Article on the "global elite"

[pinkytoe]

I found the following Atlantic article about the global elite fascinating. It is long but explains in a sense how and why the uber-wealthy of the world are not interested in helping the countries from which they came since they can find all the new business they need in other expanding economies. It does not bode well for any improvement of middle class life in America, ie jobs:
http://www.theatlantic.com/magazine/archive/2011/01/the-rise-of-the-new-global-elite/8343/7/

[morris_rl]

I found the following Atlantic article about the global elite fascinating. It is long but explains in a sense how and why the uber-wealthy of the world are not interested in helping the countries from which they came since they can find all the new business they need in other expanding economies. It does not bode well for any improvement of middle class life in America, ie jobs:
http://www.theatlantic.com/magazine/archive/2011/01/the-rise-of-the-new-global-elite/8343/7/

The article you cite has a flawed thesis, in that it treats the financially wealthy as a monolithic group of selfish people who care not a whit about others. The rich are not a monolithic group, nor are the majority of them selfish. Here is a minor counter example I came across by using the search phrase, "billionaire philanthropist":

http://www.forbes.com/2006/11/29/billionaire-charitable-donations-pf-phil_cz_dp_1129billionairephilanthrophy.html

Further, I suggest you read the research done over the past thirty years by Dr. Thomas Stanley, author of "The Millionaire Next Door" and other books about the rich. Dr. Stanley bases his conclusions upon extensive research; he states that most millionaires are generous.

Here are three postings on Dr. Stanley's website that support that thesis:

http://www.thomasjstanley.com/blog-articles/221/Tonys_Reflections_of_a_Millionaire_Next_Door


Later Tony became a caddy, as I did. His early impressions were similar to mine regarding the characters who can be found at golf clubs. I mentioned in Stop Acting Rich that the blue collar, self-made millionaires whom I caddied for at a public course were significantly better tippers than most of the aspirationals whom I caddied for at a private country club. But those who did tip tipped very well. According to Tony:

I look back now and realize that I learned more about business working there than all my time in business school. The self made men all tipped well and continued to encourage me while I was working my way through college. One member mentor, Mr. R, owned a large general contracting business and had bankrolled more than half of the club's construction. Because of the cold Connecticut winters, he had to double his work time during the summer months. He couldn't play golf on Saturdays with the rest of the members because he was working. Mr. R would come to the club Saturday afternoon for a beer on the patio. . . wearing his 'millionaire next door' uniform of work khakis and steel-toed boots. One day a new member's wife had designated herself the club's doyenne saw Mr. R drinking his beer and smoking a cigar on the patio. . . . . . . she scream[ed] at him. . . that he, as a mere workman had no right to sit on the patio to drink and smoke. Her final bombshell. . . 'who do you think you are; do you think you own this place?' Mr. R calmly answered back, 'Almost, lady, almost.' Naturally she ran screaming [to the manager] who proceeded to inform her that Mr. R actually owned about 75% of the club equity and if she had any more questions, she should talk directly to him.
<SNIP>

http://www.thomasjstanley.com/blog-articles/143/To_Be_Happy-Stop_Acting_Rich.html


Beyond health, family and job factors, why are some people more satisfied with life than others? In terms of statistical significance, the higher one's level of happiness the more likely he/she is to agree with the following statements :

1. I have more wealth than most people in my wealth/income group.

2. We are financially better off than our neighbors.

[B]3. I donated 5% or more of my income last year to charity.
<SNIP>

http://www.thomasjstanley.com/blog-articles/142/The_Millionaire_Down_Under.html


I have found that wealthy people who have a modest consumption life style tend to be generous in giving to noble causes. The following profile of John Adu (Australian Down Under) is yet another example of this.

I have been unable to escape the uncanny similarities between my own circumstances and the things described in your books. You can make your own judgment from the following: I am 62 years old; my wife is 54; our family's realized pre tax income from all sources (no inheritance) last year was $1.15 million; our net worth is $22.0 million (after deducting a recent $100,000 inheritance), and I regularly give around one tenth of my annual income to religious or charitable causes including support of overseas orphans and scholarships.

