[narrator] Money is a little different for a billionaire.
For a billionaire compared to an average American,
a trip on a private jet is like a New York City subway ride.
A Lamborghini is like a Little Tike car.
And buying a private island is like a down payment on a house.
Billionaires aren't the 1%.
They're more like the .0001%.
What's the worst thing about being a billionaire?
Nothing.
Nothing at all.
They can just make a call and meet with a world leader.
At least a dozen are world leaders.
[in Spanish] ...better times are coming.
[cheering]
[narrator] There are roughly a hundred billionaires in the Chinese parliament.
Billionaires are booming.
In 1987, there were an estimated 140 billionaires.
In 2019, there are 15 times as many billionaires
with almost 30 times more wealth,
totaling almost nine trillion dollars.
If today's billionaires formed a country,
it would be the eighth wealthiest in the world.
It's an extraordinary amount of wealth that these people hold
and they influence so many parts of the world.
[narrator] That influence has made them symbols of inequality and a rigged system,
fueling protests and political movements around the world.
I think people are sick and tired of living in a nation and a world
where so few have so much and so many have so little.
[narrator] But many of these billionaires
made their fortunes by inventing things that changed our lives.
Some more so than others.
So why are there more billionaires than ever?
And are they good or bad for the world?
[man] The wealthy enjoy a life of ease and elegance.
[man 2] Money's too valuable to spend.
-Sold! -[cheering]
The gap between the super rich and the middle class
widens in dramatic fashion.
Well, I'm looking forward to my next million.
[man] What will you do with those extra dollars?
I build companies and I support people who are building new things,
from social networks to rocket ships.
[Obama] There's only so much you can eat. There's only so big a house you can have.
[man] What this country needs is a little more Golden Rule
and a little less rule of gold.
I'm embarrassed to admit how long I have been covering wealthy people.
[narrator] Luisa Kroll helps create
one of the most popular billionaire rankings in the world.
Around 1981, at the time that the list was started,
there were some obvious places to look for wealth in the country.
Places like Texas where you have the huge oil fortunes.
And then Silicon Valley where tech was just starting to take off.
And then in New York City,
they literally walked around the city figuring out who owned this or that.
[narrator] It turned out it's incredibly hard to track down wealth.
Very few people thought that they'd be able to pull it off,
but in the end, in September 1982, they published the first Forbes 400.
[narrator] On that first-ever wealth ranking
were 11 heirs of John D. Rockefeller.
He lived in the late 1800s in the United States,
an era called the Gilded Age,
which saw the world's first-ever self-made billionaires.
In today's dollars, Rockefeller and Carnegie
are estimated to be more than twice as wealthy
as the richest person in the world today.
This age was characterized not only by this astounding wealth,
but massive corruption.
[narrator] Mark Twain coined the term Gilded Age,
because while the wealth was glittering on the surface, it was rotten underneath.
Carnegie, Vanderbilt, and Rockefeller got rich from their political connections,
consolidating industries into trusts and exploiting workers
and they were barely taxed.
Before this time, wealth is hard to compare,
but to be extremely wealthy, you probably controlled an empire,
like Augustus Caesar, emperor of Rome,
or Empress Wu of China
or Mansa Musa, ruler of the Mali Empire,
who controlled one of the largest sources of gold.
His wealth was so legendary,
his image was printed on one of the most important medieval maps.
But the Gilded Age tycoons made their money a different way.
They founded successful companies.
What caused that massive rise of wealth at the time
was the creation for the first time of a continental-scale economy
in the United States and the rise of major corporations.
[narrator] Like Vanderbilt's railroads,
which formed part of the more than 200,000 miles of new track
that connected the continent for the first time,
helping turn the U.S. into an economic superpower.
And billionaires are booming today
because of an increasingly global-scale economy.
And that's helped the whole world get wealthier.
At a global level, inequality has been declining.
This is mainly driven by the fact that...
some of the poor countries are growing fast.
[narrator] And in the last few decades,
no country has been growing as much as China.
China, 40 or 50 years ago, was a country
with the vast majority of people in extreme poverty.
[reporter] The Communist government is pursuing
what they call socialist modernization.
[Sachs] Extreme poverty is almost gone from China.
Before 1978, there were no Chinese billionaires.
[narrator] By 2017, China was minting two new billionaires a week
and had the second highest number of billionaires in the world after the U.S.
[Huang] Then it's not surprising to see entrepreneurs become very rich,
accumulating wealth very, very fast.
