Chrystia Freeland

‘‘The next 10 years is going to be the most exciting time in our lives!’’ said Tejpreet Singh Chopra, an Indian entrepreneur. ‘‘The Indian economy will double! It will be incredible!’’

It was hot and humid  —  typical spring weather in Dar Es Salaam, Tanzania. It was also late  —  close to midnight. But the enthusiastic Mr. Chopra, dressed in a still-crisp light  shirt with blue and white stripes, navy trousers and blue turban, was on his way to yet another meeting.

Mr. Chopra was in East Africa last May as one of the World Economic Forum’s Young Global Leaders, a sort of farm team for the full-grown global business elite that gathers every January in Davos.

As that meeting of the World Economic Forum begins, Mr. Chopra, 41, is among the 2,500 participants.

And intentionally or not, Davos will focus attention on one of the most striking consequences of the most recent technological revolution and the spread of globalization that has transformed the world economy in the past 30 years or so: the emergence of an international economic elite whose globe-trotting members have largely pulled away from their compatriots.

The trend is particularly stark in the United States, where from 1980 to 2005 more than 80 percent of the total increase in income went to the top 1 percent of the population. The gap there between the superrich and everybody else is now greater than at any time since before the Depression of the 1930s.

Income inequality has surged in much of the rest of the world, too: in Britain and Canada, to be sure, but in the  more egalitarian countries of Scandinavia and Germany as well.

While poor but resource-rich countries like Brazil, Mexico and South Africa have long been known for stark disparities in wealth and income, the divide is widening further in emerging markets, too, including India and China, which now has a bigger gap between the top and bottom than the United States.

But in contrast with the landed, and often leisured, aristocracies of previous eras, the elite now consists mostly of ‘‘the working rich,’’ in the words of Emmanuel Saez, an award-winning economist at the University of California, Berkeley, who is one of the leading students of income inequality.

In 1916, Mr. Saez’s research shows, the richest 1 percent of Americans received only one-fifth of their income from paid work. In 2004, in  contrast, paid work accounted for 60 percent of the income of that same sector.

Mr. Chopra clearly belongs in this group. Born and educated in Chennai (formerly Madras, and also the hometown of Indra Nooyi, the chief executive of Pepsi, who will be one of the star speakers at Davos this year), Mr. Chopra’s first two jobs were working for Lucas Diesel Systems in Britain and France. He earned a master’s degree in business administration from Cornell University in New York State, a member of the Ivy League, and spent the next decade at General Electric in Connecticut and Hong Kong before moving back to India.

Mr. Chopra met his future wife — a fellow Indian — while he was working in the United States. She has a law degree from New York University and handled mergers and acquisitions for the Wall Street law firm Weil, Gotshal & Manges.

He was disappointed that she could not join him in Dar es Salaam, but she was attending another gathering of the global elite, the annual meeting of the Young Presidents Organization, a group of  leaders younger than 40, in Hong Kong.

Hong Kong is a more familiar watering hole than Tanzania for 21st-century business lions. Indeed, someone looking for a country that has not yet found its place in the hyperconnected, turbocharged world economy would find those of East Africa at the top of the list.

While Tanzania and Kenya are popular as tourist destinations for affluent Westerners seeking some of the last wild places on earth, Dar Es Salaam and nearby Zanzibar had their last moment of global economic relevance in the 16th and 17th centuries, when they were important entrepots in the spice trade. Since then, they have pretty much fallen off the world business map.

That was part of the reason Mr. Chopra was there. In anti-globalization circles, the World Economic Forum has become a symbol for rapacious international capitalism and the insular elite that benefits from it. The more complicated reality is that Klaus Schwab, the Swiss professor who created and masterminds the World Economic Forum, is a rather traditional European social democrat who aims to encourage among its participants a kind of noblesse oblige, or its modern equivalent, stakeholder capitalism.

Hence his summoning of the crown princes of international business to sleepy Tanzania, giving the country a national branding opportunity gratefully acknowledged in front-page coverage of the conference and the V.I.P. status accorded to its participants.

