8. Like Father, Like Son

On March 2, 1918, Forbes Magazine published its first ever attempt at creating a list of the richest Americans. At the top was Eil Tycoon John D. Rockefeller, whose wealth was estimated at a whopping $1.2 billion. More than five times as much as his closest rival for the title of richest American, Henry Frick. To give you a sense of how gargantuan Rockefeller's wealth was, when his last surviving grand son David Rockefeller died in 2017, Forbes ranked him as the 214th richest American with an estimated worth of $3.3 billion. But David only inherited between 1 and 2% of his grandfather's wealth. Welcome to You Can't Take It With You, a podcast about what happened to some of America's greatest fortunes after those fortunes' makers had met their maker. Trying to answer the question, why did they pile up so much money in the first place? In this final episode, I discussed the greatest fortune of them all, that of John D. Rockefeller, lead partner of the greatest fortune building company of all time, Standard Oil, which controlled about 90% of the United States oil market at the dawn of the automobile age. Now I'm not going to talk about Rockefeller's business career because it is covered copiously elsewhere. I particularly recommend a biography of him by the great author Ron Chernau, who would go on to write a bestseller about Alexander Hamilton you might have heard of. I have taken many key details from Chernau's biography titled Titan, including one that is worth highlighting in order to understand one important reason Rockefeller got so rich. In 1870, when an earlier partnership was reorganized as the Standard Oil Company of Ohio, Rockefeller owned 27% of its shares, exactly twice as much as each of his four other partners. By the time the Standard Oil Trust was formed only nine years later, Rockefeller owned three times as many shares as his partners. The reason for this was simple. When the money from Standard Oil dividends started pouring in, Rockefeller's partners began spending it on luxuries and high living. Rockefeller preferred to invest his pile in making yet more, and was always ready to buy whenever any of his partners wanted to sell. In 1884, he bought $50,000 worth of shares from his brother William, and in 1890, $375,000 worth from his close friend Henry Flagler. Even after Rockefeller retired from Standard Oil in 1895, he continued to buy more shares in the company, as well as to invest in an array of other assets, which is how he also ended up owning a large chunk of the Mesopi Iron War range. That is why, by the time of that 1918 Forbes listing, John had eight times as much money as his brother William, who is nevertheless still tied for fourth place on the list. Rockefeller was born July 8, 1839, the oldest son in a family of five children, and two extremely ill-matched spouses. His father, William Avery Rockefeller, known as Big Bill or sometimes Devil Bill, was a genial traveling con man, a lander, and eventually big amist, who by the time John was in his late teens, had basically abandoned his first family to live with a younger second wife. While in some ways a supportive father, Big Bill had a distinctive view of his role as a parent. I trade with the boys and skin them, and just beat them every time I can. I want to make them sharp. His influence on his son could be summed up by an anecdote shared in John's own memoir written in 1908. In need of a thousand dollars to pay for his share of the capital for his first partnership, 18-year-old John approached Big Bill. I talked the matter over with my father, who told me that he had always intended to give $1000 to each of his children when they reached 21. He said that if I wished to receive my share at once instead of waiting, he would advance it to me and I could pay interest upon the sum until I was 21. But John, he added, "The rate is 10%. 10% was a high rate for the time, much less for a loan to one's own son, and John knew his father had a nasty habit of asking for his loans to be repaid at the worst possible moment. But lacking any other source of funds, he accepted the deal, and he would continue to borrow from his father until he became established enough to borrow from banks." From his father, John got his love of money and the drive and ambition to become rich. But from his mother, the devoutly religious Eliza Davison, John got his notions about what he ought to do with his wealth. Eliza loved and remained loyal to her husband, even through his increasingly extended absences. But she quickly learned that he could not be fully trusted, with the result that even though Bill was able to provide barely adequate support for the family until his son was old enough to take his place as breadwinner. Eliza became extremely fearful of financial hardship, and as a result extremely frugal, a trait she passed on in full to her son. Another result of Bill's absences could be summed up by the way Eliza saw parenting. No doubt affected by having to deal with her wayward child of a husband, as shown in another anecdote related by John. "My mother was a good deal of a disciplinary and upheld the standard of the family with a bird switch. Once when I was being punished for some unfortunate doings, which had taken place in the village school, I felt called upon to explain after the whipping had begun that I was innocent of the charge. "Never mind," said my mother. "We've