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Luxury has progressed: the rise of the global elite

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Lisa Kramer

Lisa Kramer is a contributing contributor at The League of Ordinary Gentlemen.

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57 Responses

  1. Meet the new douchebags, same as the old douchebags.Report

  2. Avatar Rufus F. says:

    The Atlantic article kept reminding me of this sketch for some reason:

    Report

  3. Ms. Kramer, I do believe the super-rich will indeed escape even the “softest demands” via lawyers or relocation. They are smarter than us, or at least their lawyers are.

    My own guess is that the super-rich and placeless can pick fight after fight against the softest demands on them without sparking a particularly large backlash.

    I tend to think of these super-rich—and as you note they tend to be entrepreneurs, New Money rather than Old—as forces of nature that we harness as best we can. But if we build too ambitious a windmill, it’s the windmill that collapses, not the wind.

    So too, there is—for whatever psychological reason—a philanthropic impulse with these people. Although I might not agree with the wisdom of all of Bill Gates’ initiatives, on the whole I expect them to do more good than if the money had been taxed away and largessed via government.

    And that goes for George Soros, whose politics I despise. He has done much good financing various liberation movements worldwide, although I wish he’d do the rest of the world first before tackling the US.

    Adam Smith’s wisest book—the other one—The Theory of Moral Sentiments puts it best: we only admire the good done by those whose motives we share. It’s not so much the super-rich have “lost touch” with the plebes like us [no doubt they have], it’s more that we don’t quite identify with them. It’s easier to ascribe venal motives [guilt, narcissism] to their philanthropy [even St. Bono’s!] than credit it.

    [Oh, and thx for reading the Freeland article and giving such a thorough report, Lisa. I tried to tackle it, but the prose was simply too dull. Atlantic ain’t what it used to be, and with Hitchens MIA, I barely spend 10 minutes with it anymore. Hell, the letters pages used to be worth 10 minutes alone!]Report

    • > They are smarter than us, or at least their lawyers are.

      Neither, I’d guess.

      They have (a) capital (b) access. You can be as dumb as a brick if you have loyal people who know what to do with your money. And knowing what to do with money isn’t genius, really. It’s knowing the system.Report

    • Should have finished the read, first.

      > Although I might not agree with the wisdom of all of
      > Bill Gates’ initiatives, on the whole I expect them to
      > do more good than if the money had been taxed away
      > and largessed via government.

      Probably. However, I’m not entirely certain that an economic engine that creates a Bill Gates is going to do more good than one that disburses that ridiculous amount of money to more than one dude.

      I imagine that 50 mini-Bills would have done more good than just one Bill.Report

      • Avatar MFarmer in reply to Pat Cahalan says:

        Holy crap. The wealth has to created before it’s “disbursed”. If the economic engine didn’t exist which allows a Bill Gate to create that money, what would be disbursed? Borrowed Chinese money? I can’t take much more. And what about all that has been created because of Bill Gates — jobs, competition which creates more jobs, and….oh, just forget it — it’s futile.Report

        • Avatar Pat Cahalan in reply to MFarmer says:

          Dude, people didn’t start using personal computers because of Bill Gates.

          In fact, *Microsoft* wasn’t the first business OS. Everyone seems to forget that the Apple IIe and *it’s* spreadsheet was what started the revolution to having a computer in every office. But the revolution was going to happen anyway; if it wasn’t Apple and it wasn’t MS-DOS it would have been something else.

          Yes, lots of productivity was created because of business applications on the individual desktop. But that’s not all due to Bill Gates any more than Calculus is all due to Newton. Someone could have shot Sir Issac before he published Principa and Leibniz would have still given us Calculus. Someone could have shot Bill before he bought (didn’t steal, but bought) DOS and business apps would have still be prevalent in the workforce well before 1990.

          The primogenitor nature of our intellectual property laws is hugely misleading, for one thing, and the extended patent/copyright is further distorting.Report

      • Avatar E.C. Gach in reply to Pat Cahalan says:

        Part of what would disburse it better is different copyright laws. And I’m not convinced that if Gates hadn’t invented Windows, no one else would have, or wouldn’t have invented something even better.

        Hardly any inventor/creator is the only thing working on what they are working on, and just because they’ve made it into a cash cow, it can’t be assumed from their financial success that had that single person not done what they’d done, someone else wouldn’t have taken their place.

