Ownership Society News

The Rise of the New Ruling Class: How the global elite is leaving you behind by Chrystia Freeland.

It's the cover story of the current special State of the Union issue of the Atlantic with some fascinating facts and quotes. It's all about how the emergence of this new global elite, whose wealth has come mainly from the information economy, is widening the gap between the super-wealthy and the rest of us.

What we were seeing...was not a single economy at all, but rather “fundamentally two separate types of economy,” increasingly distinct and divergent.

Freeland writes that a multi-billion-dollar bailout and Wall Street’s swift, subsequent reinstatement of gargantuan bonuses have inspired a narrative of parasitic bankers and other elites rigging the game for their own benefit. And this, in turn, has led to wider—and not unreasonable—fears that we are living in not merely a plutonomy, but a plutocracy, in which the rich display outsize political influence, narrowly self-interested motives, and a casual indifference to anyone outside their own rarefied economic bubble.

The new ruling class salutes no flag but the dollar sign in their quest for greater wealth and power. With modern technology and an increasingly educated global workforce ready to work for one-tenth of what a U.S. worker makes, the increased pauperization of the middle class is a certainty.

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. 

Freeland concludes: "The lesson of history is that, in the long run, super-elites have two ways to survive: by suppressing dissent or by sharing their wealth.' Not much sharing going on these days, I'm afraid.