...

Among the high income population giving and building wealth are not substitutes. On the contrary they are complements statistically. Why? Because generous people get much more satisfaction from giving than from hyper consuming. Living well below their means enables them to contribute to noble causes while at the same time contributing to their investment portfolios.<SNIP>


Best,


Rodger Morris
"Brother Rail Gun of Quiet Reflection"

[loosechickens]

I read this article in its entirety this week while at Barnes and Noble. It doesn't sound as though you've actually read the article in question, Rodger......it is not talking about "the rich" in general, or in any sort of monolithic terms, and certainly not your ordinary millionaire, such as in The Millionaire Next Door. The article is zeroing in on a very specific slice of the global "immensely rich", a tiny group which the article explores in depth, including the ramifications of how their huge amount of capital moves, is invested, and the global playing field upon which their financial chess games are played, etc. Also, the fact that the countries of origin of these people not only do not separate them, but instead form a worldwide, very exclusive "community", of global, extremely wealthy and powerful citizens without national loyalties.

[Gregg]

Kind of a side note, but I'm curious what others think. In civilizations throughout history haven't there always been "super rich"? Civilizations ebb and flow, but humanity has always somehow made it through. It is worth noting that, as LC pointed out, the latest ruling class isn't necessarily tied to a single nationality, but they all have to go somewhere, don't they? So the loss of one nation will be the gain of another somewhere. I don't know much about tribal cultures, but it seems that may be the one human structure where wealth is less of an issue. Is anyone who believes the gulf in wealth from one "class" to the other is the root of {some} evil advocating a return to tribal structure in the developed world?

[loosechickens]

Agreed, Gregg. One point of the article was to bring home the fact that to global capital, four families in China or India, say, whose rising incomes allow the purchase of consumer goods may well provide more profit, so whether or not a middle class family in the U.S. has a job, or purchasing power, becomes less and less important.

It's more for what this going to do to countries like the U.S., when the necessity for a strong middle class in this country, able to buy stuff is no longer very important to the people providing jobs and manufacturing products. Something that has been happening, and the acceleration of which, continues.

It will sort itself out, but not before our standard of living in this country begins to seek a global level, sadly.

The people at the very top, who are making decisions of moving capital over the globe, no longer think in terms of nations, or national basing of profits. They think globally, the capital is dispersed globally wherever profits are to be made, and whether or not jobs disappear in the U.S. or whether more and more Americans lose middle class status is not really of much importance to them so long as somewhere in the world, some populations are gaining some wealth and can buy products.

The loss of one nation will be the gain of another, yes, and that is all they care about......so if we are the nation that loses and another gains, it's nothing to them, so long as profit continues.

It's always been "normal" for there to be class differences, and in most periods of history, not even much class mobility. But we have never experienced the truly global reach and global loyalties of the ruling class until very recently. And the fact that the "nation" as we have experienced it throughout history of nation states, is becoming more powerless in an economic sense, and the global viewpoint of the folks moving capital about in the world lacking loyalties to any particular country, etc., means some real root changes that most are not yet considering.

At least that was some of the understanding I got from that article, and others.

It's not necessarily a BAD thing, if you think globally, but probably not a great thing for the U.S. in particular.

[bae]

Why are "nations" still important these days?

[loosechickens]

That's a valid question, bae. I wish I had a deep enough understanding to really frame an answer. Perhaps they will become extinct, but probably not before a huge amount of military hardware is discharged in their defense of trying to maintain themselves. What do you think? This is probably a subject on which you're pretty knowledgable.

[kib]

Why are "nations" still important these days?I think the answer might start with a question: Important to whom? They aren't important to the elite of the article. They are important to the elected policy makers in terms of who their backing constituency will be, but less so as multinationals gain a headlock over our politicians. There is a certain citizen to whom 'patriotism' and therefore nations is important for purely emotional reasons, but I think the final answer to the question is this: Nations are important to the individual who is not independently wealthy. From that particular vantage point, "nation" is another term for "neighborhood". The wealth of my neighborhood, the functionality of my neihborhood, the availablity of goods, services and jobs in my neighborhood, and the decisionmaking of my neighborhood all impact me, the citizen of the neighborhood (or nation).