started in on this whipping and it will do for the next time." After Bill's secret marriage in 1855, his need to support a second household resulted in John, now 16, abandoning plans to attend college in favor of a quick business education followed by a first job managing the books for a small merchant firm. This was the final and critical step in forming Rockefeller's financial personality, an obsession with measurement and record keeping, both for his business and for himself. Immediately after beginning that first job in September 1855, he paid ten cents for a small red book, which he titled "Leadger A," the first in a long series, recording to the penny his personal income and spending, investments, charity, everything. Decades later, Rockefeller would look upon Ledger A as a holy relic. Ledger's love of the orderliness and precision of accounting is interesting for two reasons. The first is that his obsession with numbers is shared by modern economists. In order to predict what might happen if, say, a tax is imposed on the accumulation of capital, economists try to create mathematical models of human behavior, but doing so requires them to make assumptions about what exactly humans are trying to accomplish when they make economic decisions. And the assumption that lies at the heart of all economics is that people are trying to maximize. That is, they choose the course of action that will give them as much of something as they can possibly get. And maybe that sounds reasonable to you. After all, don't businesses try to maximize their profits? That's certainly an important reason Rockefeller was obsessed with accurate measurement. His systematic tracking of costs and income was one of his major strengths as a competitor. But economists face a problem. If they assume that humans are trying to maximize profit, that is, they are trying to become as rich as possible, then they wouldn't ever spend any money at all. In other words, if your goal is to maximize your wealth, you should do what Wellington Bert did with his wealth, and simply invest it to grow for as long as possible. Which not only sounds ridiculous as advice, I think Bert was actually senile. It is obviously not an accurate description of how people actually behave. So instead economists assume that people try to maximize consumption, not wealth. I mean, after all, you can't eat profit, or live in it, or drive it. You have to turn it into food, or a house, or a car first. And that might sound pretty reasonable to you too. But then economists go one step further, and assert that because people often like to use money to buy things to consume, that means that they only like money because of the things they can buy with it, and that people never like just having money for itself. Which is, in a word, ridiculous. It's obvious that people enjoy having money in the bank. Sometimes that's just because it's nice to know you can buy something if you want it. But as Cornelius Vanderbilt observed, wealth also gives you power, while Peter Telleson recognized that great wealth could bring you status too. Plus, one consistent theme with every single tycoon I've talked about so far, with the possible exception of Isaac Singer, is that they liked having money more than they liked spending it. Rockefeller, most of all. Which leads to the second reason that Rockefeller's obsession with keeping accurate accounts is interesting. It lets us see exactly what he did with his money. And I can therefore state pretty definitively that John Rockefeller did not make all that money in order to spend it on himself. I would estimate that Rockefeller consumed well under 5% of his lifetime wealth. A revealed preference against consumption, consistent with numerous statements he made on the topic. In Titan, Ron Chernow suggests that Rockefeller's attitude toward spending was formed early in his business career. I saw wealthy men and I was glad to see that they went about their business without any display of power of money. Later, I saw some who wore rich jewels and luxurious clothes. It seemed unfortunate that they were led into such lavish style. If John's lack of interest in luxury was a subtle, or not so subtle, rebuke of his spend thrift father, like everything in Rockefeller's life he took his attitude to an extreme. For example, more than 60 years after he recorded in Ledger A that he had bought a pair of fur gloves for $2.50 to replace his usual woolen mittens, he still puzzled over his decision. I can't say to this day what caused me to waste that $2.50 on regular gloves. Even as late as 1908 when he was nearing 70 and was widely considered the richest American, and his son gave him a fur coat and hat for Christmas. He returned the outfit as too lavish. A decade later he was the richest American by far and Junior tried again, offering Senior a Rolls Royce for his 80th birthday, but Senior told Junior he'd rather have a check for the $14,000 cost instead. But if Rockefeller didn't spend much on himself, what did he do with his vast wealth? What half went to his children? So did he make all that money so that his descendants could spend it? This too is pretty clearly not the case. Rockefeller married Laura Celestius Spellman, who he called Ceti, in 1864, and remained deeply devoted to her until she died 50 years later. One of the only times he was known to have wept openly. Ceti was his religiously John and