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Blacklisting the super rich

Blacklisting the super rich
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First Published: Sun, Mar 13 2011. 10 09 PM IST
Updated: Sun, Mar 13 2011. 10 09 PM IST
Deposed Egyptian president Hosni Mubarak may now be powerless, but he is not moneyless. There are several estimates doing the rounds about how much wealth the Mubarak family has stashed away. The Guardian reported on 4 February that it could be as high as $70 billion.
Mexican tycoon Carlos Slim and his family are worth $74 billion, according to the latest list of the richest people in the world that is published every year by Forbes magazine. Not much separates the size of their fortune with what the Mubaraks are said to be worth. What is $4 billion in the world of plutocrats? But there is an important distinction: the fortune of the Slims comes from wealth creation while the Mubarak fortune is from embezzlement.
This is a distinction that matters. The political climate has changed, and the super rich are under attack around the world against the backdrop of angst and anger—angst about growing income inequality and anger at the way Western governments rushed to bail out fat-cat bankers while doing precious little to help distressed home owners and unemployed workers. The air is thick with recommendations to impose special taxes on the super rich and bring back stiff estate duties to prevent consolidation of wealth in select families.
The angst and anger are not baseless, even though they skirt important issues on the nature of wealth today. As Chrystia Freeland argued in an excellent article published in the January issue of The Atlantic, the super rich today are more meritocratic and hardworking than their earlier peers, though they are “less connected to the nations that granted them opportunity—and the countrymen they are leaving ever further behind”. As far as India goes, these columns have often pointed out how the fact that so many of the Indians who make it to the Forbes list have earned their wealth from oligopolistic industries (where management of government policy and access to natural resources matter) rather than in competitive industries (where innovation, technology and brands are the key to success).
Yet, despite all these caveats, the men and women who top the global fat-cat league have created economic value in their respective countries, and often around the world as well. They have created jobs, new products and provided tax revenues to governments. For all its warts, such wealth creation is essential for economic progress. The attack on inequality should not lead to a general backlash against business.
In fact, embezzlement of money by corrupt political regimes does far more harm to the poor in whose name so many politicians claim to rule.
The world’s richest: robber barons or economic drivers? Tell us at views@livemint.com
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First Published: Sun, Mar 13 2011. 10 09 PM IST