It's true that some millionaires and billionaires are not wealthy because of their own sweat, but thanks to Mom or Dad's (or Grandma or Granddad's) previous success in life. But very often, we read about people rising from ordinary, unremarkable origins to become outlandishly wealthy and successful. Think of Berkshire Hathaway (NYSE:BRK.A, BRK.B) CEO Warren Buffett, for example, or Oprah Winfrey. We think of them as self-made millionaires (and billionaires), but as a new report points out, in many ways they didn't achieve their success on their own.
The report, titled "I Didn't Do It Alone," was penned by Chuck Collins, associate director of United for a Fair Economy; Scott Klinger, co-director of Responsible Wealth and a chartered financial analyst; and Mike Lapham, co-director of Responsible Wealth. You might remember Collins for having co-written Wealth and our Commonwealth with Bill Gates Sr., father of Microsoft (NASDAQ:MSFT) founder Bill Gates. That book supported the estate tax.
"I Didn't Do It Alone" champions the idea that it takes a village to raise not only a child but also a millionaire. It points to the facts that certain infrastructural elements are needed before many businesspeople can succeed, and these are paid for by society, which means all us taxpayers. Buffett supports this view, saying, "I personally think that society is responsible for a very significant percentage of what I've earned."
What infrastructure? Well, think of public schools, for starters. And roads and highways. The legal and financial establishments that are supported by the government to some degree. Ideas are protected by patents. Budding fortunes are safeguarded by banks, which sometimes make critical loans, as well. Brilliant minds are fed by schools and teachers and sometimes supported by loans. Businesses thrive often thanks to available transportation systems. Where would Buffett have gone without an existing stock market?
Collins notes, "How we think about wealth creation is important since policies such as large tax cuts for the wealthy often draw on the myth of the self-made man.. Taxes are portrayed as onerous, unfair redistribution of privately created wealth -- not as reinvestment or giving back to society. Yet, where would many wealthy entrepreneurs be today without taxpayer investment in the Internet, transportation, public education, legal system, the human genome and so on?"
Addressing the topic, Jim Sherblom, formerly the CFO of biotech firm Genzyme (NASDAQ:GENZ), said, "The opportunities to create wealth are all taking advantage of public goods -- like roads, transportation, markets -- and public investments. None of us can claim it was all personal initiative. A piece of it was built upon this infrastructure that we all have this inherent moral obligation to keep intact."
Google (NASDAQ:GOOG) CEO Eric Schmidt adds another wrinkle: "Lots of people who are smart and work hard and play by the rules don't have a fraction of what I have. I realize I don't have my wealth because I'm so brilliant. Luck has a lot to do with it."
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Longtime Fool contributor Selena Maranjian owns shares of Berkshire Hathaway and Microsoft. Much to her regret, she's not a millionaire.