        And Bill Gates is always an easy example to pull. What about the hedge fund managers/traders/etc. Some invest long term and create wealth by enabling other entrepreneurs. Others (most?) are more like highly respected gamblers who leach off the actual wealth creation of others.Report

        • Avatar NoPublic in reply to E.C. Gach says:

          Of course Gates didn’t create Windows.
          He stole it.
          Just like he stole DOS.
          But don’t let that derail your point…Report

        • Avatar E.C. Gach in reply to E.C. Gach says:

          In the interest of getting back on the tracks, where did I derail?Report

          • Avatar Trumwill in reply to E.C. Gach says:

            How would you change copyright laws to part Gates with his money? If someone else had done it, you’d just have a different rich guy, wouldn’t you? You could require that versions of Windows become public domain after a few years, but who wants Windows 3.1 in the late 90’s?

            * – Excluding Linux and open-source, which in the nineties was nowhere near where it needed to be for mass consumption (if it ever got there). And I am skeptical that absent Windows that there would have been a huge push for it since it doesn’t respond to typical economic motives.Report

            • Avatar Pat Cahalan in reply to Trumwill says:

              Most of the Linux motivators would have come about anyway, because Linux development is tied directly to the web and the porting of UNIX systems.

              Much of the development force behind Linux comes from making UNIX ports free, not competing with Microsoft.Report

              • Avatar Trumwill in reply to Pat Cahalan says:

                No disagreement on that. Well, not much*. When I say “a huge push” I don’t mean the push we’ve seen. I mean the much larger push that it would take for Linux to be sufficiently easy to use and universal as Windows became. Had Windows not emerged victorious, I think that IBM or some other for-profit entity would have and would have made the money that Gates made.

                * – Over the last several years, there has been a pretty big push on the UI-front and with Ubuntu, which I do consider an attempt to challenge Microsoft and Apple as a viable consumer OS. But that’s a tangential point. Linux didn’t get to the point that Ubuntu could make that thrust (and Linux=!Ubuntu), so I mostly agree with you.Report

              • Avatar Pat Cahalan in reply to Trumwill says:

                That’s certainly a fair assessment of recent history.

                Mandrake (now Mandriva) always had a “desktop experience” design community, but most of the other major distributions really didn’t until Ubuntu came along. Now OpenSUSE, Ubuntu, Mandriva, and a couple others are actually trying to make “out of the box user-usable” installations on a wide hardware platform.

                Until recently, of course, there’s wasn’t really a practical form-factor driver, either. Nowadays you’re seeing lots of devices with embedded Linux (or, if you want to quibble over the genetic roots of Mac OSX, *BSD) operating systems, because you can run a micro-version of those operating systems without having to pay Microsoft a vig for their micro-Windows on the one hand (or you’re Google) and Steve Jobs is trying to take over the world on the other 😉Report

              • Avatar Trumwill in reply to Pat Cahalan says:

                I wish Linux all the luck. Preferably something not just using Linux for largely proprietary ends. I wish I could say more than that, but for anonymity’s sake I shouldn’t. Feel free to email me (t*****ll@gmail.com) for the rest of the comment I thought better of posting.

                I try Linux about twice a year, once Mandriva and once Ubuntu. It’s great right up until I run into a wall. Past a certain point, it feels like you have to know everything to do anything.Report

              • Avatar gregiank in reply to Trumwill says:

                fwiw, i’ve been using Linux solely for about two years with few problems. I am in no way super knowledgeable.Report

              • Avatar Trumwill in reply to Trumwill says:

                I keep trying, but keep running into walls whenever I want to go outside the sandbox. Ubuntu (and to a slightly lesser extent Mandriva) make the easy stuff really easy (much easier than Windows), but then once I try to get out of the sandbox (by, say, sharing a drive on a Windows network or accessing a shared drive, or trying to use a widget that isn’t immediately available in a repository, or install a driver that’s not in its voluminous library), what takes two steps in Windows takes 10 in Linux. Once I figure it out. And then, the next version, it won’t work anymore for some reason or another.

