Why We Should Share the Wealth

By Jeffrey Sachs

What is the power of one when that one happens to be a John D. Rockefeller or a Bill Gates? If history is a guide, the answer is, quite a lot. I'm speaking not only about the power to reshape an industry like oil or personal computers but also about the ability to improve the world through philanthropy. Rockefeller proved that giving away money is much more than charity. It can be transformative. And if today's billionaires were to pool their resources, they could outflank the world's governments in ending poverty and pandemic disease.

A century ago, Rockefeller decided to put his vast fortune to public use, offering to endow a federal institution to fight disease, poverty and ignorance. Hotheads attacked him, claiming that he was just trying to buy a good name, and Congress demurred. So, instead, in 1913, Rockefeller set up the Rockefeller Foundation with two initial gifts totaling $100 million. No institution did more in the 20th century to further the cause of international development. It led the way in the eradication of hookworm in the U.S. South, helping pave the way for the region's economic development. It supported the Nobel-prizewinning work that created the yellow-fever vaccine. It helped Brazil eliminate a malaria-transmitting strain of mosquito. And perhaps most stunningly, it funded the Asian Green Revolution, the transformative agricultural success that enabled India and other countries to escape endless cycles of famine and poverty.

Now Bill and Melinda Gates, backed by more than $30 billion of their own funds and an additional $31 billion of Warren Buffett's, can do the same. Like the Rockefeller Foundation, the Gates Foundation rightly looks to technology for the breakthroughs that can end extreme poverty on a global basis. Its original focus has been on health technologies, but now the foundation is expanding to agriculture, water and other areas that are also critical in the fight against poverty.

Of course, Bill and Melinda Gates are not alone in contemporary transformative philanthropy. George Soros' support for brave truth tellers in Central Europe and the former Soviet Union helped catalyze the peaceful end of communism. The Google guys, Larry Page and Sergey Brin, are out to prove how information technologies can bring about major change. They have recently posted satellite imagery of Darfur, Sudan, in order to raise awareness and technical support for solutions in that violence-ravaged region. The dynamism of social entrepreneurship makes a mockery, alas, of our political leadership. The Gateses, Buffett, Soros, Page and Brin have left George W. Bush and the rest of Washington in the dust. U.S. international aid is at a pitiful 0.17% of national income (just 17-c- per $100), with much of that squandered as failed "reconstruction aid" in Iraq.

According to Forbes magazine, there are some 950 billionaires in the world, with an estimated combined wealth of $3.5 trillion. Even after all the yachts, mansions and luxury living that money can buy have been funded many times over, these billionaires will still have nearly $3.5 trillion to change the world. Suppose they pooled their wealth, as Buffett has done with Bill and Melinda Gates. By standard principles of foundation management, a $3.5 trillion endowment would have a 5% payout of about $175 billion a year, an amount sufficient to extend basic health care to all in the poorest world; end massive pandemics of AIDS, TB and malaria; jump-start an African Green Revolution; end the digital divide; and address the crying need for safe drinking water for 1 billion people. In short, this billionaires' foundation would be enough to end extreme poverty itself. All in all, it's not a bad gig for men and women who have transcended the daily economic struggle faced by the rest of humanity. They might also take note of the admonition of America's first megaphilanthropist, Andrew Carnegie, who wrote in 1889 that "the day is not far distant when the man who dies leaving behind him millions of available wealth, which was free for him to administer during life, will pass away unwept, unhonored, and unsung." Fortunately, plenty of new heroes seem ready for a different legacy. WHO HAS THE MONEY

The top five on the Forbes list of the world's wealthiest people come from all over the globe.] [This article contains a table. Please see hardcopy or pdf.]

RANK NAME CITIZENSHIP AGE NET WORTH * RESIDENCE 1 William Gates III U.S. 51 56.0 U.S. 2 Carlos Slim Helu Mexico 67 53.1 Mexico 3 Warren Buffett U.S. 76 52.4 U.S. 4 Ingvar Kamprad Sweden 81 33.0 Switzerland 5 Lakshmi Mittal India 56 32.0 Britain

* In billions of dollars