Our Worthy Overlords

If there must be rich folks, what would you want them to be like? You might want:

• They mostly work, instead of living lives of leisure.

• They or their parents are mostly self made, vs. coming from long rich families. You probably sympathize more with parents wanting to help their kids than their great-great-grandkids.

• They compete fiercely for positions in orgs that themselves compete strongly globally, assuring you their wealth isn’t from local insider clubs.

• They don’t promote national conflicts or wars, but instead look to what’s good for the world.

• They give most of their wealth away, to especially innovative and socially valuable charities.

In the January Atlantic, Chrystia Freeland says that that is exactly the sort of elites we now have! Yet Freeland seems more inclined to scold than to celebrate:

Today’s super-rich are … more hardworking and meritocratic, but less connected to the nations that granted them opportunity—and the countrymen they are leaving ever further behind. … [A rich guy] argued that the hollowing-out of the American middle class didn’t really matter. … “If the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade.” … [Another said,] “It sounds harsh, but maybe people in the middle class need to decide to take a pay cut.” … [Regarding] the financial crisis, … the real cuplrit, he explained, was his feckless cousin, who owned three cars and a home he could not afford. …

Someone will have to pay for the improved public education and social safety net the American middle class will need in order to navigate the wrenching transformations of the global economy. (That’s not to mention the small matter of the budget deficit.) Inevitably, a lot of that money will have to come from the wealthy. … If the plutocrats’ opposition to increases in their taxes and tighter regulation of their economic activities is understandable, it is also a mistake. The real threat facing the super-elite, at home and abroad, isn’t modestly higher taxes, but rather the possibility that inchoate public rage could cohere into a more concrete populist agenda. … In the long run, super-elites have two ways to survive: by suppressing dissent or by sharing their wealth. … Let us hope the plutocrats aren’t already too isolated to recognize this.

It doesn’t seem to matter to Freeland how deservingly the rich obtain or spend their wealth; they still must be taxed to help average Americans, even if that slows the lifting of Chinese and Indians out of poverty. It isn’t clear why she recommends the rich eagerly submit to such taxation; she suggests taxation will happen whether they like it or not. Why fear “populism” beyond its taxation? The point seems more to scold the rich, in order to reassure the rest of us that we are justified in taxing them.

How many elites are we talking about? The top 1% of households worldwide, ~37 million of them, are each at least half-millionaires, and hold ~40% of world wealth. “Thirty millionaire” households number ~100,000 (0.03% of world), and ~800 billionaires hold ~1% of world wealth (2.4 of 195T$). I’d guess Freeland’s cutoff for “elite” is somewhere in this 30M$ to 1B$ range.

Me, I celebrate these new worthier elites. We aren’t obviously justified in taking their wealth, however convenient that might be, and they might manage to avoid such takings via international competition to attract them. The US seems a bit too arrogantly unaware that we compete on this and many other margins.

If you resent this level of concentration, by new elites more confident and justified in their sense of superiority, you may really hate the new world of emulations, which I guess will arrive within roughly a century or so. After all, you may take some comfort from the fact that our elites’ fractional genetic influence on future generations is vastly smaller than their wealth faction. I doubt the top 1% in wealth has more than 2% of the grandkids, and it may be less than 1%.

But in the em transition, profit-driven scanning and copying may result in many trillions of ems who are mostly copies of the thosand most capable and adaptable humans. Members of our very capable and productive social elites should be prime candidates for profit-driven consideration, and they may in addition pay out of their own deep pockets. The vast majority (99+%) of our progeny may descend from a thousand or so (<0.0002%) of the very elite humans living at the time the em transition.

Of course if the vast majority of these ems are living near susistence level, you can’t really envy their individual wealth. But you might envy the overall wealth and influence of the total clan of descendants of each initial human. Just remember that you are descended genetically from distant ancestors who also had a quite disproportionate influence on future generations. In order for innovations to accumulate, the long run influence of whatever embodies innovations must be highly inequitable. And in the em revolution, where brains hold most innovations, a lot of history will be crammed in a rather short clock time.

More quotes from Freeland:

The rich different from you and me. … today’s super-rich are also different from yesterday’s: more hardworking and meritocratic, but less connected to the nations that granted them opportunity—and the countrymen they are leaving ever further behind. …  Our light-speed, globally connected economy has led to the rise of a new super-elite that consists, to a notable degree, of first- and second-generation wealth. Its members are hardworking, highly educated, jet-setting meritocrats who feel they are the deserving winners of a tough, worldwide economic competition—and many of them, as a result, have an ambivalent attitude toward those of us who didn’t succeed so spectacularly. … they are becoming a transglobal community of peers who have more in common with one another than with their countrymen back home. … The rise of the new plutocracy is inextricably connected to two phenomena: the revolution in information technology and the liberalization of global trade. … As companies become bigger, the global environment more competitive, and the rate of disruptive technological innovation ever faster, the value to shareholders of attracting the best possible CEO increases correspondingly.  …

“Fat cats who owe it to their grandfathers are not getting all of the gains. … A lot of it is going to innovators this time around.” … Few of today’s plutocrats were born into the sort of abject poverty that can close off opportunity altogether— a strong early education is pretty much a precondition—but the bulk of their wealth is generally the fruit of hustle and intelligence …  The real community life of the 21st-century plutocracy occurs on the international conference circuit. …  in this age of elites who delight in such phrases as outside the box and killer app, arguably the most coveted status symbol isn’t a yacht, a racehorse, or a knighthood; it’s a philanthropic foundation—and, more than that, one actively managed in ways that show its sponsor has big ideas for reshaping the world.

The super-wealthy have long recognized that philanthropy, in addition to its moral rewards, can also serve as a pathway to social acceptance and even immortality: Andrew “The Man Who Dies Rich Dies Disgraced” Carnegie transformed himself from robber baron to secular saint with his hospitals, concert halls, libraries, and university. … A measure of the importance of public engagement for today’s super-rich is the zeal with which even emerging-market plutocrats are developing their own foundations and think tanks. … America’s business elite is something of a latecomer to this transnational community. … There is a growing sense that American businesses that don’t internationalize aggressively risk being left behind.  … “If the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade.” … “It sounds harsh, but maybe people in the middle class need to decide to take a pay cut.” … [Regarding] the financial crisis … The real cuplrit, he explained, was his feckless cousin, who owned three cars and a home he could not afford. …

There is also the simple fact that someone will have to pay for the improved public education and social safety net the American middle class will need in order to navigate the wrenching transformations of the global economy. (That’s not to mention the small matter of the budget deficit.) Inevitably, a lot of that money will have to come from the wealthy—after all, as the bank robbers say, that’s where the money is. … Many of the plutocracy’s rationalizations have more than a bit of truth to them: as a class, they are generally more hardworking and meritocratic than their forebears; their philanthropic efforts are innovative and important; and the recent losses of the American middle class have in many cases entailed gains for the rest of the world. … If the plutocrats’ opposition to increases in their taxes and tighter regulation of their economic activities is understandable, it is also a mistake. The real threat facing the super-elite, at home and abroad, isn’t modestly higher taxes, but rather the possibility that inchoate public rage could cohere into a more concrete populist agenda. … In the long run, super-elites have two ways to survive: by suppressing dissent or by sharing their wealth. … Let us hope the plutocrats aren’t already too isolated to recognize this.