also shared his severe sense of thrift when she died in 1915, the most expensive item of clothing she left behind was a seal coat and muff with $150. Together the couple would have three daughters survive childhood, Bessie, Alta, and Edith, and finally in 1874 they had a son they named John D. Rockefeller Junior, known within the family as Junior, while his father now became Senior. Ron Cherno explains that his parents the Rockefeller's face to dilemma. Convinced that struggle was the crucible of character, Rockefeller wanted to accumulate wealth while inculcating in his children the values of his threadbare boyhood. The first step was keeping them ignorant of their father's affluence. They earned pocket money by doing chores and earned two cents for killing flies, ten cents for sharpening pencils, five cents an hour for practicing their musical instruments and a dollar for repairing vases. They were given two cents a day for abstaining from candy and a dime bonus for each consecutive day. Once again Ceti was completely aligned with her husband, even going to the extent of once commenting that, "I'm so glad my son has told me what he wants for Christmas, so now it can be denied him." The children lived in isolated and relatively Spartan life. They shared a single bicycle. Remember how I told you that Senior's vast wealth came in part from buying some of his brother's shares? Junior would later comment on his Uncle Williams family. We children didn't have what those children had, and we used to notice the difference. They had a gay kind of social life with many parties which we used to wish we could have. Junior extended his efforts at instilling thrift in his children into their adulthood, keeping them all on allowances until 1917 when Bessie the oldest child was already a decade in the grave, and Junior the youngest was 43. Senior required his daughters and their husbands to provide a careful accounting of their expenditures to Junior, who Senior had designated as auditor of their lifestyles. Needless to say, this did not improve Junior's relationships with his brothers-in-law. Nor did it improve Senior's relationship with his youngest daughter Edith, who did not visit him at all for the last 18 years of her life. Rebellious as a child, she developed an extravagant, almost aristocratic lifestyle after she married Harold McCormick, heir to another great fortune as the younger son of the inventor of the mechanical reaper, which provided Edith money beyond what her father was willing to provide. The oldest daughter Bessie had a better relationship with her father, but she died in 1906 at the age of 40, leaving behind a nine-year-old daughter and her husband, an intellectual, and an atheist, neither of which traits had much appeal for Senior. Middle-daughter Alta was the most conformist of the three, but she too married a man who ended up having a strained relationship with his father-in-law, suggesting the problem was Senior not just his son's in law. Senior was clearly an intimidating and controlling presence for any family member who vowed independence or their own identity. Yet Rockefeller was also generous, with Alta and Edith's allowances reaching 50 to $60,000 a year by 1916, adjusting for inflation alone the equivalent of around a million dollars today. In that year, with war raging in Europe, the United States Congress created a new estate tax on wealth given through bequests, initially 7-10%, but within a year raised to 25%. The new tax, however, did not apply to money given by someone still living. That wouldn't happen until 1932, and since in 1917 Senior was remearing 80, he decided to replace his daughter's allowances with $12 million trust funds, providing them with something like 10 times as much income. As for Junior? Over the next 5 years, Senior gave him assets worth around $470 million, 40 times as much as he gave to his daughters, and probably the largest single intergenerational gift ever. So why did Senior give almost half of his wealth to his one son? Was he trying to create a dynasty? After all, aren't the Rockefeller still among the richest of Americans today? Well consider this. When Senior died in 1937, the New York Times reported that over the course of his life, he had given away a total of precisely $530 million, $853,632, or about half of his wealth to various charities. And it's worth noting that Ledger A proves decisively that Senior's late life rebranding from Robert Barron to philanthropist wasn't a mere public relations stunt. In his very first year of working, with little salary and a mother in four younger siblings to support, he still managed to donate 6% of his income to various charities. By 1859, only 4 years later, he was donating over 10% of his annual income. At the same time, I think the evidence is pretty clear that not only did Rockefeller have little interest in living a life of luxury himself, he had no more interest in funding ones for his descendants. He told Junior Sons when they were young, "Do you know what would hurt grandfather a great deal? To know that any of you boys should become wasteful, extravagant, careless with his money. Be careful boys, and then you'll always be able to help unfortunate people. That is your duty, and you must never forget it." Or as Senior put it most succinctly, "I believe it's a duty for a man to get all the money he honestly can, and to give all he can." So why didn't