It’s time to take power back from the plutocrats

Tony Blair and Bill Gates aren’t big fans of author Anand Giridharadas. But Merryn Somerset Webb finds he has a lot of good points on plutocrats and the do-gooders of Davos.


Tony Blair: richsplaining at Davos
(Image credit: © 2019 Bloomberg Finance LP)

Listen to the whole of Merryn's interview with Anand Giridharadas on the MoneyWeek Podcast

When I spoke to Anand Giridharadas about his new book Winners Take All: The Elite Charade of Changing the World last month, it was Davos week. Neither of us were there. My absence went entirely unnoted. Not so Giridharadas's. Had I noticed, he said, that both Bill Gates and Tony Blair had had a dig at him, "something that was sort of fun." I bet it was: after all, get a rise out of the likes of Gates and Blair and you can be pretty sure you've touched a nerve or two. It also makes sense: Davos is the place where the people being criticised in Giridharadas's book very rich do-gooders are most likely to gather; or as he puts it himself, "a family reunion for the plutocrats who broke the modern world." These billionaires and CEOs "are the people who pushed a generation of insecurity on the advanced economies, who have benefited from the cataclysmic shifts of our age, who have benefited from globalisation and trade"

Think, he says, about the great forces of change in our lifetime. There has been globalisation this great "mingling of the world." There has been the extraordinary rise of India and China and the rise of both women and people of colour in many countries. These things alone represent huge changes to people's lives. But on top of that we have also had the tech revolution. It's all great on paper but one effect is that those who have been on the right side of it all have become extreme winners. Many of those who have not, "have actually lost ground". This losing of ground has not been a necessary part of the change it is government policy that shapes how new forces actually play in people's lives. Germany has, for example, been subject to most of the same forces as the US "but because of policies it has in place, people don't die on the street because they don't work enough hours to have healthcare, right? In the United States we haven't made that choice".

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"Richsplaining" and the erosion of democracy

Why not? Giridharadas reckons it has a lot to do with the policies the winners have pushed for in taxation, labour law and education policies that keep them winning. They talk "incessantly about changing the world but the kind of change they want to talk about in places like Davos and the Aspen Ideas Festival is change that changes everything except their power and privilege". They want to be seen to alleviate the effects of their power (and wealth) but in such a way that that power remains undiminished. Look at any issue, says Giridharadas, and you can easily see "what's the real thing and what's the fake thing".

Take the empowerment of women. We know what really empowers them "policies such as maternity leave", for example. But these kinds of things "cost the winners a lot, cost men a lot so, what do the plutocrats offer? Lean In Circles'... a phoney empowerment kind of thing that does nothing to change structural power". It's the same with poverty. "These people love to talk about microcredit" but they certainly don't want to help alleviate poverty by stopping using tax structures that "cost the world billions and billions" or even paying a wealth tax. The rich and powerful get a lot of attention. They "get to kind of richsplain change to the rest of the world". But it's change that works for them, not us: we've allowed ourselves to believe it's OK to let the people who burned our structures down to be its firefighters.

The problem now is that we are all beginning to see through this. Our Davos class has ignored people's real pain in their attempt to perpetuate rigged economies. But while they have been busy playing with their philanthropic foundations and phoney solutions, another group of leaders have appeared "who exploit the angst and fear of those middle and working-class people by trying to make them fear the other, whether it's Polish people, or Mexican people, or Muslims, or whatever". Now none of these "others" have anything to do with the real source of the angst (listen to our podcast for more on whether immigration was a real driver of Brexit).

"The people who burned our structures down are now acting as firefighters"

But it does play into the feeling of the last decade that "the shaping of our societies is somehow beyond the grasp of citizens, even though that's the promise of democracy". People like to feel they have a say in their societies. But when there are too many "supranational institutions that don't manage to cultivate legitimacy in the eyes of... citizens"; more "decisions being made plutocratically and privately"; and "more problems being solved through business arrangements and market arrangements" than via the ballot box, they may not feel as though they are getting that say. "Their town is changing, their job is changing, their company has changed ownership four times, they've had to be retrained for something three times. Their kids studied something but that didn't turn out great, so now the kid has to study something else. Their town used to be white, now it's not. Their town used to be of colour, now it's white. All the stuff that we've put people through in the last 30, 40 years, it is really important in a moment like this that people feel agency over the fate of their society". OK, I say, I entirely agree. But how? "By restoring real democracy," something that might mean different things in different places. "In the United States it starts with getting money out of politics. On a bunch of issues there is a public position that is 55, 60, 65% in favour of something, and none of those things can ever happen because there's basically a billionaire veto."

