1
00:00:06,799 --> 00:00:09,427
[narrator] Money is a little different
for a billionaire.
2
00:00:09,510 --> 00:00:12,013
For a billionaire compared
to an average American,
3
00:00:12,680 --> 00:00:16,184
a trip on a private jet is like
a New York City subway ride.
4
00:00:16,976 --> 00:00:19,896
A Lamborghini is like a Little Tike car.
5
00:00:20,396 --> 00:00:23,858
And buying a private island is like
a down payment on a house.
6
00:00:24,776 --> 00:00:26,694
Billionaires aren't the 1%.
7
00:00:26,778 --> 00:00:30,490
They're more like the .0001%.
8
00:00:31,199 --> 00:00:33,284
What's the worst thing
about being a billionaire?
9
00:00:33,993 --> 00:00:35,244
Nothing.
10
00:00:35,328 --> 00:00:36,496
Nothing at all.
11
00:00:36,954 --> 00:00:39,749
They can just make a call
and meet with a world leader.
12
00:00:40,458 --> 00:00:42,919
At least a dozen are world leaders.
13
00:00:43,002 --> 00:00:44,712
[in Spanish] ...better times are coming.
14
00:00:44,796 --> 00:00:46,005
[cheering]
15
00:00:46,798 --> 00:00:50,093
[narrator] There are roughly a hundred
billionaires in the Chinese parliament.
16
00:00:50,927 --> 00:00:52,595
Billionaires are booming.
17
00:00:52,678 --> 00:00:56,724
In 1987, there were
an estimated 140 billionaires.
18
00:00:56,808 --> 00:01:01,145
In 2019, there are 15 times
as many billionaires
19
00:01:01,229 --> 00:01:03,439
with almost 30 times more wealth,
20
00:01:03,981 --> 00:01:06,484
totaling almost nine trillion dollars.
21
00:01:07,318 --> 00:01:09,320
If today's billionaires formed a country,
22
00:01:09,403 --> 00:01:11,781
it would be
the eighth wealthiest in the world.
23
00:01:11,864 --> 00:01:15,493
It's an extraordinary amount of wealth
that these people hold
24
00:01:15,576 --> 00:01:19,205
and they influence
so many parts of the world.
25
00:01:20,081 --> 00:01:24,418
[narrator] That influence has made them
symbols of inequality and a rigged system,
26
00:01:24,502 --> 00:01:27,630
fueling protests and
political movements around the world.
27
00:01:28,339 --> 00:01:31,717
I think people are sick and tired
of living in a nation and a world
28
00:01:31,801 --> 00:01:35,138
where so few have so much
and so many have so little.
29
00:01:35,805 --> 00:01:37,431
[narrator] But many of these billionaires
30
00:01:37,515 --> 00:01:40,685
made their fortunes by inventing things
that changed our lives.
31
00:01:41,185 --> 00:01:42,937
Some more so than others.
32
00:01:44,397 --> 00:01:46,899
So why are there
more billionaires than ever?
33
00:01:46,983 --> 00:01:48,693
And are they good or bad
for the world?
34
00:01:53,656 --> 00:01:55,825
[man] The wealthy enjoy
a life of ease and elegance.
35
00:01:55,908 --> 00:01:57,618
[man 2] Money's too valuable to spend.
36
00:01:58,286 --> 00:01:59,829
-Sold!
-[cheering]
37
00:02:00,204 --> 00:02:02,665
The gap between the super rich
and the middle class
38
00:02:02,748 --> 00:02:04,500
widens in dramatic fashion.
39
00:02:04,584 --> 00:02:06,878
Well, I'm looking forward to
my next million.
40
00:02:06,961 --> 00:02:08,963
[man] What will you do
with those extra dollars?
41
00:02:09,046 --> 00:02:12,341
I build companies and I support people
who are building new things,
42
00:02:12,425 --> 00:02:14,844
from social networks to rocket ships.
43
00:02:14,927 --> 00:02:19,515
[Obama] There's only so much you can eat.
There's only so big a house you can have.
44
00:02:19,599 --> 00:02:22,894
[man] What this country needs is
a little more Golden Rule
45
00:02:22,977 --> 00:02:25,021
and a little less rule of gold.
46
00:02:29,984 --> 00:02:34,030
I'm embarrassed to admit how long I have
been covering wealthy people.
47
00:02:34,447 --> 00:02:35,865
[narrator] Luisa Kroll helps create
48
00:02:35,948 --> 00:02:38,576
one of the most
popular billionaire rankings in the world.
49
00:02:38,659 --> 00:02:41,704
Around 1981, at the time
that the list was started,
50
00:02:41,787 --> 00:02:45,082
there were some obvious places
to look for wealth in the country.
51
00:02:45,166 --> 00:02:48,669
Places like Texas where you have
the huge oil fortunes.
52
00:02:48,794 --> 00:02:52,381
And then Silicon Valley where
tech was just starting to take off.
53
00:02:52,465 --> 00:02:53,925
And then in New York City,
54
00:02:54,008 --> 00:02:58,971
they literally walked around the city
figuring out who owned this or that.
55
00:02:59,055 --> 00:03:02,266
[narrator] It turned out it's
incredibly hard to track down wealth.