It was easy to see why the back-room boys at the Forum had tapped Mr. Chopra — ‘‘my friends call me T.P.’’ — as one of global capitalism’s dauphins. In 2007, when he was just 37, Mr. Chopra was chosen as the first Indian to run G.E.’s Indian business.

While there, he helped manage the creation of the Mac 400, a portable electrocardiogram machine made and designed in India. A cheaper, cruder, and lighter version of a  U.S. model, the  Mac 400 weighs one-fifth what the original does; its price is the equivalent of less than $1,000. Virtually all of the engineers who created it were based at G.E.’s Bangalore research lab.

Selling Western technology and brands into emerging markets is an old story — even drowsy Dar es Salaam boasts international hotels like the Kempenski and Holiday Inn and billboards hawking Nokia cellphones. So is selling cheap labor to developed markets in the form of manufactured goods or services like call centers.

The Mac 400 is an example of the next stage: emerging market engineers, employed by a Western company, creating a product inspired by a Western prototype and redesigned for emerging-market consumers. Two years ago, in the Harvard Business Review, Jeffrey R. Immelt, G.E.’s chief executive and now a top outside adviser to President Barack Obama, dubbed this process ‘‘reverse innovation’’ and said that without it Western companies like G.E. would be defeated by their emerging market competitors.

To be sure, the world’s most sophisticated companies, like G.E., Google and Goldman Sachs, are finding plenty of ways to profit from the great economic shift under way. But the greatest riches go not to institutions but to individuals smart enough and lucky enough to make it on their own. Just a few years out of college, for example, Facebook’s founder, Mark Zuckerberg, is already challenging Google, prompting the recent management shakeout there.

Three weeks before the World Economic Forum’s conference in Tanzania, Mr. Chopra left G.E. to start his own company. Following the model of Nucor, which revolutionized the U.S. steel business by building minimills, Mr. Chopra has founded Bharat Light & Power, a clean-energy utility.

‘‘I’ve helped so many entrepreneurs when they just had a piece of paper, and I thought, ‘I could do that,’’’ Mr. Chopra said. ‘‘When you work in a corporation, when you retire, you only look back. As an entrepreneur, you are always looking forward. I wouldn’t be happy in my life if I was always looking back.’’

Mr. Chopra’s story reflects the spread of Western technology and the adaptation of U.S. management techniques to the global market. It is about making fancy medical devices available to the rural poor of India.

Mr. Chopra’s career — and it is just beginning — shows how a venerable behemoth like G.E. is adapting to the changing world economy and highlights the tremendous opportunities available to educated, risk-taking entrepreneurs.

But Mr. Chopra also embodies an uncomfortable paradox: Even as the gap between the advanced industrial world and emerging markets is shrinking, raising living standards for hundreds of millions of people, within individual countries,  the people at the very top are doing so much better than everyone else.

Robert Reich, a professor at Berkeley who is a former U.S. labor secretary, illustrates the disparity with a vivid statistic: In 2005, Bill Gates was worth $46 billion and Warren Buffet was worth $44 billion. That year,  the combined wealth of the 120 million Americans at the bottom of the pyramid, 40 percent of the population, was about $95 billion — barely more than the sum of the fortunes of those two men.

Mr. Gates and Mr. Buffett are extreme examples, of course, but they embody a broader trend. The richest one-hundredth of 1 percent of American families — about 15,000 — accounted for less than 1 percent of national income in 1974. By 2007, the figure was 6 percent, according to Tyler Cowen, an economist at George Mason University outside Washington. That difference translates into hundreds of billions of dollars.

None of this is a secret, but it does not get as much attention as many critics think it deserves. One reason for that may be that the plutocrats do not like talking about it very much. In a history of global income inequality published last month, Branko Milanovic, a World Bank economist, wrote that ‘‘studies of interpersonal inequality are not too popular.’’ That is because, he believes, ‘‘inequality studies are not particularly appreciated by the rich.’’

