What Is a Billionaire?

Lots of billionaire news flow this week. Bill Gates sort of criticized Elizabeth Warren’s wealth tax, and Warren unveiled a simple calculator to mock him. Bernie Sanders said more directly that billionaires shouldn’t exist. And Michael Bloomberg says he may jump into the Presidential race.

Ok. So here’s what most people think of when they think of a billionaire.

A Billionaire Is Someone Who Runs a Very Important Tollbooth

Most people think a billionaire is someone with a lot of money, a sort of Scrooge McDuck who goes swimming in a pool of gold coins. And why wouldn’t we? The name billionaire has the word billion contained within it, so clearly it means having a net worth of at least ten figures.

Billionaires use market power to extract revenue the way that a tollbooth operator does. If you want to drive on a road, you have to pay for the privilege. It costs the tollbooth operator nothing, he/she just has a strategic chokepoint for extraction. Billionaire Warren Buffett, for instance, has such a ‘tollbooth’ strategy for investing, though he uses the term ‘moat’ because it sounds charming and quirky rather than rapacious.

Bill Gates Is a Billionaire Because of the Law

Bill Gates made his money the old-fashioned way. He stole it. Or well, most of it. As one person who made deals with Gates said anonymously: “A partnership with Microsoft is like a Nazi non-aggression pact. It just means you’re next.”

Also Read : What CEO Darren Huston learned from Bill Gates

It is perhaps not theft in the direct sense, in that he didn’t physically break into someone’s house and steal the contents of their safe, but he used anti-competitive tactics to extract property from other business people, tactics that in earlier generations would have brought assertive antitrust suits.

The Sherman Antitrust Act, passed in 1890, is not just a civil statute, but a criminal one, and it can and has been used to send people to jail. Monopolization isn’t just a business practice, it is, according to the law, a crime.