The Rise of the Alpha Geek as the New Super Rich

Nov 15, 2012— -- Carlos Slim, Eike Bautista, Michael Bloomberg, Roman Abramovich, the Koch brothers, and Mitt Romney. These are just a few of the names associated with plutocracy, which refers to those who dominate social and economic life around the world.

Why's that interesting? Well, the gap between plutocrats and the rest of us humans is the widest it's been in history. And with that gap come distinct consequences, says Chrystia Freeland author of the new book, "Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else."

While covering the collapse of Communism and the rise of the market economy in Russia, Freeland witnessed firsthand the rapid ascendance of the now infamous oligarchs. She then realized that this rise was a global phenomenon when she moved to New York in 2006.

"I was struck by how many similarities there were in the mood, but also more crucially between the key players," she said.

ABC/Univision's Stephen Keppel spoke with Freeland about how this immense wealth and power gives these men an insane influence on politics and the economy, and how that threatens to stifle future innovation. Excerpts:

1. SK: What does a 21st Century Plutocrat look like and why is it different than what we've seen in previous history?

I describe them as the "alpha-geeks". This is a group which tends to be really, really hard working. I don't want to say it's about pure meritocracy but these by and large are not people who inherited the business that made them a plutocrat.

They are very numbers based and that's a real difference. When you think about the 19th century "robber barons"… you didn't have to be brilliant with data and a spread sheet. An essential quality, and you see this from a Carlos Slim to a Mikhail Khodorkovsky in Russia to a Steve Schwarzman in the U.S. to a Sergey Brin in Silicon Valley. All of these guys are masters of numbers. This is a triumph of the geeks. Also, crucially, nowadays they are all global. And this is true very much of the Latin Americans.

2. You mention Carlos Slim quite a bit in your book why is he such a good example?

First, he is so rich and successful. One of the fun pieces of research I cite is work done by an economist I really admire, Branko Milanovic [of the World Bank]. He set out to decide who was the richest man who ever lived. Branko's conclusion was the richest person who ever lived wasn't a Pharaoh, it wasn't one of the great Roman patricians, and it wasn't a robber baron. It was Carlos Slim. That says a lot about the economic transformation that's happened in the whole world. I think we tend to underestimate the economic change we're all living through. The collapse of the Soviet Union had this ripple effect of liberalization around the world, it hit Mexico and he was the guy who won that great lottery.

3. Is there anyone else in Latin America that stands out ?

I think the Brazilians are really interesting. One person who I interviewed is Eike [Bautista, the mining and oil magnate]. The emerging markets guys in some ways are more globally minded than the Americans, which I think the Americans would be shocked by. The Americans think they're so cosmopolitan but actually you talk to someone in Mexico City or Rio or in Moscow and they have a much more global perspective, because they have to.