Mr. Milanovic recounted a discussion with the head of a prestigious Washington research institute, who told him that ‘‘the think tank’s board was very unlikely to fund any work that had ‘income or wealth inequality’ in its title.’’

‘‘Yes, they would finance anything to do with poverty alleviation,’’ he recalled, ‘‘but inequality was an altogether different matter.’’

One concern some economists express about the emergence of a global plutocracy is that it may be driven, not only by seemingly benign forces like the technology revolution and global trade, but also by malign ones, particularly the elite’s ability to shape government and other public policy activities in its own self-interest.

That is a point made by Ragharam Rajan, a professor at the Booth School of Business at the University of Chicago, the intellectual home of free market economics in the United States.

In 2008, Mr.  Rajan, who will be a panelist at Davos this year, delivered a stinging keynote address at the Bombay Chamber of Commerce. India, he said, risked becoming ‘‘an unequal oligarchy, or worse — perhaps far sooner than we think.’’

One piece of evidence Mr. Rajan cited was a spreadsheet compiled by Jayant Sinha, a classmate of his from the India Institute of Technology, the alma mater of many  Indian software entrepreneurs. Mr. Sinha had calculated the number of billionaires per trillion dollars of gross domestic product in a number of countries around the world. Russia, with 87 billionaires and a national G.D.P. of $1.3 trillion, had the highest ratio. India, Rajan said, was No.2, with 55 billionaires and a $1.1 trillion G.D.P.

Mr. Rajan assured his audience that he had nothing against billionaires per se. ‘‘We should certainly welcome it if businessmen make money legitimately,’’ he said. But he argued that India’s high ratio was alarming because ‘‘too many people have gotten too rich, based on their proximity to the government.’’ Instead of reflecting new software inventions or a thriving manufacturing operation, ‘‘land, natural resources and government contracts or licenses are the predominant sources of the wealth of our billionaires, and all of these factors come from the government,’’ he said.

‘‘If Russia is an oligarchy,’’ Mr. Rajan warned the assembled magnates, ‘‘how long can we resist calling India one?’’

The rise of government-connected plutocrats is not just a phenomenon in places like Russia, India and China. The generous government bailouts of U.S. financial institutions prompted Simon Johnson, a professor of economics at the Massachusetts Institute of Technology, to compare U.S. bankers with emerging-market oligarchs. In an article in The Atlantic magazine, which he later expanded into a book, Mr.  Johnson wrote that American financiers had pulled off a ‘‘quiet coup.’’

Mr. Johnson, like Mr. Rajan, is a former chief economist at the International Monetary Fund. He, too, will be on a panel at Davos this year.

Mr. Johnson is on the center-left. But his view is shared in part by Mr.  Cowen, a libertarian. Mr. Cowen argues that concerns about income inequality are overstated by some critics: Quality of life is rising, and the wealth of the elite, he argues, largely represents returns for hard work and talent. ‘‘If we are looking for objectionable problems in the top 1 percent of income earners,’’ he wrote in the current issue of The American Interest, ‘‘much of it boils down to finance and activities related to financial markets. And to be sure, the high incomes in finance should give us all pause.’’

A further, more subtle critique of the globocrats (a term popularized by The Economist magazine) has been articulated by another economist who will speak  at Davos this year. Dan Ariely, a professor of behavioral economics at Duke University in North Carolina, worries that too many public intellectuals and policy makers have an unconscious but powerful tendency to view the sorts of big social and political questions debated at Davos through the prism of the self-interest of the elite.

‘‘We are deeply social animals,’’ Mr.  Ariely said. ‘‘We see things from the perspective of our friends, not of strangers.’’

‘‘One of the things that inequality does,’’ he went on,  ‘‘is it creates not a single society, but it creates multiple societies. It might be that inequality is creating another layer of separation between the in group and the out group.’’

One of the functions of the annual Davos gathering is to define an in group. Indeed, ‘‘Davos man’’ has become a shorthand for membership in the global elite.

For the World Economic Forum, that has turned out to be a highly effective business model. But Mr. Schwab, also contends that the gap between Davos man (and woman) and the rest of us is one of the biggest challenges facing the world today.

