Plutocracy (from Ancient Greek ploutos, meaning “wealth”, andkratos, meaning “power, rule”) is rule by the wealthy, or power provided by wealth. The combination of both plutocracy and oligarchy (a form of power structure in which power effectively rests with a small number of people) is called plutarchy. Source : Wikipedia
Economic growth that is powered and consumed by the wealthiest upper class of society. Plutonomy refers to a society where the majority of the wealth is controlled by an ever-shrinking minority; as such, the economic growth of that society becomes dependent on the fortunes of that same wealthy minority.
To follow up on the plutonomy I have been writing about. Link to old post.
I have observed an explosion in the number of headlines all alluding to the topic of class division, widening income gaps, and the middle class squeeze in the past weeks leading to this Sunday’s NY Times‘s (Singapore’s weekly adaptation) headlines below.
“In America, Land Grab by Russians.” where real estate in the US is propelled by money flowing in from Brazil, China, India and Russia (collectively BRICs) ; in a mad spending spree fleeing from their jurisdictions and running away from their regimes.
“Billionaire Roils Georgian Politics.” where one man’s wealth in Georgia amounts to a third of the country’s GDP.
Rest of the headlines below.
|11-Apr-12||BBC Business||Asia growth “fuelling inequality”|
|12-Apr-12||Huffington Post||Many working Americans aren’t earning enough to stay out of poverty huff.to/Im292T|
|12-Apr-12||Huffington Post||The number of working poor hit the highest level in two decades huff.to/Im292T|
|12-Apr-12||Huffington Post||Middle class misses out on recovery as poor, rich grab jobs huff.to/Iy9ZSu|
|6-Apr-12||Business Insider||ROBERT REICH: We Really Are Living In A Plutocracy read.bi/Hj0WZB|
|30-Mar-12||Business Insider||Chart : Very Few Countries Have Been Able to Escape The Middle Income Trap|
|23-Mar-12||Business Insider||Is Inflation Driving US Inequality|
|30-Mar-12||Fortune||Politicians have no cure for the middle class blues|
|23-Mar-12||Business Insider||Financial Repression Kicks The Can And Our Butt|
“From building 30-storey towers in just 14 days, to amassing a luxury fleet of sports cars or a private jet – China’s million millionaires and 600 billionaires are helping to change the country’s landscape.
And China’s mad rush to urbanisation is only helping these elites get richer and richer.” Source : http://www.aljazeera.com/programmes/101east/2012/04/20124315114483530.html?utm_content=automate&utm_campaign=Trial6&utm_source=NewSocialFlow&utm_term=plustweets&utm_medium=MasterAccount
|14-Apr-12||MarketWatch by Bloomberg||A widening inequality gap, high unemployment and a backlash against bankers: 1930s or today? on.mktw.net/HRTv9E|
This article bests sums up the heaviness I feel in my heart.
“After spending a few months dodging Bentleys and paying five pounds a pint in the tony confines of Kensington and Chelsea, it’s easy to feel buffered from England’s dark underbelly.”
Yes, as we consume our fancy lattes on a Sunday morning, browsing the news from our spanking new Macbook, to the chirping of birds on our gardens, it is easy to miss out thinking of coffee harvesters toiling in the fields of Brazil and thousands of Chinese workers labeling the keyboards of the Macbook. All of whom are working for their higher overlords, the same overlords buying $88 million dollar penthouses in New York City.
Yes, we are the middle class.
Why does the Fed want this? Simple. Chairman Bernanke believes that by creating a bubble in speculative assets, people will “feel” wealthier and keep consuming – regardless of the fact that real incomes are stagnant and debt burdens are already intolerable, and despite the fact that there is extremely weak evidence for any such “wealth effect” in the historical record.
All I can say is that it is happening everywhere. The BRICs and everyone else is in a race to raise minimum wages that will allow folks to feel a little happier to buy little luxuries.
Indeed, there is a larger percentage of the population in India who owns a mobile phone than in possession of a proper toilet, according to the UN in 2010.
Why Nations Fail ?
Thomas L. Friedman has this to say in his succinct take on the book which is co-authored by M.I.T. economist Daron Acemoglu and Harvard political scientist James A. Robinson, “Nations thrive when they develop “inclusive” political and economic institutions, and they fail when those institutions become “extractive” and concentrate power and opportunity in the hands of only a few.”
This screams plutocracy ! Screams at China ! Screams at Russia ! Screams at India ! and the list goes on.
I am a political agnostic nor am I chasing after an altruistic cause here. I am part of the growing apatheism who have no ideals on the state governments and my understanding is increasingly blurred these days.
We have seen the outcome of socialism on the economies of countries like Greece, Spain and Portugal. Democracy has not worked out particularly well for the US, Japan and UK too in managing their finances.
Instead, the plutocracies of China and the rest of the BRICs are making them the new world order. This is very much like the West during their respective industrial revolutions a 150 years ago.
Tipping Point Again
I pulled out my dusty copy of The Lexus and the Olive Tree by Thomas Friedman, written over 10 years ago, as I prepare to head down to the bookstore for my copy of Why Nations Fail.
A sense of irony hits me and a realization. All the crises of the past 20 years have cumulated to this one that we are living through.
Arab Spring, Occupy Everywhere Movements, the London Riots, the Facebook listing and Apple shares ? They are symbols of a movement.
Socialism as described by a quote from the MarketWatch article above has degenerated into “hitting the wealthy than helping the poor.”
And like a Trinidad migrant to the U.K. warned in the article, “Something very nasty is bound to happen” in the hands of the frustrated, powerless masses. His opinion dimly viewed by a Londoner as “The people up there are just too lazy and stupid to take care of themselves.”
Facebook is virtual asset, the power of networking. Apple is the access device. How did they come to be valued so much ? Because the masses are developing a Voice.
Ironically, it is the voices in the Plutocracies that are yet to be heard. The Africans, Chinese, Indians, Russians and Brazilians, not to mention the rest.
The Singapore Model
Happy Utopia. 3rd wealthiest nation in the world in terms of household income. Nothing much for the population to complain about except for the occasional train breakdown.
The price tag of happiness is the cheap labour imports that make life cheap and easy.
‘If there are no wars or oil crises, this golden period can stretch out over many years,’ Lee Kuan Yew said. http://app.mfa.gov.sg/pr/read_content.asp?View,7668,
I should be one of the last people on Earth blurting out about plutonomies or pluto-anything. Pluto is not even a planet anymore. Life is good and comfortable for me.
For that reason that it is too good to be true, I believe we are living in changing times. Humanity is on the cusp of a new era.
When we have central banks playing God, and deciding the fate of the masses by disrupting our system of valuations; funneling liquidity into specific channels and working to fight the extinction of organizations and countries that are too big to fail.
Central bankers and global billionaires are not God. They are individual operatives working towards their own visions.
All signs are in place for a potential tipping point in the future. Even golden eras come to an end.
We bear witness but we will also share in bearing the global pain.
So much for a tranquil Sunday.