[narrator] It's a similar story in India.
Their emerging economy lifted tens of millions of people out of poverty
and created over 100 billionaires.
These are today's billionaires.
Even for them, there's a huge wealth gap.
The vast majority, 94%,
are worth ten billion dollars or less.
Five percent of them are worth between 10 and 30 billion dollars
and one percent of the list are mega-billionaires,
worth 30 billion dollars or more.
Yeah, I look at people and go,
"Damn, they have so much more money than me."
Then I kind of catch myself and say, "Shut the fuck up, you idiot."
[narrator] And while the tech industry doesn't have
the most billionaires overall,
it's made the most mega-billionaires.
There's something called, "Winners Take All."
[narrator] Digital products like websites or apps don't take much manpower to build
and can instantly reach a global market.
There's a reason Google is synonymous with searching the internet.
That's where more than 90% of all searches happen
and its founders are the 10th and 14th wealthiest people in the world in 2019.
Facebook has more users than any other social media platform,
even excluding the ones they own,
and its founder is the eighth wealthiest person in the world.
And almost 50% of all U.S. online shopping happens on Amazon.
In 2019, Amazon's founder Jeff Bezos was the richest man on Earth.
The celebrity billionaires like Oprah, Kylie Jenner,
and Michael Jordan are low in the billionaire rankings,
and none of them are on the list for the work that first made them famous.
Michael Jordan made 90 million dollars playing basketball.
But his corporate partnerships were worth about one billion dollars
and so was his ownership stake in a basketball team.
He became a millionaire through his labor,
but he became a billionaire by owning capital.
Capital is anything you own that can make you money.
A house can be capital.
Stocks are capital.
Your likeness can be capital...
if you're Michael Jordan.
Patents are capital, like for drugs or technology.
And copyrights, like for Mickey Mouse.
I grew up around Disney and all that came with that.
You're not going to earn a billion dollars pulling down regular income
and paying regular income tax on it. Just not going to happen.
So ownership is what creates wealth.
[narrator] Most wealthy people make their money like everyone else
through labor.
But the richer you are, the less your income comes from labor
and the more it comes from capital.
The .0001% are an exceptional example of this.
So, broadly speaking, income produced in the economy
is shifted away from labor towards capital.
That's the most basic underpinning.
[narrator] And that's because global brands don't just have global markets.
They have a global labor pool
and increasingly no need to pay for labor at all.
Take the textile industry.
A series of innovations transformed it over the last two centuries.
Each one boosted productivity and profits.
Today, almost all garment workers
are in developing countries where labor is cheaper.
And now machines are starting to replace human workers altogether.
This is called the Sewbot.
It automates what once took delicate hand dexterity
and can sew as many shirts per hour as 17 factory workers.
This can lower costs for consumers
and bring more profits to the owners of capital.
The ownership of capital,
particularly in the share ownership of corporations,
is very highly concentrated.
Like the billionaire owners
of the global brands H&M, Zara, and Walmart.
And once someone has capital like that, it just grows.
Money just makes money.
It's like you put it in a room, close the door
and it has sex, and then more money babies grow.
That's kind of how it works.
[narrator] As Edgar Bronfman Sr., heir to the Seagram's fortune, put it,
"To turn $100 into $110 is work.
To turn 100 million dollars into 110 million dollars is inevitable."
That's because if you only have $100 in savings,
it's hard not to spend and it's hard to invest.
But 100 million dollars becomes 110 million dollars
if you let it sit in the stock market for an average year without lifting a finger.
Very quickly, in a matter of a couple of generations,
you're going to find yourself with a dynasty or multiple dynasties.
And given the power of money to control politics,
it's just not something that we want to see.
[narrator] According to one estimate,
13% of billionaires inherited their billions
and 56% are self-made.
But it's hard to draw a clean line between them
because most people who inherit money work to grow it.
That describes another 30% of the world's billionaires.
In 2014, we came up with what we called a self-made score.
And it ranged anywhere from one, which was where you inherited your money
and you pretty much did nothing with it, you sat around
and, you know, ate bonbons or what have you.
And then number ten were the rags to riches story.
Someone like Oprah Winfrey would fall into that category.
This year, we had Kylie Jenner which was highly controversial.
She basically figured out a way to monetize her Instagram followers
and her family's fame.
There is a new youngest self-made billionaire.
However, some people think Kylie's title needs to come with an asterisk.
When you don't get it from someone else,
that's self-made.
[woman] If you're born on third base and you hit a home run,
you're not really self-made.