‘‘Economic disparity and global governance failures both influence the evolution of many other global risks and inhibit our capacity to respond effectively to them,’’ the forum’s Global Risks report for this year’s conference notes. ‘‘In this way, the global risk context in 2011 is defined by a 21st-century paradox: as the world grows together, it is also growing apart.’’

UPDATE — Since I wrote this column early on Thursday morning, my prediction (in the final paragraph), that we would today hear more about Immelt and his ideas on how to create U.S. jobs has been vindicated: President Obama this morning appointed Immelt to lead his outside panel of economic advisers. To hear more from Immelt, watch my exclusive interview with him here.

————

For Jeffrey Immelt, the CEO of General Electric, the 130 year-old American industrial behemoth, the financial crisis marked the end of the age of America’s economic dominance.

“I came to GE in 1982,” Immelt told me this week in Washington. “For the first 25 years, until the bubble crashed in 2007, the American consumer was the definitive driver of the global economy.” But Immelt said the future will be different. For the next 25 years, he said, the American consumer “is not going to be the engine of global growth. It is going to be the billion people joining the middle class in Asia, it is going to be what the resource-rich countries do with their new-found wealth of high oil prices. That’s the game.” A lot of that game will be played in China. At a moment when it is compulsory on the American right to pay homage to the exceptionalism of the United States, Immelt, a life-long Republican, is matter-of-fact about China’s inevitable rise.

“It is going to be the biggest economy in the world,” Immelt said of China. “The only question is when.”

In the U.S. public discourse, the big strain in the American-Chinese economic relationship is the yuan, and what many Americans view as the government-manipulated undervaluation of the Chinese currency.

Some U.S. business people—who share Immelt’s enthusiasm for the Chinese market—are so keen to court Sino-investors that they are reluctant to publicly to criticize China’s exchange rate policy.

Immelt is bolder. He supports the open complaints from Obama and his administration about the exchange rate – but not why you might think. For the GE chief, the yuan is a valid focus of U.S. economic policy, not because of its impact on his company’s bottom line, but because of its impact on American public opinion.

Here’s how Immelt explained GE’s perspective: “Is it the one, two, three, four or five issue for GE? It isn’t, because we make and sell things in so many different countries around the world.” Yet Obama was right to complain, Immelt added, because “it’s important for the President to do the right things inside our country so that people feel like China can be a partner, and if it means sometimes you have to talk tough … then I want the President to do that.” But the GE chief had a warning for those Americans tempted to attribute China’s rise, and possibly their own country’s economic malaise, to the Chinese exchange rate.

“If the American people sit back in the comfort of their home, whether it is in Ohio or New York state, and think that the only reason the Chinese succeed is because of the cheap currency, they’re missing the point. And I think that’s dangerous.” The China challenge, in Immelt’s view, is about much more than a manipulated exchange rate and “cheap labor.” “It is the adaptability, it is the speed with which they move, it is the unanimity of purpose, it is the productivity of thought,” he said, adding that when he visits his interlocutors at the Ministry of Railways in Beijing, the mandarins are at work on Sunday.

Nor does Immelt flinch when, in conversation, it is suggested that this “business model that works for them” is Communist authoritarianism. “That has been very effective,” he said. “They’re in their 12th five-year plan and they’ve done quite well.”

Immelt thinks he knows what America needs to do to thrive in this changed world. “If you want to be a great country, which the U.S. has every right to want to be, you have got to be thinking about being a better exporter,” he said. “Our only destiny can be as a high-tech exporter, that creates jobs, high-paying jobs … Export-led growth is the key to national success.” Happily for Immelt, that national destiny would be very good indeed for high-tech manufacturers, like – to take one not very random example – GE.

Both the approach, and the man who advocates it, are finding favor in a White House keenly aware that Obama must be seen as trying to reduce stubbornly high unemployment.

Expect to hear more on Friday, when Obama and Immelt, who is a member of the President’s Economic Recovery Advisory Board, are scheduled to visit GE’s birthplace in Schenectady, N.Y., and talk about … how to create American jobs in the competitive global economy.

