Piketty Is Alive & Well – in London:
Why the Billionaires Worry Me
By Shlomo Maital
Chances are, you’ve never heard of a man named Alisher Usmanov. He is an Uzbekistan-born Russian billionaire who lives in London. His fortune is estimated at $18.6 b. He built it through metal and mining operations and investments. He owns, among other things, two football clubs, Arsenal and Dynamo Moscow. Usmanov is Muslim, and is married to Irina, who is Jewish. And despite his wealth, he is only London’s second richest billionaire (the richest are the Hinduja brothers, Sri and Gopa, who have interests in oil, banking, cars, property and media).
Why London? Because London is home to more sterling (pound) billionaires than any other city in the world – 72 of them, in fact, ahead of Moscow, which has ‘only’ 48. Why? Because British tax laws are highly favorable to the super-rich, and because London, in many ways the world’s financial capital (huge forex trading volumes, for instance), attracts money like a magnet. Prime Minister Cameron fails to loudly, clearly condemn Putin’s Crimea grab? Two guesses why – Russian billionaires with piles of cash in London.
Thomas Piketty’s book (see my recent blog) has drawn attention to the enormous and growing gap between rich and poor. London, and Britain, are an extreme case. According to the London think-tank NIESR Britain’s per capita GDP is still well below its 2008 peak and won’t return to it before 2017. Yet Britain’s 104 sterling billionaires now have a total wealth of ₤ 301 billion (US $500 billion); last year there were only 88 British billionaires, and their combined wealth was ₤55 b. less. The billionaires grow richer; the poor get poorer. Piketty explained why. Billionaires double their money every decade. The poor fall behind every decade.
A British food bank network reports that nearly a million people approached it for emergency food aid in the year ending in March, more than double last year’s tally.
Why don’t the poor (whom, as the saying, God loves very much, because he made so many of them) rise up and take back their country politically, democratically, from the billionaires?
Here is why. A new study by scholars Martin Gilens (Princeton) and Benjamin Page (Northwestern) shows: *
“…. rich people and organizations representing business interests have a powerful grip on U.S. government policy. After examining differences in public opinion across income groups on a wide variety of issues [1,779 cases, from 1982 through 2001] , the political scientists Gilens and Page found that the preferences of rich people had a much bigger impact on subsequent policy decisions than the views of middle-income and poor Americans. Indeed, the opinions of lower-income groups, and the interest groups that represent them, appear to have little or no independent impact on policy.”
LITTLE OR NO INDEPENDENT IMPACT ON POLICY! In America. And doubtless, in Britain, too, and anywhere that billionaires park their yachts.
The rich are growing richer. And they are using their wealth to tilt policies in their favor, including tax breaks.
That is why the billionaires worry me. Because they are taking control of our democratic system. Perhaps it is too late – perhaps we no longer have true democracy anywhere.
Never has Edmund Burke’s dictum, “for evil to triumph, it is enough for good people to do nothing” been more poignant. We ordinary people have to take action.
Readers — ideas! Action! This is intolerable.
* See John Cassidy’s excellent New Yorker post, “Is America an Oligarchy?”, April 18, 2014