If the concept of nations were done away with entirely and we lived in a purely global community ... that would be interesting. Would we have a civil world, with a global set of rules of conduct, and much less need for any sort of military? Would we all (except for the ruling elites) live at the same level of wealth? If the world were Purely run by the ruling elite with no interfering level of national identity, would small business still exist?

[ApatheticNoMore]

Why are "nations" still important these days?

To provide corporations which they have specialized relationships with, with monopolized access to resources?

Heheheh. Well actually I need no convincing why community is important and it often makes sense to extend this to more than just the immediately local community. I also understand the need for laws which protect that which is shared *globally* like the oceans and so on. But the nation concept is pretty lame, I must say.

[loosechickens]

I was hoping that bae would come back and expand on his cryptic comment, because I think he's probably pretty informed in this area. I have the feeling that we've entered a new kind of thing with this, which will have unprecedented and unknown effects, and may well erode the very idea of "nations". Whether that will be a good or a bad thing, I just don't know.

We probably wouldn't have a problem with global government as long as we were the only superpower and the ones calling the shots, but somehow don't think that we'd take kindly to it as it would probably actually happen. Of course, "government" is just a handy word, because it would probably look more like a consortium of mega giant global corporations calling the shots, but who knows?

c'mon, bae....here's a chance for you to shine, and I know you have worthy thoughts on this stuff.

[bae]

I'm stuck on an iPad this weekend, not conducive to a thoughtful, extensive reply. More to come.

[loosechickens]

thanks, bae......we'll wait. ;-)

[bae]

Ah ha, an actual keyboard:

The short answer: I think most nation-states are an archaic relic of a violent, colonialist, imperialist past. I think and hope they are being destroyed from below, as increased localism/regionalism unites people who have shared cultures, trade networks, and ecosystems that do not necessarily coincide with lines on a map. I think and hope they are being destroyed from above by the forces of globalism - easy transport of capital, information, and goods, and reliance on supra-national organizations to regulate matters of global concern.

I think nation-states these days no longer serve the needs of the citizens within their artificial borders, and are going broke trying to do so, while supra-national organizations step in to fill the void. I also think many nation-states are of a size and scope that is not appropriate, or healthy, for most of us.

I think “the global elite” represent not the wealthy abandoning us, but rather the vanguard of a growing movement, empowered by newly developed technologies and processes of freedom, that will eventually allow all of us to realize our roles as world citizens, and participate in a peaceful global exchange of ideas, goods, services, and culture. I think nation-states are resisting this as much as they can, as they fade away.

I think corporate non-state actors present a great danger to us during this time of transition, during the dying throes of the old regimes. I think other non-state actors (Al Qaeda, for instance) also threaten us.

I think it’s an interesting time to be alive, and have great hope that we’ll muddle our way through this.

Here’s a (relatively) brief reading list.

Rosecrance, Richard. The Rise of the Virtual State: Wealth and Power in the Coming Century
Francis Fukuyama, The End of History and the Last Man
Francis Fukuyama, State-Building: Governance and World Order in the 21st Century
Robert Kaplan, The Coming Anarchy: Shattering the Dreams of the Post Cold War
Thomas L. Friedman, The Lexus and the Olive Tree
Kenneth Waltz, Man, the State, and War
Kenichi Ohmae, The End of the Nation State: The Rise of Regional Economies
Peter Singer, One World: The Ethics of Globalization
Martin van Creveld, The Rise and Decline of the State
Thomas Hammes, The Sling and the Stone: On War in the 21st Century
Jean-Marie Guéhenno, The End of the Nation-State
Vaclev Havel, Kosovo and the End of the Nation-State (speech)

[loosechickens]

WOW......thanks, bae. Not only for the thoughts, but the reading list, as all I've read on that list is The Lexus and the Olive Tree, and part of Peter Singer's One World: The Ethics of Globalization. I got that one from the library and timed out on it because someone else was waiting, so I couldn't renew it, and haven't yet gone in to reborrow it.

