Book review: Plutocrats by Chrystia Freeland

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IT dates me that when I started my working life, the definition of financial aspiration was to become a millionaire.


by Chrystia Freeland

Penguin Press, 330pp, £17.99

I recall being at a lunch at The Savoy in the mid-1980s, when one of those present declared loudly (wine had been consumed) that he’d looked around the table and realised that he was the richest person there – with a house in north London, upon which he did not possess a mortgage, that had passed through the million-pound barrier.

Later, a million gave way to tens of millions and soon after, hundreds of millions. Until today, when someone is not regarded as really seriously wealthy in the world’s financial capitals unless they can claim to be a billionaire. To coin a phrase (perhaps inappropriately in this context): billionaires, they’re ten a penny.

Not only that. It used to be the case that the rich were easily defined. They tended to be entrepreneurs, industrialists and City types who made their money in one particular professional and geographical milieu and remained there, frequently not straying from their own national borders or even the region or town of their birth.

The modern bunch are a different breed. They straddle the planet in their private jets, able, thanks to the latest technology, to hold down a multitude of interests across the globe. They hail from everywhere: from the developed economies to the newer, burgeoning powers.

They’re rootless, with homes in several continents. With their friends, normally their fellow super-rich, they discuss whether a restaurant in St Tropez is better than another in Hong Kong, if St Moritz is outstripping Gstaad, and whether Beverly Hills is all it’s cracked up to be.

Their universe is one of glamour, luxury, deals, money and entitlement. Quiz them about taxes, public healthcare, state education, mass transport, and they will have little insight, based on actual first-hand experience, to impart. This and much more is analysed in Chrystia Freeland’s Plutocrats.

Freeland’s is not a work that slavishly follows its subjects (remember Alan Whicker and his TV travels, and how we gazed at sparkling yachts that now seem tiny compared with the ocean-diminishing behemoths of today?). Anyone expecting unquestioning Hello!-type fawning regard for the mega-wealthy has come to the wrong place. Freeland brings the caustic eye of a highly regarded business journalist (she’s a former deputy editor of the Financial Times, now editor of Thomson Reuters Digital) to the splendidly heeled. The clue is in her sub-title: “The Rise of the New Global Super-Rich and the Fall of Everyone Else.”

What she lays bare is the plutocrats’ insulation and isolation from the rest of society. “We live in a bubble,” Eric Schmidt, chairman of Google, is quoted as saying, in relation to the Occupy Wall Street protests and the simmering discontent of the 99 per cent about the gilded 1 per cent. “And I don’t mean a tech bubble or a valuation bubble. I mean a bubble as in our own little world. Companies can’t hire people fast enough. Young people can work hard and make a fortune. Homes hold their value.”

He said so when the unemployment rate in Clara County, where Google’s Mountain View campus is located, was 8.6 per cent, higher than the US average; and some of Occupy’s fiercest demonstrations were in Oakland, not far from Schmidt’s office.

Freeland dispels the justification trotted out by some of the plutocracy that their kind divide in two, between the “bad” – the rent-seekers and, today, the bankers – and the “good” – the wealth creators. She maintains the differences are slight: both types are driven by the same imperative to make money and win competitive advantage. They all attempt to slant the rules in their favour.

History shows us that such minorities are not new, that eventually, the “us and them” divide can become so pronounced that the majority fight back, by regulation and persecution, forcing the super-rich to live in their cages behind the walls of their palaces or the modern equivalent, the gated compound, shut off, miserable and ignored. Indeed, the question facing the US electorate in last week’s presidential election was not Mitt Romney’s credentials as a plutocrat but whether he was too separate from ordinary folk to be their leader. In the end, they conceded that he probably was

The super-rich just can’t help themselves – their short-term Hoovering-up of everything in their path makes enemies and proves their undoing. Far better to pursue a slower, below the radar, approach of “long-term greed”. That, however, does not square with the obsessive desire not only to have wealth but to flaunt it.