Being Rich in the 21st Century

[Max Hastings]

It is a good question, whether being poor in the 21st century is a worse experience than at any other time in history. For sure, however, there has never been a better time to be rich.

Great gushers of money are flooding through the tributaries of the financial and commercial worlds, and thence into the pockets of a few million lucky men and women across the world. At the head of the stream, in Britain this week, it was revealed that Sir Martin Sorrell, chief of the WPP advertising group, collected £52m last year.

The Guardian survey of executive pay shows that 230 executive directors - mere corporate managers - earn more than £1m apiece. In the US, security firms have paid their staff £4bn over the past four years, more in bonuses than they have declared in profits. A top American corporate boss can expect to accumulate tens of millions of dollars in a few years' work, without risking a penny of his own cash in investment.

In the superleague, inheritance levies have become voluntary. I know a tycoon who recently passed to his son, tax free, a business worth more than £300m. This is commonplace. It seems remarkable that any high roller these days resorts to fraud to enrich himself. It is possible to bank such huge sums legally that criminality seems redundant.

Many of us do not grudge cash to real wealth-generators such as Sorrell, who have created their own businesses and a lot of jobs from scratch. It is managers, middlemen simply creaming a percentage of everything that passes through their hands, who provoke resentment.

Yet nobody seems able to check them. Corporate CEOs need only a studied indifference to shareholders' bleatings, or to harsh words from newspaper City editors. A financial PR recently asked one of the latter sardonically: "If you had a choice between earning, say, £100,000 with nobody paying attention, or a million at the cost of a bad morning in your column, which would you choose?"

In remarking upon all this, I am not working up to a denunciation of the wickedness of capitalism. Rather, I am reflecting in wonder upon a modern phenomenon. For much of history across most of the world, being rich was a precarious predicament. Where civil turmoil was endemic, incurring the displeasure of the ruler of the moment could cause one to forfeit the lot. Revolutions could wipe out a family's riches at a stroke, and often cost heads as well.

By contrast, in today's western democracies, once someone has acquired money, there is every chance of keeping it. Even African dictators have found that if they can transfer cash looted from state treasuries into the safety of a Swiss bank, their prosperity is secure, even if they lose power. The same goes for Russian oligarchs. The might of western political and judicial stability will protect them, with an effectiveness a private army could not match in the Middle Ages.

More than that, modern wealth offers its possessors every chance of living to a ripe old age. Until the 20th century, disease was no respecter of purses. The wife of a Victorian financial colossus was almost as vulnerable to the perils of childbirth as a maid in his household. The tombstones of the great reveal how many died long before their natural spans were exhausted.

Today, medical science can do extraordinary things for people able to pay. There has never been a wider gulf between the remedies available to the rich and those on offer to most of the poor, even in societies with advanced public healthcare systems.

Some modern Croesuses like to flaunt their cash. Many, however, prudently conceal it under a bushel. It has never been easier to do so. In the past, a man's or a woman's status was immediately defined by clothes, or lack of them. If revolting French peasants in 1789 were unsure whom to dispatch to the guillotine, they needed only to seek out powdered wigs, silks and satins.

Nowadays we all look pretty much the same, millionaires or paupers. The man in front of you in the airport security queue, whether in a dark suit or trainers and sweatshirt, might be a shop assistant or a software millionaire. Which of us can tell? I greeted an acquaintance in a New York elevator a year or two ago. When he got out, a colleague with whom I was travelling asked who the man was. I answered: "A happy tycoon. He's worth maybe £300m and nobody outside the City has ever heard of him."

Michael Caine memorably remarked: "The idea that money doesn't buy you happiness is a lie put about by the rich, to stop the poor from killing them." It is not quite as simple as that. There are plenty of melancholy millionaires. People who make their fortunes as investment bankers endure such ghastly working lives that some of us find it impossible to be jealous.

Those 14-hour days, peering mesmerised at numbers on screens, attending meetings with fellow suits, catching overnight planes to meet foreign suits in featureless conference rooms, offer little to covet. American bankers are a grey, grim crew. Any attempt at humour - or worse, irony - in their company sinks without trace into a glassy pond.

What do they spend the money on? Some buy or build palaces. Most eat and drink sumptuously, holiday lavishly, buy pictures. Yet, by comparison with the rich of the past, this generation are less conspicuous consumers, seldom seen in Rolls-Royces. Divorce is their most conspicuous extravagance, servants their biggest domestic problem, in Britain especially. These are almost invariably foreign, because British people dislike providing personal service. A 21st-century Jeeves is probably Filipino.

It is fascinating to speculate whether the present flood of wealth into private purses can continue. I do not mean this year or next, but taking a historic view. Will the great mass of less affluent people indefinitely tolerate such rewards at the top of the heap? Even in the western democracies, could there again be popular revolt against the super-haves, storming of palaces, draconian taxation, or a wholesale assault on commercial greed?

The haves' most powerful weapon is globalism. Once one passes a certain corporate threshold, taxation becomes voluntary, as Rupert Murdoch's accountants can testify. Confronted with any fiscal or even physical threat, it is easy to move cash or oneself elsewhere. Recognising this, few national governments have the stomach to risk alienating wealth-creators by attacking their bank accounts.

This seems true despite the warnings of such sages as John Ralston Saul (The Collapse of Globalism) and James Howard Kunstler on these pages on Thursday. For the foreseeable future, only a meltdown of the financial system on an unprecedented scale could threaten the security of the rich, and the freedom of the corporate and banking community to continue rewarding itself on a staggering scale.

The old joke had it that the most popular slogan in a revolution was: "Let's kill all the lawyers!" If barricades get stormed in 21st-century western democracies, the cry will be: "Let's kill all the bankers!" But, until our world changes out of recognition, this looks the perfect age and place to be a fat cat.

http://www.guardian.co.uk/comment/story/0,,1543747,00.html