56
00:03:02,350 --> 00:03:05,436
Very few people thought
that they'd be able to pull it off,
57
00:03:05,519 --> 00:03:11,359
but in the end, in September 1982,
they published the first Forbes 400.
58
00:03:12,360 --> 00:03:14,528
[narrator] On that first-ever
wealth ranking
59
00:03:14,612 --> 00:03:17,031
were 11 heirs of John D. Rockefeller.
60
00:03:18,449 --> 00:03:21,327
He lived in the late 1800s
in the United States,
61
00:03:21,410 --> 00:03:23,621
an era called the Gilded Age,
62
00:03:23,704 --> 00:03:26,540
which saw the world's first-ever
self-made billionaires.
63
00:03:28,209 --> 00:03:30,419
In today's dollars,
Rockefeller and Carnegie
64
00:03:30,503 --> 00:03:32,755
are estimated to be
more than twice as wealthy
65
00:03:32,838 --> 00:03:34,966
as the richest person in the world today.
66
00:03:35,049 --> 00:03:38,928
This age was characterized not only
by this astounding wealth,
67
00:03:39,011 --> 00:03:40,638
but massive corruption.
68
00:03:41,222 --> 00:03:43,557
[narrator] Mark Twain coined
the term Gilded Age,
69
00:03:43,641 --> 00:03:47,728
because while the wealth was glittering
on the surface, it was rotten underneath.
70
00:03:48,312 --> 00:03:52,233
Carnegie, Vanderbilt, and Rockefeller
got rich from their political connections,
71
00:03:52,775 --> 00:03:56,237
consolidating industries into trusts
and exploiting workers
72
00:03:56,320 --> 00:03:58,239
and they were barely taxed.
73
00:03:58,656 --> 00:04:01,575
Before this time,
wealth is hard to compare,
74
00:04:01,659 --> 00:04:05,121
but to be extremely wealthy,
you probably controlled an empire,
75
00:04:05,204 --> 00:04:07,498
like Augustus Caesar, emperor of Rome,
76
00:04:07,581 --> 00:04:09,583
or Empress Wu of China
77
00:04:09,667 --> 00:04:12,586
or Mansa Musa, ruler of the Mali Empire,
78
00:04:12,670 --> 00:04:15,339
who controlled
one of the largest sources of gold.
79
00:04:15,840 --> 00:04:17,425
His wealth was so legendary,
80
00:04:17,508 --> 00:04:20,886
his image was printed on one of the most
important medieval maps.
81
00:04:21,387 --> 00:04:24,181
But the Gilded Age tycoons made
their money a different way.
82
00:04:24,265 --> 00:04:25,891
They founded successful companies.
83
00:04:27,476 --> 00:04:31,814
What caused that massive
rise of wealth at the time
84
00:04:31,897 --> 00:04:36,485
was the creation for the first time
of a continental-scale economy
85
00:04:36,569 --> 00:04:40,156
in the United States
and the rise of major corporations.
86
00:04:40,990 --> 00:04:42,825
[narrator] Like Vanderbilt's railroads,
87
00:04:42,908 --> 00:04:46,704
which formed part of the more
than 200,000 miles of new track
88
00:04:46,787 --> 00:04:48,998
that connected
the continent for the first time,
89
00:04:49,081 --> 00:04:51,751
helping turn the U.S. into
an economic superpower.
90
00:04:53,336 --> 00:04:55,004
And billionaires are booming today
91
00:04:55,087 --> 00:04:57,882
because of an increasingly
global-scale economy.
92
00:04:57,965 --> 00:05:00,343
And that's helped
the whole world get wealthier.
93
00:05:00,426 --> 00:05:04,680
At a global level,
inequality has been declining.
94
00:05:04,764 --> 00:05:07,933
This is mainly driven by the fact that...
95
00:05:08,017 --> 00:05:11,312
some of the poor countries
are growing fast.
96
00:05:11,395 --> 00:05:12,730
[narrator] And in the last few decades,
97
00:05:12,813 --> 00:05:15,316
no country
has been growing as much as China.
98
00:05:16,233 --> 00:05:19,987
China, 40 or 50 years ago, was a country
99
00:05:20,071 --> 00:05:23,574
with the vast majority of people
in extreme poverty.
100
00:05:23,657 --> 00:05:25,284
[reporter] The Communist government
is pursuing
101
00:05:25,368 --> 00:05:27,578
what they call socialist modernization.
102
00:05:27,661 --> 00:05:30,748
[Sachs] Extreme poverty
is almost gone from China.
103
00:05:30,831 --> 00:05:34,251
Before 1978,
there were no Chinese billionaires.
104
00:05:35,294 --> 00:05:38,923
[narrator] By 2017, China was minting
two new billionaires a week
105
00:05:39,382 --> 00:05:43,010
and had the second highest number of
billionaires in the world after the U.S.
106
00:05:43,094 --> 00:05:47,681
[Huang] Then it's not surprising to see
entrepreneurs become very rich,
107
00:05:48,182 --> 00:05:50,309
accumulating wealth very, very fast.
108
00:05:50,393 --> 00:05:52,311
[narrator] It's a similar story in India.
