Posted on Friday, February 4, 2011
In the information age, brainy people are rewarded with wealth and influence, says Robert Guest. What does this mean for everyone else?
TOMMY GALLAGHER was working across the street when the planes hit the Twin Towers. “As we evacuated, we could see people jumping out of windows,” he recalls. Then the first tower collapsed. Everyone in the street started running. A huge cloud of dust enveloped them. Mr Gallagher could not see or breathe. He thought he was going to die.
Soon after he escaped, Mr Gallagher was told to put his bank’s business back together at an office in uptown Manhattan. Plugging the computers in again was easy enough, but the people in the office could not simply be re-booted. After a month Mr Gallagher snapped. “A guy gave me shit. I threatened to beat him up. They fired me,” he says.
He was 57 at the time. “On Wall Street, you’re an old man at 50,” he shrugs. He could not find another job. Financially that did not matter much: he was a wealthy man. But emotionally he was “a basket case”. He was embarrassed about having been fired, ashamed of his behaviour and “absolutely alone”. He started worrying that the doormen at his fancy apartment must be thinking: “That guy’s a loser.”
Then he joined a self-help group for rich people called Tiger 21. Only those with more than $10m of investable assets are eligible for membership, so no one assumes that, just because you have truckloads of cash, your problems are trivial. Whether you are worried that your kids might turn out like Paris Hilton, or fed up with your brother-in-law wanting to borrow money for the umpteenth time, someone in the room has faced a similar problem before.
Mr Gallagher credits Tiger 21 with helping him to find a new purpose in life: philanthropy. Many other members are veteran givers, and advise him on how best to support his pet cause, which is caring for military veterans with post-traumatic stress disorder. His son served as a counter-intelligence officer in Afghanistan and had to calculate the power of roadside bombs by measuring how far they threw pieces of their victims’ bodies, so Mr Gallagher has a personal interest in this. He is now on the board of Phoenix House, a mental-health charity, and is involved in a programme to stop traumatised veterans from drifting into divorce, homelessness and suicide.
The new elite
This special report is about global leaders, but mostly not the sort you have heard of, such as presidents and pop stars. Instead, it looks at the people who shape the world without anyone noticing: those with enough brains, money or influence to affect the lives of large numbers of others. These three things often go hand in hand, but not always.
Some people are influential because they have compelling ideas or are skilled at popularising other people’s. The brainy toilers at think-tanks in Washington, DC, do not earn nearly enough to be admitted to Tiger 21, but they wield immense influence over public policy. The propagandists of al-Qaeda live in caves, but affect the lives of people everywhere.
Societies have always had elites. For most of history and in most countries, power was seized by force of arms and passed down from father to son. Fear and heredity still play a role. China’s ruling party remains in charge because it jails and occasionally kills those who threaten it. America elected two presidents named George Bush and came close to electing two Clintons.
The big change over the past century is that elites are increasingly meritocratic and global. The richest people in advanced countries are not aristocrats but entrepreneurs such as Bill Gates (pictured above with his wife and partner in philanthropy, Melinda). The most influential are those whose inventions change lives in many countries (think of Facebook) or whose ideas are persuasive (think of Amnesty International).
This special report will examine how influence is wielded. It will look at the minds that shape politics, business and technology, and it will describe the gatherings where influential people swap ideas, from the World Economic Forum in Davos to Nathan Myhrvold’s “invention sessions” in Seattle.
The global elite are a cosmopolitan bunch, yet they are far from rootless. Indian tycoons forge deals with ethnic Indians throughout the world. Chinese scientists in Beijing collaborate with Chinese scientists in Cambridge. The report will show how money, ideas and influence flow through the world’s diaspora networks.
It will also look at inequality, which has risen relentlessly in most rich countries even as they have become more meritocratic. Clever, well-educated people are increasingly marrying each other and raising clever, well-educated children. The children of ordinary households find it hard to compete with them. A new aristocracy of merit is emerging. That has social consequences for everybody.
Serious thinkers sometimes exaggerate the clout of the few. David Rothkopf’s book “Superclass: The Global Power Elite and the World They Are Making” is thoughtful and well researched, but his breathless description of how a mere 6,000 politicians, chief executives and other bigwigs run the world misses an important point. In democracies at least, the few are often at the mercy of the many. Voters can get rid of politicians they dislike. Consumers will stop buying a company’s products the moment something better or cheaper comes along. In a democracy with a competitive economy, power is hard to maintain without pleasing others.
In China the rules are different. Economic growth has lifted hundreds of millions of Chinese people out of poverty and made China’s coastal cities rich. But the Chinese elite depends too much on the coercive power of the Communist Party for its wealth and influence. The system of hukou (residence permits) creates two classes of citizen, urban and rural. As in South Africa under apartheid, those on top dictate where those at the bottom may live and work, suppressing their wages and providing themselves with cheap servants. This cannot last.
As Mr Gallagher’s story shows, the rich are as vulnerable as the rest of us, yet they lead separate lives. In “Richistan”, a book written before the financial crisis, Robert Frank observed that wealthy people have “built a self-contained world unto themselves, complete with their own health-care system (concierge doctors), travel network (NetJets, destination clubs), separate economy…and language (‘Who’s your household manager?’)”.
Rich folk affect the rest of us in two big ways. First, the way they spend their money has all kinds of ripple effects. Their hunches move markets. Their consumption supports a whole sub-economy of hoteliers, watchmakers and financial advisers. And their philanthropy funds schools, pressure groups and research into tropical diseases.
The second, and more important, way is that to become rich in the first place, they typically have to do something extraordinary. Some inherit their money, of course, but most build a better mousetrap, finance someone else’s good idea or at least run a chain of hairdressers in a way that keeps customers coming back. And because they are mostly self-made, today’s rich are restless, dynamic and much keener on change than the aristocrats of old.