Monday, January 28, 2013

PLUTOCRATS BY CHRYSTIA FREELAND

I was drawn to this book partly by the topic, but mainly by the author.  I had seen Chrystia on various American political shows and recently on TVO.  She made more sense (maybe because her opinions were more agreeable to me) than other more established talkers.

"Plutocrats" was more thought provoking (meaning I had to adjust my thinking) than anticipated.  As we all know the very rich are often thought of as not nice people.  However they do have their own justification and many of them are actually very helpful.

In fact many of them really did earn their advantages in life by contributing to the benefit of the rest of us 99%.  The really big winners are not so much inheritors of wealth as achievers.  In  modern global economy there are more opportunities to generate profit.  Some of them unfortunately are the result of transferring jobs to jurisdictions with lower wages and fewer cumbersome regulations or to robotics.

Most of us are pleased with how Steve Jobs and Bill Gates have made our lives more enjoyable, but with the productivity gains they have both brought about jobs have shifted.

Finance used to be little regarded, but is now the favored route of many to riches.  This is probably where the average person has the most resentment.  Most would acknowledge that financing is important and that there is a risk involved.  Part of the resentment might be the average person just can't see how playing with numbers justifies multi million dollar incomes.  Another big concern is the feeling that financiers have more political clout than the rest of us and have tilted the rules in their favour.

One anecdote near the end is of a ground breaking minority person who heads an Ivy League school and has been noted for boosting minority opportunities is quoted as not wanting to change alumni privileges as she has a grand daughter she wanted to help.  The point is that once someone hits a higher status they want to lock it in for perpetuity.

She ends with a story on the Venetian Empire. It started with a legal mechanism to encourage daring entrepreneurs out on long distance trade trips that allowed Venice to be an international dominant force.  Everyone did benefit from the wealth brought in by successful risk takers.  We all know of Marco Polo from this era. By 1500 Venice lost most of its power.  The reason was that the oligarchs who were mostly self made men wanted to entrench themselves and close down opportunities for newcomers.  I think this allegory speaks to modern times.  It is not so much that we need to shut down great wealth, but that we need to keep open opportunities.  That means equality, education, a safety net and a long term view of what is good for humankind.

A personal note:  While I was preparing this blog my page views crossed the 10,000 mark.  Google has given me a global reach.  I am not sure if many readers gained any new information or felt my viewpoints were worth the effort.  It is astonishing where you all come from--Canada, United States, Ukraine, Russia, Germany, China, India, Israel, United Kingdom, France, Australia, Brazil, Saudi Arabia, Ethiopia,  and even more.

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