The news from Forbes that Jeff Bezos is officially the world’s richest person reminded me immediately of a chat I had decades ago with my first mentor, a brilliant economist named Kenneth E Boulding, nominated repeatedly for the Nobel Prize in economics. As his research assistant 50 years ago, he made an off-handed comment that changed my life.
“As capitalism matures, it will reach a crisis when just a few of the richest business leaders will own most of the world’s wealth.” He said. “At that point, the key to the very survival of capitalism and to democratic societies will rest with the philanthropic foundations created by the these wealthiest of these individuals.”
His comment led me to the ambitious decision to become an adviser to philanthropists, a career that culminated in a consulting role in the l990s when my role was to design Microsoft’s corporate philanthropy and create the strategy framework that led to the Bill and Melinda Gates Foundation. Back then, I was doing a lot of networking among Seattle’s up and coming digital philanthropists. One of them was Jackie Bezos, whose son Jeff had just put her and her husband Mike in charge of the family foundation. “It allowed our son to focus their energies strictly on his business agenda. After all, he is trying to leverage his position as an online bookseller to become a player in all of retail,” she said, sighing. A concerned mom, Ms. Bezos told me, “I really do think that Jeff is trying to do too much.”
Well, since then, Jeff Bezos did a lot. He made more money more quickly than any other human in history. Warren Buffet says he’s got the smartest business mind of our era. With 17% ownership of Amazon stock, his current fortune seems only to be the beginning of his personal fortune.
And yes Boulding’s prediction has come true. According to Oxfam, just eight persons own wealth equal to the combined wealth of the bottom half of the world’s economy. So it makes sense to inquire what sort of philanthropy concepts are emerging from the top of the heap and what sort of incentives are encouraging and shaping their donations.
We should begin by considering the incentives that are likely to shape Bezos’ future donations.
One incentive, to be sure, is to maintain the essentially deregulated nature of telecommunications in the digital era. Amazon is considered target number one by those who would seek to reign in the “winner-takes-all” economy. Even the Bezos-owned Washington Post published an article questioning whether Amazon is getting too big. In the wake of its big charge against Google, the EU has a far lower bar than the US for anti-trust violations. In the past, Amazon’s chief counsel, David Zapolsky has been keeping litigators at bay by arguing that the company benefits consumers by their lowering prices. But now in the Trump era, economic nationalism is the new cause.
Interestingly, that matter relates to philanthropy. The real question is how Amazon’s wealth — even the amount in Bezos personal bank accounts– could be put to optimal use.
If it could be used to restore balance as the economy that Bezos himself is disrupting through ecommerce, his outsized wealth (and Amazon’s big market share in many industries) may well be justifiable.
So here’s DDI’s recommendation. For Amazon’s own good and the good of society. Bezos should be as bold in philanthropy as he has been recently in his invasion of the grocery business in the World Foods purchase. Well, bigger actually. Our recommendation is that he should announce a big personal philanthropic foundation that outpaces Bill and Melinda Gates Foundation in size and scope. His cause? It should be the same cause as his business: to transform the Internet. He could use his cash, his expertise and his passion to fix the global internet so that reaches every one and helps everyone.
It may seem shocking that we propose that he link his personal giving with his business interests. Isn’t that a no-no? After all, no direct relationship is legally permissible between a CEO’s personal giving and his or her business. But an indirect relationship is fair game and it is safe to say that a philanthropist does the most good for society by doing what he knows best. In Bezos case what he knows best is how to bend the internet to meet specific purposes – which could be social as well as economic.
A good example is George Soros, whose Open Society Institute, is the philanthropic correlate of the philosophy he used to reap billions in business. There is no reason that Amazon.com itself could not or should not reap a dividend as a result of the impact of its founder’s own philanthropy.
If there is any doubt about this, we need only look to the very successful example of Bill Gates, whose philanthropy had a very positive – but appropriately indirect – effect on his business that did not raise eyebrows in the legal community. In the year, 2000 the US Department of Justice ordered the break up of Microsoft on the grounds that it was an illegal monopoly and guilty of antitrust violations.
After Microsoft’s legal strategy was frustrated, its PR firm went to work, convincing Gates to pursue a “soft path” to success” by announcing the debut of the world’s largest philanthropic foundation: The Melinda Gates Foundation established in that same year, focused on fixing health care among the world’s poor. Though his philanthropy was personal not corporate, his hero image created a kind of golden halo around Microsoft. The breakup of his company eventually became politically untenable and the US. Department of Justice backed off.
With antitrust concerns out of the way, Microsoft’s stock value continued its steady climb, increasing many times in value till. Gates became the richest person in the world by 1994, a status that he held for 21 years till now, despite (or perhaps because of) his big giveaways.
Bezos has even more reason now to follow the same path. With 17% of Amazon’s stock portfolio now worth about $500 billion. Of that, Bezos owns 15% of Amazon, while Gates owns just 4% of Microsoft. World governments are alarmed. For good reason. Bezos wealth jumped $43.5 billion in just the past two years.
Beyond these macroeconomic concerns is the Trump factor. Every day the opinion pages of the Bezos-owned Washington Post gives a poke in the eye to the President of the United States who put “raising Amazon’s taxes” on his to do-list for this first 100 days. It is only a matter of time. In Asia, where Alibaba is Amazon’s big competitor, Bezos’ personal leadership could shape public/private partnerships that will be welcomed from Delhi to Jakarta.
With his inspiration clearly tied to the space-travel plans of Blue Origin, Bezos seems not yet to have given serious consideration to how his insights and resources could combine to solve big problems here on earth.