Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else

by Chrystia Freeland

  Families in the top 0.01 percent Saez’s complete data set available at http://elsa.berkeley.edu/~saez/TabFig2010.xls.

  “A recent academic study of the Forbes list” Wojciech Kopczuk and Emmanuel Saez, “Top Wealth Shares in the United States, 1916–2000: Evidence from Estate Tax Returns,” National Tax Journal, vol. 57, no. 2, part 2, June 2004, 482.

  “Although comparable data on the past are sparse” “Global Wealth Report 2011,” Credit Suisse Research Institute, October 2011.

  93 percent of the gains Saez, “Striking It Richer.”

  “Probably if you had looked at the situation” CF interview with Emmanuel Saez, February 24, 2011.

  CHAPTER 2: CULTURE OF THE PLUTOCRATS

  “Somebody ought to sit down” Scott Turow, Pleading Guilty (Grand Central Publishing, 1994), p. 174.

  “men like Henry George” Albert Einstein, letter to Anna George de Mille, 1934. http://www.cooperativeindividualism.org/einstein-albert_letters-to-anna-george-demille-1934.html.

  “the battle cry for all” Joanne Reitano, The Restless City: A Short History of New York from Colonial Times to the Present (Taylor & Francis, 2006), p. 101.

  “Not even Lincoln had a more glorious death” “Expressions of Regret: The Comments of Many Prominent Persons in New York Upon the Death of Henry George,” New York Times, October 30, 1987.

  “I stopped a man” Henry George, Jr., The Life of Henry George (Doubleday and McClure Company, 1900), p. 149.

  “Why should there be” Ibid., pp. 468–69.

  “The present century has been marked” Henry George, Progress and Poverty (D. Appleton and Co., 1886), pp. 3–4.

  “We are coming into collision” Ibid., p. 5.

  “Some get an infinitely better” Ibid., p. 7.

  “show that their sympathies” Edward Robb Ellis, The Epic of New York City: A Narrative History (Carroll & Graf, 2005), p. 382.

  “born rich” F. Scott Fitzgerald, “The Rich Boy,” in The Short Stories of F. Scott Fitzgerald, ed. Matthew J. Bruccoli (Charles Scribner’s & Sons, 1989), p. 317.

  “The ordinary progress of a society which increases in wealth” John Stuart Mill, Principles of Political Economy with Some of Their Applications to Social Philosophy (Longmans, Green and Co., 1848), Book V, Chapter 2, Section 5.

  “Fat cats who owe it to their grandfathers” Freeland, “The Rise of the New Global Elite.”

  “As a consequence, top executives” Thomas Piketty and Emmanuel Saez, “The Evolution of Top Incomes: A Historical and International Perspective,” American Economic Review 96:2 (May 2006), p. 204.

  Speaking at a Columbia University conference Paul Sullivan, “Scrutinizing the Elite, Whether They Like It or Not,” New York Times, October 15, 2010.

  “Capital income excluding capital gains” “Trends in the Distribution of Household Income Between 1979 and 2007,” Congressional Budget Office study, October 2011, Section XI, p. 17.

  This is true even at the very, very top Jon Bakija, Adam Cole, and Bradley T. Heim, “Jobs and Income Growth of Top Earners and the Causes of Changing Income Inequality: Evidence from U.S. Tax Return Data,” working paper, April 2012, p. 4, footnote 3.

  “While I have been richly rewarded” Leon G. Cooperman, “An Open Letter to the President of the United States of America,” November 28, 2011. http://www.thestreet.com/tsc/common/images/pdf/Omega%20Advisor1.pdf.

  “We are fighting the caste system with capitalism” Lydia Polgreen, “Scaling Caste Walls with Capitalism’s Ladders in India,” New York Times, December 21, 2011.

  “We have witnessed substantial changes” Oliver H. Holiet, “Torsten Müller-Ötvös, CEO of Rolls-Royce,” Luxos (Germany), Fall/Winter 2011–2012, p. 46.

  “During that 80-year period” Goldin and Katz, Race Between Education and Technology, p. 4.

