The real trouble with billionaires
Renowned author Linda McQuaig paid a visit to Fanshawe last week to deliver her compelling lecture The Trouble with Billionaires. McQuaig offered a scathing indictment of corporate tycoons citing the growing income gap in North America as a cause for alarm. The rich are indeed getting richer while the middle class and poor are not sharing in the wealth. To borrow an analogy from economics: the pie may be getting larger but everyone's slice is not growing equally.
McQuaig's presentation chided a few uber-rich entrepreneurs such as Bill Gates. She proceeded to explain how Gates had built a billion dollar empire by making a small update to an existing invention. After all, the Microsoft operating systems were just marginal improvements on technologies that had already been refined. Other people did the heavy lifting while Gates reaped the rewards. McQuaig suggests that Gates shouldn't be entitled to all of the financial rewards. Since society had accumulated the knowledge for Gates, perhaps society should harvest some returns; maybe in the form of taxes.
By any definition Gates is exceptionally wealthy, and few would argue that point; the dispute is over the amount. Does he deserve his billions? I would argue yes. His innovations in operating systems and web browsing technology have made people exponentially more productive than they ever imagined. The applications for communications have linked and empowered people across the globe. This “marginal” innovation has likely created billions if not trillions of dollars worth of cumulative value for society. In that context, Gates' returns seem quite modest.
Consider an analogy for illustration. Tom Brady and Peyton Manning are two of the finest quarterbacks in professional football. Few others can match the contributions they have made to the quarterback position, and they both get paid quite handsomely for their efforts. The forward pass that they execute so prolifically was not always part of the game. It has been slowly (at first) incorporated into the game of football, gradually becoming more significant over time. It developed and evolved thanks to the efforts of many contributors.
Since the forward pass wasn't really their invention, should Brady and Manning be entitled to their enormous salaries? Generations of skilled quarterbacks and coaches helped contribute to their development, so shouldn't they be forced to compensate society in some manner?
While Brady and Manning didn't invent the forward pass, they are able to apply it to their craft better than any of their contemporaries. That deserves a reward. Marginal innovations are the essence of all innovations, and when they produce value for society, the innovators should be entitled to the rewards. In this sense I have no quibble with the accumulation of substantial wealth.
The real problem with billionaires however, is how they use their wealth and power to prevent others from sharing in the success. Innovators routinely deter others from making use of their innovations. Gates' wealth is entrenched within our legal system's intellectual property laws. By patenting different “software recipes” he can prevent others from making use of them — essentially limiting the potential for new innovation.
This is the real trouble with billionaires. To (fittingly) borrow another analogy: they scramble up the ladder of knowledge that society has created. Upon reaching the top they promptly turn around and kick it away from others who are attempting to climb up. It is the equivalent of Manning saying, “I've perfected the forward pass and thus no one else should be able to use it or any other quarterbacking techniques that I use.”
This excessive protection of intellectual property lies at the heart of the problem. Apple and Microsoft for example, each own thousands of patents that are nothing more than ideas. When potential competitors sprout up with similar ideas, they will promptly be dragged into court for copyright infringement. Both firms are ruthless litigators. As luck would have it, Microsoft is currently suing Apple claiming that the searchable music-sorting software in the iPod is actually a Microsoft idea. Microsoft didn't invent the iPod, why should they be compensated?
Gates and other super rich leaders of industry rely on the accumulated body of societal knowledge to drive their innovations, yet vigorously defend the use of those ideas from others. They deny other inventors the same opportunity and thus deprive society of potentially limitless possibilities. Do I resent billionaires? Maybe a little. But not for being wealthy. I resent them for being hypocritical.
Editorial opinions or comments expressed in this online edition of Interrobang newspaper reflect the views of the writer and are not those of the Interrobang or the Fanshawe Student Union. The Interrobang is published weekly by the Fanshawe Student Union at 1001 Fanshawe College Blvd., P.O. Box 7005, London, Ontario, N5Y 5R6 and distributed through the Fanshawe College community. Letters to the editor are welcome. All letters are subject to editing and should be emailed. All letters must be accompanied by contact information. Letters can also be submitted online by clicking here.
