“Behind every great fortune is a great crime,” said Honore de Balzac, French novelist and literary giant of the early 19th century. The trick is in choosing the right crime to build that great fortune. Not that happiness will accompany it, mind you.
Pursuit of wealth has been confused with the pursuit of happiness for quite a long time. Admonitions to the contrary may be rampant and perennial, but people still glaze over with envy when they hear of some lottery winner’s hundred million dollar prize, after taxes. We think that we would live a different life, a better life if only we could get so lucky.
But it’s not about luck alone, because the odds of catching the “wave” at just the right moment in the life of an industry, a company or a poker game are sufficiently small that it makes no sense hoping for luck to carry the day. Wealth is most often achieved reliably in one generation by intentional, planned effort. Wealth that is honestly gotten requires the combination of heroic effort, the right products or services at the right time, and that dollop of luck that accompanies both in order for either to succeed. Most people can’t bring themselves to do what it takes to get wealthy by hard work. The sacrifices are just too great. The crimes that lead to wealth require great cleverness and prodigious rationalization, but the ingredient of luck can be eliminated. For a time.
The iconic and regrettably recent all-time winner of rationalizing great crime is Bernie Madoff, of course. And could there be a better surname for this incredible thief? It’s the kind of screenplay element that would be thrown back to the writers to edit out the shtick. And yet billions were stolen easily over decades from really smart people. No one has proposed this explanation as yet, but there’s another piece of folk wisdom that might apply, from the film starring W.C. Fields in 1939: “You Can’t Cheat an Honest Man.”
Another alleged crime upon which an entire industry was founded is the Microsoft story. Depending upon who is doing the writing, some accounts identify much of the value created by Microsoft’s operating system and later its integrated applications as technology and intellectual property that was pilfered or bribed away from its authors. How else could a college dropout amass the world’s second largest fortune? Looking for the quicker, easier way, of course. Those general education courses were brutal, apparently.
The multimillion dollar bonuses paid to the senior executives in the rescued investment banks after the “global financial crisis” of 2008 is another example of wealth stemming from glaring greed and thievery. The fact that the funds to cover those bonuses were provided by taxpayers and decided upon by people we elected is an ironic twist. While this pickpocketing the average citizen certainly qualifies logically as a crime, we may need to exclude it from Balzac’s dictum because apparently the whole deal was nice and legal, and we participated by deferring the costs to our kids and their kids through the national debt.
There are so many examples to prove Balzac correct, going back centuries. Great wealth from great crimes. The bigger the crime, the more likely it requires political cooperation. Ivar Kreuger, known in the 1920s as “The Match King,” built his scheme before Ponzi was assigned authorship of the structure, selling equity to new investors to pay dividends to earlier ones. He included European governments as his partners in the scam, loaning them the raised money in exchange for match monopolies in those countries. The return on matches was insufficient to pay the promised phenomenal returns, so more capital was raised for each successive round of dividend increases. That was Kreuger’s larcenous brilliance, until Kreuger’s financial scaffolding gave way to the extreme pressure of growing dividends. He solved his insolvency through a private conversation with a pistol in 1932.
Government participation in truly grand theft is legendary. The railroads and the U.S. government were quite happy to collude in removing pesky natives from their right of way. One could even point to the annexation of Texas from Mexico as a partnership of thieves between Washington, D.C., and the squatters in San Antonio, if you look at it from Mexico’s perspective.
We can decide not to be thieves, and thankfully the vast majority of us make that decision daily. The few who take the thief’s path are often inept and happily unsuccessful. But occasionally there arises a smart psychopath who is able to convince himself (most are male) that his objectives trump everyone else’s, and the plot is laid. Partner that criminal with his favored accomplices — politicians — and the riches that can be stolen are nearly uncountable.
Tell me again the basis of the Supreme Court’s finding in favor of Citizens United v. Federal Election Commission?