109
00:05:52,395 --> 00:05:56,440
Their emerging economy lifted tens
of millions of people out of poverty
110
00:05:56,524 --> 00:05:58,734
and created over 100 billionaires.
111
00:06:02,029 --> 00:06:03,572
These are today's billionaires.
112
00:06:03,656 --> 00:06:05,574
Even for them, there's a huge wealth gap.
113
00:06:05,658 --> 00:06:07,785
The vast majority, 94%,
114
00:06:07,868 --> 00:06:09,870
are worth ten billion dollars or less.
115
00:06:10,413 --> 00:06:14,083
Five percent of them are worth
between 10 and 30 billion dollars
116
00:06:14,166 --> 00:06:16,627
and one percent of the list
are mega-billionaires,
117
00:06:16,710 --> 00:06:18,921
worth 30 billion dollars or more.
118
00:06:19,004 --> 00:06:20,673
Yeah, I look at people and go,
119
00:06:20,756 --> 00:06:22,675
"Damn, they have
so much more money than me."
120
00:06:22,758 --> 00:06:25,511
Then I kind of catch myself
and say, "Shut the fuck up, you idiot."
121
00:06:27,096 --> 00:06:28,681
[narrator] And while the tech industry
doesn't have
122
00:06:28,764 --> 00:06:30,307
the most billionaires overall,
123
00:06:30,391 --> 00:06:32,476
it's made the most mega-billionaires.
124
00:06:32,560 --> 00:06:35,020
There's something called,
"Winners Take All."
125
00:06:35,104 --> 00:06:39,150
[narrator] Digital products like websites
or apps don't take much manpower to build
126
00:06:39,233 --> 00:06:41,610
and can instantly reach a global market.
127
00:06:41,694 --> 00:06:45,281
There's a reason Google is synonymous
with searching the internet.
128
00:06:45,364 --> 00:06:47,908
That's where more than 90%
of all searches happen
129
00:06:48,742 --> 00:06:53,456
and its founders are the 10th and 14th
wealthiest people in the world in 2019.
130
00:06:53,956 --> 00:06:57,251
Facebook has more users than
any other social media platform,
131
00:06:57,334 --> 00:06:59,211
even excluding the ones they own,
132
00:06:59,295 --> 00:07:02,089
and its founder is the eighth
wealthiest person in the world.
133
00:07:02,798 --> 00:07:06,927
And almost 50% of all U.S. online shopping
happens on Amazon.
134
00:07:07,011 --> 00:07:11,557
In 2019, Amazon's founder Jeff Bezos
was the richest man on Earth.
135
00:07:12,641 --> 00:07:15,436
The celebrity billionaires
like Oprah, Kylie Jenner,
136
00:07:15,519 --> 00:07:18,647
and Michael Jordan are low
in the billionaire rankings,
137
00:07:18,731 --> 00:07:22,151
and none of them are on the list
for the work that first made them famous.
138
00:07:22,234 --> 00:07:25,321
Michael Jordan made
90 million dollars playing basketball.
139
00:07:25,821 --> 00:07:28,699
But his corporate partnerships
were worth about one billion dollars
140
00:07:28,782 --> 00:07:31,535
and so was his ownership stake
in a basketball team.
141
00:07:32,203 --> 00:07:34,371
He became a millionaire through his labor,
142
00:07:34,455 --> 00:07:37,208
but he became a billionaire
by owning capital.
143
00:07:37,875 --> 00:07:40,711
Capital is anything you own
that can make you money.
144
00:07:41,587 --> 00:07:43,255
A house can be capital.
145
00:07:43,756 --> 00:07:45,424
Stocks are capital.
146
00:07:45,508 --> 00:07:47,343
Your likeness can be capital...
147
00:07:47,426 --> 00:07:48,802
if you're Michael Jordan.
148
00:07:49,637 --> 00:07:52,848
Patents are capital,
like for drugs or technology.
149
00:07:52,932 --> 00:07:55,476
And copyrights, like for Mickey Mouse.
150
00:07:55,559 --> 00:07:59,605
I grew up around Disney
and all that came with that.
151
00:08:00,981 --> 00:08:04,193
You're not going to earn a billion dollars
pulling down regular income
152
00:08:04,276 --> 00:08:06,904
and paying regular income tax on it.
Just not going to happen.
153
00:08:07,321 --> 00:08:09,532
So ownership is what creates wealth.
154
00:08:10,032 --> 00:08:12,576
[narrator] Most wealthy people make
their money like everyone else
155
00:08:12,660 --> 00:08:13,786
through labor.
156
00:08:13,869 --> 00:08:16,914
But the richer you are,
the less your income comes from labor
157
00:08:17,039 --> 00:08:19,083
and the more it comes from capital.
158
00:08:19,166 --> 00:08:23,295
The .0001% are
an exceptional example of this.
159
00:08:24,088 --> 00:08:27,383
So, broadly speaking,
income produced in the economy
160
00:08:27,466 --> 00:08:31,303
is shifted away
from labor towards capital.
161
00:08:31,387 --> 00:08:34,139
That's the most basic underpinning.
