The self-made myth

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Societal support key to much wealth creation, report says
By Thomas Kostigen, CBS.MarketWatch.com
Last update: 8:55 p.m. EDT June 28, 2004
SANTA MONICA, Calif. (CBS.MW) -- Some of the wealthiest entrepreneurs in this country say there is no such thing as the "self-made man."
With more millionaires making rather than inheriting their wealth, there is a false conceit that they haven't received outside support, a new report says.
But society's role in wealth creation is significant, therefore society has an obligation to maintain a level playing field for opportunities to create wealth, contends the report, "I Didn't Do It Alone: Society's Contribution to Individual Wealth and Success."
The idea that if government would get out of the way, then every entrepreneur would automatically succeed is wrong, the report says.
The report is published by Boston-based United for a Fair Economy, a nonprofit group that researches and raises awareness on issues related to wealth and power. It has signed more than 2,200 multimillionaires and billionaires to a petition to reform and keep the inheritance tax; the "I Didn't Do It Alone" report was gleaned from small sample of those petitioners.
"Pro-business economic policies and tax policies are often centered on the myth of the self-made man," the report says. But the myth of "self-made" wealth "is potentially destructive to the very infrastructure that enables wealth creation."
Individuals profiled believe that they prospered in large part thanks to things beyond their individual control, such as social investments in education, research, technology and infrastructure, the report says. Or as Jim Sherblom, former CFO of Genzyme, says, "We are all standing on the shoulders of those who came before us."
He and others profiled believe it's vital to give back to society so that others in the next generation can have the same opportunities they had. This giving goes beyond taxes to charity and mentoring programs.
"This is not so much a call for increased taxes as it is a highlight of society's role and claim upon us as individuals. We each have a responsibility to the common wealth upon which individual wealth is possible," says Chuck Collins, the report's co-author.
In prepared remarks, Collins was more emphatic: "How we think about wealth creation is important since policies such as large tax cuts for the wealthy often draw on the myth of the self-made man... Taxes are portrayed as onerous, unfair redistribution of privately created wealth -- not as reinvestment or giving back to society. Yet, where would many wealthy entrepreneurs be today without taxpayer investment in the Internet, transportation, public education, legal system, the human genome and so on?"
Those Collins profiled in the report say their success is attributable to many factors, among them public schools and colleges, government investment in research and small business assistance, contributions of employees, and strong legal and financial systems.
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Warren Buffett, founder of Berkshire Hathaway and the second-richest man in the world, says: "I personally think that society is responsible for a very significant percentage of what I've earned."
And Eric Schmidt, CEO of Google, says, "Lots of people who are smart and work hard and play by the rules don't have a fraction of what I have. I realize I don't have my wealth because I'm so brilliant."
What shines through the report is that those profiled and interviewed have an awareness of what made them successful, and they want to pass that along to future generations in the form of public support.