If we try to recall the most widely circulated pieces of gossip from the last century – those we read or heard about (or saw adapted for the screen) – we find: Prince Rainier III’s marriage to Grace Kelly (1956); the divorce of Shah Reza Pahlavi and Soraya Esfandiary-Bakhtiari (the ‘Sad-Eyed Princess’), who were obliged to separate despite being ‘madly in love’ according to the tabloids; the opera singer Maria Callas’s divorce from Giovanni Battista Meneghini, and her subsequent affair with the Greek shipping magnate Aristotle Onassis (1959); the adventures of Marilyn Monroe and John Fitzgerald Kennedy, and his brother Bobby (1954-62); the love story between Onassis and the widowed Jacqueline Kennedy, for whom he left Callas (1968); the diamond-studded infatuations and disavowals of Liz Taylor and Richard Burton (1961-76); and the last great scandal of the 20th century, Prince Charles and Lady Diana’s divorce (1996), plus her death the following year. This is the luxurious world of private islands and jewelry, where one’s only piece of nightwear is Chanel No. 5. It is the world of aristocrats – regents, even – heads of state, actors, opera divas and prime donne.
But if we browse the gossip sections of 21st-century newspapers, we no longer see a sparkling world of nobility and celebrity. Instead, we find ourselves in the boardrooms of major corporations. In the second half of the last century the deaths that caused the most commotion – other than the Kennedys, Monroe and Diana – were those of Eva Perón (wife of the Argentinian general and statesman Juan Perón), Albert Camus, Jimi Hendrix and Janis Joplin. In this century, however, the death that stands out in terms of its global resonance was that of Steve Jobs.
One story that has occupied public attention in recent months, and continues to fill the broadsheet pages, is Bill and Melinda French Gates’s divorce in May 2021. Much like the classic cases of scandal-reporting from the last century, details about the Gates–French affair have gradually been drip-fed by the media, such as Bill’s association with Jeffrey Epstein. But however laden with outrages and infidelities these stories might be, it’s not the sexual content of the hearsay that captures our attention. It’s the money, pure and simple. Luxury has been supplanted by money in the tabloid reader’s fantasies. The distinction between the two is the same as that between eroticism and hard porn. The former is a semiotic unit – its meaning refers to other meanings (like refinement and style) – whereas the latter refers only to itself.
We have read about the dizzying sums involved in Jeff Bezos and MacKenzie Scott’s 2019 divorce: Bezos leaving his ex-wife 4% of Amazon’s shares (worth $38 billion). We know that Steve Jobs’s widow Laurene Powell inherited nearly the entirety of his fortune, estimated at the time to be around $10.8 billion (including 5.5 million shares in Apple). The amount Melinda French Gates will receive is still unclear, though it will certainly be between $3 and $65 billion. In this whirlwind of billions we are struck by another fact. High society ladies of previous centuries completed their education in private colleges (finishing schools), more often than not Swiss, such as the Institut Alpin Videmanette (attended by Lady Diana and, more recently, by fashion magnate Tamara Mellon); the Mon Fertile (Camilla Parker Bowles); the Institut Le Mesnil (Queen Anne-Marie of Greece); the Brillantmont (Maharani Gayatri Devi of Jaipur); but also American, such as Manhattan’s Finch College (Isabella Rossellini). By contrast, their contemporary equivalents have a far more direct path to fortune. Laurene Powell obtained a BA in Political Science, then a BS in Economics from the Wharton School, and finally an MBA at the Stanford Graduate School of Business; in between she spent three years working for Goldman Sachs and Merill Lynch. Melinda Gates graduated from Duke with a bachelor’s in computer science and economics before pursuing an MBA at its School of Business. MacKenzie Scott’s trajectory seemed less predestined: she studied literature at Princeton, where she was taught by Toni Morrison, before writing a number of middle-brow domestic novels. But she underwent an entrepreneurial transformation at Amazon, brainstorming names for the company in its early days and shipping its very first orders through UPS.
Bourdieu noted that women’s education had been revolutionized in the 19th century by changes in the marriage market, as the emerging bourgeoisie came to expect new qualities from their brides. It was no longer necessary for them to possess land, wealth, jewels; but it was vital for them to know how to preside over a salon, play the piano and hold conversation, preferably in French. The education of these ‘madams’ could no longer be confined to sewing and running a kitchen. Now, in the new millennium, we are witnessing another such revolution, where the ability to play Chopin from memory is replaced by the capacity to identify opportune moments to buy or sell subordinated risk swaps on the derivative market. If paparazzi photos used to show celebrities naked, nowadays their bodies are covered but their finances are laid bare. Fortunes are revealed, wallets unbuttoned. Diderot’s Indiscreet Jewels have reverted to their literal meaning.
