Outrageous fortunes abound in study of the mega-rich

By Ian Birrell

The $103.5 billion fortune of telecoms tycoon Carlos Slim is equal to that of 400,000 of his fellow Mexicans. Photo / AP
The $103.5 billion fortune of telecoms tycoon Carlos Slim is equal to that of 400,000 of his fellow Mexicans. Photo / AP

Who is the richest person ever?

Not Marcus Crassus, whose fortune was the same size as the entire government treasury of the Roman Empire. His annual return was paltry for a plutocrat, equating to the average yearly income of 32,000 Romans.

Nor was it those robber barons of the Gilded Age: Andrew Carnegie, whose wealth peaked in 1901, took home the same as 48,000 typical Americans; John D. Rockefeller's vast riches yielded an annual income equal to 116,000 of his countrymen.

The wealth of these figures from history pales in comparison with the strutting financiers of Wall St, the geeky billionaires of Silicon Valley and the grisly oligarchs who plundered Russia.

Trumping them all is Carlos Slim, a telecoms tycoon whose £53 billion ($103.5 billion) fortune is equal to that of an incredible 400,000 of his fellow Mexicans.

There has always been a gap between rich and poor but this is one sign of how the gulf has widened into a chasm over the past few decades.

Creaming off more and more wealth is a new elite, a transglobal class of mainly self-made men carving out unimaginable fortunes. They are the subject of this timely and absorbing analysis by former Financial Times deputy editor Chrystia Freeland.

Forget the 1 per cent targeted by the Occupy mob. Freeland is talking about the 0.1 per centers who look down with disdain at the paupers struggling on a few million a year.

She quotes another shocking sign of our times: three decades ago the average American chief executive made 42 times as much as the average worker; today this ratio is 380. And bear in mind the richer you are, the smaller proportion of your income you tend to pay in tax, levels diminishing even at the very top of the tree.

This is no voyeuristic glimpse into the fabulous lifestyles of the rich and famous. Freeland charts the rise of this class by examining global trends and exploring the consequences of the creation of such a money-laden elite, shifting smoothly from dense academic studies and interviews with George Soros to grappling with the success of Lady Gaga. So who are these people? They are nearly all men for a start, sacrificing family life in their search for a fortune.

Often middle-class and frequently mathematicians, they make their own money rather than inheriting it. They go to the top universities and create their first fortunes early.

Many are outsiders to some extent - most Russian oligarchs, for example, were Jews clever and driven enough to get degrees from top universities under the old Soviet system - and often they are immigrants.

Unsurprisingly, bankers and financiers dominate, followed by the technology titans but, like pilot fish feeding on the leftover food from sharks, the likes of lawyers and even dentists who service their needs can join their ranks. "The superstars who work for the super-rich can charge super fees," observes Freeland drily.

Her findings are fleshed out with fine research, strong statistics and neat nuggets of information. She argues that technology and globalisation are creating winner-take-all superstars in many sectors who join a cosy, conformist bubble.

They flit round the world to the same events and using the same services; they freely admit to having more in common with one another than their fellow citizens, whether coming from Africa, Asia or the west.

Although short of solutions, Freeland highlights the danger when a small, self-serving and self-satisfied group dominate public discourse, then seek a system tilted even more in their favour. "I think the ultra-wealthy actually have an insufficient influence," says one billionaire Republican donor.

Yet these super-elites are not evil people; they genuinely think what is good for them is good for the rest of society. The irony, as the author points out, is that a big intrusive state is often the plutocrat's best friend, whether it's a state capitalist regime such as China or the protectionist capitalism of the west.

As the global meltdown showed, the best brains follow the money, so the regulators, earning a fraction of the huge incomes enjoyed by bonus-chasing bankers, were no match for the global behemoths. Such is their power and wealth, the mega-rich proclaim free-market values yet lobby hard and often successfully to bend markets in their favour, devastating the traditional middle classes and dislocating social mobility.

In so doing, they are destroying the very things that gave birth to so many of them - to all our detriment.

* Plutocrats: The Rise of the New Global Super Rich by Chrystia Freeland (Allen Lane, p352)

- Observer

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