162
00:08:34,932 --> 00:08:38,602
[narrator] And that's because global
brands don't just have global markets.
163
00:08:39,103 --> 00:08:41,355
They have a global labor pool
164
00:08:41,438 --> 00:08:44,108
and increasingly no need
to pay for labor at all.
165
00:08:44,191 --> 00:08:45,859
Take the textile industry.
166
00:08:46,402 --> 00:08:49,572
A series of innovations transformed it
over the last two centuries.
167
00:08:50,114 --> 00:08:52,700
Each one boosted productivity and profits.
168
00:08:53,242 --> 00:08:55,286
Today, almost all garment workers
169
00:08:55,369 --> 00:08:57,580
are in developing countries
where labor is cheaper.
170
00:08:58,163 --> 00:09:01,709
And now machines are starting
to replace human workers altogether.
171
00:09:01,792 --> 00:09:03,502
This is called the Sewbot.
172
00:09:04,003 --> 00:09:06,797
It automates what once took
delicate hand dexterity
173
00:09:06,922 --> 00:09:10,759
and can sew as many shirts per hour
as 17 factory workers.
174
00:09:11,260 --> 00:09:13,095
This can lower costs for consumers
175
00:09:13,178 --> 00:09:15,639
and bring more profits
to the owners of capital.
176
00:09:15,723 --> 00:09:17,141
The ownership of capital,
177
00:09:17,224 --> 00:09:20,644
particularly in the share ownership
of corporations,
178
00:09:20,728 --> 00:09:22,938
is very highly concentrated.
179
00:09:23,647 --> 00:09:24,857
Like the billionaire owners
180
00:09:24,940 --> 00:09:28,193
of the global brands H&M,
Zara, and Walmart.
181
00:09:29,194 --> 00:09:32,615
And once someone has capital like that,
it just grows.
182
00:09:33,657 --> 00:09:34,783
Money just makes money.
183
00:09:34,867 --> 00:09:36,869
It's like you put it in a room,
close the door
184
00:09:36,952 --> 00:09:38,954
and it has sex,
and then more money babies grow.
185
00:09:39,038 --> 00:09:40,748
That's kind of how it works.
186
00:09:41,332 --> 00:09:45,085
[narrator] As Edgar Bronfman Sr.,
heir to the Seagram's fortune, put it,
187
00:09:45,628 --> 00:09:49,256
"To turn $100 into $110 is work.
188
00:09:49,798 --> 00:09:55,137
To turn 100 million dollars
into 110 million dollars is inevitable."
189
00:09:56,805 --> 00:09:59,975
That's because if you
only have $100 in savings,
190
00:10:00,059 --> 00:10:03,145
it's hard not to spend
and it's hard to invest.
191
00:10:03,520 --> 00:10:07,441
But 100 million dollars
becomes 110 million dollars
192
00:10:07,524 --> 00:10:11,862
if you let it sit in the stock market for
an average year without lifting a finger.
193
00:10:11,945 --> 00:10:14,615
Very quickly, in a matter
of a couple of generations,
194
00:10:14,698 --> 00:10:18,035
you're going to find yourself
with a dynasty or multiple dynasties.
195
00:10:18,118 --> 00:10:21,664
And given the power of money
to control politics,
196
00:10:21,747 --> 00:10:23,624
it's just not something
that we want to see.
197
00:10:24,708 --> 00:10:26,210
[narrator] According to one estimate,
198
00:10:26,293 --> 00:10:29,254
13% of billionaires
inherited their billions
199
00:10:29,338 --> 00:10:31,298
and 56% are self-made.
200
00:10:31,924 --> 00:10:34,385
But it's hard to draw
a clean line between them
201
00:10:34,468 --> 00:10:37,471
because most people
who inherit money work to grow it.
202
00:10:37,554 --> 00:10:40,808
That describes another
30% of the world's billionaires.
203
00:10:40,891 --> 00:10:45,396
In 2014, we came up with
what we called a self-made score.
204
00:10:45,479 --> 00:10:50,067
And it ranged anywhere from one,
which was where you inherited your money
205
00:10:50,150 --> 00:10:52,611
and you pretty much
did nothing with it, you sat around
206
00:10:52,736 --> 00:10:54,905
and, you know,
ate bonbons or what have you.
207
00:10:55,030 --> 00:10:57,741
And then number ten were
the rags to riches story.
208
00:10:57,825 --> 00:11:00,828
Someone like Oprah Winfrey
would fall into that category.
209
00:11:00,911 --> 00:11:04,415
This year, we had Kylie Jenner
which was highly controversial.
210
00:11:04,498 --> 00:11:09,044
She basically figured out a way
to monetize her Instagram followers
211
00:11:09,128 --> 00:11:10,129
and her family's fame.
212
00:11:10,212 --> 00:11:13,173
There is a new youngest
self-made billionaire.
213
00:11:13,257 --> 00:11:16,719
However, some people think Kylie's title
needs to come with an asterisk.
214
00:11:16,802 --> 00:11:19,680
When you don't get it
from someone else,
215
00:11:19,763 --> 00:11:20,681
that's self-made.
