An article by Lynn Stuart Parramore, circulated by Salon today, seems to suggest that – for all its shortcomings – American- and British-style democracy offers the best chance of stability in a world in flux.
Ms. Parramore quotes a Vanity Fair piece that reports Third World billionaires are buying up apartments in an exclusive London building. She adds that at least one global plutocrat has bought an obscenely expensive property in New York, and concludes that:
Preparing for an economic or political collapse of the world as we know it is no longer reserved for paranoids living in flyover states who stockpile canned goods. The new 1 percenters are worried about a day of reckoning, too, and they’re scouring the globe for places to stash cash and putting their trust in First World security in the increasingly likely event of Third World meltdown. Big money has got a bug-out plan.
She explains that:
As Britain and other First World countries sink into the mire of austerity, a tsunami of unfettered capitalism is spreading over the Third World and the BRIC countries (Brazil, Russia, India and China). Headlong capitalist growth tends to create instability and a growing trend of authoritarianism. Many of the new elites are living under semi-dictatorial regimes, and they need safe havens in the event of a collapsed government or a dictator who decides to give them the boot. They require real estate as insurance against economic catastrophe.
It seems to me that Ms. Parramore’s diagnosis may be based on incomplete information. She is right about the shift in wealth from the developed nations to those emerging under globalism. But she seems to be ignoring another world power that is as authoritarian as any Third World dictatorship.
I read in Bloomberg News today that:
Thai billionaire Dhanin Chearavanont, who bought a $9.4 billion stake in Ping An Insurance (2318) (Group) Co. from HSBC Holdings Plc (HSBA) in February, said he is seeking more acquisitions to tap growth in China.
So at least one Third World billionaire apparently sees China as the most secure country in which to invest.
What does it all really mean?
This is not our grandfather’s world, obviously. You’ve probably read that there are now more billionaires in Russia than in America, and Ms. Parramore points out that the world’s richest human is not an American but a Mexican.
I see through a glass darkly, of course. But I see a world in which unfettered capitalism will inevitably create unsustainable disparities between rich and poor.
Global income inequality is already greater than it has ever been. The richest one percent of people in the world rakes in more than the bottom 57 percent. And, from what I’ve read, the disparity is increasing exponentially.
In such a world, there is no such place as a safe haven. When “le deluge” erupts, as it inevitably will, no country will be exempt. Not Russia, not China, not the United Kingdom and Europe. Not even America.
Indeed, nowhere is the gap between rich and poor wider than in America. According to a 2011 study from the Congressional Budget Office, incomes for the bottom fifth of Americans grew about 20 percent between 1979 and 2007, while the top 1 percent saw their incomes grow by 275 percent.
And in the past few decades, the number of Americans living in extreme poverty has doubled.
Perhaps those “paranoids living in flyover states who stockpile canned goods” aren’t so crazy after all.