Posts Tagged ‘Elite’

A clash of elites: the 0.1% vs. the 9.9%

May 29, 2018

The United States has two elites—an elite of great wealth, embracing about 0.1 percent of the population, and an elite of educational credentials, based on the next 9.9 percent.

A writer named Matthew Stewart wrote a good article in The Atlantic about the 9.9 percent, of which he considers himself a member.  If you go to an elite school, you’re on track for a job in medicine, law, finance or management consulting.

How you do in those jobs is up to you, but you’ve got a permanent, lifelong advantage over somebody who is a high school graduate or somebody who attended a non-elite school.

We Americans like to talk about how equality of result doesn’t matter, only equality of opportunity matters.  But the whole point of being in a higher social or economic class is to lock in advantages for your children.

Thomas Frank has written about how American politics has been changed by the fact that liberal reformers in the 9.9 percent no longer identify with the 90 percent.  Instead their goal is a multi-racial, gender-neutral aristocracy based (supposedly) on merit.

This has been exploited by Donald Trump, who speaks the language of the populists of old, but represents the interests of the plutocracy.   And the liberal professional class confuses Trump with real populism, and fears the masses more than they do the power elite.

These are sweeping, over-simplified generalizations, but I think they are a broadly accurate picture of what’s going on.

LINKS

The 9.9 Percent Is the New American Aristocracy by Matthew Stewart for The Atlantic.

Forget Trump—populism is the cure, not the disease by Thomas Frank for The Guardian.

A Plutonomy world – we just live in it

June 30, 2011

PLUTONOMY is a word coined five or so years ago by Ajay Kapur, then a global strategist at Citigroup, to describe the United States economy.  It is a kinder, gentler synonym for plutocracy or oligarchy.  It means an economic system based on serving the needs and desires of the ultra-rich.

In the United States, 1 percent of the population has wealth equivalent to the bottom 90 percent.  And, according to Kapur, their share of the national wealth is likely to continue to increase.

Ajay Kapur

One implication of this fact is that it makes more sense for business to make products for the ultra-rich than for the mass public. He recommended a Plutonomy investment portfolio, in stocks of Tiffany’s, Sotheby’s, Burberry, the Four Seasons and other companies that cater to the wealthy elite.

Another is that many of the problems that affect the general public – for example, rising gasoline and food prices – do not affect the Plutonomy.  That means little is likely to be done about these problems.

After Michael Moore cited Kapur in his documentary movie, “Capitalism: a Love Story,” his writings were taken down from the Internet.  But earlier this year Kapur, who now is head of Asian equity strategy for Deutsche Bank, resurfaced with an interview by Robert Frank of the Wall Street Journal.

Kapur said the Plutonomy is alive and well, and is so well entrenched it is unlikely to go away anytime soon.  In fact, he now sees the whole world, not just the United States, as a Plutonomy.

The foundation of Plutonomy is deregulation and low taxes, Kapur said, and the Plutonomy is so politically powerful that it can resist populist pressures for the indefinite future.

Unlike me, he has no problem with this.  He sees the desire to join the Plutonomy as the driving force of progress.  And as for an economy in which most people work to serve the desires and interests of the rich, he has made a good career doing just that.

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The new global elite and the rest of us

April 12, 2011

My friend Marie Sidoti e-mailed me a link to an article in the Atlantic Monthly which drew a disturbing group picture of the new global elite of wealth.  They are not an elite of hereditary wealth, Chrystia Freeland wrote; most of them rose from the middle class through their enterprise and intelligence.  They are not content do sit back and enjoy lives of luxury; they use philanthropy as a means to reshape the world as they think it should be.

They meet at places like the World Economic Forum in Davos, Switzerland, where they hear presentations by people such as Desmond Tutu or Bill Clinton as medieval kings once heard theological disputes of medieval philosophers.

They have wealth beyond the dreams of most people.

[Novelist Holly Peterson] described a conversation with a couple at a Manhattan dinner party: “They started saying, ‘If you’re going to buy all this stuff, life starts getting really expensive. If you’re going to do the NetJet thing’”—this is a service offering “fractional aircraft ownership” for those who do not wish to buy outright—“‘and if you’re going to have four houses, and you’re going to run the four houses, it’s like you start spending some money.’”

The clincher, Peterson says, came from the wife: “She turns to me and she goes, ‘You know, the thing about 20’”—by this, she meant $20 million a year—“‘is 20 is only 10 after taxes.’ And everyone at the table is nodding.”

They have more in common with each other than with ordinary people in their own countries.  In other worlds, they are class conscious.

As Glenn Hutchins, co-founder of the private-equity firm Silver Lake, puts it, “A person in Africa who runs a big African bank and went to Harvard might have more in common with me than he does with his neighbors, and I could well share more overlapping concerns and experiences with him than with my neighbors.” The circles we move in, Hutchins explains, are defined by “interests” and “activities” rather than “geography”: “Beijing has a lot in common with New York, London, or Mumbai. You see the same people, you eat in the same restaurants, you stay in the same hotels. But most important, we are engaged as global citizens in crosscutting commercial, political, and social matters of common concern. We are much less place-based than we used to be.”

They have little sympathy for the American middle class.

The U.S.-based CEO of one of the world’s largest hedge funds told me that his firm’s investment committee often discusses the question of who wins and who loses in today’s economy. In a recent internal debate, he said, one of his senior colleagues had argued that the hollowing-out of the American middle class didn’t really matter. “His point was that if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade,” the CEO recalled.

I heard a similar sentiment from the Taiwanese-born, 30-something CFO of a U.S. Internet company. A gentle, unpretentious man who went from public school to Harvard, he’s nonetheless not terribly sympathetic to the complaints of the American middle class. “We demand a higher paycheck than the rest of the world,” he told me. “So if you’re going to demand 10 times the paycheck, you need to deliver 10 times the value. It sounds harsh, but maybe people in the middle class need to decide to take a pay cut.”

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