Senior give it all away? I would argue that the answer is that his obsession with avoiding waste made it difficult for him to give the money away fast enough. It's easy to do harm in giving money. Junior would later say that his father had left him all that money because Senior had come to believe that he. would carry on his philanthropic and charitable work in the same spirit which had activated father and. anything he gave me would be administered with the same sense of duty and stewardship which impelled his giving. In other words, Sr. passed on so much wealth to his son because he believed that his son would act just like him and give most of it away, and Sr. was quite right to think so. Begin with the fact that Junior idolized his father, which is hardly surprising given that Sr. was and still remains a larger than life figure who created a vast business empire as well as vast wealth. Junior was a coddled, youngest and only boy surrounded by women. In addition to his three older sisters and his mother, during Junior's childhood, the Rockefeller household also included one or both of his grandmothers and an aunt. His father was not only the only male presence in the household. He was, perhaps surprisingly, his son's principal male playmate. Since the children had few outside friends and Sr. was happy to join in his children's games. As reported by Chair now, when they played Blindman's bluff, he electrified them with his daring fates, sudden thrusts and unexpected whirling turns, followed by whoops of delight, where he won. Only important, Junior was the most obedient of the children, though he didn't see himself that way. He told his biographer, "I never thought of myself as an unusually obedient child. At least I wasn't obedient in the sense that I did what I didn't want to do. My attitude was due entirely to mother, who talked to us constantly about duty and displeasing the Lord and painting her parents. We did what we did from a sense of duty and right." Naturally then, when Junior was about to graduate from Brown University in 1897, he wrote to his father for career advice, but made it clear that, "My first duty, as well as my pleasure after this year, would be to help you in whatever capacity or position you might see fit." As Chair now notes, Junior never wavered in this decision to subordinate his life to his fathers. Even decades later, he sent a wire to his father in advance of a visit. "I'm not coming because I think you need me, but because I know I need you." Worshiping his father had a downside. Junior's endless worry he could not live up to his father's legacy caused him to fall into a serious depression around 1904, which lasted for several years. But with support from his wife and father, he eventually returned to his father's office to focus exclusively on the great task of giving away the family fortune as thoughtfully as possible. Which was a job Junior was particularly suited for, because Junior had absorbed in full senior's obsession with caring about and accounting for every last penny. A college friend of Junior's recalled, "He told me his father allowed him all the money he wanted, but insisted on an exact account of every penny. It used to be a great joke among the girls in Providence to laugh a good deal about being treated to a soda by John D. Rockefeller, Jr., and having him enter it into his book as he sat at the soda fountain." As late as January 1910, when Junior was 36 years old, his father asked him to account for his personal spending for the prior year, so he provided the answer precisely, $65,918.45. Note however, that this was merely a fraction of 1% of his by then nearly $20 million personal fortune. The apple hadn't fallen very far from the tree. Junior also raised his children in the same way he had been raised. Chernau says, "On Saturday mornings, stomachs afflutter, the children filed one by one into Junior's study and had their account books scrutinized. Although they received only a thirty-cent allowance, much less than their friends, they had to account for every penny. They were fined a nickel for omissions and awarded a nickel for scrupulous recordkeeping. They were expected to spend a third of their money, save a third, and donate a third to charity. Bound by these rules, the Rockefeller children acted like destitute waifs and constantly scrounge small change from friends." In short, by the time Senior was finally deciding how to dispose of his wealth, his daughter Bessie was gone, Edith was a spendthrift and had married into another fortune, and Alta was married to someone Senior had tried to involve in his giving repeatedly without success. Thus while Junior fully absorbed his parents' attitude about money and was perfectly content to be his father's devoted acolyte, Edith and all three of Junior's brothers-in-law fell short on both counts. It is worth pausing here to note that Senior's decision to not involve Alta in his philanthropy is undoubtedly due in part to the misogynistic tradition of pre-imageniture, which I talked about last episode. Even before Senior began his great transfer of assets to his son, he had clearly favored him financially. That said, his ultimate choice of Junior as the custodian of his assets seems pretty obvious and pretty logical. But why did he wait to begin this vast transfer of wealth in earnest until 1917? Junior's youngest son, David Rockefeller, says in his