The Gates’ separation is exemplary. The more we learn about the story, the less its jealousies and indiscretions (real or imagined) seem to matter. Bill Gates had a tartuffesque approach to inviting women for dinner: ‘If this makes you uncomfortable, pretend it never happened’, he had the habit of writing in email postscripts. But much more weight has been placed on his rift with Melinda over the management and control of the Gates Foundation, which holds assets valued at around $49.8 billion. The struggle for sovereignty over this kingdom was what made their break-up particularly bitter. This was well-understood by Warren Buffett – ‘the Oracle of Omaha’ – one of the richest men in the world with a net worth of $104 billion, who rules over the conglomerate Berkshire Hathaway. Buffett joined the Gates Foundation in 2006 and has since invested $33 billion, serving until this year as one of its trustees. As soon as there was word of divorce, he ran for the hills as quickly as his nonagenarian legs allowed him.
It’s astonishing how seldom the philanthropy business has been the object of sustained criticism. It is barely known that, as an institution, the ‘philanthropic foundation’ in its current legal form is relatively recent, dating back to the First World War. From the moment it was dreamt up, the institution – now seemingly as natural and necessary as the air we breathe – was met with raised shields and vigorous opposition, not just from American unions, but from establishment politicians such as Theodore Roosevelt and William Taft. When the proposal was first brought to establish a Rockefeller foundation, Roosevelt observed that ‘No amount of charities in spending such fortunes can compensate in any way for the misconduct in acquiring them.’ Taft called on Congress to oppose the plan – describing it as ‘a bill to incorporate Mr. Rockefeller’ – while the American Federation of Labor President Samuel Gompers growled, ‘The one thing that the world would gratefully accept from Mr. Rockefeller now would be the establishment of a great endowment of research and education to help other people see in time how they can keep from being like him.’ (I discussed the controversy over foundations more extensively in my latest book, Dominio. La guerra invisibile dei ricchi contro i poveri – Dominion: The Invisible War of the Rich on the Poor – published in Italy last October.)
Today we still have only a rough idea of the financial benefits these tax-exempt foundations enjoy. Indeed, most people are unaware that their returns on investments also go untaxed. If the Gates Foundation happens to invest in Microsoft shares, the dividends of those shares (or the capital gains if they are sold) will not be touched by the state. This explains one of the great mysteries of the foundations: however much they donate, their assets continue to grow.
It’s clear that MacKenzie Scott, like many of her peers, hates having so many billions; she donated $4.1 billion in 2020 and another $8 billion in June of this year alone. But according to the Bloomberg Billionaire Index, on 9 August 2021 her net worth had grown to $59.2 billion (whereas in 2019 it was ‘only’ $38 billion following her divorce settlement). This increase is partly attributable to the fact that Amazon shares rose from $1,789 to $3,341 in the space of two years. Likewise, Laurene Powell’s wealth never seems to diminish despite her vast donations: she was worth $21 billion in 2012; now she has $22.5 billion to her name. Not to mention the spectacular and constant appreciation of the assets held by the Gates Foundation:
|Net worth ($ billion)
For all their self-aggrandizing PR, such institutions are ultimately financed by tax exemptions – that is, by public funds. In 2011, for example, the total amount of ‘donations’ made by American foundations was $49 billion; but in the same year, fiscal subsidies to philanthropic works cost the US Treasury $53.7 billion. In other words, American philanthropists donated $4.7 billion less than what they took from the state. They gave away none of their own money, but rather that of others.
But there’s more: the conduct of a foundation is rarely subject to scrutiny because the donors are under no obligation to answer for their actions. As Joanne Barkan writes, ‘When a foundation project fails…the subjects of the experiment suffer, as does the general public. Yet the do-gooders can simply move on to their next project.’ Alongside this lack of accountability is a tendency to encourage obsequiousness. Before the donors we are all mendicants come to beg for support, a loan, logistical assistance. This feature of the philanthropy economy was enough to scandalize even one of the standard-bearers of the Chicago School, Richard Posner, a man who once supported a ‘free baby market’ – i.e. the unregulated buying and selling of children – as an optimal mechanism for adoption. He remarked in 2006 that
A perpetual charitable foundation is a completely irresponsible institution, answerable to nobody. It competes neither in capital markets nor in product markets (in both respects differing from universities), and, unlike a hereditary monarch whom such a foundation otherwise resembles, it is subject to no political controls either. It is not even subject to benchmark competition. The puzzle for economics is why these foundations are not total scandals.
Posner hits the nail on the head. The foundation is a monarchy, absolute rather than constitutional. This is perhaps the key to understanding why the foundation magnates are so often the protagonists of 21st-century gossip. As contemporary royals, wielding all the arcane power associated with such figures, they carry out the same symbolic functions that were once the purview of royal dynasties in the previous century. The Marquess of Boeing, the Archduke of Facebook, the Prince of Google, the Landgrave of Amazon.
Translated by Francesco Anselmetti.
Read on: Robin Blackburn, ‘Reform to Preserve?’, NLR 120.