216
00:11:20,764 --> 00:11:23,851
[woman] If you're born on third base
and you hit a home run,
217
00:11:23,934 --> 00:11:25,436
you're not really self-made.
218
00:11:27,563 --> 00:11:30,649
[narrator] Other types of self-made wealth
are controversial too.
219
00:11:31,150 --> 00:11:34,361
[Kroll] When we began to put
the Russian billionaires on the list,
220
00:11:34,445 --> 00:11:38,157
the oligarchs, we weren't quite sure
what else to call these people.
221
00:11:38,240 --> 00:11:40,701
[narrator]
Some people call them kleptocrats.
222
00:11:40,784 --> 00:11:45,414
It's from the Greek kleptes meaning thief
and kratos meaning power.
223
00:11:45,956 --> 00:11:48,417
It refers to politically-connected people
224
00:11:48,500 --> 00:11:50,878
who get rich off a country's
natural resources.
225
00:11:50,961 --> 00:11:54,423
That's what happened when
the Soviet Union fell in 1991.
226
00:11:54,506 --> 00:11:58,886
Russia now has nearly 100
so-called self-made billionaires.
227
00:11:58,969 --> 00:12:03,265
There wasn't a category for,
well, kind of helped
228
00:12:03,348 --> 00:12:06,935
get these assets on the cheap by stealing
or colluding with the government
229
00:12:07,019 --> 00:12:08,979
or whatever you want to call it.
230
00:12:09,062 --> 00:12:14,943
Good and bad has to do
with how you obtain your wealth.
231
00:12:15,027 --> 00:12:19,490
Do you obtain your wealth
at the expense of everybody else?
232
00:12:19,573 --> 00:12:21,950
Or do you create additional wealth
233
00:12:22,034 --> 00:12:24,787
creating great products
for the rest of the society?
234
00:12:24,870 --> 00:12:27,748
These are two fundamentally
different ways of wealth creation.
235
00:12:29,333 --> 00:12:33,462
[narrator] In the Gilded Age, billionaires
gave much of their wealth back to society,
236
00:12:33,545 --> 00:12:34,713
like Andrew Carnegie.
237
00:12:36,089 --> 00:12:38,383
[Carnegie] The public verdict
will then be...
238
00:12:39,426 --> 00:12:42,596
the man who dies thus rich
239
00:12:43,764 --> 00:12:45,474
dies disgraced.
240
00:12:45,557 --> 00:12:49,645
He said it was actually a shame for
a rich person to die with their wealth.
241
00:12:49,728 --> 00:12:52,272
That's why wherever you go,
242
00:12:52,356 --> 00:12:55,984
you see Carnegie Institutes,
Carnegie Libraries, Carnegie Hall,
243
00:12:56,068 --> 00:12:57,694
Carnegie Mellon University.
244
00:12:57,778 --> 00:13:02,658
You see a legacy of giving back the money.
245
00:13:02,741 --> 00:13:04,701
[narrator] That tradition continues today.
246
00:13:04,785 --> 00:13:08,580
At least 200 billionaires
have signed the Giving Pledge,
247
00:13:08,664 --> 00:13:11,416
vowing to give away
at least half of their wealth.
248
00:13:12,000 --> 00:13:14,419
And they're doing things
that governments traditionally do
249
00:13:14,503 --> 00:13:16,922
like fighting infectious diseases,
250
00:13:17,005 --> 00:13:19,508
funding the construction
of Olympic facilities,
251
00:13:19,591 --> 00:13:23,554
as several Russian billionaires did for
the Sochi Winter Games in 2014,
252
00:13:23,929 --> 00:13:25,681
and ensuring college is affordable.
253
00:13:26,974 --> 00:13:30,936
And my family is making a grant
to eliminate their student loans.
254
00:13:31,019 --> 00:13:32,813
[cheering]
255
00:13:32,896 --> 00:13:35,315
[narrator]
Or repairing critical infrastructure.
256
00:13:35,399 --> 00:13:38,610
Where the state of Michigan
and the city of Flint have failed,
257
00:13:38,694 --> 00:13:40,028
billionaire Elon Musk...
258
00:13:40,112 --> 00:13:41,655
...is pledging to fix the water crisis...
259
00:13:41,738 --> 00:13:45,534
...is vowing to get clean water
to every home in the city. Good for him.
260
00:13:45,868 --> 00:13:49,329
[Disney] There was a lot of talk about
how we could just raise $55 million
261
00:13:49,413 --> 00:13:51,498
among rich people and
fix the Flint water problem.
262
00:13:51,582 --> 00:13:54,334
And I was ferociously against that.
263
00:13:54,418 --> 00:13:57,254
There has been, of course,
a great deal of philanthropy and charity
264
00:13:57,337 --> 00:13:58,380
and that's great,
265
00:13:58,463 --> 00:14:01,758
but the problem here
is a structural problem.
266
00:14:01,842 --> 00:14:05,512
You do not want our citizens
to be at the mercy
267
00:14:05,596 --> 00:14:07,973
of private unaccountable individuals
268
00:14:08,056 --> 00:14:11,351
who might or might not
fix the problems that you have
269
00:14:11,435 --> 00:14:13,854
with your infrastructure,
with your governments,
270
00:14:13,937 --> 00:14:15,397
with your basic human rights.