memoirs, "I'm not sure grandfather ever intended to leave a great fortune to his children. His original plans for fathers inheritance were probably the same as for his daughters. He would leave father enough to be comfortable, to be rich, by most measures, but by several orders of magnitude less than it turned out to be. Grandfather really believed it when he said in the context of philanthropy that there is no easy way to do harm than by giving money, and he felt it applied most particularly to his own children." This analysis seems reasonable. Junior's mental breakdown of the early 1900s suggested an emotional sensitivity that would present a real danger to anyone inheriting control of standard oil and its associated legacy. But Senior's attitude would change dramatically due to events that began on April 20, 1914, when a tent colony of striking minors was attacked by a company gunman hired by the Colorado Fuel and Iron Company, killing eight men, two women, and eleven children, an incident that would come to be known as the Ludlow Massacre. Why did this matter? Well, Senior owned a majority of the stock of Colorado Fuel and Iron, and although Junior had resigned from the board of standard oil and several other companies in 1910 to focus on philanthropy, for some reason he had decided to keep his position on this board. For all the public attacks on the standard oil trust, it had at least never been accused of gunning down innocent women and children. And so now the family was attacked more fiercely than ever before. As a result, in January 1915, Junior testified for three days in front of the newly formed United States Committee on Industrial Relations in New York City Hall, where he did something his father had never done. Junior admitted he'd made a mistake. He said he now understood a need to broaden his views about the role of a corporate director beyond solely maximizing the company's profit, and indeed, Junior went on to become an important advocate for improved labor relations in the United States. More amazingly, he did so in a way that satisfied both the labor organizer Mother Jones, who would afterwards visit him in his office, and his father, who would reward him by gifting him his shares of Colorado fuel and iron stock. In Ron Chernow's words, "Junior had repudiated his father's principles without seeming to repudiate the man." That very same month, Junior wrote to his father, asking to borrow $1 million so that he could buy the lion's share of the late JP Morgan's collection of antique Chinese porcelains. Junior had developed a great love for and knowledge of these delicate masterpieces, but even though he was worth a lot on paper, he didn't have enough cash on hand to pay for the purchase himself. Knowing his father, he wrote to explain in great detail how much time he had spent confirming the great value of the collection, but even so, Senior turned him down without explanation. In the past, Junior would likely have accepted this decision quietly, but this time he persisted, writing his father, "I have never squandered money on horses, yachts, automobiles, or other foolish extravagances. A fondness for these porcelains is my only hobby, the only thing on which I have cared to spend money. This hobby, while a costly one, is quiet and unostentatious and not sensational. So money put into these porcelains is not lost or squandered. It's all there, and while not incomproducing, I have every reason to believe that even at a forced sale, I could get within 10% of what these things would cost." The moment was a critical one for Senior. Two months later, in March 1915, his wife Settied up. And a month after that, Junior's father-in-law, Senator Nelson Aldrich, also passed away, undoubtedly highlighting for the nearly 80-year-old senior that the time was approaching to make a final decision about disposition of his wealth. As a harbinger of what was to come, Senior changed his mind about Junior's request and decided to give him the million dollars needed for the purchase rather than make it alone. And a year later, Congress enacted a new estate tax that left lifetime gifts untaxed. The ever-efficient Rockefeller got the final push he needed. On March 13, 1917, he gave Junior 20,000 shares of standard oil of Indiana stock. The first of many gifts over the next four years of stock, bonds, and other assets, which would eventually total around half a billion dollars, a large S that passed the title of the richest man in America from father to son. David Rockefeller thought that the Ludlow Massacre marked a critical turning point in his grandfather's thought process. Grandfather saw his son who was struggling with his own emotional problems and to find his place in the world already waited down with more responsibility than he could bear, and he probably concluded that dumping an immense fortune on him wasn't going to help matters. Until 1915, grandfather probably planned to give the bulk of his money to philanthropy either before his death or through his will. What changed his mind was Ludlow. Ludlow and its aftermath seemed to have convinced grandfather that his son was fully qualified to bear the burden of managing his great fortune. Because of that change of mind, during the 1920s, Junior's income ranged from 35 to 57 million dollars annually, three to five times as much each year as his sister's entire fortunes. Following this great transfer