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.
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.