There are too many super rich people now, and that spells trouble

n Berkeley Square in Mayfair is a private members’ club called Annabel’s. The entrance is reached by a green felt carpet, the doorman is dressed in a cashmere wool uniform and inside it feels like how Versailles might have been before the Terror. A £20 million Picasso hangs in the entrance, the terrace boasts a 5ft golden unicorn and the wallpaper looks like silk. A recent refurbishment cost £100 million.

It may sound wonderful, or ghastly, depending on your perspective. But I wonder if it may also serve as a metaphor for these strange times.

For there are two big economic trends. The first is the stagnation in living standards for the majority, which have barely improved for a generation. The second is the rising tide of super-rich — the number of millionaires (in real terms) has increased faster than at any time for a century, while the number worth £10 million or more has increased faster still.

Much has been said about the former, but the Russian-American scholar Peter Turchin, perhaps the most closely studied historian of the moment, argues that we should keep our eye on the latter, too. Why? Well, let us return to Annabel’s. A lot of rich people regard membership of the club as an indicator of social status and fully expect to join. Given the constraints of the building, however, the club cannot accommodate these rising expectations. This means that hundreds of wealthy people have been snubbed by the club and its scions. And this has led to fury.

Fury might seem a curious emotion for the rich — I mean, aren’t they rich? But think of Trollope’s The Way We Live Now, his satire about a mysterious banker, who happened to live up the street from Annabel’s. Trollope captures a truth repeated across history: there is no resentment quite as inflammatory as that of a wealthy person spurned. “Then there comes the jealousy that others should be growing rich with the approval of all the world,” he writes.

Turchin argues that resentment among elites is having serious political consequences. He points out that the trappings of social prestige are, by their nature, limited. After all, if everyone had membership of Annabel’s, it wouldn’t be worth having. Status goods derive their cachet from how they exclude others. But this means that as the pool of super-rich swells rapidly, expectations outpace the constraints. This can lead to corruption and, in time, a breakdown of moral order.

Take the US House of Representatives, where many of the American elite have historically sought entry, partly as a means of securing public recognition. Over the past two decades, the number of millionaires fighting for seats has ballooned, with the total spent on elections now standing at more than a billion dollars (much of it financed by candidates). The increasing number of excess candidates means that there are more losers, more resentment and a greater willingness to play dirty.

You see the same in the scramble for knighthoods and honours here in the UK. I have never quite understood the yearning for these baubles but it is difficult to deny that they are a go-to commodity for many elites craving recognition.

Given that there are only a limited number that can be given out each year (although this government’s performance points to inflationary tendencies), this leaves many of the most powerful people in the UK desperate to usurp their rivals — leading to endemic cronyism.

Lex Greensill is a case in point, an Australian banker who ingratiated himself with David Cameron, took up a role advising the government and was appointed CBE in 2017. A year later Cameron took a job at Greensill’s bank, not on a retainer but, according to the Financial Times, for stock options worth up to £70 million on a £7 billion valuation. Last week the enterprise collapsed, the bank falling into administration — 35,000 jobs and large amounts of taxpayer cash are threatened.

It is a pity Trollope isn’t around to satirise such episodes. Greensill yearned for recognition from the establishment while Cameron was seemingly prepared to risk his already tarnished reputation in pursuit of wealth so that he could walk tall among the economic elites with whom he now consorts, just as Tony Blair sought to do. Perhaps the most remarkable thing, though, is not that the affair happened, but that it is barely remarked upon. It shows how normal these attempts to cash in have become.

The children of elites are facing the squeeze, too. Those who expected to follow their forebears into magic circle law firms are being frustrated — for there are only so many jobs at the top. The “overproduction” of law graduates is leading to 25,000“surplus” lawyers a year in America alone — many in debt. The glut of MBA graduates is perhaps even more grotesque. This, according to Turchin, is a critical ingredient in our cultural turmoil.

On the left, everything from Occupy Wall Street to the extreme tendencies of “wokeism” is spearheaded not by the working classes but by the spurned children of elites who have failed to gain prestige commensurate with their expectations. Janan Ganesh of the FT put the point well: “What is woke culture if not the howl of a generation of underemployed humanities graduates?” On the right, Trumpism and Brexit were popular revolts but they were led by “outsider” elites, many of them with assets denominated in foreign currency.

What is perhaps most striking about reading Turchin is not that you are always convinced by his arguments, but that he makes you think. From a historical perspective, he argues that “elite overproduction” (in other words, a swollen top stratum increasingly detached from the rest) was one of the prime catalysts for social unrest in the late Roman republic, 17th-century England, 18th-century France, 19th-century America and 20th-century Russia.

It is common at times of upheaval to cast around for people to blame, whether welfare-scroungers or whoever else, but this feels a time for elites to look squarely at themselves. At the very least, it’s worth remembering the words of Trollope, who showed that wealth does not inoculate human beings from resentment, but has a curious knack of inflaming it — creating cycles of recrimination that can affect us all.

“Throughout the world,” he writes, “the more wrong a man does, the more indignant is he at wrong done to him.”

Matthew Syed is a columnist for The Times.

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