                Glad to hear that you’re not having any problems. I want Linux to succeed.Report

              • Avatar Pat Cahalan in reply to Trumwill says:

                I think to some extent this issue is solving itself simply by becoming less relevant for the average joe, by inventive marketable solutions. See, I’m a market guy! : )

                Take for example the “sharing files on the local network” issue. On Linux, if you want to share with a Windows box in a classic “client-server” scenario, you do indeedy need to know how to set up Samba (and, to a greater extent, if you do it wrong you’re usually hanging your pants out on the line in a very bad way).

                However, there are lots of services that get rid of this problem for you. You get an S3 slice and you throw your data on Amazon’s servers and you can get to it anywhere, or you use Dropbox or some other middleware solution that solves this problem for you. Or, you buy a utility box like a stupid-simple NAS (which, coinkydinkily is probably running Linux) with a web front end and you stick stuff there and click boxes instead of fiddling with smb.conf.

                As people get less used to “this is my machine, upon which resides my data, and thus I need to monkey with my machine to get other people my data” to “this is my machine, from which I access my data, which is somewhere ubiquitous, and thus if I want other people to get my data I point them at the ubiquitous thing”, this problem becomes less relevant.

                Then, of course, you get the flip problem of, “Hey, how can I easily tag what data I want to be secure, and what data I like to share, and the access hierarchy that supports who gets to see what”. But that problem isn’t going away anytime soon, iff’n you ask me, regardless of what software you’re using. Because that’s not a technology problem, it’s a human security problem.Report

              • Avatar Trumwill in reply to Trumwill says:

                I think to some extent this issue is solving itself simply by becoming less relevant for the average joe, by inventive marketable solutions

                I think that’s true, at least to some extent. I do think that once we get to the point that we have reliable access to the Internet at all times, and when there is really good (and trustworthy) synchronization for when we are offline, the OS will matter a lot less. That will, hopefully, provide more of an opening for Linux. Of course, then the OS you’re running becomes a lot less relevant in and of itself, so Microsoft’s dominance of it will be a lot less of an issue.

                Samba has really been the death of me. But even when I had it figured out a while back (before the next version made the steps of the previous version no longer work), I just ran into other things. My card-reader being read-only, spotty shortcut ability, and so on. But I remain ever-hopeful. 🙂Report

  4. Avatar Tim Kowal says:

    What struck me about Freeland’s piece was how alike the elite of today are to the elite of a hundred years ago. While I do not share Mr. Comstock’s antipathy, he’s got the parity about right.

    I also agree with the general sentiment that today’s elite, like those of yesterday, will need to yield in some degree to populist sentiment. Progressivism demonstrated the intellectual and political untenability of “making society nice.” But its ghost lives on.

    Yet, society has already been made so much “nicer” than it was a hundred years ago that I tend to disagree that the new elite will have to give way more than they did under the old Progressives. Granted, the Progressives gained a lot of ground and still hold it. But the rate of change is markedly declined.

    Coincidentally, I also posted my own semi-lengthy review of Freeland’s piece just this morning, juxtaposing it with my recently finished jaunt through Michael McGerr’s book on the Progressive era.Report

  5. Avatar E.C. Gach says:

    There is nothing inherently wrong, the reader is left to understand, with being completely free of any concept of home, or loyalty to any particular place or people. Rationally speaking, who can argue with one U.S.-based hedge fund CEO that “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.” When there’s no such thing as country, I suppose it’s all the same.

    I think an important distinction to make is between someone with no home, and someone whose home is everywhere. So while some people may no longer identify with a single country, if they instead begin to identify with something larger (humanity, planet, etc.) it might not be a disaster.

    On the other hand, those who have lost all ties and replaced them with none will have no qualms about leaving a trail of destruction in their third world developing market wake.Report

  6. Avatar North says:

    In fairness to the new economy; if you keep lifting 4 people out of poverty at the cost of 1 person falling into poverty then eventually you run out of poverty.Report

    • Avatar Francis in reply to North says:

      true, but then you can’t really argue with a fair number of Americans voting against that trade. In the long run everyone may be out of poverty, but the long run to date is much longer than the human lifespan.Report

      • Avatar E.C. Gach in reply to Francis says:

        True. It’s an ethical conflict of the highest order.

        Why should I act in order to further the interests of my family, community, state, country above all others? If it is moral to do so, as I think many of us all feel it intuitively is, then where do we decide the cut off is for then helping the rest.

