practically the same, right?! Wrong.
Words have failed us in an important way.
For the millions of Americans (you’ll have to forgive my use of the word) who are never going to get close to having a net worth of a million dollars, the substitution of a “b” for an “m” may seem as inconsequential as the decision to “super-size” a meal at McDonalds. It can’t be that much more- and even if you “know” it’s a lot more, it is actually so much larger that it takes true effort to truly understand it.
The difference is so large that words don’t do it justice. The American people need to understand it and care about it. YOU should care about it the next time you head to the ballot box. It is a fundamental part of this conversation.
A billion looks like this numerically: 1,000,000,000. Yes- it has three more zeroes than a million, but that still underplays the magnitude of the difference. My daughter has a cute children’s book called “How Big Is A Million?” that follows the adventures of an inquisitive penguin as he progressively makes his way up from 10 fishes, to 100 penguins, to a 1,000 snowflakes, finally culminating with a 4.5’ x 3’ pullout poster that has a million “stars” (tiny, tiny dots) on it. Now, that poster is 13.5 sq. ft. The dots are so tiny that from a distance of just three feet away, they are essentially invisible to the naked eye.
So, what’s the difference between one million and one billion?
The poster that comes with my daughter’s book is about the size of over-sized bath towel. If we scaled that poster up to represent a billion stars, it would be larger than 3 NBA size basketball courts.
Take a moment to let that sink in. Imagine standing on a basketball court, with that bath-towel sized poster at your feet with a million tiny stars on it. Now look up and imagine that poster blanketing three basketball courts and the first few rows of seats.
Do I have your attention yet?
Putting it another way, an Olympic sized swimming pool holds 660,000 gallons of water. So you’d need just under two Olympic sized swimming pools to hold a million gallons. But to hold a billion gallons of water? We’re going to need to go bigger- a lot bigger.
One of the most recognizable large bodies of water in the United States is the Lincoln Memorial Reflecting Pool- it holds about 6,750,000 gallons of water and is nearly a third of mile long. Now, imagine 148 Reflecting Pools lined up, row upon row, and you are getting an idea of the size difference between one million and one billion.
And we have only been talking about one billion dollars, thus far. Bill Gates has an estimated net worth of $82,000,000,000. Now, we are talking about a reflecting pool the size of the city of Denver.
The median net worth of a family in the United States is less than $100,000- which won’t even get you out of the shallow end.
You can see why our language is failing us in conveying the difference adequately.
A few months back, I was chatting with a friend about estate taxes (me being strongly in favor of them) and she talked proudly about how her grandfather is a self-made millionaire who had worked incredibly hard and started with nothing.
His story is amazing and to be admired. I vehemently agree that he should enjoy the fruits of his labor and that his family should as well. So, let’s raise the estate tax cap to 50 or 100 million dollars to ensure that happens. But even at that level, it doesn’t get us past the free throw line on our imaginary basketball court.
In fact, the gap between her grandfather in the top 1% and the billionaires in the top 0.1% is widening faster than upper, middle, and lower class Americans. Numerically speaking, we are all in the same very large, slowly sinking boat. Even millionaires can’t keep up.
Today, there are 492 billionaires in the United States and the concentration of wealth in their hands is staggering. I have tried to give you some sense of that, but see here if you want to read more, or here if you are like your information in video form.
I am in no way suggesting that we should create a system that discourages the creation of wealth, but I do hope that by illustrating the nearly unimaginable magnitude of concentrated wealth, it opens the door to a conversation about ensuring that the wealth gap doesn’t remain so large that it defies description. That is our reality today.
Many billionaires are speaking out about this issue- Bill Gates and Warren Buffett being among the most eloquent and dedicated to illuminating the topic of wealth distribution and income inequality. Bill recently published a wonderful review of Thomas Picketty’s book Capital in the Twenty-First Century. I’ll confess I’m only about 30% through this dense tome myself and with all the reviews out there, that may be as far as I get.
This startling wealth inequity is also why Bill & Melinda Gates, along with Warren Buffet, created The Giving Pledge– which is a promise (non-binding, mind you) that these incomprehensibly wealthy families will give over half of their money away via philanthropy or charitable causes. I love it. It’s noble, it’s brave, it’s incredibly generous. And it’s also still not enough.
As brilliant, enlightened, and worthy as a few of the billionaires in our society may be, they shouldn’t be able to influence so much of our future. That’s why we established a democracy in the first place. They are not fundamentally better people. Most will readily acknowledge that they have been incredibly lucky. Recently, firebrand activist and billionaire Nick Hanauer published a wonderfully brash article titled The Pitchforks Are Coming… For Us Plutocrats highlighting this very issue.
As Americans, we have to get our act together and start acting and voting in our best interests. This is not a question of red or blue, but of black and white, as in cold, hard facts. Facts are showing us, by every measure, that we are the most unequal we have been in the history of our nation.
I won’t pretend to have all the answers, or even a fraction of them, for how to resolve this issue. I know it will take the hard work of many people- but I hope that by helping illuminate the incredible size of a billion, such a deceptively small word, it advances the case for the need to do it.
Thanks for reading! I’d love to hear your ideas and thoughts on this issue and I’d love for you to share my blog!