[narrator] Other types of self-made wealth are controversial too.
[Kroll] When we began to put the Russian billionaires on the list,
the oligarchs, we weren't quite sure what else to call these people.
[narrator] Some people call them kleptocrats.
It's from the Greek kleptes meaning thief and kratos meaning power.
It refers to politically-connected people
who get rich off a country's natural resources.
That's what happened when the Soviet Union fell in 1991.
Russia now has nearly 100 so-called self-made billionaires.
There wasn't a category for, well, kind of helped
get these assets on the cheap by stealing or colluding with the government
or whatever you want to call it.
Good and bad has to do with how you obtain your wealth.
Do you obtain your wealth at the expense of everybody else?
Or do you create additional wealth
creating great products for the rest of the society?
These are two fundamentally different ways of wealth creation.
[narrator] In the Gilded Age, billionaires gave much of their wealth back to society,
like Andrew Carnegie.
[Carnegie] The public verdict will then be...
the man who dies thus rich
dies disgraced.
He said it was actually a shame for a rich person to die with their wealth.
That's why wherever you go,
you see Carnegie Institutes, Carnegie Libraries, Carnegie Hall,
Carnegie Mellon University.
You see a legacy of giving back the money.
[narrator] That tradition continues today.
At least 200 billionaires have signed the Giving Pledge,
vowing to give away at least half of their wealth.
And they're doing things that governments traditionally do
like fighting infectious diseases,
funding the construction of Olympic facilities,
as several Russian billionaires did for the Sochi Winter Games in 2014,
and ensuring college is affordable.
And my family is making a grant to eliminate their student loans.
[cheering]
[narrator] Or repairing critical infrastructure.
Where the state of Michigan and the city of Flint have failed,
billionaire Elon Musk...
...is pledging to fix the water crisis...
...is vowing to get clean water to every home in the city. Good for him.
[Disney] There was a lot of talk about how we could just raise $55 million
among rich people and fix the Flint water problem.
And I was ferociously against that.
There has been, of course, a great deal of philanthropy and charity
and that's great,
but the problem here is a structural problem.
You do not want our citizens to be at the mercy
of private unaccountable individuals
who might or might not fix the problems that you have
with your infrastructure, with your governments,
with your basic human rights.
[narrator] Governments raise money for these public services through taxes,
but in most wealthy countries,
individual's labor income is taxed higher than their capital income.
So, already what the tax system has decided to do
is to tax work at a higher rate than it taxes ownership.
I don't have a problem writing a check for more money. I really don't.
I'm not here to say that I should pay 90% taxes
because then that's going to change what I do
from investing in entrepreneurs and investing in start-ups
and investing in philanthropy.
[narrator] And even if a country increases its taxes on the wealthy,
in a globalized world, that's hard to enforce.
I think the best analogy for the offshore financial system is...
it's like an-- an ecosystem.
It's a series of small countries, sometimes large countries,
and they each carve out a little realm of the law.
[narrator] Like avoiding income taxes. That's a specialty of the Cayman Islands.
So you got a building in the Cayman Islands,
one building,
which hosts, "hosts", 20,000 companies.
It's a postal address that allows them to take advantage
of the Cayman Islands' tax breaks.
[narrator] For shirking corporate taxes, you can go to Luxembourg
or the U.S. state of Delaware.
And for avoiding inheritance taxes,
one of the most popular spots is the European island of Jersey.
[Harrington] The Cook Islands, sometimes known as the "Crook Islands",
specializes in helping people hide assets from creditors
and that's really all that they do.
[narrator] The world got a glimpse into this system in 2016.
New revelations on how the rich and powerful hide cash
are rocking countries around the world.
Now being called the Panama Papers.
Eleven million Panama Papers to be precise.
It's a leak from a Panama law firm called Mossack Fonseca.
These Paradise Papers, it's another leak--
...exposing how some of the world's wealthiest and most powerful people
...hide their money in offshore accounts.
[Harrington] I think one of the... big lessons was this rogue's gallery
of faces that came out of it.
It was this motley crew of sports stars like Lionel Messi
and entertainers like Jackie Chan
and then Queen Elizabeth and some members of the House of Lords.
[narrator] But the big shock came when people crunched the numbers.
An analysis of Scandinavian countries found that on average
most people avoid paying 5% or less of their taxes.
The wealthiest .01% don't pay about 25%.
In total, the equivalent of 10% of the world's GDP
was stashed in offshore bank accounts.
That's trillions of dollars.