McQuaig's presentation chided a few uber-rich entrepreneurs such as Bill Gates. She proceeded to explain how Gates had built a billion dollar empire by making a small update to an existing invention. After all, the Microsoft operating systems were just marginal improvements on technologies that had already been refined. Other people did the heavy lifting while Gates reaped the rewards. McQuaig suggests that Gates shouldn't be entitled to all of the financial rewards. Since society had accumulated the knowledge for Gates, perhaps society should harvest some returns; maybe in the form of taxes.
By any definition Gates is exceptionally wealthy, and few would argue that point; the dispute is over the amount. Does he deserve his billions? I would argue yes. His innovations in operating systems and web browsing technology have made people exponentially more productive than they ever imagined. The applications for communications have linked and empowered people across the globe. This “marginal” innovation has likely created billions if not trillions of dollars worth of cumulative value for society. In that context, Gates' returns seem quite modest.
Consider an analogy for illustration. Tom Brady and Peyton Manning are two of the finest quarterbacks in professional football. Few others can match the contributions they have made to the quarterback position, and they both get paid quite handsomely for their efforts. The forward pass that they execute so prolifically was not always part of the game. It has been slowly (at first) incorporated into the game of football, gradually becoming more significant over time. It developed and evolved thanks to the efforts of many contributors.
Since the forward pass wasn't really their invention, should Brady and Manning be entitled to their enormous salaries? Generations of skilled quarterbacks and coaches helped contribute to their development, so shouldn't they be forced to compensate society in some manner?
While Brady and Manning didn't invent the forward pass, they are able to apply it to their craft better than any of their contemporaries. That deserves a reward. Marginal innovations are the essence of all innovations, and when they produce value for society, the innovators should be entitled to the rewards. In this sense I have no quibble with the accumulation of substantial wealth.
The real problem with billionaires however, is how they use their wealth and power to prevent others from sharing in the success. Innovators routinely deter others from making use of their innovations. Gates' wealth is entrenched within our legal system's intellectual property laws. By patenting different “software recipes” he can prevent others from making use of them — essentially limiting the potential for new innovation.
This is the real trouble with billionaires. To (fittingly) borrow another analogy: they scramble up the ladder of knowledge that society has created. Upon reaching the top they promptly turn around and kick it away from others who are attempting to climb up. It is the equivalent of Manning saying, “I've perfected the forward pass and thus no one else should be able to use it or any other quarterbacking techniques that I use.”
This excessive protection of intellectual property lies at the heart of the problem. Apple and Microsoft for example, each own thousands of patents that are nothing more than ideas. When potential competitors sprout up with similar ideas, they will promptly be dragged into court for copyright infringement. Both firms are ruthless litigators. As luck would have it, Microsoft is currently suing Apple claiming that the searchable music-sorting software in the iPod is actually a Microsoft idea. Microsoft didn't invent the iPod, why should they be compensated?
Gates and other super rich leaders of industry rely on the accumulated body of societal knowledge to drive their innovations, yet vigorously defend the use of those ideas from others. They deny other inventors the same opportunity and thus deprive society of potentially limitless possibilities. Do I resent billionaires? Maybe a little. But not for being wealthy. I resent them for being hypocritical.
Editorial opinions or comments expressed in this online edition of Interrobang newspaper reflect the views of the writer and are not those of the Interrobang or the Fanshawe Student Union. The Interrobang is published weekly by the Fanshawe Student Union at 1001 Fanshawe College Blvd., P.O. Box 7005, London, Ontario, N5Y 5R6 and distributed through the Fanshawe College community. Letters to the editor are welcome. All letters are subject to editing and should be emailed. All letters must be accompanied by contact information. Letters can also be submitted online by clicking here.
