Orders of Magnitude: Intuiting how rich these f*ckers actually are
Note: I tried to place this in a pub, the editors rejected it as too political, so I’m placing it here because why not? (Shout out to my dad who said, “Nice try!” when I told him what happened.) I may have added a few choice words that shift the tone and emphasis, since it’s now just going up on a blog. And of course, these arguments could apply to many other rich heirs, including people here in the US. It’s all blood money.
In my day-to-day life as a theoretical physicist, I often need to estimate whether a certain quantity is large enough to have a significant impact on my calculations. For example, when astrophysicists want to calculate how dark matter will behave on galactic scales, some people ignore something called the “self-interaction,” a particle phenomenon that can potentially enhance the effects of gravity. The argument they use to for this choice is that it is numerically very small compared to more important effects like gravity, so it’s not reasonable to consider it. A lot of my work in the community has been challenging this perspective, and all of my recent publications indication that I’m right about this.
Even so, it’s typically true that differences in scale can make a huge difference in how we understand numbers. I personally doubt that I would realize the difference between two numbers that are big on the scale of day-to-day life if I hadn’t studied physics and astronomy. But you don’t need special training to start to get a sense of what these differences do and do not mean, for example using money.
By some estimates, the Crown Estate is worth just under £30 billion. Buckingham Palace alone is valued at over £4 billion. These numbers are so big that it’s potentially hard for our brains to fully conceive of them. Most of us will never personally deal with amounts of money large than sums in the thousands or tens of thousands – if we’ve been lucky, maybe hundreds of thousands.
These numbers feel big to us. At least they feel big to me, as someone who grew up in a working-class household. But in fact they are small numbers relative to the amounts we are discussing when the Crown Estate is involved. There is a huge difference between a million pounds and £34 billion. Mathematically speaking, we speak about these differences in terms of orders of magnitude. Ten has an order of magnitude of one because it has one zero after the one. One million has an order of magnitude of six because it has six zeros after the one. A billion has a magnitude of nine, and 34 billion a magnitude of 11. It can seem like after you get past the six, there isn’t really a big difference in the numbers: it’s all more money than either of us will ever have.
The recent death of the Queen has prompted discussion of the new King’s inherited wealth (which is tax exempt), and it has completely dominated the news cycle simultaneous to some other, pretty important news: UK families are struggling to pay basic utilities bills. With an 80% spike in costs due to new price caps, the International Monetary Fund (IMF) estimates that UK households will spend close to 10% of their household income on energy bills in 2022. The same analysis found that the richest 10% of households spend 6.1% of their income on energy costs, while the poorest 10% spend 17.8% of their income on those same bills.
Using The Crown as an exemplar of the top 10% of households, we then have to consider not their total wealth but instead their annual revenue on that wealth, which we can guess is a good estimate for its income. Earlier this year, The Crown Estate announced that during the fiscal year 2021-22, the revenue generated was £312 million. The IMF numbers allow us to guesstimate an energy bill of £19 million. Wow, that’s a lot of money! Of course, when you subtract £19 million from £312 million (and remember they’ve got 30 billion in the bank), you realize they’re still left with £293 million as their annual income. £19 million sounds like a big number, but compared to the rest of their wealth, it’s not, which to be clear is horrifying because that’s how rich these fuckers are, off of slavery, land theft, genocide, and all the other nasty bits of colonialism.
On the other hand, let’s consider the poorest families in the UK. According to the government Office of National Statistics, in 2021 the median income for the 20% poorest families in the UK was £14,550. Using the IMF statistics, this means they can expect to spend around 2600 GP on energy bills alone, leaving them with under £12,000 annually to pay for rent, food, child care, transit costs, clothing, telephone, internet, and other basics like water and the BBC tellie licence. We can safely assume that this is a group which does not have any savings in the bank, and they’re also unlikely to have non-cash assets, like property. Their income is all they’ve got to live on.
So what’s the take away? The Crown Estate is, to put it in somewhat non-technical terms, filthy rich. They are so rich that £19 million is an extremely manageable annual expense to them. If that same £19 million were distributed among families, it could cover the costs of energy for over 7000 poor households. If all £312 million of revenue were distributed, it could cover the energy costs for over 100,000 poor households.
But no households will be funded with any of The Crown Estate’s money because it is legally tax exempt. That’s a pretty good deal for the Royal family, who also seem to get their funerals paid for by the same public funds that pay out welfare benefits for the poor. This should leave us asking the question: does public support for rich heirs add up, mathematically? I don’t think so.
