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Tycoon Warning: How the obscenely rich are becoming the new dictators of the 21st century.
Earlier this month, the investment bank Credit Suisse published its annual survey of global wealth. The bank's report is filled with illuminating findings, but one in particular caught my eye. It has to do with the distribution of assets in Russia, where, as the report notes, a mere 110 people own a mind-boggling 35 percent of the country's entire wealth. At the same time, 93.7 percent of Russians are worth $10,000 or less.
As the report notes, this makes Russia the country with the greatest wealth disparities in the world. Americans, who are now increasingly concerned about deepening inequality in their own country, might seek some consolation from this dismal conclusion. Even under present circumstances, wealth in the United States is still spread a lot more evenly than that (as this comparison shows). Things could be worse, right?
Well, maybe. But I see little cause for jubilation. Russia is merely the most extreme case of a worldwide trend that potentially represents one of the greatest threats that democracy faces today: the spread of oligarchy.
The problem isn't just that some people in today's world are fabulously rich. It's that disproportionate wealth increasingly goes along with disproportionate power. Russia, again, offers a textbook example of the dangers. Back in the 1990s, a handful of politically well-connected business tycoons managed to profit from their close relations with Boris Yeltsin's Kremlin by taking advantage of the privatization of the country's industrial jewels -- above all its vast oil wealth. Those magnates weren't shy about exploiting their economic power to political ends. They bankrolled Yeltsin's re-election as president in 1996, controlled ministerial appointments, and dictated government policy. No wonder these businessmen-cum-politicians were soon dubbed the "oligarchs." ("Oligarchy" is Greek for "government of the few.")
One of them, the recently deceased, arch-Machiavellian Boris Berezovsky, engineered the rise of an ex-KGB officer to the prime ministership. Vladimir Putin ultimately proved less than grateful, though. Once Putin became president in his own stead, he was quick to cut his erstwhile patron down to size, forcing Berezvosky into exile. Putin curtailed the power of other Yeltsin-era tycoons, too (most notably Mikhail Khodorkovsky, who today marks his 10th year of imprisonment in a labor camp), but in their place he raised up a new group of businessmen -- many with ties to the old Soviet security services -- who owed their fortunes to him. One of them, another KGB alumnus named Igor Sechin, who heads the country's largest oil company, is regarded by some as the second-most powerful man after Putin himself. (Sechin is shown at left in the photo above.)
But this isn't only Russia's problem. As has now become apparent, globalization and the powerful economic forces it has unleashed have awarded unparalleled wealth and power to a tiny new elite. Call them what you will: the superclass, the plutocrats, the "global meritocracy." What they exemplify is the nexus of wealth and political power. And that's a problem that is increasingly vexing voters in places from London to Kuala Lumpur.
It's a challenge that takes different forms. In China, membership in the ruling Communist Party is often the easy road to wealth. Many of today's political scandals center on the antics of well-connected "princelings," the descendants of senior party officials who embody the country's peculiarly potent blend of Marxist-Leninist crony capitalism. Thanks to some remarkable digging by enterprising journalists in recent years, we've learned some astonishing things about the scale of privilege enjoyed by the extended families of notables such as President Xi Jinping...
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[ 5.7 ms ] story [ 17.0 ms ] threadTycoon Warning: How the obscenely rich are becoming the new dictators of the 21st century.
Earlier this month, the investment bank Credit Suisse published its annual survey of global wealth. The bank's report is filled with illuminating findings, but one in particular caught my eye. It has to do with the distribution of assets in Russia, where, as the report notes, a mere 110 people own a mind-boggling 35 percent of the country's entire wealth. At the same time, 93.7 percent of Russians are worth $10,000 or less.
As the report notes, this makes Russia the country with the greatest wealth disparities in the world. Americans, who are now increasingly concerned about deepening inequality in their own country, might seek some consolation from this dismal conclusion. Even under present circumstances, wealth in the United States is still spread a lot more evenly than that (as this comparison shows). Things could be worse, right?
Well, maybe. But I see little cause for jubilation. Russia is merely the most extreme case of a worldwide trend that potentially represents one of the greatest threats that democracy faces today: the spread of oligarchy.
The problem isn't just that some people in today's world are fabulously rich. It's that disproportionate wealth increasingly goes along with disproportionate power. Russia, again, offers a textbook example of the dangers. Back in the 1990s, a handful of politically well-connected business tycoons managed to profit from their close relations with Boris Yeltsin's Kremlin by taking advantage of the privatization of the country's industrial jewels -- above all its vast oil wealth. Those magnates weren't shy about exploiting their economic power to political ends. They bankrolled Yeltsin's re-election as president in 1996, controlled ministerial appointments, and dictated government policy. No wonder these businessmen-cum-politicians were soon dubbed the "oligarchs." ("Oligarchy" is Greek for "government of the few.")
One of them, the recently deceased, arch-Machiavellian Boris Berezovsky, engineered the rise of an ex-KGB officer to the prime ministership. Vladimir Putin ultimately proved less than grateful, though. Once Putin became president in his own stead, he was quick to cut his erstwhile patron down to size, forcing Berezvosky into exile. Putin curtailed the power of other Yeltsin-era tycoons, too (most notably Mikhail Khodorkovsky, who today marks his 10th year of imprisonment in a labor camp), but in their place he raised up a new group of businessmen -- many with ties to the old Soviet security services -- who owed their fortunes to him. One of them, another KGB alumnus named Igor Sechin, who heads the country's largest oil company, is regarded by some as the second-most powerful man after Putin himself. (Sechin is shown at left in the photo above.)
But this isn't only Russia's problem. As has now become apparent, globalization and the powerful economic forces it has unleashed have awarded unparalleled wealth and power to a tiny new elite. Call them what you will: the superclass, the plutocrats, the "global meritocracy." What they exemplify is the nexus of wealth and political power. And that's a problem that is increasingly vexing voters in places from London to Kuala Lumpur.
It's a challenge that takes different forms. In China, membership in the ruling Communist Party is often the easy road to wealth. Many of today's political scandals center on the antics of well-connected "princelings," the descendants of senior party officials who embody the country's peculiarly potent blend of Marxist-Leninist crony capitalism. Thanks to some remarkable digging by enterprising journalists in recent years, we've learned some astonishing things about the scale of privilege enjoyed by the extended families of notables such as President Xi Jinping...