Problems of the Super-Rich
A study just released by UBS, a major global financial services company, has revealed that, during 2016, the total wealth of the world’s billionaires rose by 17 percent―from $5.1 trillion to $6.0 trillion. Furthermore, the number of billionaires grew by 10 percent to 1,542, with more than a third of them located in the United States. As of late October 2017, the five wealthiest Americans were Jeff Bezos ($93.8 billion), Bill Gates ($88.7 billion), Warren Buffet ($81.0 billion), Mark Zuckerberg ($75.4 billion), and Larry Ellison ($56.0 billion).
There is a very substantial gap between the circumstances of what Senator Bernie Sanders calls “the billionaire class” and average Americans, including the nearly 28 million Americans working for companies these billionaires own or partly own. The five members of the Walton family who are heirs to the Walmart fortune now have a collective net worth of $140 billion. Recently, in fact, their wealth jumped $5 billion in one day. Walmart workers, though, are unlikely to ever amass any wealth―indeed, many find it necessary to apply for government food stamps to feed themselves and their families―for their wages are pathetic. Walmart sales associates earn an average of $9.41 an hour, while Walmart cashiers average $9.36 an hour.
Given these wealth disparities in what has been called “a new Gilded Age,” you might think that government action would be taken to redress the balance. But you would be wrong. Despite rising economic inequality in the United States, Congress has kept the minimum wage stuck at $7.25 an hour since 2009. If anyone thinks this is a living wage, he or she should try living on it some time. Meanwhile, as Senator Sanders pointed out, the Republican tax plan moving through Congress provides $1.9 trillion in tax breaks for the richest Americans and the largest corporations. About 80 percent of the tax breaks would go to the top 1 percent, with 40 percent going to the top 1/10 of 1 percent.
But the super rich do have problems.
Key among them is how to spend the enormous amounts of money that they are amassing. Many of their new purchases include very expensive art and, particularly, sports teams. Indeed, more than 140 of the top sports clubs around the world have been gobbled up by just 109 billionaires, of whom 60 are from the United States. Billionaires now own two-thirds of NBA and NFL teams and half of all Major League baseball teams. But there’s plenty of wealth left over, and so the super rich spend it on driving $4 million Lamborghini Venenos, acquiring megamansions for their horses, flying luxurious underwater planes, taking $80,000 “safaris” in private jets, purchasing gold toothpicks ($600 each), creating megaclosets the size of homes, having champagne delivered to them by parachute, building new megamansions and leaving them vacant for years, residing in $15,000 a night penthouse hotel suites, installing luxury showers for their dogs, covering their staircases in gold, and building luxury survival bunkers. Commenting on his expenditure of at least $600 million to create an exact replica of the Titanic, one billionaire remarked: “I’ve got enough to pay for it, so that’s all that really matters.”
Of course, there’s also the issue that has plagued the upper classes for centuries: how to deal with “the Servant Problem.” For the most part, the very wealthy do not want to shop for and cook their own food, serve their meals, wash their dishes, care for their children, clean their homes, and engage in the many other tasks that consume large portions of the lives of ordinary people. Therefore, the very wealthy rely heavily on those other people to do these things for them. But they are frequently dissatisfied with the service they receive and, as a result, spend a good deal of time among themselves complaining about “the help” and looking for better, more dutiful workers. Not surprisingly, the new super rich are now scrambling to acquire well-trained, impeccably-groomed, and properly-behaved servants, even at a substantial cost.
Finally, the super rich face the problem of how long people are going to tolerate a situation in which just eight men possess the same wealth as half the world’s population: 3.6 billion people. “Wealth concentration is as high as in 1905,” warned the lead author of the UBS report, and “this is something billionaires are concerned about.” The “question is . . . at what point will society intervene and strike back?” This is a perennial problem for economic elites and, to head off popular resistance or revolt, they have, at various times, resorted to government repression or to anti-Semitic, racist, and xenophobic appeals to divert popular discontent. Yes, they could also give way gracefully to public pressure and accept a redistribution of wealth. But there is no evidence that this is a popular position among the “billionaire class.”
In any case, the problems of the super rich are rather unique, and do not appear to be those of most other people. In the United States, at least, there seems to be far more widespread concern about unemployment and underemployment, stagnant wages, climate change, and the enormous cost of healthcare and higher education than there is about acquiring gold toothpicks. Furthermore, like most Americans, the vast majority of the world’s people are not going to have their problems addressed as long as the world’s riches remain concentrated in the hands of the wealthy few, whose priorities determine public policy.
[Lawrence Wittner is Professor of History emeritus at SUNY/Albany and the author of Confronting the Bomb (Stanford University Press).]
Thanks to the author for sending this to Portside.
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