Russia was one of the worst hit.
The .01% stashed more than half
of their wealth in offshore accounts.
That's a lot of missing tax revenue for public services...
or things like Olympic facilities.
And everyone who turned up in these leaks likely got some help.
[Harrington] They're not sitting around boning up on their yachts
on the tax code of the Cayman Islands.
Wealthy people hire folks to do that,
just like they hire folks to clean and maintain their homes
or cook for them or nanny their children.
[narrator] Billionaires may be the eighth wealthiest nation in the world,
but they're also, in many ways, people without a nation at all.
With expert help, they can pick and choose
the laws of whatever country they like.
Globalization has opened up all sorts of addresses to hide the money.
[narrator] This is known as Billionaires' Row,
an enclave of luxury high-rise towers south of Central Park in New York City,
the city with the most billionaires in the world.
And you see, in New York City, these billionaires are buying
these luxury-- "Luxury" is the understatement.
These condos worth tens and tens of millions of dollars.
[Lenz] Our average sale is slightly over 18 million dollars,
and our average client
has a net worth in the hundreds of millions to billions of dollars.
New York real estate is-- is part of that global ecosystem
of hiding wealth from the law,
laundering money, and doing all sorts of things
that really skirt the edges of legality.
[Lenz] People who wanted a store of value,
they wanted a safety deposit box in the sky perhaps,
and they're buying property to have their money secure,
perhaps away from their home country
where it may be taxed or taken or they don't know what happens tomorrow.
[narrator] In early 2018, 72% of apartments that cost
more than 10 million dollars
were purchased using LLCs,
which often let the buyer remain invisible.
You just have to set up an LLC or a trust
or an LLC owned by another LLC owned by a trust.
So it would be almost impossible for anyone to search out
who the ultimate owner is.
[narrator] And this is just one reason it's hard to know
exactly where all the billionaires are
or how many there are,
or how many billions they have.
Governments don't track wealth on a global scale,
so rankings like Forbes are the best sources we have
and they're not reliable.
I think the Forbes 400 list
or any of the rich lists that get published are highly misleading.
They are based on publicly available information.
If an individual's primary source of wealth
is stocks in a public company,
you just look up the number of shares that they own,
multiply times the price and if it's over a billion dollars, voilà!
But many people all over the world are wealthy from other sources.
[narrator] For most billionaires,
around two thirds of their wealth is private.
Billionaires may not even know how much money they have.
Like the oil tycoon Nelson Bunker Hunt once explained to the U.S. Congress.
Do you have any notion of how much you're worth?
People who know how much they're worth generally aren't worth too much.
[man] Well, that's-- You're absolutely right.
Once you buy an asset that's not publicly traded,
it's really whatever you want to value at.
There's people in the political arena who've done that.
[Kroll] Donald Trump and his father were listed on the very first Forbes 400.
And even in that very first listing, there was a note that said
"They say they're worth 500 million."
[narrator] Entrepreneurs may want to be on the cover of Forbes.
They have something to gain from being known as wealthy,
but a lot of billionaires don't.
So even Forbes acknowledges it underestimates
the amount of wealth in the world.
We always wonder just how much wealth we're missing.
It's something that quite frankly sometimes does keep me up at night.
[narrator] Back in the Gilded Age,
the first billionaires didn't just give away their money.
The government stepped in.
[Sachs] The Progressive Era began a new way of regulation,
breaking up the major trusts like Standard Oil.
Teddy Roosevelt was famously called the "trust buster" for this.
[narrator] In a globalized world, reining in wealth looks a little different.
The European Union has put tax havens on a blacklist.
But the results remain to be seen.
And in the U.S., politicians on the left have started pushing
for much higher taxes on the wealthy,
which a majority of Americans agree with,
and even some billionaires do too.
I should be paying more taxes.
Should taxes on people like you be raised?
Of course.
The taxation system has tilted toward the rich
and away from the middle class. And I think it should be addressed.
The manner with which you accrue wealth
is a relevant public policy topic.
Morality...
that's their own thing.
That's between them and their priest.
[narrator] Our relationship to billionaires is complicated.
We've made them celebrities if they weren't already.
We've made them powerful.
And they do some incredible things with their money,
sometimes more efficiently than governments.
So it's not the individuals that I'm worried about.
It is a system which allows this kind of massive income and wealth inequality.
[narrator] That nation of billionaires might soon be the richest in the world.
And while their money might not live in one country,
we'll all live in theirs.
[theme music playing]