Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland Read Free Book Online Page B

everything.”
    No matter what passport you hold, if you run or own a global company, that is not really a big deal. But, as Autor, Dorn, and Hanson show, if you are an American worker, that “leveling out” can be painful indeed.
    Professor Van Reenen said these tensions have been building for years but have been laid bare by the financial crisis. That, he believes, has sparked a wave of populist protest, ranging from the Tea Party on the right to the Occupy movement.
    “These things have been going on for a couple of decades,” he said. “What has happened is, with the rise of the financial crisis, all of these things are coming into sharp relief.”
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    The twin gilded ages are speeding each other up: The industrialization of the emerging economies is creating new markets and new supply chains for the West—iPhones are produced in China, and also sold there. The new technologies of the West’s second gilded age, meanwhile, have accelerated the developing world’s first gilded age—it is a lot easier to build a railway or a steel mill in an age of computers and instant communication than it was in the nineteenth century—and the developed economies, too, offer a rich market for the industrializing developing world.
    “India’s gilded age is going to be a combination of America’s first gilded age and the second gilded age,” Ashutosh Varshney, a professor of political science at Brown University who was born in India and now spends half his time in Bangalore, where his wife and son live full-time, told me at a meeting of the World Economic Forum in Mumbai in November 2011. “India is going through this phenomenon in the twenty-first century. . . . The pace at which information traveled in the nineteenth century was very different. Today eight hundred million Indians are connected through mobile phones.”
    The two gilded ages can also get in each other’s way. As good an explanation as any for the 2008 financial crisis is that it is the result of the collision between China’s gilded age and the West’s—the financial imbalances that are an essential part of China’s export-driven growth model also played a crucial role in inflating the credit bubble that burst with such devastating consequences in 2008.
    The two gilded ages have a lot in common, and they are reinforcing each other. But both transformations are creating intense political and social pressures, partly because change is always hard, and partly because the rewards of this sort of convulsive shift are so unequal.
    Moreover, this time around, the whole world no longer has the escape valve that, at least for a time, released some of the pressures of the original industrial revolution—the frontiers of North and South America. When the strain of urbanization became too tough, or too unfair, Europe’s huddled masses could emigrate. Even with that option, it is worth remembering, the conflicts and inequities created by industrialization and urbanization were ultimately resolved in the West only after a half century of revolution and war.
    “In the long run, we are in good shape,” said Professor Van Reenen. “It depends on your time horizon. After all, the Great Depression and World War II were a massive cost to humanity. Eventually, humanity will prosper. Capitalism does work, but over the medium term, thirty or forty years, there could be incredible dislocations. I am very worried about what happens over the next year or so.”
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    Looked at from the international, Olympian perspective of the super-elite, the cost of these short-term “dislocations” pales in comparison with the transformative power of the twin gilded ages.
    Mr. O’Neill concludes his book with a heartfelt rebuttal of the gloomsters, with their emphasis on rising national income inequality and the hollowing out of the Western middle class:
This is an exciting story. It goes far beyond business and economics. We are in the early years of what is probably one of the