From Our Future
The German sociologist Georg Simmel, way back in 1900, likened grand concentrations of private wealth to stars in the sky. These days, here in our second grand global Gilded Age, the more appropriate celestial analogy might be the black hole.
The more wealth concentrates in a precious few pockets, we've come to understand, the more the resulting concentration sucks out from the rest of society. What exactly gets sucked out from below? Money, of course. But much more as well. Grand concentrations of wealth at the economic summit suck up talent.
The latest case in point: the career of the world-class designer Frank Stephenson. This 58-year-old has already made a creative impact on us. A decade ago, one business media outlet dubbed him one of our time's "most influential automotive designers."
Stephenson first made his mark as a designer for Ford in Germany, working on the Escort, a motor vehicle for distinctly average families. He went on to BMW, where his creativity brought us the widely beloved MINI Cooper, a pricier but still affordable -- at least for the upper middle class -- compact.
A half-century ago, in a considerably more equal world than we have today, a designer as accomplished as Stephenson would have ended up at a world automaker serving the mass market. His talents would have brought smiles and maybe even some joy to millions of average car-buyers.
But in our staggeringly unequal contemporary world countless talents like Stephenson tend to go down a quite different career path. They end up serving society's richest.
Stephenson would move on from the MINI Cooper to the corporate auto empire that boasts the high-end Ferrari and Maserati brands. Among his projects: the Maserati Quattroporte, a "race-bred luxury sedan" that now starts at over $100,000. Stephenson did, to be sure, also do designing for that empire's more pedestrian Fiats, but his career was clearly revolving ever closer to grand fortune. His next stop would be McLaren Automotive, the maker of vehicles that retail for over $1 million.
Stephenson now has a new gig. He's just signed on with Lilium, a German electric flying car start-up. Lilium is positioning itself as a transportation disruptor. By 2025, the company predicts, people will be able to hail a Lilium on-demand air taxi that can lift off and land vertically -- and fly passengers close to 200 miles on a single electric charge.
Lilium is also positioning itself as a benefactor for all humankind, not just the "very wealthy." Stephenson is buying into that positioning. Lilium's flying cars, he's telling the press, "will be designed to be for everybody, not just a privileged segment of the public."
But imagining a world where flying cars offer an affordable, mass-market alternative to ground transport takes some doing. Lilium's flying taxis seem almost certain to become just another convenience that allows the rich to bypass the inconveniences of modern life.
In a better -- more equal world -- talents like Frank Stephenson would be addressing those inconveniences directly instead of figuring out how the wealthy can best do end runs around them.
We see this same "black-hole" dynamic in every sector of modern life. Businesses of every sort are rushing to get sucked into the orbit of grand fortune. Last week, around the same time that Lilium was hailing the hiring of Frank Stephenson, banking giant Goldman Sachs was celebrating the hiring of a financial-industry superstar to head up a good chunk of its private wealth management operations.
Goldman Sachs is now feverishly competing with the world's biggest financial institutions for greater market share among the world's richest households. Goldman alone currently has 700 staff dedicated to serving the financial needs of families worth at least $40 million.
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"The world," Goldman CEO Lloyd Blankfein gushed this past February, "seems to be growing rich people faster than we can grow advisers to cover them."
Goldman's private wealth management staffers, Bloomberg reports, each generate $4.5 million of revenue. Staffers at banks that service ordinary households can't come anywhere close to generating revenues that stratospheric. At least not honestly. So their employers -- banks like Wells Fargo -- put them to much more lucrative dishonest labor.
In Iowa last week, community groups from across the United States gathered at the Wells Fargo annual meeting to protest the bank's predatory practices on everything from mortgages to car loans.
Top execs at Wells Fargo, George Goehl of People's Action noted at the protest, "have proven that they can't do business without cheating, racism, and investing in violence."
"We have the power," added Cherie Mortice of Iowa Citizens for Community Improvement, "to stand up against the greedy financial giants and corporate elites who rig the economy for their own benefit."
Mortice happens to be absolutely right. Black holes in space may be too powerful to stop. But that doesn't hold for black holes in human affairs. We have the power to stop wealth's concentration before grand fortune -- and the chase after it -- devours us all.
Sam Pizzigati is an Associate Fellow, Institute for Policy Studies
Editor, Too Much , an online weekly on excess and inequality
Author, The Rich Don't Always (more...)