Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else (46 page)

Many plutocrats have helped me to understand their world and some have become friends (though that does not mean we always agree). They include: George Soros, Eric Schmidt, Victor Pinchuk, David and Mary Boies, Nikesh Arora, Jeff Immelt, Peter Weinberg, Mark Gallogly, Roger Altman, David Rubenstein, Bill Ford, Bob Rubin, Klaus Schwab, Aditya Mittal, Mikhail Fridman, Vladimir Gusinsky, and Igor Malashenko.

My editors, researchers, and agents have been amazingly committed. Above all, the wise and brilliant Ann Godoff has steered this book through many iterations and tolerated my efforts to appoint her my surrogate mother. Peter Rudegeair, my erudite and fastidious researcher, has done a huge amount of research and has been an essential intellectual sounding board. Ben Platt, Ann’s assistant, will one day run Penguin. He has been terrifically supportive together with Peter and rescued the endnotes. From Olympus, Marjorie Scardino and John Makinson blessed this project early on. My agents, first Pat Kavanagh and Zoë Pagnamenta and now Andrew Wylie, found an audience for me and encouraged me to keep going. Andrew, who never sleeps, read my drafts seemingly before they were written.

Several colleagues and friends went above and beyond the call of duty to help pin down elusive facts. I am especially grateful to my colleagues Amy Stevens and Nate Raymonds for their legal expertise and to Kieran Murray, Dave Graham, Cyntia Barrera, and Krista Hughes in Latin America. Mark MacKinnon, a colleague from the
Globe and Mail
, generously shared his China expertise. Boris Davidenko, of
Forbes Ukraine
, helped with facts about my second homeland. Four professional fact-checkers—Rachael Brown, Ellie Smith, Nicole Allen, and Esther Yi—combed through the book collaboratively, meticulously, and at very short notice.

My best friends have been unflagging cheerleaders and sources of great ideas. Thank you Alison Franklin, Roberta Brzezinski, Lucan Way, Annette Ryan, Karen Berman. The Ukrainian women of Nannies, Inc., particularly Nadiya Basaraba and Ira Andreychuk, have kept my kids alive during the gestation of this book, which has often seemed to be my fourth child.

Finally, I am more dependent on my extended family than anyone else I know. My aunts Natalka Chomiak, Maria Hopchin, and Chrystia Chomiak, and my mother-in-law, Barbara Bowley, have been mothers and intellectual supporters throughout this project. My father, Don Freeland, and my sister Natalka Freeland have been critical intellectual and moral influences. My sister Anne Freeland and my cousin-sisters Katrusia Ensslen and Eva Himka have taken care of me and my brood. Above all, whatever is good about this book is thanks to my husband and writing comrade, Graham Bowley, and the three most important people in our lives—Natalka Bowley, Halyna Bowley, and Ivan Bowley.

NOTES

INTRODUCTION

“The poor enjoy what the rich”
Andrew Carnegie, “Wealth,”
North American Review
148:391 (June 1889).

“I was once told”
Branko Milanovic,
The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality
(Basic Books, 2011), p. 84.

“I didn’t attack them for their success”
Bill Clinton,
Back to Work: Why We Need Smart Government for a Strong Economy
(Knopf, 2011), p. 93.

“often the word ‘rich’”
Graeme Wood, “Secret Fears of the Super-Rich,”
The Atlantic
, April 2011.

“If one looks closely”
Alexis de Tocqueville,
Memoir on Pauperism: Does Public Charity Produce an Idle and Dependent Class of Society
? 1835.

“Americans grew together”
Claudia Goldin and Lawrence F. Katz,
The Race Between Education and Technology
(Belknap Press, 2008), p. 87.

Ariely showed people
Michael I. Norton and Dan Ariely, “Building a Better America—One Wealth Quintile at a Time,”
Perspectives on Psychological Science
6 (2011).

“for the first time since the Great Depression”
For a more developed take on this, see Lawrence Summers, “The fierce urgency of fixing economic inequality,” Reuters, November 21, 2011.

Look more closely at the data
Emmanuel Saez, “Striking It Richer: The Evolution of Top Incomes in the United States (Updated with 2009 and 2010 Estimates),” March 2, 2012. http://elsa.berkely.edu/~saez/saez-UStopincomes-2010.pdf

“This association of poverty with progress”
Henry George,
Progress and Poverty: An Inquiry in the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth; The Remedy
(Cambridge University Press, reprint, 2009), p. 8.