Earlier this week in her exclusive interview with Jeff Immelt, Chrystia asked whether the GE head would replace Paul Volcker as chairman of President Obama’s outside panel of economic advisers.  Immelt ducked the question a bit, saying he would leave that decision to the President.  Today it became clear why he was noncommittal as the White House announced that Immelt will chair a new Council on Jobs and Competitiveness, the successor to the President’s Economic Recovery of Advisory Board which Paul Volcker chaired.

Watch Chrystia’s exchange with Immelt and read the transcript of his remarks below:

You know, I’m going to leave that alone. I’m going to leave it to the President. What I would say is that I think American companies and American CEOs need to be as constructive as we can be to help, you know, resolve some of these mistrusts and residue that exist in the environment today. 9.5% unemployment is not a tenable situation for any of us. You know, even though, it’s not directly my responsibility, in a broader sense, it’s all of our responsibilities. And so, I think there’s nothing wrong with working constructively with this President to try to drive growth and job creation.

Posted by Peter Rudegeair.

As President Barack Obama’s new lieutenants settle into their offices in the White House, talk has turned again to the revolving door between Washington and Wall Street: William Daley, the president’s chief of staff, arrives from JPMorgan Chase, where he earned millions; Gene Sperling, the new top economic adviser, collected $887,727 from Goldman Sachs for advice on a charity project on a recent hiatus from government.

There’s nothing new about this tradition – indeed there was a time not so long ago when it seemed as if actually running Goldman Sachs was a prerequisite for serving as Secretary of the Treasury. But the triple whammy of the financial crisis, the trillion-dollar government bailout and the return of lavish bonuses to many on Wall Street while unemployment in the United States is stuck above 9 percent has cast the intimacy between political and business elites in a new, often more jaundiced light.

To many U.S. business people, and to centrists in both parties, the concern that Mr. Obama’s White House is too close to business sounds absurd. Far from being a dangerous example of an overly intimate relationship between business and politics, Mr. Obama’s recent appointments, particularly of Mr. Daley, are seen as a welcome sign that the White House will work harder to bring business onto its side.

“We have a private, market economy. We don’t believe in the government being the source of economic growth. The whole thing depends on business,” said Laura Tyson, a business school professor at the University of California, Berkeley, and head of the Council of Economic Advisers under president Bill Clinton. “Starting from the view that business is a vested interest is not a healthy place to begin. Here’s the irony – you sit in a boardroom and you talk about making a company profitable, and then in the press there is a criticism that ‘these guys are simply maximizing profits,’ ” said Ms. Tyson, who is on the board of Morgan Stanley. “There’s this ideological inconsistency. We want business to succeed, but we also don’t want business to succeed. The point is that we don’t have an alternative economic system.”

Mark Gallogly, co-founder of the private equity firm Centerbridge, one of the President’s early supporters on Wall Street and a member of his economic recovery advisory board, said the fiercely competitive global economy made it more important than ever for government policy to be focused on making the United States an attractive place to do business.

“The goal is to provide incentives to create jobs here and not someplace else,” Mr. Gallogly said. “There are a lot of other markets where companies can invest.” All of which sounds obvious and unobjectionable, especially in a country where “socialist” is a term of derision, not a mainstream political party. So why are Mr. Daley’s and Mr. Sperling’s Wall Street paychecks a point of contention rather than a source of pride?

Raghuram Rajan, a professor at the Booth School of Business at the University of Chicago and a former chief economist at the International Monetary Fund, said one reason for popular suspicion of the ties between policy makers and financiers was the 2008 bank rescue.

With hindsight, he believes Washington should have demanded a higher price for saving Wall Street: “They should have put far more restrictions on the banks. They should not have let them pay dividends, for example.” Close ties between Washington policy makers and Wall Street banks are relevant to those decisions, Mr. Rajan argued, because of the human instinct to worry most about those we know the best.