of wealth, senior kept only around 20 to 25 million dollars for himself, which he used to play the stock market. When he died in 1937, he left the bulk of his remaining estate to the 40-year-old daughter of his late daughter, Bessie, to make up for the fact that she had only received two million dollars in 1919 when he had given each of her two aunts 12 million dollars. Senior expressed his philosophy about these gifts and Edith's trust documents. "I honestly hope that my daughter would bear in mind my belief that it would be prejudicial to the welfare of her children and their descendants for them to come into possession of large amounts of property before and unless they have attained sufficient wisdom and character to use the same wisely, and that in order to prevent such injury to them, I am more concerned less they receive too much, rather than too little." Was Senior then being hypocritical in the case of Junior? Did Senior in fact give him too much? It's awfully hard to make that argument. Junior regularly gave 30 to 40% of his income to charity, and by the time he died, he had matched his father, a lifetime total of around a half a billion dollars given away about half of his total fortune. And just like his father, Junior made his own children rich, but hardly as rich as he could have. He ultimately gave them only around 14% of his wealth, meaning that they collectively split about 7% of their grandfather's wealth. Ever efficient like his father, Junior was also prompted by pending increases in estate and gift tax rates to give his children money after they reached adulthood, but well before his death. In the early 1930s he transferred $102 million into trust for his wife, daughter and five sons, adding another $61 million in 1952. Junior was also, like Senior, a more successful father with his sons than with his daughter Babs, with whom he always had a strange relationship. Her niece related conversation she and Babs once had had about Junior. "I cannot convey the tone of bitterness the crept into her speech. She constantly said that he meant well, yet it is clear that she feared and hated him. She viewed him as a man who was incapable of enjoying himself." As a result, for all intents and purposes, Junior's five sons would be viewed by the public as the only real Rockefeller descendants. When Junior died at the age of 86 in 1960, his will split his remaining fortune of $157 million, between his widow, his second wife, and the Rockefeller Brothers Fund, his son's joint philanthropic effort. In short, Senior proved to be completely justified in trusting his son, who was neither wasteful, nor extravagant, nor careless with the wealth he had been given. Together father and son forged the most remarkable record of philanthropic giving ever. Senior funded research in health and medicine through the Rockefeller Institute for Medical Research, now Rockefeller University, supported higher education through the General Education Board, created the Rockefeller Foundation which still remains among the 50 largest in the United States, and helped create the University of Chicago. Junior in turn proved to be completely accurate in predicting that his purchase of Morgan's porcelains was not money, lost, or squandered, since the bulk of the Priceless Collection now belongs to the Metropolitan Museum of Art. His father's belated encouragement of that purchase enabled Junior to create a model of cultural entrepreneurship that resulted in the creation of the Cloister's Museum in New York and the preservation of Colonial Williamsburg in Virginia, while his wife Abbey was a central figure in the creation of New York's Museum of Modern Art. So given all of this, can we conclude that John D. Rockefeller's senior made all that wealth in order to just give it away? Perhaps, remember what he himself said, "I believe it's a duty for a man to get all the money he honestly can, and to give all he can." But it seems to me that the first part of this statement is in fact the more important one. At the risk of being an armchair psychologist, I suspect that the motivation senior seems to have inherited from his father, a desire for wealth and status, or getting all the money he honestly could, was in fact more important to him than the one he got from his mother, to give it all away. Rockefeller also said the following, "I never had a craving for tobacco, tea or coffee. I never had a craving for anything, but I was a young man when one day my employer received a banknote for $4,000, and then put it in the safe many times during the day. Did I open that safe to gaze longingly at that note?" I'd like to offer this banknote as the rosebud of Rockefeller's story. You may recall that was the sled in the movie Citizen Kane that was the key to understanding the main character's childhood and hence his behavior as an adult. Consider Rockefeller's obsession with accounting, which as I noted is useful for maximizing, but requires that you know exactly what it is you are trying to maximize. Using the profits of a business may not necessarily be easy to do, but it's a pretty straightforward goal to have. Standard oil partner Henry Rogers would later explain, "I am made fairly miserable if I discover that in any business I do, I have not extracted every dollar possible. It's one of the first principles Mr. Rockefeller taught me. It is one that he has inculcated in every standard oil