        So my family, community, state, country, gets to point p of having obtained prosperity x (prosperity being various liberties, protections, material amenities, etc.), now can all the excess benefits start trickling down?

        At what point do we say, the material loss to me, and the relative gain to another, will be such that it is not only permissible but morally encouragable (i.e. my wage goes down by $1.00 while another laborer’s goes up by that amount).Report

      • Avatar North in reply to Francis says:

        Yes Francis, I’m not saying that it makes no sense. But it isn’t like protectionism is going to recreate the union jobs of the fifties. If history is any lesson a huge upsurge in protectionism is more likely to create a horrific war.Report

    • Avatar JohnR in reply to North says:

      “..if you keep lifting 4 people out of poverty at the cost of 1 person falling into poverty then eventually you run out of poverty.”

      Boy, there are a lot of hidden assumptions there, not least of which is that the “4 gains, 1 loses” assumption is accurate and complete. Oversimplification is the basis and curse of advertising, politics and comment threads.Report

      • Avatar E.C. Gach in reply to JohnR says:

        There aren’t any assumptions other than that the statement is true. So if it’s true, is it such a bad thing? Now whether or not it is true is disputable but North’s point seemed to be that, if we take that as true, how should our moral sentiments react.Report

      • Avatar North in reply to JohnR says:

        I’d go one further than E.C. and ask if we know of an earlier era where it was a better time to be a human being than the current one? I know if I had to pick an era to roll the 9 billion sided die and be incarnated as a baby randomly in the world I’d choose the current one.Report

    • Avatar Kyle in reply to North says:

      In contrast to my appeasement joke, I’m quite serious when I say that this is a really crucial point that often goes unrealized.

      Relative misery is a terrible thing because on one hand all pain is regrettable and the union worker who loses his job in Michigan is hardly comforted by the fact that he’s not a street beggar in Manilla. On the other hand, as we talk about no net job creation over what a decade now in the United States and lower middle class incomes, crumbling infrastructure, etc…

      We never talk about the rise of the global middle class, the fact that in 1981 there were 1.5 billion people living below international poverty line and that number has astonishingly dropped to 920 million. While much of the change in income levels and poverty reduction has occurred in east asia, so it’s not even poverty reduction, still we’re comparing the differences between people who budget by eating out less (Americans), to people who’ve been lifted from guaranteed malnutrition and starvation to regular eating.

      I guess, w/r/t Lisa’s concerns – I don’t worry about rising development in Africa being zero sum coming at the cost of an Asian middle class. I think those economies will transform, diversify, and develop as other countries have. One, after all, cannot be a net exporter of manufactured goods forever.

      Still at the end of the day, protectionism – which might be questionably good for America at best – is not devoid of moral considerations. What are we protecting? Our own jobs and prosperity? Which considering the relative difference makes us a nation like Goldman?Report

      • Avatar North in reply to Kyle says:

        Good to see you back around the digs Kyle. Where ya been?Report

      • Avatar Trumwill in reply to Kyle says:

        Still at the end of the day, protectionism – which might be questionably good for America at best – is not devoid of moral considerations. What are we protecting? Our own jobs and prosperity? Which considering the relative difference makes us a nation like Goldman?

        While agreed on the “questionability” of protectionism, I do think that we have to be careful not to get too moralistic on trade. It sort of makes me uncomfortable to talk about how it’s someone else’s obligation to take it in the chin for the Asians. Granted, working in IT, I am not immune. But neither am I remotely as vulnerable (at the present time).Report

        • Avatar Kyle in reply to Trumwill says:

          True enough, though I find most moral sentiments with respect to trade tend to be of the “globalization is evil”, “trade with china is bad for human rights” variety. So yay for competition?

          In my ideal world, we’d craft free trade zones among countries that have (and enforce) similar labor protections and minimum wage laws as our own and slap some sort of significant but non-punitive tariff on exports from countries that don’t. So that way we’re not unfairly penalizing American companies that choose to treat their employees well, while encouraging a global consensus on humane labor laws.

