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

A New New Deal: A Review of Paul Krugman's The Conscience of a Liberal

Title: The Conscience of a Liberal
Author: Paul Krugman
Edition: Hardcover
Publisher: W.W. Norton & Co. (2007)
Pages: 273
Challenges: 2011 GoodReads Reading Challenge
How I Came by This Book: I borrowed this from the library the same day that I borrowed Barry Goldwater's  The Conscience of a Conservative. I figured it would be interesting to see how the two were similar and different.

About the Author: Paul Krugman, who was named Columnist of the Year by Editor and Publisher magazine, writes a twice-weekly column for the op-ed page of the New York Times. A winner of the John Bates Clark Medal, the most prized award given to American economists, he also teaches economics and international affairs at Princeton University.

Synopsis: America emerged from Franklin Roosevelt's New Deal with strong democratic values and broadly shared prosperity. But for the past thirty years American politics has been dominated by a conservative movement determined to undermine the New Deal's achievements--a movement whose founding manifesto was Barry Goldwater's The Conscience of a Conservative. That movement has been highly successful in turning the clock back: both the inequality of today's America and the corruption of its political life hark back to the age of the robber barons.

Now, the tide may be turning--and in The Conscience of a Liberal Paul Krugman, the world's most widely read economist and one of its most influential political commentators, charts the way to reform.

Krugman ranges over a century of history, from the political economy of the Gilded Age--which seems all too familiar these days--to the calamities of the Bush years, which he argues where inevitable once movement conservatives gained full control of the U.S. government. he shows that neither the middle-class America the baby boomers grew up in nor the increasingly oligarchic nation we have become over the past generation evolved naturally: both were created, to a large extent, by government policies guided by organized political movements. He explains how defenders of inequality have exploited cultural and racial divisions to their advantage, while reformers have found ways to bridge those divisions. And he argues that the time is ripe for another great era of reform.

Last by not least, The Conscience of a Liberal outlines a program for change. It shows how universal health care can be the centerpiece of a New Deal, just as Social Security was the core of the original. It explains what can be done to narrow the wealth and income gap. And it shows how a new political coalition can both support and be supported by reform, making our society not just more equal but more democratic.

The Conscience of a Liberal promises to reshape public debate about American social policy and become a touchstone work for an entire generation.

Review: This review and the review I did yesterday can be seen as a sort of yin and yang type of thing. Goldwater wrote The Conscience of a Conservative as a way of shaping Conservative politics in order to move away from New Deal-type policies; Krugman wrote The Conscience of a Liberal several decades later in order to bring people back to the New Deal way of thinking. While I'm politically, fiscally, and socially liberal (and therefore agree far more with Krugman than with Goldwater), I felt that this book was much better than Goldwater's not because of what it said, but because of how it was said.

I've mentioned several times on this blog that I got my BA in history. I was taught the importance of using primary and secondary sources, of citing those sources correctly, and of using those sources in order to enhance your argument. I was also taught the value of being able to identify an author's bias. Obviously these skills benefit me both as a reader and as a writer, but they've also helped me as an individual. Being able to see the flaws in someone's argument or having the ability to understand why someone is saying something just make life a whole lot easier. So, of course, I can see the bias inherent in both this book and in Goldwater's treatise as well. Yet, I'm a lot more prone to support writers who provide evidence rather than simply relying on their opinions to write an argument.

Krugman's Conscience of a Liberal is a well-researched, well-cited book that takes a historical as well as a contemporary perspective on the issue of politics, economics, and society. He is highly critical of Conservative politicians (and engages in just as much blame as Goldwater does), but he gives a solid reasoning based on an exploration of the detrimental policies of the Gilded Age rather than just railing against Conservatives because he doesn't like them (even though it's obvious that he doesn't).

This book is a reaction to The Conscience of a Conservative as much as it is a reaction to the Bush presidency. Published prior to the 2008 election, Krugman can focus on criticism of one president without speculating on the next (simply because he hadn't been elected yet). He derives his solutions to contemporary problems both from an analysis of historical events as well as from an exploration of the (then) current socio-political climate. Goldwater, on the other hand, spent much of his book suggesting solutions based on little more than (what seemed like) gut feeling and deeply-held prejudices about everyone from poor people to Russians. Whereas Goldwater advocated for an economy basically based on social Darwinism, Krugman is more conscious of inequality and the systematic racism that has pervaded American society for far too long.

The only real issue I'd like to raise about this book was, despite being mostly straightforward in terms of writing style, Krugman is an economist, a subject in which I am no expert. Occasionally I had difficulty understanding some of what he was saying and I'm not really a graph/chart person so their presence was a bit distracting. They were, however, necessary to his point and almost everything was explained in easy-to-understand terms. There were only a few passages that were hard to get through, which is to be expected when the reader (i.e., me) has only a rudimentary understanding of how economics works.

Much like Goldwater's book was interesting to read in terms of the current goings-on in this country, so, too, is Krugman's. I honestly recommend reading the two of them together just to get an idea of the vast differences between parties. Too often I hear people saying that there's not a lot of difference between Democrats and Republicans or Conservatives and Liberals. Not only does Krugman blow that theory out of the water (at one point the parties were fairly similar but within the last thirty years they've grown so far apart that it's hard not to believe that the expanding universe theory might not apply to politics as well), but reading these books together shows just how different they truly are.

I'm giving The Conscience of a Liberal 4 out of 5 Gabriels.

-Gabe