“We have had growing inequality for 25 years,” Ms. Tyson said. “It is not just that the top has gone up; everyone else has gone down. And we are going to see even more inequality coming out of the crisis.” Mr. Gallogly, who welcomes what he sees as a more explicitly business-friendly tone from the White House, argues that “this president gets the equation that if business is successful, America will be successful.” The problem for Mr. Obama, and a source of the suspicion of policy makers with business ties, is that for many Americans, that equation has broken down.

“Is the anger simply because the elite has been found to be incompetent?” Mr. Rajan asked. “Part of the job of the elite was to keep everybody happy. By all means accumulate your stuff, but keep me growing at 3 per cent.” That may be the heart of the tension between America’s elites and everyone else. After all, rule by a moneyed, mutually connected establishment is nothing new. But to stay in charge, those insiders need a way to deliver to the whole country, not just the narrow sliver smart and lucky enough to shuffle between the C-suite and the Oval Office.

Watch Chrystia and Reuters finance blogger Felix Salmon discuss how to find “frisson” at the World Economic Forum’s annual meeting at Davos, starting with that 20-minute cab ride with the Ayatollah.  Oh, and the reinstatement of Russia’s president – all because of Davos.

Posted by Peter Rudegeair.

For anyone who ever hoped Russia could become a liberal, free-market democracy, the grim trial last month of Mikhail Khodorkovsky, the former oil tycoon who was once his country’s richest man, offered a slender solace—it was widely and loudly condemned.

David Remnick, editor of The New Yorker, compared the prosecution to that of the late poet and Nobel laureate Joseph Brodsky. Joe Nocera, writing about the business and economic consequences in The New York Times (whose global edition is the International Herald Tribune), described the Kremlin’s tactics as “boneheaded.” Secretary of State Hillary Clinton warned that the case would “have a negative impact on Russia’s reputation,” and particularly on its “investment climate.” What was notable about this chorus of foreign criticism was the implication that, even judged by the Kremlin’s own standards of realpolitik, the treatment of Mr. Khodorkovsky was a mistake. Moscow’s leaders want to restore Russia’s wealth and greatness: Western assertions that the Khodorkovsky trial had hurt Russia’s reputation and would discourage foreign investment suggested that the Kremlin was harming its own cause.

But some investors, economists and political analysts are drawing a different, and much starker, conclusion: The Khodorkovsky verdict was an inevitable and logical act of self-preservation by a regime that is fully and lucratively in control of Russia.

In this reading, there is nothing accidental about Mr. Khodorkovsky’s continued imprisonment. It is, instead, the clearest possible statement of the rules of Kremlin capitalism, and of Prime Minister Vladimir Putin’s confidence that, at least as long as Siberia has oil, there is plenty of private capital willing to play.

“Within Russia, everyone who matters understands exactly what the Kremlin is trying to say – that there is no one above the rule of the Kremlin,” said Roland Nash, co-founder of Verno Capital and a 16-year veteran of doing business in Moscow.

The message, according to Sergei Guriev, one of Russia’s leading economists and rector of the New Economic School, is this: “It is to show that Putin is fully in control. It is not a question of Khodorkovsky getting out of jail, it is a question of other businessmen not following in Khodorkovsky’s footsteps.” Ian Bremmer, author of a recent book on state capitalism and president of Eurasia Group, a global political risk and consulting firm, said the verdict was “rational” and “predictable.” “If you are in a sector the state cares about in Russia,” he said, “you either play ball with the Kremlin, or you leave.’’ Mr. Nash did remark that the Khodorkovsky case had exacted a real, quantifiable economic cost. “The Russian equity market would be worth several hundred billion dollars more if it weren’t for the critical Western perception of Russia, and the Khodorkovsky case is the principal example of that perception,” he said.

Critics of Putinism, especially Western ones, like to point to this lost value as proof that the treatment of Mr. Khodorkovsky, and the authoritarian politics that his case represents, is a mistake. But that analysis, according to Mr. Guriev, a liberal who laments the path Russia has taken, leaves out the essential political calculus of Putinism.

