I have to admit that as I settled down to watch this 2-part BBC2 documentary, I was prepared for the worst: a programme on the 0.001% made by some people lower down in the 1%, lingering on their luxury lifestyles, narcissistic personalities and fawning minions, with scarcely a hint of criticism beyond the odd ineffectual mention of greed, and ending up with a politically safe ‘balanced agnosticism’ or untroubled bewilderment. But I was wrong.
The Super-Rich and Us broke the mould. It linked the rise of the super-rich to growing inequality and to austerity, and to the financial boom and crash. It took the trickle-down theory to pieces, went back to the 1970s and the subsequent rise of indebtedness as a source of profit or lenders, and for those who managed risk, who saw inequality as a way to make money. It even referred to debt as a means of wealth extraction. It exposed how tax inspectors were promoted for fostering a ‘relationship’ with companies rather than making them pay their taxes. It recognized the UK as a tax haven and the error of imagining that attracting the super-rich would benefit the British economy. It showed that greater inequality did not result in more growth. It acknowledged the huge rise in housing costs and the booming market for luxury property and goods bought not for use but as ‘investments’. There were a couple of apologists for the rich telling us that they didn’t believe you could make the poor rich by making the rich poor, as if anyone wanted to do that (a bit of polarisation to the point of absurdity is always a good way of avoiding an awkward issue).
And it got some of the right people on: Thomas Piketty, David Graeber (author of the brilliant Debt: the First 5000 Years), Nick Hanauer (the US billionaire who rejects many of the myths about the rich wants more equality), Ha-Joon Chang (the alternative economist), Danny Dorling (prolific author on inequality), Matt Whittaker from the Resolution Foundation, and Deborah Hargreaves from the High Pay Centre. Jacques Peretti did a good job as the interviewer/investigator, avoiding the egoism and gush of the usual suspects fronting these sorts of programmes.
No doubt BBC2 will be charged with ‘bias’. If anyone wants to put on 2 episodes arguing against it, I hope BBC will let them. That would be better than the ridiculous expectation that every programme should achieve ‘balance’.
Anyway, you’re waiting for the ‘but’:
Well first, although it did mention wealth extraction, it failed to make explicit the dependence of the super-rich on unearned income – the crux of the matter when it comes to evaluating the legitimacy of extreme wealth. So while it did say austerity and stagnating pay for the majority were products of the rise of the super-rich, it didn’t get to the heart of the matter, to the mechanisms by which the rich extract wealth from others, though some were at least implicit in its coverage of debt and interest payments.
Second, it used those dangerous, ideological words ‘investment’ and ‘investor’, without showing how they cover both real investment in new activities (wealth creation) and financial investment that just provides the investor with a yield at the expense of others (wealth extraction), and regardless of whether any real investments result from them.
Third, there was also little on the return of plutocracy – the infiltration and capture of the state by the super-rich and their political supporters, servants and sycophants, though some of the super-rich did recognize that one day the 99% may realize what has been done to them, and rise up.
Lastly while it did mention Citibank (bailed out by the American people in 2008 after
sustaining huge losses in the crash), and its services to the super-rich, it missed an opportunity to reveal the shocking contents of its ‘Plutonomy’ reports, produced for its ultra-rich clients but leaked to the press in 2006. The last of these reports, sensitively titled Plutonomy Rising Tides Lifting Yachts, reassured its readers that “the rich are likely to keep getting even richer, and enjoy an even greater share of the wealth pie over the coming years.” However, they needed to be vigilant:
“RISKS — WHAT COULD GO WRONG? Our whole plutonomy thesis is based on the idea that the rich will keep getting richer. This thesis is not without its risks. For example, a policy error leading to asset deflation, would likely damage plutonomy. Furthermore, the rising wealth gap between the rich and poor will probably at some point lead to a political backlash. Whilst the rich are getting a greater share of the wealth, and the poor a lesser share, political enfranchisement remains as was – one person, one vote (in the plutonomies). At some point it is likely that labor will fight back against the rising profit share of the rich and there will be a political backlash against the rising wealth of the rich. This could be felt through higher taxation on the rich (or indirectly though higher corporate taxes/regulation) or through trying to protect indigenous [home-grown] laborers, in a push-back on globalization — either anti-immigration, or protectionism. We don’t see this happening yet, though there are signs of rising political tensions. However we are keeping a close eye on developments.” (emphases in the original)
Democracy is a dangerous thing if you’re a member of the plutocracy. As the BBC2 documentary noted, the 99% could stop the 1% at any time – and the Ministry of Defence, represented by Rear Admiral Chris Parry*, has already warned of a backlash if inequalities deepen – but you can be sure that the plutocracy will fight hard and dirty to resist this.