I'm surprised that my gut feelings from the little I've read, and now reading your post, seem very much in line with what you're saying. And, I too, think that it's going to be a rough transition as those in political power throughout the world attempt to consolidate their power, institute protectionalist policies, etc., but in the long run, for the human race, seeing ourselves as all global citizens on this closed system of Earth may be best in the end. I'm sure I'll be long dead before it sorts itself out, but.......

Thanks for taking the time to post this very thoughtful and helpful post. I've got a good reading list, now.

[peggy]

This is an interesting conversation. I think I agree although I must confess I haven't thought a lot about it. I"m afraid it will be more than a little bumpy since there is such a gulf of ideologies, laws and pockets of, as bae said, Al-Qaeda and like groups who simply won't let go.
I wouldn't mind really if it were just the gentle grumbling of Europe after they essentially dissolved their borders that I saw when there, but then those countries were/are pretty close in so many ways. Their standard of living, for pretty much everyone is comfortably middle class. From low to high, very not-american like though.

[Gregg]

Even now geographic/climatologic barriers seem to make more sense than lines drawn by conquest or political whim. It will be interesting to see if commodity trading of goods becomes more localized even as capital, information and other forms of intellectual sharing becomes more global or if the trade and transport of goods continues to increase. I think bae's statement that corporate and other non-state players represent a danger to a transition away from national states also makes sense. IMO various religious 'factions' may represent the biggest challenge to peaceful transition (but what else is new, right?). Corporate entities should be able to use their resources and the dependence on their products to span the gap and possibly emerge at the top of the global heap. Lets just say I won't bet against "BIG".

[loosechickens]

Certainly the imperialist habit of just drawing lines on maps and creating countries with no regard for bioregions, ethnicity, etc. has caused a huge number of problems........

I'd almost hope for multinational corporate control if religious factions were the alternative, because at least corporations want profit, and the most profit is to be had by lots and lots of customers buying products and there being a healthy trading and business climate. The religious divides seem so ideological and sometimes self defeating, that I'd hope those groups would not end up being the ones that ran the show. Many of them would sink the ship in an effort to be right and have their version of The Truth ascendant.

I can't picture the great military powers of nation-states going down without a big fight......although perhaps the process of government being co-opted by corporations has really already begun in a big way and we don't even realize it.

It's a fascinating subject to me, and one of the things that is really bothering me about getting older (I am 69) is that for the first time, I realize I won't be around to see many of the things I like to speculate about.

I won't bet against BIG, either, nor against that drive to make a profit. While war is profitable to some corporations, in general, having a healthy global trading and business climate would seem to be in their long term best interest, so although taking this global view may mean that some of the "haves" nations may see a big slide downward, looking globally, in the long term, becoming citizens of Earth may end up being in our best interest.

Although unless aliens land and make war against us, it's hard for me to see Earthlings as a group, working together.......

[Dharma Bum]

One of the more pithy criticisms of anarchy is that if people could live without government they would have done so by now.

The way you arrange things does matter. Krugman's recent article on the Euro crisis is a good reminder that there are consequences to misaligning governmental systems with societal units. There are also some advantages to scale.

http://www.nytimes.com/2011/01/16/magazine/16Europe-t.html?ref=general&src=me&pagewanted=all

[bae]

One of the more pithy criticisms of anarchy is that if people could live without government they would have done so by now.


I am not arguing for anarchy. Simply for organizations and processes that are appropriate for scale and location, and that meet the needs of the people they exist to serve.

I live right on the border of the US and Canada, in the Salish Sea, in a county made up of hundreds of small islands. There are similar islands off Vancouver Island in Canada, an easy kayak paddle or dory row away. I share much more in common with my Canadian neighbors there than I do with the people who live down Puget Sound in Seattle/Tacoma, or with people who live in Washington DC.

