September 28, 2012

The lives of the global megarich

By Chrystia Freeland
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Plutocrats is an immensely useful and entertaining book, not only because it lets the striving 99 percent of the world’s population see how the glittering 1 percent live but, more significantly, because it provides insight into the mindsets and methods of the super-rich—insights that sympathizers will regard as instructional manuals and opponents will seize upon as Achilles’ heels. A former reporter for the Financial Times, the Economist and the Washington Post, the author moves with ease among the financial titans she anatomizes, chatting with the likes of investor George Soros and Google chief Eric Schmidt and moderating panels at international economic conferences where the wealthy ponder ways of remaining so.

Freeland does not concern herself here with mere millionaires. Her microscope is trained on those whose outsized wealth gives them global impact. She seeks to determine the factors that enabled them to become wealthy and then considers what the social effects may be of the widening gap between the self-satisfied rich and the resentful middle class and poor.

The two biggest factors in gestating today’s megafortunes, Freeland concludes, have been advances in technology and the breaking down of national trade barriers. Add to these basics such economic opportunities as the collapse of the Soviet Union and subsequent privatization of its state-owned resources, China’s rapid embrace of capitalism and the U. S. government’s shielding of Wall Street from the consequences of its risky speculations and you have an entrepreneur’s concept of heaven.

Freeland is a bit too ready to buy into the “self-made” rationale from which some plutocrats derive smug comfort. “[T]he bulk of their wealth,” she says, “is generally the fruit of hustle, intelligence, and a lot of luck.” Overlooked in this sunny equation is the essential contribution of workers whose pay and benefits are kept low by outsourcing, union busting and lax or non-existent labor laws. One may get by but no one gets rich on his own, much less super-rich.

Using the economic rise and fall of 14th-century Venice as a cautionary tale, Freeland lays out a warning to plutocrats. Once Venice’s entrepreneurial class had made its vast fortunes, she says, it tried to safeguard them by closing off the very social mobility that enabled these fortunes to be created in the first place. Today’s plutocrats are inclined to do the same, she says, through manipulating laws and regulations and disregarding “the interests of society as a whole.” That path, she acknowledges, is fraught with peril.

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By Chrystia Freeland
ISBN 9781594204098

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