Many people know that economic inequality has grown significantly over the past few decades. But it may shock you just how much global wealth is controlled by a tiny capitalist class — and how much power that gives them.
Thanks in part to movements like Occupy and Bernie Sanders’s presidential campaigns, it’s no secret that the United States, and the world, are grossly unequal in wealth and income. But many people may be unaware of just how bad inequality has gotten, both in the United States and globally, or what it might mean for humanity’s future.
In his new book, Mastering the Universe: The Obscene Wealth of the Ruling Class, What They Do with Their Money, and Why You Should Hate Them Even More, economist and Jacobin contributor Rob Larson provides an up-to-date primer on the scope and scale of the widening gap between the very rich and everyone else. Jacobin’s Sara Wexler recently caught up with Larson to discuss the uberrich, their grotesquely lavish lifestyles, and the pernicious threats extreme inequality poses to human freedom, a livable planet, and more.
- Sara Wexler
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Many people who see economic inequality as a problem may still not grasp the extreme magnitude of the disparities you discuss in Mastering the Universe. Could you share some of the statistics on wealth and income inequality that you think people might find especially shocking or surprising?
- Rob Larson
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Many people are vaguely aware that the rich have too much money, but they may not realize the tremendous scale of the issue. The World Inequality Database (WID), a consortium of economists whose work I rely on in the book, have current estimates of world wealth concentration that are truly eye-watering. In the United States, in 2021, the richest 1 percent of households owned 34.9 percent of the national wealth; worldwide, the 1 percent owns 40.5 percent of all wealth. In country after country, the top one in one hundred households owns around a third of whatever there is to own. Even more consistently, the bottom 50 percent has between about 3 percent and -3 percent of national wealth — in other words, “nothing,” to use a sophisticated economics concept.
More surprising, perhaps, is that the same richest 1 percent took home 27 percent of world per-capita wealth growth from 1980 to 2017. That’s a big deal, since liberals and conservatives alike argue that the best way to address poverty or inequality is to grow the economy — but it turns out that this has left the ruling class with an even more lopsided share over the past several decades.
Finally, one of the most important things I try to draw attention to in the book is the connection between the 1 percent and the corporate economy. We tend to say corporations are unaccountable, and it’s true they’re not accountable to us — we don’t get mass manufacturing layoffs, bank mergers, and tech platforms selling our data because those things are popular with the public. But corporations are accountable to their owners — the major stockholders, who hold ownership shares in the great global corporate empires. Research by Richard Wolff found that in 2016, the top 1 percent owned 40 percent of all corporate stock, and the top 10 percent owned 84 percent. Today’s big corporate profits pour into the pockets of the already rich, through traditional dividends or through stock buybacks.
- Sara Wexler
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You connect your discussion of inequality with the question of freedom. Defenders of capitalism claim that capitalism gives us freedom; with the advent of the “free market” and consumer capitalism, we can choose among a vast variety of job opportunities as well goods and services.
- Rob Larson
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Philosophers historically have developed two broad conceptions of freedom. Negative freedom refers to not being subject to the forcible interference of other people or institutions, a “freedom from” outside coercion. Positive freedom, on the other hand, refers to the ability to consume certain goods or perform certain actions, a “freedom to” do things.
Frequently, liberals and conservatives claim capitalism provides negative freedom, since the government can’t generally tell you what to consume or what career to pursue. Conservatives also often add that positive freedom isn’t desirable, since such freedom might entail undesirable entitlements like school lunch or public health insurance. So the usual line is that capitalism provides negative but not necessarily positive freedom.
Socialists often argue, however, that capitalism in fact fails to provide either form of freedom. While most workers under contemporary capitalism have more career freedom, say, than they would under feudalism and or in a totalitarian state, we’re all subject to the enormous power of the tiny rich elite who are the major shareholders in today’s gigantic global firms. When your boss wants to sample your urine to make sure you’re not having too much fun on your time off, or says you have to move to Texas to keep your job, or just closes the whole plant and moves production overseas, you’re sure as hell subject to the coercive interference of capitalist managers and investors, who can put you in the position of hustling to find a new job while the bills pile up.
- Sara Wexler
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Some of your book is devoted to the very lavish (to put it mildly) lifestyles of the ultrarich. Maybe you can relate a few anecdotes.
- Rob Larson
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What you discover writing a book like this is, there’s almost too much to choose from. For instance, there are the stupefyingly rich men who buy beloved art masterpieces and treat them like throw rugs. One person had an expensive Japanese modernist print cut up to accommodate his space; casino kingpin Steve Wynn infamously put his elbow through Pablo Picasso’s Le Rêve while showing it off to guests.
These families often buy these masterpieces purely as investments, meaning they disappear from public view and end up in free ports, air-conditioned storage facilities, with the public unable to enjoy them. Picasso’s Garçon a la pipe was bought at a 2004 Sotheby’s auction for $104 million and disappeared from public view. Art dealers have told the press they assumed the painting was in a free port somewhere.
One very rich Hamptons woman enjoyed impressing her guests by regularly switching the flowers in her giant garden. But she was offended by the sights of her gardeners toiling, and so ordered that they complete their labors overnight by lantern light. Mark Zuckerberg bought up four houses that neighbored his Crescent Park home, just so he could tear them down and replace them with foliage and other sight-line obstacles. Considering his company’s history of hoarding user data for sale, the Wall Street Journal called that “a tad ironic.”