  In one example, the wage premium Ibid., p. 50.

  Getting a college degree Anthony P. Carnevale, Stephen J. Rose, and Ban Cheah, “The College Payoff: Education, Occupations, Lifetime Earnings,” Georgetown University Center on Education and the Workforce, August 5, 2011.

  wage premium for a college education Thomas Philippon and Ariell Reshef, “Wages and Human Capital in the U.S. Finance Industry: 1909–2006,” National Bureau of Economic Research, working paper no. 14644, March 2011.

  “Most of the increase in wage inequality” Thomas Lemieux, “Postsecondary Education and Increasing Wage Inequality,” American Economic Review 96:2 (May 2006), pp. 195–99.

  That contest has prompted absurdities like the story of Jack Grubman “The Wall Street Fix,” PBS Frontline, May 8, 2003.

  “With those numbers in mind” John Quiggin, “Cutthroat Admissions and Rising Inequality: A Vicious Duo,” Chronicle of Higher Education, September 11, 2011.

  “There’s a kid. You know” CF interview with Larry Summers, November 22, 2011.

  “have the courage to follow your heart and intuition” Steve Jobs, Stanford University commencement address, June 12, 2005.

  “Don’t park ten blocks away” Drew Gilpin Faust, “Living an Unscripted Life,” 2010 baccalaureate speech, Memorial Church, Harvard University, Cambridge, Massachusetts, May 25, 2010.

  But the winner-take-all economy turns out “The New Wave of Affluence,” Ad Age Insights white paper, May 23, 2011.

  “of 55 American laureates, 34 worked” Robert K. Merton, “The Matthew Effect in Science,” Science 159:3810 (January 5, 1968), pp. 56–63.

  “The conditions of industry change so fast” Alfred Marshall, Principles of Economics, Book VI, Chapter XII, Section 10.

  “A lot of professional writers apply here” David Streitfeld, “Funny or Die: Groupon’s Fate Hinges on Words,” New York Times, May 28, 2011.

  This volatility makes us unhappy See Carol Graham, Happiness Around the World: The Paradox of Happy Peasants and Miserable Millionaires (Oxford University Press, 2010).

  Carlos Slim, who bought his first David Luhnow, “The Secrets of the World’s Richest Man,” Wall Street Journal, August 4, 2007.

  “flying class” Scott Turow, Pleading Guilty (Grand Central, 1994), p. 304.

  When the European sovereign debt crisis Eric Dash, “In Euro Era, Opening Bell Is a 2:30 A.M. Alarm,” New York Times, December 10, 2011.

  “We are Wall Street” Stacy-Marie Ishmael, “We Are Wall Street . . .” Alphaville blog, Financial Times, April 30, 2010.

  “The average tenure of a Fortune 500 CEO” A. G. Lafley, “The Art and Science of Finding the Right CEO,” Harvard Business Review, October 2011.

  “If you push towards an Apple world, a Google world” CF interview with Eike Batista, September 23, 2011.

  The famous Whitehall study The first Whitehall Study, begun in 1967 with a sample of 18,000 male civil servants, found higher mortality rates and prevalence of cardiorespiratory disease among those with lower employment grades.

  “and the law of competition between” Andrew Carnegie, “Wealth,” North American Review 148:391 (June 1889).

  “It’s not possible in tech to frame your ambitions” CF interview with Eric Schmidt, February 23, 2011.

  “Those of you who practice” Pitch Johnson, lecture of venture entrepreneurship at Moscow’s Polytechnic Museum, October 2010.

  “Britain now has a Wimbledon economy” Harry Mount, “England, Their England: Foreign Money Now Dominates at the Most Traditional of Summer Fixtures,” The Spectator, June 18, 2011.

  “There’s an interaction between the global elite” CF interview with Eric Schmidt. February 23, 2011.

  “The base of the wealth pyramid” Global Wealth Report, Credit Suisse Research Institute, October 2011, pp. 16–17.

  “A person in Africa” Chrystia Freeland, “The Rise of the New Global Elite,” The Atlantic, January/February 2011.

