Oprah Winfrey is rich. She is more than rich. She is rich
in an era of capitalism that has allowed entrepreneurs to amass
wealth on a scale that was considered impossible for any individual
as recently as 20 years ago. She is only one of hundreds of
equally rich or richer Americans who are on the Forbes
list. On paper, each of the five Waltons is worth
16.5 times what she is. She’s only worth a billion dollars.
There are 476 billionaires world-wide, according to Forbes.
Most are Americans. Yet in 1982, there were only a handful.
America’s richest man was Daniel Ludwig, a recluse who made
his money in shipping and real estate, but who lost a lot of
it in the Amazon on an ill-fated project. He was worth $2 billion
in 1982. He died, unnoticed, in 1996, at the age of 99. The
total wealth of all American billionaires in 1982 was $15 billion
— less than just one Walton.
We have lived during a quiet revolution of wealth. This revolution
is on a scale so vast that there is nothing in history to match
it. Yet we have not seen the rise of demagogue politicians in
the Huey Long mold, who have been elected with some version
of Long’s share the wealth rhetoric. This, too, constitutes
WHAT OPRAH HAS DONE
I don’t watch her show. The only show I watch every week is
“Sunday Morning.” I just do not have time for TV. I have never
seen Oprah’s show from start to finish. While I was in a motel,
I did see her interview Michael Jordan, who got the better of
her. This was in his minor-league baseball phase. She asked
him something about all his money. He replied, “Yes, I’ve got
money — though nothing like you’ve got.” She responded,
appropriately, “Touch!” Those were the two richest people I
can recall ever seeing on a talk show.
Nobody publicly hates Oprah. I have never seen anyone say,
“She has too much money. Nobody should have that much money.”
Envy is powerless against her — or Jordan, for that matter.
She made it fair and square: by entertaining millions of women.
She is a former beauty queen, still quite good looking. She
is overweight by post-Rubenesque standards, but no longer bordering
on obese, the way she was in “The
Color Purple.” Her weight probably helps her. Her weight
reminds her viewers, “everyone’s got some problem that seems
personally unsolvable.” Hers is potatoes.
What I respect most about her is that she faced one of those
crucial career decisions in life, and she made it correctly.
She had pioneered a talk show format that presented sleazy topics
— “trash TV” — with interviews of people with bizarre
sexual stories to share. Then, in 1994, she turned the show
around. (The biblical term for “turn around” is “repent.”) While
other daytime TV talk shows were beginning to follow her lead,
becoming ever-more bizarre, she made a self-conscious career
decision to go the other way: toward self-help guests. This
appeared at the time to be a risky decision. It was an attempt
to shift what we direct-mail people call the USP: unique selling
proposition. This is very difficult to do. It is like abandoning
Coca-Cola for New Coke. You can lose your market share, fast.
She didn’t. She took her audience with her. In the history of
marketing, this has to be one of the classic stories of re-positioning
a product — in Oprah’s case, herself. She is today relentlessly
upbeat. She interviews guests who have stories that can help
viewers who are suffering or in trouble.
That decision is what made her super-rich. It also moved her
from celebrity status to international icon status. It was her
version of Bob Hope’s decision to do that March Field performance
62 years ago: May 6, 1941. It changed everything.
[If you want an instant-reply copy of my report on Hope, click
here, and click Send.]
Celebrities who get really rich are rarely the targets of
envy. The public loves them, or at least doesn’t resent their
wealth. The public understands the economic principle that the
fans make celebrities rich. By doing whatever it is that they
do, celebrities persuade millions of people to see them do it
and even pay to see them do it. The public fully understands
that the celebrities’ economic success is based on the widespread
support, including money, from the fans. The economist would
say that the celebrity is rich because he or she meets consumer
demand. This free market principle — consumer sovereignty
— is not easily understood in cases of manufacturing or
especially financial speculation, but it is widely understood
with celebrities. So, more money to them! Just not more power.
Their political views are usually a liability. I think they
suffer from too much guilt about their success. They don’t understand
the simple truth: the consumers have made capitalists rich,
including themselves. All hail the consumers!
