Billionaires: Marc Benioff says capitalism has led to ‘horrifying inequality’

In our latest fotnightly roundup, Salesforce CEO argues for a system reboot and US presidential hopeful Tom Steyer weighs in on ‘billionaires should not exist’ debate

Marc Benioff, chairman and chief executive of Salesforce, argued in a New York Times opinion article last week that a new type of capitalism is needed. Photo: Bloomberg

Marc Benioff

American tech entrepreneur Marc Benioff, who has a net worth of $6.69 billion (Dh24.57bn), acknowledged that capitalism has been good to him in a New York Times opinion article published last week. Salesforce, the cloud computing company he cofounded 20 years ago, has generated billions in profits and made him a “very wealthy person”.

There are positives of such success, including Mr Benioff’s personal philanthropy. But “capitalism as it has been practised in recent decades — with its obsession on maximising profits for shareholders — has also led to horrifying inequality”, he wrote in the article titled “We Need a New Capitalism”.

Globally, the 26 richest people in the world now have as much wealth as the poorest 3.8 billion people, according to the article. In the US, income inequality has reached its highest level in at least 50 years, with the top 0.1 per cent owning roughly 20 per cent of the wealth.

“To my fellow business leaders and billionaires, I say that we can no longer wash our hands of our responsibility for what people do with our products. Yes, profits are important, but so is society. And if our quest for greater profits leaves our world worse off than before, all we will have taught our children is the power of greed,” Mr Benioff wrote.

He advocated for a “more fair, equal and sustainable capitalism” in which companies truly give back and have a positive impact on society. He also called for higher taxes on the wealthiest, including himself, to “generate the trillions of dollars that we desperately need to improve education and health care and flight climate change”.

Tom Steyer

US presidential hopeful Tom Steyer is the latest billionaire to respond to fellow candidate Bernie Sanders’s tweet last month that “billionaires should not exist”.

At the Democratic debate last week, the moderator asked Mr Sanders if he intended to tax billionaires out of existence. He responded, “If you’re asking me, do I think we should demand that the wealthiest top one-tenth of 1 per cent start paying their fair share of taxes … yes, that’s exactly what I believe.”

When given the floor, former hedge fund entrepreneur Mr Steyer agreed with Mr Sanders, saying: “There have been 40 years where corporations have bought this government and those 40 years have meant a 40-year attack on the rights of working people and specifically on organised labour. The results are as shameful as Senator Sanders said.”

He pledged to “undo every Republican tax cut for rich people and major corporations”.

A number of the country’s wealthiest people, including Bill Gates and Warren Buffett, have called for their own taxes to be raised. Facebook founder Mark Zuckerberg has gone even farther, declaring that “no one deserves” the amount of wealth that he and other billionaires have accumulated.

Adam Neumann

Forbes removed WeWork co-founder Adam Neumann from its billionaire list earlier this month after lowering his wealth estimate from $4.1bn to $600 million.

The demotion follows the ousting of Mr Neumann as WeWork CEO last month, a botched IPO and hundreds of planned job cuts. The company has been in negotiations with its largest shareholder SoftBank over a new $1bn investment to enable the shared office space company to go through a major restructuring.

Mr Neumann first appeared on the Forbes billionaires list in 2016, at age 36, with an estimated net worth of $1.5bn. Private investors had just valued WeWork at over $10bn. Following multiple funding rounds, led by SoftBank, it was valued at $47bn in January of this year.

Forbes estimates We Company, as it is now called, is currently worth at most $2.8bn. That valuation is based on a multiple of the company’s revenue consistent with publicly traded competitor IWG. We Company had a net loss of $1.4bn in the first half of this year.

Mr Neumann, who is now chairman, still owns an estimated 18 per cent stake in the nine-year-old company.

Bill Gates

Bill Gates committed $700m to battle diseases that kill millions of people a year, saying experimental technologies like a matchstick-sized implant to prevent HIV could become new weapons in the global effort.

The implant, under development by Merck and inserted just under the skin of a patient’s arm, is among potential breakthroughs Mr Gates highlighted at an international conference in France earlier this month. Others include a tuberculosis vaccine GlaxoSmithKline is developing.

The Bill & Melinda Gates Foundation will provide the money to the Global Fund to Fight Aids, Tuberculosis and Malaria over the next three years, bringing its total contribution since 2002 to almost $3bn, according to a statement from the Seattle-based group.

The Global Fund raised at least $13.92bn for the next three years, French President Emmanuel Macron said after the conference.

The Microsoft co-founder pointed to significant strides in fighting the three diseases, saying the fund has cut deaths by 40 per cent in areas where it invests. But Mr Gates has also warned that wealthier nations risk losing sight of the need to keep funding those international efforts.

“More and more, countries seem to be stepping back from the world and saying they’ll cut things like foreign aid,” Mr Gates said at the conference in Lyon. “If there’s a narrative about how the globe is turning, it is that it’s turning inward.”

Mr Gates, who heads the world’s biggest private charity with his wife, Melinda, also cited a triple-drug for TB treatment recently approved in the US that shows significant promise against even the most resistant forms of the disease, along with a new generation of bed nets for malaria.

While Mr Gates’s focus was on progress, he said a child still dies every two minutes from malaria, almost 1,000 adolescent girls and young women are infected with HIV every day, and nearly 40 per cent of people who become ill with TB each year go unreported and untreated.

Jay Y Lee

Samsung’s de facto leader, Jay Y Lee, plans to give up his board seat after his directorship expires later this month as he prepares for another trial over alleged bribery, a person familiar with the matter told Bloomberg.

The billionaire heir won’t seek to extend his three-year term on the board of the tech behemoth when it ends October 26, but will remain at the helm of the world’s largest chip and smartphone maker, the person said, asking not to be named because of the sensitivity of the issue. Mr Lee will instead continue to run Samsung with the title of vice chairman though its board will stay central to overall management, the person added.

The 51-year-old is putting some distance between himself and Korea’s largest conglomerate ahead of a retrial over bribery charges that could land him back in jail. He faces additional allegations in a landmark case that inflamed popular anger over the large companies known as "chaebols" that control the country’s economy and helped bring down former president Park Geun-hye.

When Mr Lee joined the board in 2016, it was deemed a symbolic move to step out from under the shadow of his ailing father and consolidate his power over Samsung. Yet months later, Mr Lee got caught up in a nationwide scandal. He spent about a year in prison battling accusations that he offered horses and funds to a confidante of then-president Ms Park in return for support of a 2015 merger that cemented his control over the Samsung group.

Since his release in 2018, Mr Lee has been busily recultivating an image as the face of successful Korean business. The only son of Chairman Lee Kun-hee has been grappling with a laundry list of tasks including steering Samsung through a severe industry downturn. The company’s operating income fell more than 50 per cent in the September quarter, though that was less of a decline than anticipated.

Mr Lee has stressed that the company needs to continue to invest in future businesses such as logic chips and even sixth-generation mobile networks to overcome growing uncertainty.