  “I think, in a sad sense, these cities are so similar now” CF interview with Aditya Mittal, November 11, 2010.

  “There are more and more global CEO meetings” CF interview with Dominic Barton, November
30, 2011.

  “There is an emergent power in people” CF interview with Eric Schmidt, February 23, 2011.

  “This is the new wave, the new trend” Chrystia Freeland, “Global Seagulls and the New Reality of Immigration,” International Herald Tribune, October 6, 2011.

  “Four out of every five Chinese entrepreneurs today” GroupM Knowledge–Hurun Wealth Report 2011, p. 19.

  nearly 60 percent Tim Adams, “Who Owns Our Green and Pleasant Land?” The Observer, August 6, 2011.

  a study of British and American CEOs Elisabeth Marx, Route to the Top: A Transatlantic Comparison of Top Business Leaders (Heidrick & Struggles, 2007). http://www.heidrick.com/PublicationsReports/PublicationsReports/RoutetotheTop.pdf

  “I came to GE in 1982” Chrystia Freeland, “Accepting the Rise of China,” International Herald Tribune, January 20, 2011.

  “is not going to be the engine” Chrystia Freeland, “U.S. Needs to Think Globally About Business,” International Herald Tribune, October 20, 2011.

  “This year, almost 90 percent of our sales” Freeland, “The Rise of the New Global Elite.”

  “they don’t think of themselves as American anymore” Conversation with author at Council on Foreign Relations, New York, April 5, 2012.

  “I have three passports” Freeland, “The Rise of the New Global Elite.”

  “The largest metals group in the world is Indian” Stephen Jennings, “Opportunities of a Lifetime: Lessons for New Zealand from New, High-Growth Economics,” Sir Ronald Trotter Lecture, April 7, 2009.

  “They know how to provide mobile phones” Chrystia Freeland, “Globalization 2.0: Emerging-Market Cross-Pollination,” The Globe and Mail, October 1, 2010.

  “The proprietor of land is necessarily a citizen” Adam Smith, The Wealth of Nations, Book V, Chapter II, Section 91.

  “We don’t have castles and noble titles” Benjamin Wallace, “Those Fabulous Confabs,” New York, February 26, 2012.

  and where, in lieu of noble titles, an elaborate hierarchy of conference badges Nick Paumgarten, “Magic Mountain: What Happens at Davos?” The New Yorker, March 5, 2012.

  “Combined, our contacts reach” “Chris Anderson on TED’s Nonprofit Transition.” TED. February 2002. http://www.ted.com/talks/chris_anderson_shares_his_vision_for_ted.html.

  “Name one action” Ginia Bellafante, “With Vows Exchanged, Break Out the Slides,” New York Times, December 16, 2011.

  “The new philanthropists believe” Matthew Bishop and Michael Green, Philanthrocapitalism: How Giving Can Save the World (Bloomsbury, 2008), pp. 2–3.

  “What they are doing is much more” CF interview with Matthew Bishop, November 2011.

  “If we can apply the entrepreneurial” Jamie Doward, “Can This ‘Venture Philanthropist’ Save Our Schools?” The Observer, May 29, 2005.

  “We have to figure out what makes” Bill Gates, prepared remarks at the 2010 Annual Policy Forum of the Council of Chief State School Officers. http://www.gatesfoundation.org/speeches-commentary/pages/bill-gates-2010-ccsso.aspx.

  “Our foundation tends to fund more” Jeff Guo, “In Interview, Gates Describes Philanthropic Journey,” The Tech, April 23, 2010.

  “They can also do dangerous things” Charles Piller and Doug Smith, “Unintended Victims,” Los Angeles Times, December 16, 2007.

  whose members included two millionaires Ibid.

  “was not Democracy” Jeffrey A. Winters, Oligarchy (Cambridge University Press, 2011), p. 227. Subsequent statistics come from Oligarchy pp. 227–31.

  “income defense industry” Ibid., p. xii.

