Friday’s Wall Street Journal carried a remarkable story about Bill Gates — and a telling quote about wealth in our time.
The page one piece, penned by my colleague Rob Guth, described how Gates got ready for his commencement speech to Harvard — the school he famously dropped out of in 1975 to launch Microsoft.
Rather than giving advice on how to succeed or how technology is changing the world, Gates talked an issue not usually associated with billionaires — reducing inequality.
“Humanity’s greatest advances are not in its discoveries — but in how those discoveries are applied to reduce inequity,” he says in the article. “Whether through democracy, strong public education, quality health care or broad economic opportunity — reducing inequity is the highest human achievement.”
In other words, here is the richest man in the world talking about reducing the gap between the rich and the poor. What gives?
The rich, after all, are supposed to be champions of the free market, believers in survival of the fittest, and enemies of government involvement that reduce incentives. Why is Gates — and Buffett and so many other billionaires — suddenly worrying about the wealth gap?
One answer can be found in history — and John D. Rockefeller Sr., to be specific. Peter Johnson, a Rockefeller family adviser and historian, tells me that during the last Gilded Age, in the late 1800s, when incomes and wealth were much more unequal than they are today, the upper class took the lead in calling for reforms to shrink the wealth gap.
Labor unions, religious groups and socialist politicians played a strong role, of course. But it was largely the aristocracy and billionaires who eventually pushed for political and economic changes that spread the wealth more evenly throughout the population and created the modern middle class.
Rockefeller, for instance, put his charitable dollars toward education and health-care — the two areas he felt could most help lift the poor off the streets.
“He didn’t talk about inequality per se. But he did seek to eliminate the artificial constraints that kept people in poverty,” Mr. Johnson says. “He felt that the best way to do that was through improving education and providing better access to health care.”
Of course, that doesn’t mean Rockefeller was anti-wealth. Rockefeller, who grew up relatively poor, believed that success was the result of one’s innate talents and strengths and that governments shouldn’t interfere with success by limiting pay or achievement. “His focus was on making opportunity available to more people, rather than limiting the opportunities” of those who cane be successful on their own, Mr. Johnson says.
All well and good. But why, you might wonder, is it in the self-interests of Gates (and Mr. Rockefeller before him) to care about inequality? After all, you don’t become a billionaire by worrying about the poor.
Mr. Johnson says that for Rockefeller, it was a case of economic survival and stability.
“If you take a hard-headed political view, I think he felt that a stable society was in the best interests of business. He lived through some unstable times, like the panic of 1893 and labor strikes. There’s a calculation involved, where you can take the enlightened view and say “we don’t have to have it all. It would be much better to create a stable prosperous society where as many people benefit as possible, rather than having it all for yourself. Otherwise, the whole thing collapses.”
“So if you look back at that time, it was really the aristocracy, like the Rockefellers, or Roosevelts, who pushed for the pro-middle-class reforms.”
Perhaps history will repeat.