Andreas Whittam Smith: New aristocrats well served by globalisation

This group sees itself as different from the rest of society, preaching restraint to its fellow citizens

In his book, Le monde comme je le vois (The world as I see it), M. Jospin says the new aristocracy is composed of bosses of large companies, financiers, senior management, high civil servants and top media people. This group sees itself as different from the rest of society, preaching restraint to its fellow citizens while rejecting any limit on its own activities. And unlike the old bourgeoisie which was patriotic, sometimes nationalist and, in France at least, protectionist, the new caste, as M. Jospin puts it, has international rather than national ambitions. It embraces globalisation precisely because that justifies its existence and its demands.

By coincidence, a few days after M. Jospin's book appeared, in the middle of October, the research department of Citigroup produced an analysis of the world economy that came to a broadly similar conclusion by a different route. Citigroup argues that there are three countries, the US, the UK and Canada, which it calls plutonomies, where economic growth is powered by and largely consumed by the wealthy few. France doesn't figure on this list for it has not experienced the same concentration of wealth.

In a plutonomy as described by Citigroup there is no such things as the average consumer. There are rich consumers, few in number but disproportionate in the gigantic slice of income and consumption they take. And there are the rest, the "non-rich", the multitudinous many, but only accounting for surprisingly small bites of the national pie. In the US, the top 1 million households account for 20 per cent of overall US income; this is only slightly less than the share of the income of the bottom 60m households put together.

In the UK, the income share of the top 5 per cent of households declined during the period 1954 to 1979 as the arrival of the welfare state financed by high taxation had its effects. But since then, their share of income has risen by 10 percentage points to 28 per cent. In France, on the other hand, the rich were very rich until the outbreak of the Second World War. Their share of income then fell sharply to a level that has hardly altered since.

Citigroup confines itself solely to income whereas, as we have seen, M. Jospin defines his "aristocracy" more widely. Citigroup refers to a "managerial aristocracy" which has commandeered a vast chunk of the rising profits of American business either through capital profits or paying itself a lot.

Not all M. Jospin's new aristocrats are very rich, though if you visited a senior French civil servant in his beautiful 17th-century apartment in Paris (owned by the state and let to him at a cheap rent) and travelled with him in his chauffeur-driven car to the 17th-century mansion a few streets away where his ministry is situated, you might think so. And while the aristocrats of the Ancien Regime lived very well, they often had enormous debts. The Duc de Saint-Simon, author of the famous memoirs describing the courts of Louis XIV and the Regency, had to come to an agreement with his creditors towards the end his life.

As far as the Citigroup's research department is concerned, the emergence of an aristocracy in all but name is purely a function of wealth, while in M. Jospin's thinking it is more to do with attitudes, though high income comes into it. In the former case, it is the sole fact of high spending power that make a tiny proportion of the population feel as though they live on a different planet from everyone else, whereas the latter's attitudes result from their high positions.

M. Jospin's new aristocrats urge other groups to make sacrifices in the name of international competition or economic stability, but they never consent to do so themselves and cannot even conceive that the question is relevant. They see themselves as motivated by economic rationality and efficiency. They methodically explain why wage earners must give up any excessive hopes. Production costs and state expenses must both be reduced.

M. Jospin writes that you can ask these champions of sacrifice what they are ready to give up themselves , whether it be their profits, their high salaries, their leisure time, their spectacular pensions or their generous compensation for loss of job. And the answer that comes back is that they cannot be touched because that would discourage initiative, paralyse creative energy, provoke disinvestment, shift production overseas and set off a flight of talent.

Am I right in thinking that Britain doesn't fit into either camp? Certainly we have a concentration of income in the hands of a small proportion of the population but we remain a far less wealthy country than the US. Similarly, like France we have a governing class, but it is an establishment that is constantly changing. Blair's cronies will soon lose their membership rights. We don't have the French notion of an elite which has shared the same higher education and networked ever since.

In their different ways, the Citigroup experts and M. Jospin are right about their own countries but I believe it would be wrong to extend their analysis to us.