THE COIN OF OPRAH’S REALM
As with all the rest of us, Oprah has 24 hours a day to accomplish
whatever it is that she wants to accomplish. In this respect,
there is perfect equality. We all get the same number of hours
in a day. The only differentiating factor is life expectancy,
and even here, there isn’t much difference among us. A rich
person may have 10,000 times more money than a poor person,
but an adult rich person doesn’t have 10,000 times the life
expectancy of a poor person.
There she is, sitting on top of a billion dollars. The best
definition of wealth I have ever heard is this: “The number
of alternatives a person can afford to buy.” By this definition,
Oprah has a huge number of alternatives. But, in fact, she doesn’t.
That’s because she defines herself by what she does, not by
what she owns. This is true of most rich people. Among the super-rich,
I suspect that 98% of them define themselves this way.
In one sense, this is the greatest single advantage that the
super-rich possess over the rest of us. The rich, like the saints
(e.g., Mother Teresa), have few illusions about money’s ability
to define them. Money tells them how well they are doing their
work, but it doesn’t define them in their own minds. They have
so much money that they have few illusions about its ability
to provide happiness or a sense of personal worth. It is the
person in between Mother Teresa and Oprah Winfrey who is tempted
to use money as an indicator of self-worth. You and I are more
likely to be seduced by the lure of money than either a person
who has taken a vow of poverty or a billionaire.
I think it was J. Paul Getty who said, “If you know how much
you’re worth, you’re not super-rich.” That pretty much says
it. The super-rich have so much wealth that they can’t keep
track of its price tags. Anyone who would try could not concentrate
on his or her work, which is the basis of the person’s wealth.
Oprah is rich because she has found a unique way to serve
consumers. She goes on TV five days a week and makes viewers
feel good. She appeals to their more noble instincts —
self-improvement, helping others — and they respond by
buying products that pay for air time on her show. To maintain
her self-image, she has to spend time on producing her TV show.
Remember: she doesn’t define herself in terms of money. She
must pay for her continuing success — her continuing self-worth
— by spending time on TV. But time is the only truly non-renewable
She can buy many alternatives with her money. But the currency
of her realm is not money. The currency of her realm is time.
She is short of time. All rich people are. This is their universal
characteristic. They are long on money and short of time.
All of life is a trade-off between money and time. Scarce
resources are allocated either by price (capitalism) or by standing
in line (socialism).
Oprah doesn’t stand in line. Rich people never do. They pay
others to stand in line for them, or else they have an assistant
order something over the phone. Rich people place a very high
value on their time, so they do not waste it. Time is running
out for them, tick by tock. Meanwhile, the money keeps rolling
in, almost on autopilot. For them, time is always increasing
in value compared to money. This should be true for all of us,
but it is especially true for the rich.
Again, this is a tremendous advantage of being rich. The rich
person knows what the real currency of life is: time. He is
reminded of this daily. He must allocate his time wisely. Each
remaining minute is so precious.
Odd; that’s what Jesus said. Yet Jesus spent his time telling
this to the poor. He didn’t have to tell the rich. They already
knew. A few of them may forget, but they are rare.
The rich must look to succession. Who will inherit their wealth,
i.e., their gigantic pile of alternatives? This question weighs
heavily on them. It always has. Not many people leave legacies
that can shape the world. A few politicians can, a few super-rich
can, and a few writers can. No one else has illusions in this
regard. As the writer of Ecclesiastes (probably King Solomon)
warned 3,000 years ago:
For who knoweth what is good for man in this
life, all the days of his vain life which he spendeth as a shadow?
for who can tell a man what shall be after him under the sun?
The rich and powerful cannot escape the responsibility of
making preparations for the disposal of their legacies. They
may ignore the problem, but the responsibility cannot be shifted.
It’s their money, so it’s their responsibility. They are required
to predict what shall follow them under the sun. Part of what
will be done will take place because of what they leave behind.
How would you like that job?
