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For the plutocrats, globalization may be reducing both this political incentive and this economic one to support inclusion. That’s because in today’s interconnected economy, Western democracies can import economic demand from the emerging markets, and the emerging markets can import democracy from the West. To put it another way, Western businesses are less dependent on a prosperous domestic middle class because they can now sell to the rising middle class of the emerging markets. Henry Ford needed a domestic middle class with buying power; increasingly, his successors can look to the emerging markets to supply those mass consumers.

Meanwhile, the oligarchs who prosper in extractive emerging market regimes don’t need to worry too much that repression at home is cutting them off from the innovation that democracies are better at nurturing. Communist Chinese princelings can import technology from the West; Russian oligarchs can invest directly in Silicon Valley’s hottest start-ups. And all of them can buy second homes in Manhattan and Kensington and villas on the Côte d’Azur and send their children to British boarding schools and American Ivy League universities.

There’s another way that globalization and its twin economic force, the technology revolution, are reducing the pressure on the plutocrats to make their societies more inclusive, or to keep them that way. That is what you might call the cultural Serrata, which is already separating the plutocrats from everyone else—even without formal political divisions like the Golden Book. As the economic gap between the plutocrats and everyone else becomes a chasm, they are coming to inhabit their own global gated community. Indeed, the gap is becoming so wide and so apparent that even the right, traditionally allergic to discussions of class, has started to take notice. Conservative sociologist Charles Murray’s big new idea is that the 1 percent and the 99 percent live in different cultures; the big issue in the 2012 Republican primary was whether Mitt Romney’s hundreds of millions put him at too far a remove from ordinary voters.

This cultural Serrata matters because it increases the political myopia of the plutocrats. Add to that ordinary greed and a society that has turned its capitalists into popular heroes and you have an economic elite primed to repeat the mistake of the Venetian merchants—to drink its own Kool-Aid (or maybe prosecco is the better metaphor) and to conflate its own self-interest with the interests of society as a whole. Low taxes, light-touch regulation, weak unions, and unlimited campaign donations are certainly in the best interests of the plutocrats, but that doesn’t mean they are the right way to maintain the economic system that created today’s super-elite.

Elites don’t sabotage the system that created them on purpose. But even smart, farsighted plutocrats can be betrayed by their own short-term self-interest into undermining the foundations of their own society’s prosperity. In 1343, La Serenissima petitioned the pope for permission to trade with the Muslim world. Here is how the city made its case: “Since, by the Grace of God, our city has grown and increased by the labors of merchants creating traffic and profits for us in diverse parts of the world by land and sea and this is our life and that of our sons, because we cannot live otherwise and know not how except by trade, therefore we must be vigilant in all our thoughts and endeavors, as our predecessors were, to make provision in every way lest so much wealth and treasure should disappear.”

Intel founder Andy Grove, with his faith in the virtue of paranoia, could not have made a better argument for the importance of trade and traders to the city’s continued prosperity. But it was this same elite who, a few decades earlier, had begun the process of economic exclusion that would eventually transform La Serenissima from a trading power to a museum. Gus Levy, who was the senior partner of Goldman Sachs between 1969 and 1976, a decade we are coming to look back on as that firm’s golden era, said his philosophy was one of “long-term greed.” If the plutocrats are smart, that’s the philosophy they’ll adopt today. But, as even Levy’s successors at mighty Goldman Sachs are learning, that can be harder than it sounds.


All the errors and oversights in this book are, of course, my own. But its virtues build on the work I’ve done over the past two decades as a journalist and the people who taught me while I did it. In particular, this book draws on my work for the Financial Times covering Russia, Ukraine, and Eastern Europe, and on Sale of the Century, my book about the rise of the oligarchs. Work I did for the Financial Times in the United States, particularly a profile of George Soros and an essay on Canadian banks, also inform this book. My Atlantic cover story on the global super-elite was my first public articulation of the ideas in this book; research I did for my Atlantic essay on Skolkovo, the Russian Silicon Valley, also proved useful. My weekly column for Reuters and the International Herald Tribune was a valuable space for working out my thinking, as were Reuters video interviews and the Reuters magazine.

I am grateful to many colleagues, editors, and sparring partners. Chief among them: Martin Wolf, Alison Wolf, John Lloyd, David Hoffman, John Gapper, Felix Salmon, Jim Impoco, Jim Ledbetter, Mike Williams, Stuart Karle, Alison Smale, Anatole Kaletsky, David Rohde, David Wighton, Gary Silverman, Francesco Guerrera, John Thornhill, Alan Beattie, Krishna Guha, Robert Thomson, Annalena McAfee, Andrew Gowers, Richard Lambert, Daniel Franklin, Sebastian Mallaby, Fareed Zakaria, David Frum, Arianna Huffington, Eliot Spitzer, Steve Brill, Anya Schiffrin, Steve Clemons, Susan Glasser, and Ali Velshi. Dennis Gartman and Joshua Brown, two business thinkers whose work I admire, generously allowed me to quote their writing at length. Steve Adler, my boss, has been uniquely and crucially supportive, providing vital intellectual guidance and emotional encouragement. I owe a special debt to Don Peck, who edited my 2011 Atlantic essay and read and improved a first draft of this book; James Bennett, who commissioned the piece; and to David Bradley.

This book draws on a vast body of academic research. Some scholars have become important sounding boards and advisers, too. They include Larry Summers, Daron Acemoglu, Emmanuel Saez, Jacob Hacker, Alan Krueger, Branko Milanovic, Daniel Kaufmann, Ian Bremmer, Peter Lindert, Michael Spence, Joe Stiglitz, Theda Skocpol, Anders Aslund, Roman Frydman, Rob Johnson, Sergei Guriev, Michael McFaul, Ernesto Zedillo, John Van Reenen, Raghuram Rajan, Shamus Khan, and the late Yegor Gaidar.

I sometimes describe my own political philosophy as being simply “Canadian,” and my Maple Leaf community has been central to my thinking. Important friends and teachers are Roger Martin, Geoff Beattie, Mark Carney, Diana Carney, Paul Martin, Dominic Barton, Mark Wiseman, David Thomson, John Stackhouse, Anne McLellan, Annalise Acorn, Don Tapscott, and Morris Rosenberg.

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.



2011 - 2018