CHAPTER 1: HISTORY AND WHY IT MATTERS

USA Today
advised its readers
Deirdre Donahue, “Able, Entertaining
The Manny
Does Triple Duty,”
USA Today
, June 18, 2007.

“There’s so much money”
Several CF interviews with Holly Peterson, 2009–2010.

In 2005, Bill Gates was worth
Robert Reich,
Supercapitalism: The Transformation of Business, Democracy, and Everyday Life
(Knopf, 2007), p. 113.

A 2011 OECD report showed
“Divided We Stand: Why Inequality Keeps Rising,” OECD report, December 2011.

“I’ve never understood in my life”
CF interview with Naguib Sawiris, November 18, 2011.

“the World is dividing into two blocs”
Ajay Kapur, Niall Macleod, and Narendra Singh, “Plutonomy: Buying Luxury, Explaining Global Imbalances,” Citigroup Global Markets Equity Strategy report, October 16, 2005.

“The U.S. stock markets and the U.S. economy”
James Freeman, “The Bullish Case for the U.S. Economy,”
Wall Street Journal
, June 4, 2011.

“very distorted”
Alan Greenspan, interview on NBC’s
Meet the Press
, August 1, 2010.

“consumer hourglass theory”
Ellen Byron, “As Middle Class Shrinks, P&G Aims High and Low,”
Wall Street Journal
, September 12, 2011.

On February 10, 1897, seven hundred members
Sven Beckert provides an excellent description of the Bradley Martin ball in
The Monied Metropolis (
Cambridge University Press, 2001) in his smart and highly readable account of New York City and the consolidation of the American bourgeoisie, pp. 1–2.

“British history is two thousand years old”
Walter L. Arnstein, “Queen Victoria’s Diamond Jubilee,”
American Scholar
, September 22, 1997.

“It is here; we cannot evade it”
All Andrew Carnegie quotations come from “Wealth,”
North American Review
148:391 (June 1889).

“We have no paupers”
Thomas Jefferson, letter to Dr. Thomas Cooper, September 10, 1814. http://www.yamaguchy.com/library/jefferson/cooper.html.

“nothing struck me more”
Alexis de Tocqueville,
Democracy in America
(Penguin Classics, 2003), p. 11.

Data painstakingly assembled by economic historians
Peter Lindert and Jeffrey Williamson. “American Incomes Before and After the Revolution” (NBER Working Paper No. 17211, July 2011).

“In America nearly every man”
Mark Twain and Charles Dudley Warner, “Author’s Preface to the London Edition,”
The Gilded Age: A Tale of Today
(Chatto & Windus, 1897).

In 1980, the average U.S. CEO
“CEO Pay and the 99%,” AFL-CIO Executive PayWatch report, April 19, 2012.

Milanovic, the World Bank economist
Branko Milanovic, “Global Inequality: From Class to Location, from Proletarians to Migrants” (World Bank Development Research Group Policy Research Working Paper 5820, September 2011).

“Britain’s classic industrial revolution”
Chrystia Freeland, “The Rise of the New Global Elite,”
The Atlantic
, January/February 2011.

“The rate of technological change”
CF interview with Joel Mokyr, August 19, 2010.

“The Treaty of Detroit” to the “Washington Consensus”
Frank Levy and Peter Temin, “Inequality and Institutions in 20th-Century America,” MIT Economics Department Working Paper No. 07-17, June 2007.

“The bottom line: we may not be able”
Conversation with author at Yale conference on the budget and inequality, April 30, 2012.

“It is structurally much more extreme”
Chrystia Freeland, “Some See Two New Gilded Ages, Raising Global Tensions,”
International Herald Tribune
, January 23, 2012.

“We are seeing much more rapid growth in developing countries”
Ibid.

A survey of nearly ten thousand
Michael E. Porter and Jan W. Rivkin, “Prosperity at Risk: Findings of Harvard Business School’s Survey on U.S. Competitiveness,” Harvard Business School, January 2012.

“When a company is stressed and has issues”
CF interview with Michael Porter, January 17, 2012.

“Although the overall pie is getting bigger”
CF interview with John Van Reenen, January 13, 2012.

“Conservatively, it explains one-quarter”
David Autor, David Dorn, and Gordon Hanson,“The China Syndrome: Local Labor Market Effects of Import Competition in the United States,” MIT working paper, May 2012.

“lousy and lovely” jobs
Maarten Goos and Alan Manning, “Lousy and Lovely Jobs: The Rising Polarization of Work in Britain,”
Review of Economics and Statistics
89:1 (February 2007).