          (Which is why free trade with Canada makes sense, Mexico – not so much)

          That’s not going to happen but in the meantime I don’t think it’s too much to ask that people consider the moral dimension of pursuing trade policies that are the international equivalent of tax cuts for the wealthy. Also, we’ve helped to make incredible strides in lifting hundreds of millions out of crippling, deadly poverty. I think if we internalized that we’d be happier in general and less pessimistic about the future or the machinations of a less nationalistic global elite. Maybe? Just an unfinished thought.Report

          • Avatar Jaybird in reply to Kyle says:

            In my ideal world, we’d craft free trade zones among countries that have (and enforce) similar labor protections and minimum wage laws as our own and slap some sort of significant but non-punitive tariff on exports from countries that don’t. So that way we’re not unfairly penalizing American companies that choose to treat their employees well, while encouraging a global consensus on humane labor laws.

            I’d support such a law, I suppose. The one that would come out of committee would make major exceptions for the countries X, Y, and Z and the companies P, Q, and R which would make me hate the law about as much as the status quo, though.

            But I’m borrowing trouble.

            Let me join the chorus in saying that it’s good to have you back.Report

            • Avatar Kyle in reply to Jaybird says:

              Jay!

              Still fighting the good fight, I see. Of course that supposes the bill would even make it out of committee and not just placed on one of those interminable secret holds so some Senator could bargain with the White House.

              Sadly ideal world with ideal Congress does not exist.Report

          • Avatar Trumwill in reply to Kyle says:

            In my ideal world, we’d craft free trade zones among countries that have (and enforce) similar labor protections and minimum wage laws as our own and slap some sort of significant but non-punitive tariff on exports from countries that don’t.

            Doesn’t that kind of undercut their primary market advantage, though? They are relying on their price advantage. I suppose as long as you keep it from being too punitive, they should still be able to do so. I’m not sure how to approach this, though, because it seems that part of the cycle of getting from there to here involves working cheaply and, unfortunately, dangerously. Until you can command such a premium as to be able to demand better compensation and safety standards. I’ve read a number of articles on China and how their labor costs are increasing on this basis.

            (OT: I’ve responded to a couple of your tweets and never heard back. No problem if you’re too busy or whatever – no hurt feelings – but I don’t know all that much about how Twitter works and if you’re not seeing them, I’ll just move on.)Report

            • Avatar Kyle in reply to Trumwill says:

              Yeah, I’m the worst about Twitter, I’ll post and then not check back for days at a time.

              I mean domestic industry wants protective/punitive tariffs which would make imports as expensive, if not more so than domestically produced substitutes. Which is anti-competitive and just not that productive. On the other hand, domestic labor costs are higher because we’ve long decided that having 14 year olds work 90 hour work weeks is inhumane.

              There has to be a balance between encouraging others that kids should be in school not factories (or enslaved) and making it prohibitively expensive to import steel from Asia because they’re cheating by being so populous or something.

              I’ve been encouraged by one of the carrots we’ve seen with respect to China is that large purchasers like say Walmart have a significant amount of bargaining power and use that to ensure their suppliers follow some basic standards of decency. So the trick would be to find some kind of balance between encouraging progressive, voluntary changes, with an eye towards making codification a less expensive prospect.

              As developing countries grow more prosperous their currencies should appreciate against the dollar/euro/pound making their products increasingly expensive. A developing country would – at a certain point – already be facing domestic pressure to adopt better labor laws but in doing so this would mean admittance to a “benevolent” free trade zone where their still competitively priced exports would then be granted wider access, while remaining competitive. Meanwhile, a domestic pro-labor political force is now established.

              Not being a trade economist I have no idea what percentages we’re talking about but it strikes me as within the realm of human ability to find an amount that would keep but narrow the price advantages.Report

          • Avatar Pat Cahalan in reply to Kyle says:

            > and slap some sort of significant but non-punitive tariff
            > on exports from countries that don’t.

            This is one of those “devil in the details” moments: what’s a “significant but non-punitive” tariff?Report

        • Avatar E.C. Gach in reply to Trumwill says:

          I understand being cautious of inviting the “moral” dimension of things into discussion about trade policy.

          My point not necessarily that we should be moral with regard to trade, but that if we decide morality has no place at the table with regard to trade (or maybe only a place at the kid’s table) than why should we allow it a place at the table in any discussion of policy? And my thinking is that many people will be even more queasy about dismissing talk of “morality” from other facets of their life, and so will be forced to re-evaluate it’s role in trade relations (though that would require more logical consistency, not something most of us seem to be worried about).Report

  7. Avatar Kyle says:

    So….Chrystia Freeland is an appeaser?!?!Report

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