From: Jurriaan Bendien (adsl675281@tiscali.nl)
Date: Sun Jun 01 2008 - 16:05:17 EDT
Plutonomies are countries where the wealthy have a disproportionate slice of economic wealth. This is not a unique historic phenomenon. In some ways the drift towards a much more egalitarian wealth structure in the twentieth century could be seen as an aberration. It certainly is not the pattern of previous centuries. Such concentrations of wealth in plutonomies have a huge impact on savings and consumption patterns. In these economies, growth is powered and consumed by the very wealthy. Its opposite model, the egalitarian economy, has simply not seen such wealth concentration. Japan and most of continental Europe are examples of such egalitarian economies. To illustrate this trend, the top 1% of households (by wealth) in the UK have increased their share of national income dramatically in recent years, from a low of 6% of national income in 1978 to 13% in recent years. This is not far short of the 15% seen in the US (Figure 01). This experience is totally unlike continental Europe, where the share of wealth held by the top 1% of households has declined or at best stabilised in recent years (Figure 02). What drives an economy to become a plutonomy? Plutonomies rely on the presence of several factors to invigorate wealth. These include creative financial innovation, technologically driven productivity gains, capitalist friendly government, light touch regulation and an open attitude to sourcing international talent via immigration. The UK and the US have been very successful in two critical areas for plutonomy development. New media technologies have had a significant impact on wealth creation (internet downloading, cable and satellite TV). These outlets have massively increased market size and media audiences. The result has been the creation of new types of high wealth occupations in sports, music, television, film, fashion and design. The second area is the rise of occupations such as the legal and financial intermediaries, seen crowding into central London, who help realise the potential for the globalisation of production and consumption. All contribute to the development of the plutonomy model. The future. We predict that such wealth inequality will only increase. The UK will see a continued development in this direction. Wealth from the US, Europe, Russia, Middle East and Asia circles the world and a large proportion is invested either through, or in London. The ranks of the wealthy in the plutonomy are growing. It is in cities and locations characterised by global outlook and activity where we will see this trend most. Where are the next plutonomies? Eastern Europe appears to be embracing many of the characteristics of a plutonomy. Russia is the classic emerging plutonomy, and China and India are following closely. Over the last two decades where the plutonomy model has been developing, the wider population has seen the benefits of economic growth. The wealth pie has become larger for just about everyone. This growth will continue and we will see ongoing serious wealth concentrations in the plutonomies. Only significant political change will affect this trend. http://www.knightfrank.com/ResearchReportDirPhase2/11086.pdf http://www.knightfrank.co.uk/press/2008-News-Stories/documents/2008AnnualWealthReport.pdf _______________________________________________ ope mailing list ope@lists.csuchico.edu https://lists.csuchico.edu/mailman/listinfo/ope
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