BILLIONAIRES HAVE never exactly been popular, but today they are loathed. Politicians in America’s Congress talk about them far more than ever before, usually to decry their ill-gotten gains or their malign influence on politics, or to insist that their wealth needs taxing (see chart 1). Fundraising emails from Democrats are three times as likely to mention billionaires—and almost always negatively—as they were in 2024, according to Andrew Hall of Stanford University. “Every billionaire is a policy failure” is a common cry from the left, linking members of the ten-figure club with a rigged economy and social decay.
Yet just as politicians think they have hit on a winning message, something unexpected is happening. More and more billionaires derive their wealth not from accidents of birth or from gaming the system, but by providing useful goods and services and by employing thousands of people. Perhaps billionaires are still policy failures—but to a lesser extent than before.
Many billionaires are unquestionably sketchy. John D. Rockefeller, probably the first person in history whose net worth crossed $1bn (and in the prices of the early 20th century), was a genius. But his company, Standard Oil, also took advantage of weak competition laws, and probably gave out plenty of bribes, to stack the deck in its favour. The oligarchs who emerged in Russia in the 1990s seized state assets during a period of violent chaos. And dodgy wealth is a satirist’s dream: C. Montgomery Burns, in “The Simpsons”, skimps on safety at his nuclear plant to cut costs.
The surge in anti-billionaire sentiment reflects several forces. After a few years of high inflation hitting living standards, people are looking for someone to blame. Billionaires, the thinking goes, use their market power and buy political influence to overcharge for everything from housing to groceries, and then pay low taxes on the profits. The “affordability crisis” and the powerful billionaire are thus two sides of the same coin. And political strategists, chiefly but not exclusively on the left, have realised that billionaires are the perfect enemy. A tax on their wealth would affect almost nobody a voter has ever met.
Yet many billionaires make their money without a hint that they enjoy questionable monopolies or political favour. Oprah Winfrey, worth $3.4bn today, has become rich because millions want to watch and listen to her. Cristiano Ronaldo’s nine-zero fortune rests on scoring amazing goals. Others are less well known, but similarly impressive. Peggy Cherng, the co-founder of Panda Express, is worth perhaps $6.5bn, having built a restaurant chain that serves cheap meals to millions. Yanai Tadashi, who is worth tens of billions, built up Fast Retailing, the parent company of Uniqlo. Can you really begrudge someone who makes such great T-shirts?
The Economist has quantified the better (Ms Winfrey, Mr Yanai) and worse (Mr Burns) sorts of billionaire wealth. Drawing on data from Forbes, a magazine, Hurun, a research firm, and Gapminder, a Swedish foundation, we have assembled a list of about 7,000 billionaires from the past 25 years. We call a billionaire’s wealth “uncompetitive” when it mainly comes from industries such as gambling, construction, defence and raw materials. These sectors often depend on political access. It is hard to open a mine or a casino, for instance, without friends in the government.
We count inheritors in the “uncompetitive” category. Heirs are usually not oligarchs. They have usually not bent or broken any laws, or screwed over customers; they were simply born into the right family or married well. Yet they plausibly represent policy failures too, on the grounds that their immense riches are undeserved.
From 2001, when our data begin, to 2014, the uncompetitive share of billionaire wealth rose slightly. Yet over the past decade the share derived from self-made entrepreneurs in competitive sectors has surged to an all-time high (see chart 2). For the first time, half the wealth of the world’s billionaires is reasonably fairly earned. And since 2021 the total wealth derived from uncompetitive sectors has declined.
Out-and-out oligarchs have had a poor few years. The total wealth of post-Soviet billionaires peaked in 2008 at $500bn or so, a “policy failure” of colossal proportions. Today they are worth around $400bn—still a lot, but a lot less. War has devastated the industrial base that gave Rinat Akhmetov, Ukraine’s richest man, his wealth. Roman Abramovich, the Russian former owner of Chelsea Football Club, is perhaps $5bn poorer than he was in 2021, as Western sanctions on those perceived to be close to Vladimir Putin have taken their toll.