271
00:14:16,189 --> 00:14:19,359
[narrator] Governments raise money
for these public services through taxes,
272
00:14:19,443 --> 00:14:20,986
but in most wealthy countries,
273
00:14:21,069 --> 00:14:24,865
individual's labor income is taxed higher
than their capital income.
274
00:14:26,116 --> 00:14:29,286
So, already what the tax system
has decided to do
275
00:14:29,369 --> 00:14:34,374
is to tax work at a higher rate
than it taxes ownership.
276
00:14:34,458 --> 00:14:38,003
I don't have a problem writing
a check for more money. I really don't.
277
00:14:38,086 --> 00:14:41,131
I'm not here to say that
I should pay 90% taxes
278
00:14:41,214 --> 00:14:43,675
because then that's
going to change what I do
279
00:14:43,759 --> 00:14:47,596
from investing in entrepreneurs
and investing in start-ups
280
00:14:47,679 --> 00:14:49,681
and investing in philanthropy.
281
00:14:50,223 --> 00:14:53,352
[narrator] And even if a country
increases its taxes on the wealthy,
282
00:14:53,435 --> 00:14:56,271
in a globalized world,
that's hard to enforce.
283
00:14:56,897 --> 00:15:00,817
I think the best analogy
for the offshore financial system is...
284
00:15:00,901 --> 00:15:02,903
it's like an--
an ecosystem.
285
00:15:02,986 --> 00:15:07,366
It's a series of small countries,
sometimes large countries,
286
00:15:07,449 --> 00:15:09,910
and they each carve out
a little realm of the law.
287
00:15:10,744 --> 00:15:14,665
[narrator] Like avoiding income taxes.
That's a specialty of the Cayman Islands.
288
00:15:14,748 --> 00:15:17,501
So you got a building
in the Cayman Islands,
289
00:15:17,584 --> 00:15:18,961
one building,
290
00:15:19,044 --> 00:15:23,674
which hosts, "hosts", 20,000 companies.
291
00:15:23,757 --> 00:15:26,718
It's a postal address
that allows them to take advantage
292
00:15:26,802 --> 00:15:28,679
of the Cayman Islands' tax breaks.
293
00:15:29,471 --> 00:15:31,974
[narrator] For shirking corporate taxes,
you can go to Luxembourg
294
00:15:32,057 --> 00:15:33,600
or the U.S. state of Delaware.
295
00:15:34,768 --> 00:15:36,645
And for avoiding inheritance taxes,
296
00:15:36,728 --> 00:15:40,732
one of the most popular spots is
the European island of Jersey.
297
00:15:41,149 --> 00:15:44,361
[Harrington] The Cook Islands,
sometimes known as the "Crook Islands",
298
00:15:44,444 --> 00:15:48,699
specializes in helping people
hide assets from creditors
299
00:15:48,782 --> 00:15:50,200
and that's really all that they do.
300
00:15:51,076 --> 00:15:54,162
[narrator] The world got
a glimpse into this system in 2016.
301
00:15:54,246 --> 00:15:56,748
New revelations on how
the rich and powerful hide cash
302
00:15:56,832 --> 00:15:58,417
are rocking countries around the world.
303
00:15:58,500 --> 00:16:00,669
Now being called the Panama Papers.
304
00:16:00,752 --> 00:16:03,630
Eleven million Panama Papers
to be precise.
305
00:16:03,714 --> 00:16:06,758
It's a leak from a Panama law firm
called Mossack Fonseca.
306
00:16:06,842 --> 00:16:08,844
These Paradise Papers, it's another leak--
307
00:16:08,927 --> 00:16:12,264
...exposing how some of the world's
wealthiest and most powerful people
308
00:16:12,347 --> 00:16:14,307
...hide their money in offshore accounts.
309
00:16:14,391 --> 00:16:17,769
[Harrington] I think one of the...
big lessons was this rogue's gallery
310
00:16:17,853 --> 00:16:19,521
of faces that came out of it.
311
00:16:19,646 --> 00:16:24,901
It was this motley crew of
sports stars like Lionel Messi
312
00:16:24,985 --> 00:16:27,070
and entertainers like Jackie Chan
313
00:16:27,154 --> 00:16:30,282
and then Queen Elizabeth
and some members of the House of Lords.
314
00:16:30,365 --> 00:16:33,785
[narrator] But the big shock came
when people crunched the numbers.
315
00:16:33,869 --> 00:16:37,581
An analysis of Scandinavian countries
found that on average
316
00:16:37,664 --> 00:16:40,709
most people avoid paying
5% or less of their taxes.
317
00:16:41,376 --> 00:16:45,714
The wealthiest .01% don't pay about 25%.
318
00:16:46,214 --> 00:16:49,009
In total, the equivalent of 10%
of the world's GDP
319
00:16:49,092 --> 00:16:51,428
was stashed in offshore bank accounts.
320
00:16:51,511 --> 00:16:53,722
That's trillions of dollars.
321
00:16:54,139 --> 00:16:55,849
Russia was one of the worst hit.
