Gilded Age 2.0: A Review of Chrystia Freeland's Plutocrats

Title: Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else
Author: Chrystia Freeland
Edition: Penguin Press (Hardcover, 2012)
Pages: 330
How I Came by This Book: This was on the "New Acquisitions" shelf at the library I work at. As income inequality is an issue near and dear to my heart, I obviously had to check it out.

About the Author: Chrystia Freeland is the digital editor at Thomson Reuters, following years of service at the Financial Times both in New York and in London. She was the deputy editor of Canada's The Globe and Mail and has reported for the Financial Times, The Economist, and The Washington Post. Freeland's last book was Sale of the Century: The Inside Story of the Second Russian Revolution. She lives in New York City.

Synopsis: There has always been some gap between rich and poor in this country, but in the last few decades what it means to be rich has changed dramatically. Alarmingly, the greatest income gap is not between the 1 percent and the 99 percent, but within the wealthiest 1 percent of our nation--as the merely wealthy are left behind by the rapidly expanding fortunes of the new global super-rich. Forget the 1 percent; Plutocrats proves that it is the wealthiest 0.1 percent who are outpacing the rest of us at breakneck speed.

What's changed is more than numbers. Today, most colossal fortunes are new, not inherited--amassed by perceptive businesspeople who see themselves as deserving victors in a cutthroat international competition. As a transglobal class of successful professionals, today's self-made oligarchs often feel they have more in common with one another than with their countrymen back home. Bringing together the economics and psychology of these new super-rich, Plutocrats puts us inside a league very much of its own, with its own rules.

The closest mirror to our own time is the late-nineteenth-century Gilded Age--the era of powerful "robber barons" like Andrew Carnegie and John D. Rockefeller. Then as now, emerging markets and innovative technologies collided to produce unprecedented wealth for more people than ever in human history. Yet those at the very top benefited far more than others--and from this pinnacle they exercised immense and unchecked power in their countries. Today's closest analogue to these robber barons can be found in the turbulent economies of India, Brazil, and China, all home to ferocious market competition and political turmoil. But wealth, corruption, and populism are no longer constrained by national borders, so this new Gilded Age is already transforming the economics of the West as well. Plutocrats demonstrates how social upheavals generated by the first Gilded Age may pale in comparison to what is in store for us, as the wealth of the entire globalized world is concentrated in fewer and fewer hands.

Cracking open the tight-knit world of the new global super-rich is Crystia Freeland, an acclaimed business journalist who has spent nearly two decades reporting on the new transglobal elite. She parses an internal Citigroup memo that urges clients to design portfolios around the international "Plutonomy" and not the national "rest"; follows Russian, Mexican, and Indian oligarchs during the privatization boom as they manipulate the levers of power to commandeer their local economies; breaks down the gender divide between the vast female-managed "middle class" and the world's one thousand billionaires; shows how, by controlling both the economic and political institutions of their nation, the richest members of China's National People's Congress have amassed more wealth than the net worth of all the members of all three branches of the U.S. government combined--the president, his cabinet, the justices of the Supreme Court, and both houses of Congress.

Though the results can be shocking, Freeland dissects the lives of the world's wealthiest individuals with empathy, intelligence, and deep insight. Brightly written, powerfully researched, and propelled by fascinating original interviews with the plutocrats themselves, Plutocrats is a tour de force of social and economic history, and the definitive examination of inequality in our time.

Review: As a language geek, it's always fun for me when I can bring that knowledge into this blog. In my perfect world, everyone would multilingual and would be as excited about grammar as I am. This isn't my perfect world. I bring this up because the word "plutocrat" gets thrown around a lot and there are probably a lot of people who are unaware of its meaning. In the ancient Greek "ploutos" means "wealth" and "kratos" means "power." Therefore, the word "plutocrat" roughly means "power through wealth." Chrystia Freeland's timely book about those who have gained power through wealth is an excellent source of information for those of us who are curious as to how the super-rich got that way, what they will do to hold onto their wealth and power, and what this could mean for the rest of us.

The dust has started to clear from the financial crisis of 2008 and with that clarity comes a startling realization: we the people are no better off now than we were at the height of the crisis. Republicans want to throw all the blame at President Obama, but those following the bailout and other aspects of the global financial meltdown who aren't drinking the Republican Kool-Aid can see that those at the top of our economy are doing very, very well indeed. Anyone with a grain of sense in them can recognize a pattern when they see one and I'd like to think that I have a grain of sense. Global financial crisis + bailouts to banks and industries rather than to those of us on Main Street (which was a Bush initiative that Obama carried out no matter how many people want to call it "Obama's Bailout") + concentration of wealth at the top = continued financial strain for the rest of us.

Freeland's Plutocrats explores the world of the super-rich, the billionaires who hold more financial and political power than they should, with an approachable writing style, humor, and an eye towards the Gilded Age. Drawing on history, economics, psychology, and personal interviews, Freeland paints a startling portrait of wealth and privilege around the world. Even an informed reader will be shocked by some of the revelations in this book, as well as by the attitudes of the super-rich. They really do see themselves as being separate from the rest of us and from the interests of the countries in which they were born, raised, and made a fortune.

Examining the lifestyles of the rich and the powerful, Freeland draws conclusions that highlight the danger we are all in of falling victim to the unchecked power and greed of CEOs and other earners of astronomical income--people who will risk capital to the detriment of society all in the hope of becoming even more rich. Anyone who lost their investments or their life savings or their job after Wall Street's meltdown can attest to the perils of a world in which the rich are unaccountable. And yet, because of their own desire to be rich and living the high life, many people affected by the financial crisis are more willing to buy into conservative notions of the danger of raising taxes on high-income-earners, the so-called "job creators," than they are to demand that those who fly in private jets and wall themselves off in large houses away from the troubles of the world should have to pay back into the society that helped them to become wealthy in the first place.

Freeland shows how the super-rich blame everyone but themselves for the financial hardships of the last four years and how they view themselves as being above the mundane issues of everyday Americans (or Indians or Chinese or wherever they are from). She gives evidence of their lack of loyalty to anyone but themselves and of their lack of understanding/concern about what they are doing to everyone else in the pursuit of that next car/house/jet/vacation. She tells of millionaires (and billionaires) who feel that they aren't making enough, giving credence to Plato's ideas about the tyrant--a tyrant is never satisfied with what he has and is always going to the next level of excess looking for happiness and never finding it. The tyrants of our age are the plutocrats and those just below them who desire to be plutocrats. Freeland's interviews and anecdotes about the super-rich prove that. And their constant search for happiness in excess will bring further hardship to the rest of us.

I highly recommend this book. If nothing else, it may sway you away from your support of the "job creators" by realizing that they aren't there to create jobs but to make money for themselves. Once the lower and middle classes in this country--and elsewhere--are informed about what is actually being done behind the closed doors of board rooms and in the lavish mansions of the upper crust, we might actually be able to have reasonable discussions about how to move forward in such a way that the middle class isn't hollowed out and the poor aren't left with no way to clamber out of the pit of poverty they have been thrown into. If you walk away from this book with anything, I hope that it is with a feeling of indignation and a determination to stop the cycle of income inequality that is plaguing this nation and the world.

I'm giving Plutocrats five out of five Gabriels.

-Gabe