The rise of 'plutocrats'

The world’s run not by the 1 per cent but by the 0.1 per cent, the former Financial Times managing editor Chrystia Freeland argues in her new book, Plutocrats: The Rise of the New Global Super Rich, and the gulf between this tiny group of multimillionaires and everyone else is getting wider. The plutocrats (those whose wealth allows them to shape the world) have political clout; and with their private tutors for their kids to ensure that their offspring are Ivy League-educated, it’s only going to become harder for ordinary folk to break into their ranks.Freeland’s a fast, precise talker with a Canadian accent and natural warmth, which goes some way towards explaining how she got some of the world’s wealthiest to go on the record about their lavish lifestyles. The book strikes a satisfying balance between collating facts and figures in the service of a serious economic argument and telling gossipy stories about the rich and famous. It’s fun to hear the Egyptian telecoms tycoon Naguib Sawiris suggesting that a billion dollars is what you need for life’s necessities – “the plane, the boat” – and the heiress Holly Peterson recounting her friends moaning about their paltry annual income of US$20 million (Dh73.5m), lamenting that, after tax, “20 is only 10”. Barely enough to pay the staff. What’s emphasised both in Plutocrats and in conversation with Freeland is the international nature of the plutocracy. The same thing is happening everywhere, Freeland says. The disappearance of a middle class and the division of jobs into “the lovely” (highly paid tech jobs, for example) and “the lousy” (minimum-wage servitude). Those doing the very “loveliest” jobs are truly global citizens, having more in common with their colleagues on other continents than with their fellow countrymen – and they would think nothing of taking a 7,000-mile flight for one meeting. “One of the most important cities on [the plutocrats’] international itinerary is Dubai,” Freeland explains over the phone. “It’s one of the half-dozen cities of the global super rich” (along with New York, San Francisco, Mumbai, Shanghai and Hong Kong). To illustrate what this jet-setting life feels like from the inside, she recalls talking to an American “major money manager”, who had recently jetted to the Middle East, walked from his plane to the office and got straight back on to the plane afterwards. The plane staff felt sorry enough for their boss that they ran out to a restaurant for takeaway while he was working, so he would at least get to sample local cuisine. He ate on his way back to the US, thousands of feet above the desert. For the richest 0.1 per cent, this experience is becoming increasingly common: Dubai, with its ceaseless flow of air traffic, is a sign of things to come elsewhere on the planet. “For the people at the top,” Freeland says, “the people for whom Dubai airport is sort of an extension of their office, [their lives have become] a series of these brief visits to places that look a lot alike. One person who is a member of this community calls it the ‘Four Seasons tribe’ because they go around visiting different Four Seasons hotels in different global cities.” Freeland cites technology, globalisation and market-focused economic policies as drivers of the plutocracy, and while she’s keen to point out that she’s a “big supporter” of global capitalism, she suggests that the more powerful plutocrats get, the more they put their own class at risk. At the moment, the typical plutocrat was educated by a state-run school, made it into a top university on their own merit and has an outsider status that’s a boon to innovation: think of the Facebook founder Mark Zuckerberg. If the plutocrats have the power to change politics in order to benefit themselves, the rich become richer, society becomes less inclusive and perhaps the next Zuckerberg will never get a chance to shine. Although her focus on income equality – always an unpopular topic among the rich, she says – has got Freeland struck off a few party-invite lists, other wealthy readers have taken her message to heart. One European multimillionaire sought Freeland’s advice after reading her warnings about the plutocracy’s uncertain future.  “He said: ‘We are the winners in the current system; we have the greatest stake in maintaining it, so we should be alert to ways in which it isn’t working, because if we don’t fix it, the whole system is in jeopardy and we will suffer the most.’” This response, she says, “made me so happy”.