322
00:16:55,932 --> 00:16:58,685
The .01% stashed more than half
323
00:16:58,769 --> 00:17:00,979
of their wealth in offshore accounts.
324
00:17:01,063 --> 00:17:04,232
That's a lot of missing tax revenue
for public services...
325
00:17:04,816 --> 00:17:06,985
or things like Olympic facilities.
326
00:17:08,070 --> 00:17:11,323
And everyone who turned up
in these leaks likely got some help.
327
00:17:12,032 --> 00:17:15,285
[Harrington] They're not sitting around
boning up on their yachts
328
00:17:15,368 --> 00:17:17,412
on the tax code of the Cayman Islands.
329
00:17:17,496 --> 00:17:19,748
Wealthy people hire folks to do that,
330
00:17:19,831 --> 00:17:23,001
just like they hire folks
to clean and maintain their homes
331
00:17:23,085 --> 00:17:25,087
or cook for them or nanny their children.
332
00:17:25,170 --> 00:17:28,507
[narrator] Billionaires may be
the eighth wealthiest nation in the world,
333
00:17:28,590 --> 00:17:31,885
but they're also, in many ways,
people without a nation at all.
334
00:17:32,969 --> 00:17:35,055
With expert help,
they can pick and choose
335
00:17:35,138 --> 00:17:37,390
the laws of whatever country they like.
336
00:17:37,474 --> 00:17:43,355
Globalization has opened up all sorts
of addresses to hide the money.
337
00:17:43,855 --> 00:17:45,690
[narrator]
This is known as Billionaires' Row,
338
00:17:45,774 --> 00:17:49,778
an enclave of luxury high-rise towers
south of Central Park in New York City,
339
00:17:50,362 --> 00:17:52,781
the city with the most billionaires
in the world.
340
00:17:53,281 --> 00:17:55,951
And you see, in New York City,
these billionaires are buying
341
00:17:56,034 --> 00:17:57,869
these luxury--
"Luxury" is the understatement.
342
00:17:57,953 --> 00:18:00,831
These condos worth tens
and tens of millions of dollars.
343
00:18:02,874 --> 00:18:06,545
[Lenz] Our average sale is
slightly over 18 million dollars,
344
00:18:06,628 --> 00:18:09,214
and our average client
345
00:18:09,297 --> 00:18:12,968
has a net worth in the hundreds
of millions to billions of dollars.
346
00:18:13,051 --> 00:18:17,639
New York real estate is--
is part of that global ecosystem
347
00:18:17,722 --> 00:18:19,766
of hiding wealth from the law,
348
00:18:19,850 --> 00:18:22,102
laundering money,
and doing all sorts of things
349
00:18:22,185 --> 00:18:24,521
that really skirt the edges of legality.
350
00:18:24,604 --> 00:18:26,356
[Lenz] People who wanted a store of value,
351
00:18:26,439 --> 00:18:29,526
they wanted a safety deposit box
in the sky perhaps,
352
00:18:29,609 --> 00:18:33,071
and they're buying property
to have their money secure,
353
00:18:33,155 --> 00:18:35,824
perhaps away from their home country
354
00:18:35,907 --> 00:18:39,494
where it may be taxed or taken or they
don't know what happens tomorrow.
355
00:18:39,578 --> 00:18:43,498
[narrator] In early 2018,
72% of apartments that cost
356
00:18:43,582 --> 00:18:45,083
more than 10 million dollars
357
00:18:45,167 --> 00:18:47,335
were purchased using LLCs,
358
00:18:47,419 --> 00:18:49,588
which often let the buyer
remain invisible.
359
00:18:49,671 --> 00:18:51,923
You just have to set up an LLC or a trust
360
00:18:52,007 --> 00:18:55,886
or an LLC owned
by another LLC owned by a trust.
361
00:18:55,969 --> 00:18:58,722
So it would be almost impossible
for anyone to search out
362
00:18:58,805 --> 00:19:00,098
who the ultimate owner is.
363
00:19:00,557 --> 00:19:02,601
[narrator] And this is
just one reason it's hard to know
364
00:19:02,684 --> 00:19:04,936
exactly where all the billionaires are
365
00:19:05,020 --> 00:19:06,605
or how many there are,
366
00:19:06,688 --> 00:19:08,899
or how many billions they have.
367
00:19:08,982 --> 00:19:11,776
Governments don't track wealth
on a global scale,
368
00:19:11,860 --> 00:19:14,779
so rankings like Forbes
are the best sources we have
369
00:19:14,863 --> 00:19:16,239
and they're not reliable.
370
00:19:17,032 --> 00:19:18,867
I think the Forbes 400 list
371
00:19:18,950 --> 00:19:22,829
or any of the rich lists that get
published are highly misleading.
372
00:19:22,913 --> 00:19:25,790
They are based on
publicly available information.
373
00:19:25,874 --> 00:19:28,877
If an individual's
primary source of wealth
374
00:19:28,960 --> 00:19:30,921
is stocks in a public company,
375
00:19:31,004 --> 00:19:33,173
you just look up
the number of shares that they own,
376
00:19:33,256 --> 00:19:37,344
multiply times the price
and if it's over a billion dollars, voilà!