Karl Marx sat in the British Museum, year after year, writing
Das Kapital and his other books and newspaper articles.
The result, through Lenin: the deaths of 100 million innocent
people in the twentieth century, not counting World War II.
You want that job? Really?
Oprah jokes about the size of her behind. What impresses me
— no, horrifies me — is the size of her shoulders.
They are far too small to bear the load they must carry. It
gets larger daily.
The free market’s principle of consumer sovereignty has a
corollary: the social function of ownership. I have written
about this in my 1987 book, Inherit the Earth, in chapter
can download it for free.
Value is imputed to scarce resources by consumers and would-be
consumers. They bid against each other to buy property. This
is why there are prices. The process is like a gigantic auction.
In fact, it is a gigantic auction. The legal owner of
any scarce resource must decide which consumers to serve and
at what price.
Oprah’s most valuable asset is her time. She is an icon, a
cultural phenomenon. In economic terms, she is a brand. Who
gets a piece of her time?
She is most productive, in terms of money, through her TV
show. It obviously makes viewers happy. It may even help a small
percentage of them — meaning tens of thousands of them
each year — get over some besetting problem. What a tremendous
gift! It is matched only by the tremendous responsibility.
Her supply of money keeps growing. Her pile of alternatives
keeps growing. What to do with the money? She recently paid
$40 million for a house. Big deal. That’s 4% of her net worth.
What percentage of your net worth is sunk into your house? You
The rich man could not spend it all on himself, even if he
really wanted to, unless he is a compulsive gambler. He can
eat only so much. He can buy only so many tailored suits. Even
Imelda Marcos couldn’t buy that many shoes. Think of her closet.
There she was, facing walls of shoes. Which pair to wear? Who
has that much spare time? I can hear her husband: “Look, just
pick any pair. We’re going to be late for the reception! Again!”
Oprah cannot escape the responsibility of her net worth. It
keeps growing. Who will inherit it? What will be done with all
that money? There is no escape from the social function of capital.
Something will be done with that money, for good or evil. Someone
will put it to their use, in terms of his or her priorities,
after she dies. Again, quoting the Preacher:
A man to whom God hath given riches, wealth,
and honour, so that he wanteth nothing for his soul of all that
he desireth, yet God giveth him not power to eat thereof, but
a stranger eateth it: this is vanity, and it is an evil disease
We know in our hearts that along with power comes responsibility.
We may suspect — correctly — that there will be a
final day of personal reckoning. We all understand Jesus’ warning:
“For unto whomsoever much is given, of him shall be much required:
and to whom men have committed much, of him they will ask the
more” (Luke 12:48b). We teach our children this principle.
Oprah is carrying a billion dollars’ worth of alternatives
on her shoulders. If she were to give away $10,000 a day, and
if her pile of capital did not generate any more capital, and
if she never earned another dime on TV, it would take her 100,000
days to give it away. That’s 274 years. At $100,000 a day, that’s
close to the rest of her life.
How would you like to do the research to identify the most
deserving charity for your $100,000? How would you like to do
this every day for 27 years? How would you like to go through
the piles of begging letters? That’s what John D. Rockefeller,
Sr., had to do in the late 1890′s. He would give way $5,000
(worth $100,000 today), and he would then be inundated with
thousands of begging letters. It was driving him to despair.
Then along came Rev.
Frederick Gates, who advised him to set up foundations to
give his money away.
Between Gates and his successor, Raymond Fosdick, that money
changed the world, and is still changing it. Some of us would
say, “for the worse.”
Rockefeller was joined by Henry Ford and Andrew Carnegie in
giving away huge sums of money. Some of the same people sat
on their foundations’ boards. The same sorts of people wound
up as decision-makers over where the money went.
MAKING IT AND GIVING IT AWAY
Three decades ago, I spoke with my friend and mentor, economist
Ben Rogge [ROWEguee]. He was a good economist and a great speaker.
