Allen Lane, £20 Order at a discount from the Independent Online Shop

Plutocrats, By Chrystia Freeland

The very rich are still different but, in a global economy, their power shows a fresh face

Let me tell you about the very rich. They are different from you and me." So says the narrator at the start of F Scott Fitzgerald's short story "The Rich Boy". He explains that people who are born rich believe "deep in their hearts that they are better than we are because we had to discover the compensations and refuges of life for ourselves."

We remain as fascinated by huge wealth now as Fitzgerald's narrator did 90 years ago, but the world's very rich now are quite different to those American families Fitzgerald was writing about in the 1920s, in two main ways. First, most billionaires even in the US have made their own money, and in the emerging world virtually all have done so. Forbes magazine classifies 840 of the 1,226 people it ranked this year as billionaires as self-made. Second, though the stock of billionaires is still disproportionately weighted towards the US, the flow of new wealth is shifting to the emerging world. Are the new rich going to be different from the old rich? This is the meat of Chrystia Freeland's Plutocrats. But with her subtitle she gives the story a twist: "The Rise of the New Global Super-Rich and the Fall of Everyone Else".

The world is now experiencing a boom in personal wealth akin to that of the last years of the 19th century. We are, as Freeland puts it, in the second gilded age. The driver of this wealth, as then, has been a combination of technical advance and globalisation. The former is more evident in the US, for the most spectacular new fortunes are being made in the hi-tech area. Globalisation has been driving the fortunes in the emerging world, as the BRICs, Brazil, Russia, India and China, overhaul the G7 economies of the old developed world. This burst of wealth is coming from earned income, not accumulated capital. Freeland's rich are "economic meritocrats, preoccupied not only with consuming wealth but also with creating it".

But why is this happening, and why are people left behind? Part of the explanation is the emergence of the global superstar. That is evident in the entertainment industries, including sport, but also other professions. In almost all walks of life the very top have been getting disproportionate rewards compared with the competent middle-rankers.

If the market were a true one, such divergence might be tolerable. But there are, as Freeland argues, at least some areas where the market is rigged. One such area has been finance. We know what happened there. But the market has been rigged in China, India, Russia and elsewhere in the emerging world, where many new fortunes, not all, have been the result of someone being at the right place at the right time – and knowing the right people.

One aspect of the way the very rich are able to twist things to their advantage even in sophisticated democracies is relevant right now: how the American rich are shaping US tax policy. Freeland recounts pithy conversations among the private equity fraternity on vacation in Martha's Vineyard. It is not just a question of winner-take-all economics but, it may be, politics too.

Freeland seeks to divide her plutocrats into the rent-seekers and the value-creators, the "bad" and "good" ways of generating wealth. But she acknowledges they are closer than one might think and efforts to separate them might have perverse results. Still, the gap between the 1 per cent and 99 per cent is a profound preoccupation in the West, and rightly so. It would be good if she had explored more the reasons why the US the middle class have barely increased living standards for 30 years, and particularly why globalisation seems to increase differentials within countries but decrease them between countries. For it is not quite "the fall of everyone else" - as the hundreds of millions of the new middle-class in China, India and elsewhere bear testimony.

Suggested Topics
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment
Pointless host Alexander Armstrong will voice Danger Mouse on CBBC

TV
Arts and Entertainment
Pharrell dismissed the controversy surrounding

music
Arts and Entertainment
Jack Huston is the new Ben-Hur

film
Arts and Entertainment

TV
Arts and Entertainment
Cara Delevingne modelling

film
Arts and Entertainment
Emma Thompson and Bryn Terfel are bringing Sweeney Todd: The Demon Barber of Fleet Street to the London Coliseum

theatre
Arts and Entertainment
Sheridan Smith as Cilla Black

TV
Arts and Entertainment
Robin Thicke's video for 'Blurred Lines' has been criticised for condoning rape

Robin Thicke admits he didn't write 'Blurred Lines'

music
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'

film
Arts and Entertainment
Matt Damon as Jason Bourne in The Bourne Ultimatum (2007)

film
Arts and Entertainment
Sheridan Smith as Cilla Black

Review: Cilla, ITV TV
Arts and Entertainment

TV
Arts and Entertainment
Tom Hardy stars with Cillian Murphy in Peaky Blinders II

TV
Arts and Entertainment

art
Arts and Entertainment
Keira Knightley and Benedict Cumberbatch star in the Alan Turing biopic The Imitation Game

film
Arts and Entertainment
Kanye West is on his 'Yeezus' tour at the moment

Music
Arts and Entertainment
Rob James-Collier, who plays under-butler Thomas Barrow, admitted to suffering sleepless nights over the Series 5 script

TV
Arts and Entertainment
Bradley Cooper and Jennifer Lawrence star in new film 'Serena'

film
Arts and Entertainment
Some might argue that a fleeting moment in the actor’s scintillating, silver-tongued company is worth every penny.

TV
Arts and Entertainment
Colin Firth stars as master magician Stanley Crawford in Woody Allen's 'Magic in the Moonlight'

film
Have you tried new the Independent Digital Edition apps?

ES Rentals

    Independent Dating
    and  

    By clicking 'Search' you
    are agreeing to our
    Terms of Use.

    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    Exclusive extract from Janis Winehouse's poignant new memoir
    Is this the role to win Cumberbatch an Oscar?

    Is this the role to win Cumberbatch an Oscar?

    The Imitation Game, film review
    England and Roy Hodgson take a joint step towards redemption in Basel

    England and Hodgson take a joint step towards redemption

    Welbeck double puts England on the road to Euro 2016
    Relatives fight over Vivian Maier’s rare photos

    Relatives fight over Vivian Maier’s rare photos

    Pictures removed from public view as courts decide ownership
    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    Donatella Versace at New York Fashion Week