Sometime after the World Economic Forum scrum, Billionaire Husband and I got to talking about the lousy amenities at the Steigenberger Grandhotel Belvédère in Davos (the hard, European-size mattresses, for instance) and the silly village rule that allows no salt on the wintry roads. (Thus, we got to see the president of Liberia slipping along the Guggerbachstrasse before dinner. I mean, the woman has hardly ever seen snow. You’d think for this one week they’d relax their uptight Swiss-ish-ness and treat the sidewalk, so that Mme Sirleaf wouldn’t break her neck.) But mostly we talked about the idea of inequality.
You might recall that Davos opened with a letter from Pope Francis: “I ask you to ensure that humanity is served by wealth and not ruled by it.” And that Oxfam issued a report revealing that the richest eighty-five people in the world have as much wealth as the bottom half of the global population. The director of Oxfam said the result of all this money is that “the very wealthy people capture power.” Well, um, yes. Calling Mr. Medici!
This story first appeared in the March 3, 2014 issue of WWD. Subscribe Today.
Looking back over the hand-wringing at Davos, Hubby and some of his friends sat over dinner, talking about the posturing of the whole convention—a bunch of billionaires and multimillionaires pretending to care about the billions of people they don’t know and will never meet, and to whom they will never even have a cozy, award-winning-play kind of six degrees of separation.
And they decided that an unequal distribution of wealth has always been a feature of civilization. And billionaires welcome merit-based competition. In fact, they love it. They just don’t see inequality in the acquisition of assets as a problem. One of the guys at the table, an American, said: “The answer to the question of fixing inequality is to not fix it. It’s like thinking you can fix gravity or aging. In the animal kingdom, every species has a pecking order, but it’s all for the good. Unfortunately, humans have a rather vicious way of attacking one another.”
The American billionaires from Wall Street, by the way, are held in low regard by their European, Russian, and Latin American counterparts. “They act like parasites, taking wealth from Main Street and conveying it to Wall Street,” a European richie told me. And there is no question that the money-printing by the Federal Reserve has created a Sisyphean cycle of greed and excess. It won’t end well for America, and the whole Occupy Wall Street thing was a tiny taste of what’s to come. The highs and lows keep intensifying, and each reflation of wealth and income winds up going to a smaller group at the top. Read David Stockman’s The Great Deformation for more on this. It’s a big fave among billionaires; also, he understands.
After serving Reagan as an economic adviser, Stockman ended up a big swinging dick at Blackstone. When the bubble burst in 2007, he was charged with fraud after one of his companies failed. Now his stone-and-shingle mansion in Greenwich, Connecticut, is on the market. But as a local Realtor told The New York Times, “For $9 million, it’s a nice little house. But these types of houses don’t age well. There’s too much horse crap out there on the polo fields.”
The Davos conference ended with a speech by Jim Wallis, the theologian and editor of Sojourners, which bills itself as a journal “of faith and social justice.” (Now there’s a magazine Davos attendees keep at their bedside.) Wallis talked about how CEOs and presidents and prime ministers had approached him at Davos to discuss whether or not they had lost their way. “Davos confessionals,” he called them. He talked about “that moral compass we have, or would like to have, or maybe feel like we once had but no longer are so sure.”
Losing that moral compass? Please. It’s a tricky thing for a billionaire to keep a compass in his pocket when his wallet keeps edging it out.
In the great cosmic swirl, there is an unequal distribution of chance, talent, and drive. And by “chance,” I don’t mean the guy who starts out with a fortune. I mean the one who takes advantage of being in the right place at the right time—for instance, Mikhail Prokhorov. During the period when former USSR-controlled industries were being privatized, he realized he could buy the Russian nickel industry for a fraction of its value, making him a billionaire before age 30. He had grown up poor, but his family was educated, and so was he. And he was driven. And he became wealthy.
Chance came into play once again when, after allegedly flying a planeload of Russian party girls to the Côte d’Azur, Prokhorov was forced (by the resultant scandal) to sell out to his nickel partner—just before the market tanked. And now he owns the Brooklyn Nets! And is BFFs with Jay Z! And, fun fact, is so much taller than Vladimir Putin, he makes Putin look like Pepé Le Pew. For which he will no doubt be imprisoned at some point. I kid.
It turns out that education—at least, according to these guys at dinner—is the world’s biggest factor contributing to inequality. And, of course, luck. Not to mention Russian party girls.