How companies can change for the better

So what, I ask, can companies do in this context? The answer is pretty clear. Run their companies better and get out of areas that should be left to the public sector. "I actually do not need Mark Zuckerberg to try to end all the diseases (in the world)... because apparently only some guy who knows code can do what the entire medical profession has failed to do all this time I need Mark Zuckerberg to not compromise British and American democracy. Because when British and American democracy get compromised, the world starts to spin a little bit out of control."

The same goes for the big banks. "I don't need Wall Street banks to donate $3m to a shelter for women. I need Wall Street banks to be regulated in ways that actually don't allow them to put millions of women on the street when they create financial crises." The key point here is that many companies are creating major problems. When those problems become obvious, they help a few people out, when "we actually just need them to stop causing these problems".

And we need to stop putting them in charge of fixing the world. We used to move forward by reforming "systems and laws and policies". Now we go transnational and get plutocrats together with government representatives and end up with privately-funded initiatives to make the world better, where "the person with the real power is the person funding it. The private actor who can decide whether to say yes or not". That's not good for society.

"I don't need Mark Zuckerberg to end disease I need him to not compromise democracy"

So what's one simple thing all well-meaning companies can do right now? How about a "complicity audit on their role in the biggest problems of our time"? says Giridharadas. Instead of fiddling around the edges, how about they look at "extreme inequality, insecurity, this populist anger, climate change, the big issues" and look at the extent of their own involvement? They should ask these questions of themselves: "What policies are you lobbying for? What is your tax evasion or avoidance situation? Does your company use tax havens? Why... is it doing that to advance the public good? Why? How?" Sounds great, I say. But I've been writing about this kind of thing for years and telling CEOs over and over that they need to start really fixing things. They haven't. And they probably won't. So they are soon to have the distressing experience of finding out that when push comes to shove, governments are more sovereign than companies (the tech firms are first in line, of course).

It's a mix of regulation (forcing Amazon to pay a new higher minimum wage perhaps, and breaking up monopolies and oligopolies) and an actual crackdown on tax avoidance and tax havens. Do that and you'd fast find you had fewer billionaires and maybe more millionaires. But this also needs new leaders, says Giridharadas. Right now, it is the Trumps of the world who are speaking "emotionally and compellingly" to people. Those who have the kinds of policies that might work are not. Oh dear. Still, there is some good news, says Giridharadas: "I think we are at a turning point". Look at the questions being raised at Davos about Davos (I have a clippings file jammed with complaints about do-gooders on snowy mountains) and at the "real wave of new voices... raising pretty fundamental questions" in the US. Look at Alexandria Ocasio-Cortez. She was recently asked if the US should have billionaires. She said no. "That's a pretty transformative statement to make." Does he agree? "I think she's absolutely right."

Who is Anand Giridharadas?

Anand Giridharadas, 37, is an author, and a former columnist and foreign correspondent for The New

York Times. He was born and raised in Cleveland, Ohio, and educated at the University of Michigan, Oxford, and Harvard. He worked briefly as a consultant for McKinsey & Co in Mumbai, before becoming a journalist in 2005. He appears regularly on TV and radio, and is an on-air political analyst for MSNBC. He teaches journalism at New York University and lives in Brooklyn, New York.

His latest book, Winners Take All: The Elite Charade of Changing the World (2018, Penguin Random House), looks at how the global elite preserve their privileged positions while paying lip service to solving global problems they helped to cause in the first place. He has written two other books: The True American (2014) and India Calling (2011). He was just been awarded the Outstanding Lifetime Achievement Award for Humanism in Culture (the "Rushdie" award) by Harvard's humanist association.

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.