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Plutocrats, Chrystia Freeland’s exploration of the Super-Rich.

C, SKS, FDO

‘Plutocrats’

In this tome, Ms. Freeland observes the effects of great wealth, as she tracks her subjects around the globe to their laps of luxury.

“Being self-made is central to the self-image of today’s global plutocrats,” she writes of these financiers and Internet tycoons. “It is how they justify their luxuries, status and influence.”

Ms. Freeland finds a general disregard for the sufferings of the middle class and an obsession with not paying more taxes, even though marginal tax rates are historically low.

In the US, where finance has played a disproportionate role in producing mega-wealth, Ms. Freeland’s subjects tend to blame government or the middle-class for the country’s economic woes, not the recklessness of bankers.

“It is this not-our-fault mentality that accounts for the plutocrats’ profound sense of victimization in the Obama era,” Ms. Freeland writes.

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Ms. Freeland is acutely conscious of the way inequality and plutocracy have risen in tandem, even as growth in the developing world has helped shrink inequality between nations. Of course, the rise of a vast new Asian middle class is small comfort to the ailing US middle class, whose income looks increasingly paltry next to the vast sums being made by the New Wealth Club.

Citigroup Inc. NYSE:C has coined the term “plutonomy” to describe what Ms. Freeland calls the “New Virtual Nation of Mammon,” and even created an “Hourglass Index” which tracks stocks catering to the high and low ends of an economy squeezing the middle class.

Including companies like Saks NYSE:SKS and Family Dollar NYSE:FDO, it rose 56.5% between December 2009 and September 2011, while the DJIA rose 11%.

Ms. Freeland is an insightful and energetic reporter, but in this book she does not present a strong argument about how to counteract the trends she describes, or if it is important to counteract such trends.

The book is informative with thematic chapters, and countless anecdotes.

Ms. Freeland reminds her readers of Venice, which 700 yrs ago became a wealthy imperial power through commerce. The city fell into decline when its own plutocrats tried to cement their advantages, thereby stifling the openness that accounted for the society’s dynamism. Bringing the up the question, is the US in a similar sinking as befell Venice?

“Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else” is published by Penguin Press 330 pgs, $27.95.