man until this day. It is a religion with us all." A religion. But a problem with religion is that it's about your whole life not just work. Junior shared this memory of a family trip to Paris. "I can see Father now going over the long French bills studying each item. Many of them being unintelligible to him. He was never willing to pay a bill which he did not know to be correct in all its items. Such care in small things might seem panorias to some people, yet to him it was the working out of a life principle." The working out of a life principle. But is that really the best way to get the most enjoyment out of a family trip to Paris? Senior's unwillingness to pay a bill unless it was correct in every detail extended to his philanthropy. "I have always indulged the hope that I should be able to establish efficiency in giving, so that wealth may be of greater use to the present and future generations." But the net result was that he accumulated so much money he couldn't give it all away in his lifetime in the way he desired, carefully, deliberately, effectively. In short, I suggest that the life of of John D. Rockefeller Sr. demonstrates pretty conclusively that for the very richest people, the kind that I'm discussing in this podcast, the assumptions that underlie economic theory are wrong. Economists assume that people want to minimize cost and maximize benefit, and since working is a cost that people dislike, they only do it so that they can maximize what they are able to consume, or perhaps what their children can consume. But the only poem known to have ever been written by Sr. suggests he viewed things very differently. I was early taught to work as well as play. My life has been one long, happy holiday, full of work and full of play. I dropped the worry on the way, and God was good to me every day. Sr. wasn't exactly a workaholic. He retired from standard oil at the age of 56, purportedly on the advice of his doctor. But his life suggests that he liked both work and play. While as we have already seen, he didn't seem to consider personal consumption to be very appealing at all, preferring to give money away to spending it on himself. To be sure, Rockefeller was lucky in that he liked the business game and was extremely good at it. In his memoirs he argued, "It is by no means for money alone that these active men labor, they are engaged in a fascinating occupation. The zest of the work is maintained by something better than the mere accumulation of money." He could be describing every single one of the tycoons whose stories I have shared in this podcast. Hopkins, MacDonna, Gerard and Ludwig, Singer, Tiffany, Waitman, Bert, and especially Rockefeller were all good at and enjoyed the business game, and they all became super rich by reinvesting their growing wealth rather than spending it. Having become so rich, they then had to figure out what to do with it, and that wasn't easy. I suspect Isaac Singer didn't find it that difficult because it's probably easier to use your money to just please yourself, allowing you to focus bequest to your children on punishing or rewarding them for pleasing you too. William Waitman might have had the hardest time since he just passed the buck to his daughter, but Mark Hopkins apparently found the decision so hard he didn't even bother making any. Rockefeller, like MacDonna, Gerard, and Ludwig, gave his wealth away because he had nothing else he preferred to do with it. He certainly did not want to fund absurdly extravagant lifestyles for his children. I should be clear, his descendants were and remain rich, but there are nowhere near his riches they could have been if he hadn't given so much away and if his son hadn't done the same. He got lucky and was smart enough to realize he had found, or maybe it's better to say, had created a trusted and beloved caretaker who would continue the great task of giving the vast bulk of his fortune away. Junior was as close as Senior could come to cloning himself and actually taking it with him. I think it notable as well that one of Rockefeller's successors as America's richest man, Bill Gates, has not only pledged to give away much of his vast wealth, he has been encouraging his fellow billionaires to do the same. His partner in this effort, Warren Buffett, has gone further and pledged to give away most of his wealth while he is still alive, a goal shared by a much earlier member of the elite club of America's richest man, Andrew Carnegie, who in an essay titled "Welfth," which he published in 1889 wrote, "Why should men leave great fortunes to their children? If this is done from affection, is it not misguided affection?" Observation teaches that generally speaking, it is not well for the children that they should be so burdened. Although Carnegie was childless when he wrote that, the subsequent birth of a daughter did not dissuade him from following the advice he offered to other tycoons with regard to the dilemma of what to do with their accumulated wealth. Give it away while they were alive as they thought best. I think that's not a bad social norm for our society to keep pushing. You can't take it with you was produced and engineered by Jim Latham, vocal acting by Mark DeCarlo, Andrew Lehman, Sean Branny, Elaine Dalton, and Kate Flannery. If you're interested in learning more about this story, I recommend Ron Cherno's book, Titan, The Life of John D. Rockefeller Senior.