377
00:19:37,427 --> 00:19:41,723
But many people all over the world
are wealthy from other sources.
378
00:19:42,349 --> 00:19:43,516
[narrator] For most billionaires,
379
00:19:43,600 --> 00:19:45,685
around two thirds
of their wealth is private.
380
00:19:45,769 --> 00:19:48,188
Billionaires may not even know
how much money they have.
381
00:19:48,521 --> 00:19:52,734
Like the oil tycoon Nelson Bunker Hunt
once explained to the U.S. Congress.
382
00:19:52,817 --> 00:19:54,903
Do you have any notion
of how much you're worth?
383
00:19:54,986 --> 00:19:57,864
People who know how much they're
worth generally aren't worth too much.
384
00:19:57,948 --> 00:19:59,616
[man] Well, that's--
You're absolutely right.
385
00:19:59,699 --> 00:20:03,078
Once you buy an asset
that's not publicly traded,
386
00:20:03,578 --> 00:20:06,039
it's really whatever you want
to value at.
387
00:20:06,122 --> 00:20:08,541
There's people in the political arena
who've done that.
388
00:20:08,625 --> 00:20:13,588
[Kroll] Donald Trump and his father
were listed on the very first Forbes 400.
389
00:20:13,672 --> 00:20:17,634
And even in that very first listing,
there was a note that said
390
00:20:17,717 --> 00:20:20,428
"They say they're worth 500 million."
391
00:20:20,512 --> 00:20:23,181
[narrator] Entrepreneurs may want to be
on the cover of Forbes.
392
00:20:23,265 --> 00:20:26,017
They have something to gain
from being known as wealthy,
393
00:20:26,101 --> 00:20:28,061
but a lot of billionaires don't.
394
00:20:28,144 --> 00:20:30,438
So even Forbes
acknowledges it underestimates
395
00:20:30,522 --> 00:20:32,232
the amount of wealth in the world.
396
00:20:32,315 --> 00:20:35,443
We always wonder just
how much wealth we're missing.
397
00:20:35,527 --> 00:20:39,447
It's something that quite frankly
sometimes does keep me up at night.
398
00:20:40,657 --> 00:20:41,908
[narrator] Back in the Gilded Age,
399
00:20:41,992 --> 00:20:44,494
the first billionaires didn't
just give away their money.
400
00:20:44,577 --> 00:20:45,996
The government stepped in.
401
00:20:46,079 --> 00:20:51,418
[Sachs] The Progressive Era
began a new way of regulation,
402
00:20:51,501 --> 00:20:56,089
breaking up the major trusts
like Standard Oil.
403
00:20:56,172 --> 00:21:01,219
Teddy Roosevelt was famously
called the "trust buster" for this.
404
00:21:02,554 --> 00:21:06,224
[narrator] In a globalized world, reining
in wealth looks a little different.
405
00:21:06,308 --> 00:21:09,644
The European Union
has put tax havens on a blacklist.
406
00:21:10,186 --> 00:21:12,147
But the results remain to be seen.
407
00:21:12,272 --> 00:21:14,983
And in the U.S., politicians on the left
have started pushing
408
00:21:15,066 --> 00:21:17,402
for much higher taxes on the wealthy,
409
00:21:17,485 --> 00:21:19,654
which a majority of Americans agree with,
410
00:21:19,738 --> 00:21:21,573
and even some billionaires do too.
411
00:21:21,656 --> 00:21:23,408
I should be paying more taxes.
412
00:21:23,491 --> 00:21:25,535
Should taxes on people like you be raised?
413
00:21:25,618 --> 00:21:26,536
Of course.
414
00:21:26,619 --> 00:21:29,956
The taxation system
has tilted toward the rich
415
00:21:30,040 --> 00:21:32,917
and away from the middle class.
And I think it should be addressed.
416
00:21:33,001 --> 00:21:35,378
The manner with which you accrue wealth
417
00:21:35,462 --> 00:21:39,466
is a relevant public policy topic.
418
00:21:39,549 --> 00:21:40,759
Morality...
419
00:21:41,551 --> 00:21:42,927
that's their own thing.
420
00:21:43,011 --> 00:21:45,472
That's between them and their priest.
421
00:21:45,972 --> 00:21:48,141
[narrator] Our relationship
to billionaires is complicated.
422
00:21:48,725 --> 00:21:51,269
We've made them celebrities
if they weren't already.
423
00:21:51,353 --> 00:21:53,021
We've made them powerful.
424
00:21:53,104 --> 00:21:55,690
And they do some incredible things
with their money,
425
00:21:55,774 --> 00:21:57,817
sometimes more efficiently
than governments.
426
00:21:57,901 --> 00:21:59,903
So it's not the individuals
that I'm worried about.
427
00:21:59,986 --> 00:22:05,575
It is a system which allows this kind of
massive income and wealth inequality.
428
00:22:06,451 --> 00:22:10,205
[narrator] That nation of billionaires
might soon be the richest in the world.
429
00:22:10,288 --> 00:22:12,916
And while their money
might not live in one country,
430
00:22:14,042 --> 00:22:15,585
we'll all live in theirs.
431
00:22:16,544 --> 00:22:18,380
[theme music playing]