The financial journalist Robert Frank covered an elite butler academy, where you learn that rich families like their wine glasses at dinner kept right at half-full but their shampoo and toothpaste always topped-up, and that they like their drawers, clothes, and personal items arranged the same in all their different homes:
Most of all . . . students learn never to judge their employers, whom they call “principals.”. . . If a principal is in Palm Beach and wants to send his jet to New York to pick up a Chateau LeTour from his South Hampton cellar, the butler makes it happen, no questions asked.
- Sara Wexler
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You argue that the wealth inequality produced by capitalism separates classes into distinct physical spaces. You call this “class segregation.” What is class segregation, and what are its effects?
- Rob Larson
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Anyone trying to rent or buy a home today is familiar with being “priced out” of different locations and markets. Across the tremendous breadth of housing prices, this creates simple market sorting, which eventuates in class segregation — working-class families are often stunned when they witness a really rich neighborhood or home, and likewise wealthy people are known to be taken aback by conditions in poor areas.
Sometimes this class segregation can be seen with the naked eye, as when home prices and visible conditions change radically across physical barriers like highways, or on the literal wrong side of the railroad tracks. But beyond divisions within the working class, the neighborhoods of the really rich are segregated behind the walls and guard posts of gated communities or high-rise luxury towers, which keep their inhabitants away from, and indeed almost totally oblivious to, the lives of everyone else.
Sometimes it’s especially naked, like when liberal jurisdictions like New York and London insisted that property developers include low-income units in new buildings, in addition to market-rate units for the wealthy. The developers then created separate building entrances: a grand one with concierge service for the rich tenants, and a utilitarian, camera-surveilled one for the lower-cost units — “poor doors.” One real estate agent openly says the purpose of having separate entrances is “so the two social strata don’t have to meet.”
- Sara Wexler
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You argue that we are seeing a revival of a long dormant labor movement in the United States, which is necessary to tackle our extreme inequality. But you also discuss the success of corporations like Amazon, Apple, and Starbucks in crushing recent unionization efforts. Can workers still win unions when corporations are arguably more powerful than ever?
- Rob Larson
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There are important factors outside and inside the labor movement to consider. The COVID-19 pandemic, for example, had a similar historical effect to past pestilences and plagues in reducing the size of the labor force, as people quit work for fear of disease or to care for sick loved ones, or got sick themselves for months or died. That yearslong epidemic tightened the labor market and increased worker bargaining power, as employers faced a difficult hiring climate and were forced to issue real raises and improvements to benefits.
Another outside factor is growing public sympathy for labor unions, and the Biden administration’s relatively benign outlook toward organized labor and more favorable National Labor Relations Board appointments. In addition, internal to the movement, younger workers are often more open to organizing. Perhaps it has to do with growing up in the era of billionaires and massively powerful corporations.
All the classic employer tools are still around and deployed with continuing refinement. But we have still seen recent labor victories including the Amazon JFK8 union win, or the United Auto Workers’ recent success organizing an auto plant in Tennessee. Defeats are constant in labor, but these trends make a labor comeback a real possibility.
- Sara Wexler
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Let’s drill down into the issue of climate change. How, in your view, does extreme inequality and wealth concentration drive climate change?
- Rob Larson
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A number of researchers are doing pioneering work developing estimates of climate emissions by wealth. The WID estimates that the richest 10 percent of households globally emit about 47.6 percent of the world total, and the top 1 percent alone emits 16.8 percent, about 110 tons of CO2-equivalent per year. They observe that “close to half of all emissions are due to one tenth of the global population, and just one hundredth of the world population (77 million individuals) emits about 50 percent more than the entire bottom half of the population (3.8 billion individuals).”
Telling figures indeed. But when you drill down into those aggregate numbers, it gets even crazier, with the definitively climate-reckless ruling class toy no longer being the megayacht, but the private jet. The prices of private jets reach well into the tens of millions for planes with lux interiors and top-end flatware and cabin trim. The European research group Transport & Environment reported private jet travel is about ten times as carbon-intensive as commercial flights (let alone train travel). They also found that 41 percent of private flights are empty legs — a plane without passengers, flying to meet its rich owner in London or at Burning Man.
Ultimately though, it’s not so much the ruling-class luxuries that makes the rich the main climate-change culprit, but their ownership of the productive economy. The same ownership that gives them so much power over society also makes them the source of most emissions. Matt Huber, in his great book Climate Change as Class War, uses public data to estimate that the industrial sector made up 54.8 percent of world energy use, relative to transportation at 25.5 percent and residential use at 12.6 percent.
- Sara Wexler
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Mastering the Universe argues that the central task of working-class politics today must be “expropriation” of the ruling class. Why? Why isn’t taxing the rich and redistributing some of their wealth sufficient?
- Rob Larson
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Liberals, who may be sympathetic to the socialist critique of corporate power and inequality, often say that it’s going too far to expropriate the rich — meaning, socialize their wealth and property. Why not instead just levy heavy taxes on them and limit the power of their businesses with government regulations and antitrust law? The advantage of this approach is that the means to achieve these more modest goals already exist, for the most part, and these measures wouldn’t require a fundamental reshaping of social relations. This was of course a big part of why the labor and socialist movements of the postwar era were persuaded not to try to break with capitalism entirely but instead to tame it with social democratic reforms.
The problem is that, with the crucial ownership of society’s productive resources still in the hands of the 1 percent, they can bide their time until they can make a move to roll back progressive taxation, regulation, and labor unions — this is what happened starting in the 1970s, of course, inaugurating the neoliberal era that has seen the wealth distribution nearly climb back to where it was in the pre–social democratic Gilded Age of the late nineteenth century.
Reforms like progressive taxation and protections for union organizing are important and make real differences in tackling inequality. But they’re not enough to check the incredible power of the ruling class, which is why socialists have long fought for economic democracy.