Pre-9/11, I used to travel relatively freely to the small villages in the nearby Canadian islands - they are in fact closer to me in some ways than the US mainland. Yet, since 9/11, due to faceless officials in Washington DC, 3800 kilometers away, I cannot easily do so. My freedom to economically and socially interact with my neighbors, who I can wave to across a narrow stretch of water, is restricted by people on the other side of the continent(*), who have little knowledge of circumstances here, who are prepared to use force against me to compel my compliance with their will. This seems to me inappropriate, and immoral. It has had a huge impact on our local economies.

It's absurd. And this is a border region between two countries that *like* each other.

Now, consider what cultures and watershed/bioregions that are more seriously split by lines on maps have to go through. The Kurds, split between Turkey, Iraq, Iran, and Syria, for instance.

(*) And these same people sometimes herd me, at the point of a gun, into a razor-wire-topped enclosure when I am travelling back to the US mainland, travelling to an adjacent county within the USA, entirely within US waters. To ask me a few questions to make sure I'm not smuggling in Mexican lettuce pickers, or Islamic terrorists.

These same people were also seriously proposing to regulate how I raise small numbers of chickens on my own land, to require filing all sorts of paperwork, microchipping/tagging, and to pay outrageous fees. They also claim the right to regulate and prevent me growing crops on my land to feed my own animals (see Wickard v. Filburn, 317 U.S. 111 (1942)). These do not properly seem like matters of national interest.

[loosechickens]

Since we've been interacting on and crossing and recrossing the Mexican border for more than thirty years, bae, we've experienced much the same thing.

In AZ, the Tohono O'Odham indians, who have traditionally lived both in Mexico and the U.S. and for the past hundred years have gone back and forth freely, now, since both 9/11 and the high levels of anti-illegal immigrant feeling in this country, which have closed the borders in so many ways, now find their nation cut in half, with family on both sides of the border, and that artificial line between them that was never a problem before.

Going back and forth across the Mexican border used to be pretty open.......workers came north and crossed the border, worked the crops and then went home to their villages. Although technically "illegal", nobody made much of it, and it worked pretty well. One side effect of having made the border so difficult to cross has been that workers can no longer go back and forth freely, so when they come here, they stay, and often bring or send for their families as well, because they can no longer just go home in the off seasons.

We make it difficult if not darned near impossible for them to come legally, but have that "attractive" work for them still. There's got to be a better way.

[pinkytoe]

Won't the rising price of fuel put a big stop or slow-down to global trading of goods as we know it?

[Gregg]

Won't the rising price of fuel put a big stop or slow-down to global trading of goods as we know it?

Yes and no. Price is certainly one aspect of trade, but it is relative. Higher fuel prices could drive inflation keeping the cost of imported goods relatively stable. If prices go up without a corresponding rise in wages and asset values then yes, demand will probably slow down, but consumer habits are not easily changed. The government here in the States also has a habit of subsidizing certain commodities to keep the ball rolling.

The $4 gas a couple years ago had Americans looking for ways to consolidate a few trips, but not parking the cars. I remember seeing an estimate from an economist who believed gas would have to reach $10/gallon before the impact was significant enough for us to alter our lifestyles. If prices spike suddenly there is, IMO, a better chance it will cause a shift in habits. If prices rise at a moderate pace I think we will be like the proverbial frog in the pot of water on the stove who can never decide when to jump out.

[IshbelRobertson]

Read and weep about the price of petrol in the UK
http://www.telegraph.co.uk/motoring/news/8250860/Petrol-prices-to-hit-6-a-gallon.html

[bae]

The $4 gas a couple years ago had Americans looking for ways to consolidate a few trips, but not parking the cars.

Where I live, gas is routinely $1.25/gallon or so more than mainland US prices. When we hit $5/gallon a while back, it didn't really seem to put anyone off of driving, or even encourage many people to set aside their clunker pickup trucks and SUVs. We did at least use the moment to get the state legislature to pass enabling legislation so that we could allow neighborhood electric vehicles on our roads here on a few stretches that are above 35 mph.