  “There’s class warfare, all right” Ben Stein, “In Class Warfare, Guess Which Class Is Winning?” New York Times, November 26, 2006.

  “I think people making $5 million” CF interview with Holly Peterson.

  Peering inside the top 1 percent Brian Bell and John Van Reenen, “Bankers’ Pay and Extreme Wage Inequality in the UK,” CEP Special Report, April 2010. http://eprints.lse.ac.uk/28780/1/cepsp21.pdf.

  “There were about 150,000 Americans” Jeffrey A. Winters, Oligarchy, (Cambridge University Press, 2011), p. 214.

  compiled a data set chronicling Claudia Goldin and Lawrence F. Katz, “Transitions: Career and Family Life Cycles of the Educational Elite,” American Economic Review: Papers & Proceedings 2008, 98:2, 363–69.

  “very poor and destitute respondents” Carol Graham, Happiness Around the World: The Paradox of Happy Peasants and Miserable Millionaires, (Oxford University Press, 2010), p. 151.

  “the gains around them” Chrystia Freeland, “For Dictators, Protests Offer 3 Lessons.” International Herald Tribune, December 15, 2011.

  there were just 412 billionaires Oligarchy, p. 215.

  For 47,745 of the 47,763 runners who competed Dave Ungrady, “As Miles Add Up, So Do the Unforgettable Moments,” New York Times, November 1, 2011.

  By 2007, the number of women Daniel J. Hemel, “’07 Men Make More,” The Harvard Crimson, June 6, 2007.

  women outnumbered men Catherine Rampell, “Women Now a Majority in American Workplaces,” New York Times, February 6, 2010.

  In 2010, about four in ten Sarah Jane Glynn, “The New Breadwinners: 2010 Update,” Center for American Progress, April 2012. http://www.americanprogress.org/issues/2012/04/pdf/breadwinners.pdf.

  In 1979, nearly 8 percent “Jobs and Income Growth of the Top Earners and the Causes of Changing Income Inequality: Evidence from U.S. Tax Return Data,” working paper, April 2012, p. 19. http://web.williams.edu/Economics/wp/BakijaColeHeimJobsIncomeGrowthTopEarners.pdf.

  CHAPTER 3: SUPERSTARS

  “A society in which knowledge workers dominate” Peter Drucker, “The Age of Social Transformation,” The Atlantic, November 1994, p. 67.

  “It is probably a misfortune that” Friedrich A. Hayek, Law, Legislation, and Liberty, Volume 2: The Mirage of Social Justice (The University of Chicago Press, 1976), p. 74.

  “It is possible that intelligent tadpoles” R. H. Tawney, Equality (Capricorn Books, 1961), p. 108.

  samizdat manuscript György Konrád and Iván Szelényi, The Intellectuals on the Road to Class Power (Harcourt Brace Jovanovich, 1979).

  The consensus, advanced most powerfully David Autor, “The Polarization of Job Opportunities in the U.S. Labor Market,” Center for American Progress and The Hamilton Project, April 2010.

  In a January 2012 speech about income inequality Alan B. Krueger, “The Rise and Consequences of Inequality in the United States,” remarks prepared for an event at the Center for American Progress, January 12, 2012.

  But the best explanation See Noam Scheiber, “The Audacity of Data: Barack Obama’s Surprisingly Non-Ideological Policy Shop,” The New Republic, March 12, 2008.

  “Above all, Obama’s form of pragmatism” Cass Sunstein, “The Empiricist Strikes Back: Obama’s Pragmatism Explained,” The New Republic, September 10, 2008.

  Word crunchers found that the president’s 2009 inaugural address Justin Wolfers, “The Empiricist-in-Chief,” Freakonomics blog, February 26, 2009.

  Elizabeth Billington was a diva See Elizabeth Billington’s entry in Philip H. Highfill, Kalman A. Burnim, and Edward A. Langhans, A Biographical Dictionary of Actors, Actresses, Musicians, Dancers, Managers and Other Stage Personnel in London, 1660–1800 (SIU Press, 1993), pp. 122–29.