All the Money in the World How the Forbes 400 Make--and Spend--their Fortunes

Introduction The Forbes 400 is the dominant symbol of wealth in America. It recalls the earlier 400 list of Mrs. Astor but differs from hers in one telling respect. Whereas the original 400 referred to the collection of socially prominent New York families who filled the ballroom of Mrs. Astor in the late nineteenth century, the Forbes index spotlights individual wealth. It measures the size of this or that personal fortune. It asks not where you came from or who you work for, but who's richer? It's the big-banana indexsimple, primal, directand for those reasons irresistible. Malcolm Forbes, a passionate believer in fortune-making, established the list in 1982. There was nothing elitist in his ebullient approach to wealth. Forbes was unashamed by his fortune; he relished the idiosyncratic (and he knew the value of publicity in promoting his brand). His favorite form of transportation was neither the everyman's Chevy nor the aristocrat's polo pony, but a motorcycle and a hot-air balloonboth of which kept him and his eponymous magazine,Forbes, in the news. Several years before the creation of the 400 list,Forbesdeveloped a Cost of Living Extremely Well Index (CLEWI), a cheeky riff on a traditional Cost of Living Index, which measures the price of staples. The CLEWI charted the changing prices of yachts, caviar, cigars, and private planes. Similarly,Forbespresented its 400 as celebrities, treating them the wayPeopletreated actors orSports Illustratedhome-run hitters. The reported numbers had a kind of celebrity flash: A fortune was a batting average. It seems remarkable that the Forbes 400 list, today endlessly quoted around the world, is only twenty-five years old. (B.C. Forbes, Malcolm's father and the magazine's founder, published a brief precursor of the list in 1918, naming the thirty richest Americans of the time, but it did not take hold.) The Forbes 400 is a particular product of its era, a living reflection of recent history. It captures a period of extraordinary individual and entrepreneurial energy, a time unlike the extended postwar years, from 1945 to 1982, when American society emphasized the power of corporations. The gross domestic product (GDP) in the United States has more than doubled since 1982, and may soon triple. The size of American personal fortunes has more than kept pace. In 1982 only thirteen billionaires were on the Forbes list, and you needed $75 million to make the cut. Today you must be a billionaire. In 1982 the combined net worth of the 400 represented 2.8 percent of the GDP. By 2006 that figure had risen to 9.5 percent. (The percentage actually reached 12.2 percent of the GDP in 2000, during the Internet boom.) More generally, in 2005 the wealthiest 1 percent of Americans claimed a percentage of the national income not equaled since 1928. Only the Gilded Age, the period from the Civil War to the 1890s, and the 1920s can withstand comparison to the last twenty-five years in terms of wealth accumulation. For many people (not least, before his death, Malcolm Forbes himself) the Forbes 400 represents a powerful argumentand sometimes a dream about the social value of wealth in contemporary America. In this view, great wealth does not (at least in the United States) suggest an aristocratic or privileged group of people who inherited their positions. It means enterprising individuals, a marvelous meritocracy of money. Those who make fortunes are an ever-changing, ever-churning group of remarkable people who flourish in the land of opportunity. They bring jobs, energy, ideas, and even joy to their society. They have been responsible, in the late twentieth century, for extraordinary advances in technology, the invention of new financial instruments, and the efficient restructuring of American industry. Money is fluid. MonBernstein, Peter W. is the author of 'All the Money in the World How the Forbes 400 Make--and Spend--their Fortunes', published 2007 under ISBN 9780307266125 and ISBN 0307266125.