[gwendolyn]

...It is worth noting that, as LC pointed out, the latest ruling class isn't necessarily tied to a single nationality, but they all have to go somewhere, don't they? So the loss of one nation will be the gain of another somewhere. ...
Unfortunately, the issue is not so much immigration of individuals (I'm all for freedom of movement) but rather the devastating effects of the migration of MONEY. Global Financial Integrity (not affiliated with this site's host) has been going gangbusters (quite an apropros term) documenting and quantifying the effect of capital flight. Their latest report, “Illicit Financial Flows from Developing Countries: 2000-2009 (http://iff-update.gfip.org/),” finds that approximately $6.5 trillion was removed from the developing world from 2000 through 2008. “Every year developing countries are losing ten times the amount of Official Development Assistance (ODA) remitted for poverty alleviation and economic development,” said GFI director Raymond Baker.

So, regular-Joe taxpayers (here and abroad) are footing the bill for economic development efforts that are being directly undermined by the "global elite" who seek to subvert national taxation regimes. And what flows from that is corruption and poverty, pure and fairly simple (although the methods of capital flow are nothing but.)

[bae]

If I seek to relocate to Canada, and become a Canadian citizen, the US government claims the right to confiscate a significant portion of my capital as I leave the country, so that they can get their expected tax return on my assets. I suppose it would count as an "illicit financial flow" if I managed to avoid this somehow.

This makes me little more than a serf. And seems against the spirit of the UN's Universal Declaration of Human Rights.



Article 13.
(1) Everyone has the right to freedom of movement and residence within the borders of each state.
(2) Everyone has the right to leave any country, including his own, and to return to his country.

Article 15.
(1) Everyone has the right to a nationality.
(2) No one shall be arbitrarily deprived of his nationality nor denied the right to change his nationality.

Article 17.
(1) Everyone has the right to own property alone as well as in association with others.
(2) No one shall be arbitrarily deprived of his property.


http://www.irs.gov/businesses/small/international/article/0,,id=97245,00.html

[iris lily]

oh h*ll, I didn't know that the US guberment would take some assets as I fled to Canada.

WTF. Seriously.

[Dharma Bum]

They don't take assets per se. They tax you on your asset gains at the time you leave so you can't avoid tax on those gains by dropping your citizenship. One final tax bill on your way out the door.

[Gregg]

Read and weep about the price of petrol in the UK
http://www.telegraph.co.uk/motoring/news/8250860/Petrol-prices-to-hit-6-a-gallon.html

At the current exchange rate that is right at the $10/gal. figure the economist pegged. Have you noticed any change in traffic patterns or driving habits around the UK?

[IshbelRobertson]

Not really, Greg - the traffic seems as thick as ever. News reports seem to indicate that it is the road haulage businesses who are feeling the pinch - although the 'man in the street' being interviewed always moans, but says he 'cannot do without his car'!

I'm lucky, we have an excellent local bus service - so cars are for longer trips than a commute or heavy shopping or holidays only.

[Gregg]

I have to think the results in the US would be similar to those in the UK. Guess we'll know soon enough.

[Brian]

This weeks North American Economist cover and feature articles discuss some of points mentioned.

The rich and the rest
A special report report on the global elite

http://www.economist.com/?fsrc=scn/fb/wl/sl/20jan

Cover Pic
http://www.facebook.com/photo.php?fbid=502039649059&set=a.74051149059.71579.6013004059&ref=nf

[kib]

I have no problem with the idea of being a global citizen, but I do think constraints in terms of overshoot / peak oil and the like are going to require a lot more local organization as well. Bae, is that what you were getting at with, "I also think many nation-states are of a size and scope that is not appropriate, or healthy, for most of us"?

I'm wondering, does global control by Big mean more or less intrusion into local government by those who have no clue about local conditions?

[AnneM]

I worry how we get through this next step of post nationalism without someone using nukes. This is what really scares me.