Inequality grows as the super-rich become richer
In a new book, journalist Chrystia Freeland shines a light on the global elite – a tiny group of super-wealthy globetrotters whose fortunes are only increasing. How destructive is inequality?
Earlier this year, a study was published that seemed to prove rich people are different. In it, scientists graded subjects by wealth, before getting them to perform a series of morality-testing tasks. Those with more money, they discovered, were more likely to cheat, lie and even steal.
The difference between the rich and the rest is the subject of Chrystia Freeland’s new book Plutocrats. While Freeland, a business journalist, doesn’t quite say that the wealthy are more immoral, she argues that they do live in a very different world.
In recent decades, the gap between the rich and poor has been rising. In 1970s America, the top 1% of earners controlled 10% of national income. By 2005, that had risen to one third; with a shared fortune of around $90 billion, the 120 million people in the bottom 40% were worth the same as Warren Buffett and Bill Gates combined.
These men are part of a growing global elite: a small group who have amassed huge fortunes in globalised industries like technology and banking. Whether from America, China or Mexico, they live international, jet-setting lifestyles, with little in the way of state ties and more in common with each other than their compatriots. More than ever before, they tend to be self-made; having worked their way to the top, Freeland writes, many have scant sympathy for those with less.
Do private jets, champagne parties and designer stores matter much? Perhaps, Freeland argues – because money means power. Governments need the rich because they control industries that nations rely on, not to mention political donations. Using this valued position, the global elite can influence government policies to work in their favour.
How? The most obvious way is through lowering taxes for the biggest earners. The wealthy can also lobby for state support to business and industry: under Barack Obama’s administration, green energy and health insurance firms have benefited from the generous subsidies that steel and oil companies enjoyed when the Republican party was in power.
Dash for cash
Is this inequality wrong? Not everyone thinks so. The global elite, they say, grafted for their amazing riches, and the possibility of earning huge amounts of money is a motivation for people to work hard. Inequality is a result of the right rewards in a just society.
How ridiculous, others reply. The disparity between the 1% and everyone else is grossly disproportionate to what people might possibly deserve. And the power the rich wield will only serve to widen the gap between the haves and have-nots. This shocking inequality, they say, should not be tolerated in a civilised society.
- Is inequality necessarily a bad thing?
- Should the wealthy be required to contribute to society?
- If you had huge amounts of wealth, how would you spend it?
- Choosing an individual who is influential on the global stage, create a profile of a ‘new plutocrat’. Present your ideas in an interesting way.
Some People Say...
“The rich are different to the rest of us.”
What do you think?
Q & A
- People will always have more money than others. So what?
- The impact of the global rich can be felt all over society. Take education. If someone is very wealthy, they are likely to send their kids to an expensive private school. Often (but not always!) these elite institutions provide a higher standard of education than state schools – which may receive less funding if the rich are successful in lobbying for lower taxes. That means wealthy children will have a serious head start – and this could make it harder for the poor to access opportunities.
- That’s not fair.
- Many would agree. Some, however, argue that the super richdo make a hefty contribution to education: even if it’s small percentage, someone earning millions each year will pay a significant amount of tax – and that ends up funding education for other people.
- The word plutocracy comes from the Greek ploutos, which means wealth, and kratos, meaning rule. It generally refers to a powerful wealthy elite and the influence they have in a nation or society.
- Warren Buffett and Bill Gates
- Buffett, who made his fortune in investments, and Gates, the owner of Microsoft, are two of the richest men in the world. Both, however, have worked to share their fortunes with those more in need. The Bill and Melinda Gates Foundation is a major force in global public health, and has invested heavily in immunisation programmes for diseases like polio. Buffett is also a philanthropist, and has spoken openly about his desire to contribute to the world with his wealth.
- Today’s global economy has allowed business people to amass more wealth than was previously possible, by trading across borders and continents. Globalisation has created a foundation for both the spread of particular worldviews and an interchange of cultures and ideas; it also means global businesses are less tied to nation states.