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Freeland Says Globalization, Technology and Global Politics Driving Growth of the Super Rich

Chrystia Freeland

Chrystia Freeland

Chrystia Freeland has a long history in financial journalism, including stints as the Global Editor-at-Large of Reuters and managing editor at the Financial Times. She was most recently the managing director and editor of consumer news at Thomson Reuters before she decided to leave journalism to pursue a political nomination in her native Canada.

In Plutocrats: The Rise of the Global Super-Rich, Freeland describes how wealth is becoming increasingly concentrated in the hands of a historically tiny number individuals, who live a lifestyle many people—even those in the top 1 percent—can barely imagine. In interviews with many of these plutocrats, she cracks up the culture of the transglobal elite and breaks down a mindset where many of the world’s wealthiest people often believe that what is best for them is best for the world at large. Given that many of these individuals often control the puppet strings of the world’s political, social and economic systems, Freeland paints a “brightly written, powerfully researched” novel that was named a Financial Times Best Book of the Year.

POGO: What are the biggest factors that have contributed to the rise of the “super-rich”?

Freeland: There are three big drivers of rising income inequality. The first two are economic -- globalisation and the technology revolution. But politics plays a role, too. Even as powerful economic forces have been hollowing out the middle class and allowing those at the very top to pull away from everyone else, political decisions in many countries have further exacerbated these trends, rather than softening them. Unions have been weakened, effective tax rates at the top have fallen, regulations have become more lax.

 
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POGO: How does the culture of the super-rich vary from country to country?

Freeland: The most striking thing about those at the very top of the income distribution is the extent to which they are becoming a transglobal community of peers, with more in common with one another than with their neighbours back home. Business has become global and so has the community of people at its summit.

POGO: You have talked about how the upper-class often avoids “moral tension” by believing that policies that are best for them are best for society. Where does this mindset come from? 

Freeland: All of us like to equate our own self-interest with the common good -- it is much more pleasant to feel you are doing something which is virtuous, and also happens to be lucrative, rather than to feel you are merely pursuing your venal self-interest. This equation of personal self-interest with the common good is particularly strong among our leading capitalists because in the post-war era it was largely true -- the economies in the western industrialised countries grew, companies become more productive, and the middle class became richer, too. The problem is that in recent decades that connection has begun to break down.

POGO: What are some of the best strategies you’ve heard for redistributing wealth and closing the income gap?

Freeland: This is a big problem, and there are no easy and immediate answers. Distrust anyone who offers a simple 5 point plan! But there are a few areas I am focused on. First equal opportunity and social mobility. One of the most corrosive consequences of rising inequality is that it is linked to declining social mobility. We need to do everything we can to lean against that. A second area is entrepreneurship. As traditional middle class jobs vanish, we need to do everything we can to encourage people to create new ones. A third is setting international standards for taxation. Business has become global but taxation hasn't. The result is that big business pays a lower effective tax rate than in the past. That is one reason the state is being hollowed out.

POGO: If you suddenly became “super-rich”, what would you do with your money?

Freeland: I hope I would be a creative and publicly minded philanthropist. I would also buy a very nice pair of shoes.

By: Jana Persky
Intern, POGO

Photograph of Jana Persky Jana Persky is an intern for the Project On Government Oversight.

Topics: Financial Sector

Related Content: Financial Oversight, Interviews

Authors: Jana Persky

Submitted by waw siye at: August 22, 2013
I have one question for all of you first why we have not understand what cause this super-constitution and transnational corp first place
Submitted by Bert Gold at: August 18, 2013
I have had the good fortune to ask a super-rich person why more fairness and flatter income distribution is unreasonable... She explained the following to me: The most important legacy of (most) super-rich is that they can provide their children the same comfortable lives that they have had. That legacy is more important than nation, religion, affiliation of any sort and nearly anything else. Any effort to deny the ability to provide for their offspring would be seen as confiscatory and heinous by the super-rich. It's that simple: Money is more important than anything to them.
Submitted by Mcly at: August 17, 2013
None of this goes far enough. Corporations all need to belong to the employees and/or customers of the corporation . Profit should be the last duty owed, first should be the environment , second the society at large, third the employees and customers and last profit. People can own private businesses limited in size to say 5 to 10 million in annual sales. Our current system is killing us.
Submitted by shoeless in afghanistan at: August 14, 2013
What a breath of fresh air. Finally someone with clarity of thought. Until more people make decisions with the notion that our country's and our children's fate is at stake, we will all soon suffer. We owe it to each other to do what is right for America.
Submitted by cyberman at: August 14, 2013
Or... perhaps one could address the problem head on and start with the premise that we have gotten to a point of unfairness and social loggerheads where one thinks the unthinkable. And that is, there is little social value but tangible social danger in having any member of society worth over, say, a billion dollars. Freeland's point that they equate their interests with the public good and her subtle debunking of that proposition needs to be extended further than she may wish to go. How about the idea that no one's wealth should extend beyond a set level? And once achieved by of course these hard working individuals, their families, trusts, corporate ownerships etc. and their (what? self evident isn't it?) enterprise, they must be prohibited from using that money to control the political process which is an underlying problem today. We must ratchet down the influence of internationalist's thinking masquerading under the guise of their U.S. citizenship and theirU.S. constitutional rights Mr. Roberts went to Washington and OK ed corporations being classified as individuals. This pathway to political misfortune must be cut off. And of course what kind of logic is it that a financial cut off at any level could be effectively tied to reducing even these poor billionaires person's (continued) ability to buy the government, its laws and it interpretations of those laws? But without such reductions who speaks for social mobility that can make it happen? Who speaks for penalizing those allowing unfair wage competition of pitting Americans against the Chinese? Who speaks against outsourcing to Mexico or India and backs it up with criminal laws? What we have gained in permitting old fashioned American values which allows individuals to be worth tens of billions of dollars we have more than lost in a society that is no longer fair no longer right and no longer free to those hundreds of millions individuals not already in favored positions to raise themselves up and join a strong middle class or upper class. There is no strong middle class to ascend to and to join the upper classes is a reach too far. So logically we should reduce the top of the ladder to a, maybe, a billion and recognize how deleterious their power is to the other 99% of society. Bet this gets me on the NSA must follow list.
Submitted by Dfens at: August 11, 2013
Historically we have had the least amount of gap between the rich and poor when competition for labor has been at its highest point. Union participation has advanced and declined with competition for labor too, as one might expect. If there are 10,000 people outside the walls of a plant needing work, its hard to go on strike for better wages no matter how dedicated the union membership. Right now, with China having "most favored trade status" we've effectively added a billion more low paid workers to our labor pool. They might not be as good as American workers, but they are better than their pay rate, which is 1/8th of what someone in the US would make at the same job would indicate. We need politicians that look out for US interests first. We need our "representatives" to put back the tariff walls that kept our domestic industries alive and made us the export capital of the world. If China and India want to have a trade war after than, then bring it. We can do a hell of a lot with that trillion dollars we were hemorrhaging to their economies. If that means we can't buy cheap TV's for a few months while our industrial base builds back up here, well, I think we'll survive.
Submitted by Dave at: August 10, 2013
With the exception of global taxation, it seems to me that Chrystia Freeland's strategies, while of value, are not addressing the source of the problem. The movement for a living wage would seem to be useful. Also useful would be a tax or other restriction on goods produced under extractive labor practices. Finally changes in corporate governance rules to make sure that boards of directors are independent and contain other stakeholders and more would help. Liberals are not nearly bold enough and not angry enough!

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