When you talk to someone like Eike and hear his thinking about the technology revolution and how the people who've been successful in Silicon Valley are the people who spotted moments of economic change and seized on them, and seeing his own business success in similar terms. I think he's correct and its really interesting that he thinks about it that way.
4. Would you classify Mitt Romney as a plutocrat?
For sure. He's not at the very summit of plutocracy but he's a multimillionaire. And he fits the archetype very well. Of course he was raised in incredibly comfortable circumstances…having said that he didn't inherit Bain capital, he did build that. He is part of this extremely numerate "alpha geek" approach to the world. The contrast between George Romney and Mitt Romney are telling and very illustrative of the change of the American elite.
5. So what is driving the current wave of inequality, particularly in the U.S.?
One reason is this profound economic transformation: globalization, the technology revolution and as part of globalization this wave of liberalization and privatization. Those underlying economic changes are very real and actually constitute an economic transformation comparable to the industrial revolution [the last period of a major spike in inequality] in scope and significance.
Financial deregulation has also been a great creator of some of this super wealth. The taxes at the very top have fallen. If you think of the 1950s when income inequality was shrinking, taxes at the very top were more than 90%! This was Eisenhower! This was a deeply conservative United States and rich people were paying 90% taxes, just think about that for a minute.
6. You mention "rent seeking" quite a bit in your book, can you describe what this means?
There are ways you can become wealthy that aren't about creating more value. They are about capturing the state and economists call that rent seeking. One way is to get control of natural resources. The Russian oligarchs have been very good at that.
The financial sector has also been a prime area for rent-seeking. You get the government to set regulations in ways that favor you. Telecoms are also a very great way of rent seeking. If you get control of particular parts of the air waves and other people are locked out that can be a great way of rent seeking.
7. What role does philanthropy play for plutocrats? It seems that many now, instead of giving money away, are starting foundations and initiatives.
One of the things that I thought was fascinating is that increasingly the status symbol for today's plutocrat isn't having a more fabulous yacht than anyone else. As one guy said to me, "You don't want to just be another rich guy in New York." The real status symbol is being a thought leader and being a leader in public policy. So Mike Bloomberg actually is one of the prime examples of that. Mitt Romney wanted to be.