Several clientelist industries have struggled. The wealth of property billionaires has fallen by a third since 2018. Higher interest rates, China’s property crash and collapsing demand for office space during the covid-19 pandemic have hurt. Wang Jianlin, the founder of Dalian Wanda Group, a Chinese developer, is now worth $4.4bn, down from $31bn in 2017. Some casino moguls have also lost, in part because of a crackdown on gambling in Macao.
Inheritance remains an important way for people to get extremely rich. The family of Sam Walton, who co-founded Walmart, America’s biggest retailer, and who died in 1992, are worth perhaps $500bn. The descendants of William Wallace Cargill, who in 1865 created the food company that bears his name, still populate rich lists. Yet old money is fast losing relative power. In the early 2000s close to half of billionaire wealth came from inheritance. That has since fallen to around a quarter.
You might think that the artificial-intelligence boom explains the surge in self-made wealth. The fortunes of some founders, including Jensen Huang of Nvidia, have indeed exploded. This summer Elon Musk briefly became the world’s first trillionaire before a decline in SpaceX’s share price pushed him back below the 13-figure threshold. Yet even excluding tech, the self-made billionaire share is rising.
This is because all sorts of people are striking gold in other industries, including finance, food and manufacturing. In the past decade the wealth of Bernard Arnault, who built LVMH into a global luxury titan, has grown by some $100bn. Robin Zeng, who only 15 years ago founded CATL, a Chinese battery-maker, is worth $60bn. Tatyana Kim, Russia’s first female self-made billionaire, founded Wildberries, the country’s biggest online retailer, in 2004.(In recent days Ukraine has attacked some of its warehouses, accusing the firm of supplying the Russian army.)
The rise in self-made wealth is the result of three trends. One is a bull market lasting more than a decade, in which global equities have returned more than 13% a year on average. Low interest rates first pushed investors into risky assets; techno-optimism lasted even when rates rose. This has done a great deal for founders, whose wealth is often tied up in shares, as well as enriching some hedge-fund managers.
The second is Chinese economic growth. At first glance this presents a puzzle—and not just because its property slump has dethroned some billionaires. In the past decade China’s economy has grown more slowly than it did in the 2000s. Yet the number of Chinese billionaires has risen from about 200 to about 800. A paper by Coen Teulings of Utrecht University and Simon Toussaint of Leiden University may hold the answer. Billionaire-creation is not linear. At low levels of income, even rapid growth can leave most fortunes far from the billion-dollar line. But once a country is richer, many more sit just below it. China’s later, slower growth may nonetheless have been enough to push many near-billionaires over the threshold.
The third factor is mobile-first internet, which took off in the middle of the 2010s—just as the self-made share started to rise. Mobile made payments and messaging ubiquitous, and allowed companies to reach consumers instantly, hundreds of times a day. That enabled whole new types of firms to grow at extraordinary speed, from ByteDance (short-form video) to Spotify (streaming) to Stripe (payments), as well as delivery and ride-hailing apps. It has never been so easy to become extremely rich extremely fast.
Does the rise of the self-made billionaire strengthen or weaken the arguments for wealth taxation? It makes no difference to some of them. Democracy does not work well if a tiny group of people can buy influence—and that is true however they got rich. Mr Musk is self-made, which is all well and good, but he has made no secret of his desire to sway elections, both in America and abroad. Democracy might work better without such influence.
Yet if billionaires have too much political power, the solution may be to change the rules on donations rather than to change the tax system. This is because the rise of the self-made billionaire greatly weakens other arguments for wealth taxation. It is now more difficult to say, as many campaigners still do, that billionaire fortunes “were never really earned”. Taxing Mr Abramovich to the hilt may seem reasonable—but Lionel Messi? And because a greater share of today’s billionaires spurs employment growth and productivity gains, it raises the economic cost of losing them, if they decide to move away, or work less hard, to avoid taxation. Billionaires may be less popular, but the proposed remedies look weaker than ever.
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