There are more super-rich people than ever. It’s a recipe for trouble.
What’s the problem?
The entrance to Annabel’s, the fabled private members’ club in Mayfair, has a green felt carpet. There’s a £20m Picasso on the wall, a doorman dressed in a cashmere uniform and a 5ft golden unicorn on the terrace. It feels, says Matthew Syed in The Sunday Times, “a little like Versailles might have felt before the Terror”. It’s wonderful or ghastly, depending on your perspective. Might it also be a metaphor for “these strange times”?
What does he mean?
There are two big economic trends: the stagnation of living standards for most people; and a rising tide of super-rich individuals. The number of millionaires in the West has increased faster than at any time for a century, and the number of people with £10m or more has risen faster still.
The problem is that too many people are now seeking the advantages that go with wealth. Elites wouldn’t be elites if they weren’t exclusive. In the case of Annabel’s, that means keeping out lots of rich people, who then feel they’ve been snubbed. Confined to Mayfair, this may not be a great societal ill. But the Russian-American scholar Peter Turchin sees it as part of a dangerous historic trend: “elite overproduction”. He cites a swollen elite as one of the prime catalysts for social unrest in the late Roman republic, 17th-century England, 18th-century France, 19th-century America and 20th-century Russia.
Why does that matter?
If too many people seek access to the privileges and advantages of wealth, there are two unsettling effects. The first is that the only option for getting ahead is to play dirty, meaning those in power are more likely than ever to have got there by dodgy means. The second is that a huge class of rich, highly qualified people is left feeling resentful. These people might then go over to the dark side, becoming “counter-elites”.
What are counter-elites?
These are the stock of “nearly men and women”, says the Financial Times’s Janan Ganesh, whose relationship with their own class sours from “peripheral membership” to “vicious resentment”. In the past, the results have been bloody. Take the French Revolution. It wasn’t ragged street urchins who “overturned the Ancien Régime – it was those several classes above, held back by “class rigidities” from pursuing their happiness. It was the same with the Russian Revolution: Lenin’s dad earned a place as a minor member of the Russian nobility. In 13th-century England, Simon de Montfort led a rabble of resentful barons in a blood-soaked rebellion against Henry III, briefly becoming the country’s de facto ruler before being killed by forces loyal to the old elite – ie, the king.
So are we in for a revolution?
Peter Turchin says current trends portend “an age of discord”, with civil unrest and possibly even carnage. In 2010 he predicted that the unrest would get serious around 2020, with all-out civil war being the worst-case scenario.
Could he be right?
He’s certainly right to see the thumbprint of elite overproduction in the big political fights of the day. On the left, movements such as Occupy Wall Street, or the brief rise of Jeremy Corbyn, were spearheaded not by the noble proletariat, but by the resentful children of elites. The same is true of “wokeism”. “What is woke culture,” asks Ganesh, “but the howl of a generation of underemployed humanities graduates?” On the right, Trump and Brexit both came about because of alliances between snubbed insiders (Nigel Farage, Steve Bannon) and the more legitimately aggrieved masses.
What can we do about it?
One way or another, we need to stop the runaway process of elite overproduction, says Turchin in The Atlantic, “but I don’t know what will work to do that, and nobody else does”. Do we increase taxes? Raise the minimum wage? Introduce universal basic income? Each of these could have unpredictable effects. Turchin likens it to a time when the US Forest Service tried to reduce the population of bark beetles using pesticide – only to find that the pesticide killed the beetles’ predators more effectively than the beetles themselves. They ended up with more beetles than before. Somehow we need to keep elite numbers small and real wages for everyone else on a constant upward trajectory. If we can’t, says Turchin, the lessons from history make grim reading.