“Economic growth per se is not important to a ruler, if he is not there to enjoy it,” Mr. Guriev said. “Better to stay in control of a stagnant, but large and rich, country than to be kicked out of a growing one. Everyone wants a bigger cake, but better a small cake than none at all.” And while the Russia cake is surely not as big as it could be, it’s big enough, and growing steadily: Gross domestic product rose 3.7 percent last year, below China’s red-hot 10.5 percent, but better than the United States’ 2.6 percent. The Russian stock market jumped 22 percent in 2010.

One reason the cake is still big enough for Mr. Putin and his allies is that many foreign investors are still willing to tolerate an economy run according to Kremlin rules.

“I haven’t talked to one corporation that used the Khodorkovsky trial, as opposed to corruption more generally, as a factor in their investment decision,” Mr. Bremmer said. Companies in extractive industries, still the dominant sector in the Russian economy, are accustomed to dealing with all kinds of governments. Playing by the authoritarian logic of state capitalism, in Russia and elsewhere, is familiar, even reassuring, he suggested.

Emerging-market investors have similar experiences. As the flows of capital between emerging markets—rather than between emerging markets and the West—become more important, so does tolerance for Russian, or Chinese, or Middle Eastern state capitalism.

“There is a much better understanding of the nuances and the differences in the rules of the game in the emerging world than there is in the developed countries,” said Mr. Nash, whose biggest investor is from Abu Dhabi. “There are now sources of capital that don’t care so much about issues like the Khodorkovsky trial.”

The January/February issue of The Atlantic features Chrystia’s cover story, “The Rise of the New Global Elite.” The piece discusses the rise in income inequality over the past few decades, how today’s tycoons are more likely to be self-made and cosmopolitan than the plutocrats of the past, and how the new elite have more in common with the nouveau riche in emerging markets than with their own countrymen.

Chrystia was on Morning Joe this morning to preview the article along with James Bennett, The Atlantic‘s editor-in-chief. Here’s the video of their conversation:

And, here is an excerpt from Chrystia’s piece in the Atlantic:

Before the recession, it was relatively easy to ignore this concentration of wealth among an elite few. The wondrous inventions of the modern economy—Google, Amazon, the iPhone—broadly improved the lives of middle-class consumers, even as they made a tiny subset of entrepreneurs hugely wealthy. And the less-wondrous inventions—particularly the explosion of subprime credit—helped mask the rise of income inequality for many of those whose earnings were stagnant.

But the financial crisis and its long, dismal aftermath have changed all that. A multibillion-dollar bailout and Wall Street’s swift, subsequent reinstatement of gargantuan bonuses have inspired a narrative of parasitic bankers and other elites rigging the game for their own benefit. And this, in turn, has led to wider—and not unreasonable—fears that we are living in not merely a plutonomy, but a plutocracy, in which the rich display outsize political influence, narrowly self-interested motives, and a casual indifference to anyone outside their own rarefied economic bubble.

Through my work as a business journalist, I’ve spent the better part of the past decade shadowing the new super-rich: attending the same exclusive conferences in Europe; conducting interviews over cappuccinos on Martha’s Vineyard or in Silicon Valley meeting rooms; observing high-powered dinner parties in Manhattan. Some of what I’ve learned is entirely predictable: the rich are, as F. Scott Fitzgerald famously noted, different from you and me.

What is more relevant to our times, though, is that the rich of today are also different from the rich of yesterday. Our light-speed, globally connected economy has led to the rise of a new super-elite that consists, to a notable degree, of first- and second-generation wealth. Its members are hardworking, highly educated, jet-setting meritocrats who feel they are the deserving winners of a tough, worldwide economic competition—and many of them, as a result, have an ambivalent attitude toward those of us who didn’t succeed so spectacularly. Perhaps most noteworthy, they are becoming a transglobal community of peers who have more in common with one another than with their countrymen back home. Whether they maintain primary residences in New York or Hong Kong, Moscow or Mumbai, today’s super-rich are increasingly a nation unto themselves.

You can read the whole article here.

Posted by Peter Rudegeair.