He advised Pierre Goodrich, a multimillionaire investor. Goodrich,
unlike most rich men, was well-read. He was also an intolerable
bore. He would pay scholars to attend a seminar and would then
lecture them for two days or more. I once had to go through
this ordeal. My only respite was a case of ptomaine poisoning,
which was preferable to the seminar.
Rogge once told me why he served as Goodrich’s advisor. I
wish every person on the Forbes list would take this
lesson to heart. He began with two principles:
Rich people know how to make money. They don’t know how
to give it away.
When someone gives away a great deal of money to any organization,
he can create enormous damage.
He told me that he saw his role as trying to keep Goodrich
from doing too much damage with his millions. “I don’t really
expect that his money can do much good. He has too much of it.”
Rogge was wrong. Goodrich established the Liberty Fund, which
publishes exquisite reprints of classic books on the philosophy
of limited government. The organization’s by-laws are so tight
that it can’t do much else. Those books have done some good
— maybe not a lot, but some. Rogge, long dead, would be
It takes great skill to give away money without causing harm.
It is at least as challenging a task as earning it, hand over
fist. Not many people possess this skill. Surely, not many people
who have the ability to amass a huge fortune possess it.
Every day, Oprah helps people through her TV show. Every day,
her snowball of responsibility gets larger. She gets richer
and richer as her money compounds. She is facing what John D.
Rockefeller faced a century ago. Rev.
Gates challenged him with these words: “Your fortune is
rolling up, rolling up like an avalanche! You must distribute
it faster than it grows! If you do not, it will crush you, and
your children, and your children’s children.”
She has no children. Who will inherit? She needs a corps of
people to give it away, but where will she recruit them? How
will she see to it that they do not betray her by subverting
her long-term goals for her money?
In 1973, the richest Calvinist in history died. His name was
J. Howard Pew. He was the Old School Presbyterian alter ego
of the liberal Baptist Rockefeller. He and his father had created
Sun Oil (Sunoco), one of the few oil companies that Rockefeller
could neither buy out nor bankrupt. Before his death, he had
created a series of trusts and foundations. He used to give
money to the organization that I worked for, briefly, the Foundation
for Economic Education. He sat on FEE’s Board. Within two years
of his death, his foundations began to cut off FEE and similar
organizations that sponsored the free market philosophy, most
notably the tabloid that Pew had funded for two decades, Christian
Economics, which was sent free twice a month to 180,000
ministers. Today, the Pew Charitable Trusts spend money on things
I believe he would not have approved of. He left behind a billion
1973 dollars. Others inherited.
Pew had always run the show, but he could not run it from
the grave. The men who had given away millions according to
his priorities now began giving away tens of millions according
to their priorities.
He had once come to my father-in-law and offered him a high-paying
job. “I want you to help me win back the Presbyterian Church
from the theological liberals.” My father-in-law was wise enough
to know that this was at least two decades too late for such
a project by 1955. He replied, “I’m not interested in winning
back the Presbyterian Church.” He never heard from Pew again.
Yet, theologically, he was the only Presbyterian scholar-pastor
in America who shared most of Pew’s views.
For the record, I wrote an 1,100-page book on how the liberals
captured the Northern Presbyterian Church. It was too late in
1955 — or even 1925. If you suffer from insatiable curiosity
or insomnia, you
can download a free copy here.
Pew bought followers. In this regard, he was like most super-rich
people. But, once bought, the go-fers do not stay bought. When
the donor at last reaches room temperature, his bureaucratic
heirs start spending the money their way. Rarely is this his
Poor people want to get rich. Middle-class people, setting
their sights higher, want to become super-rich. They know not
what they do.
Oprah Winfrey and her 475 billionaire peers face the same
avalanche of responsibility that Rockefeller faced in 1900.
There is no escape. They do good by serving consumers as profit-seeking
entrepreneurs. But they can do great harm when their money is
transferred to people who have not earned it except by feigning
agreement or by selling the donors on short-sighted and even
It takes a lot of skill to give away a billion dollars.
Trust me, you don’t want this job. Be content with what you’ve
got until you learn how to give it away. That takes a lot of