The writer is president of Rockefeller International
In 2010, amid the global surge in billionaire fortunes, I began combing the annual Forbes list for clues as to which countries were most vulnerable to anti-rich populist revolts. When the results were last published in 2021, warnings were flashing red in France, where billionaire wealth was rising rapidly and concentrated in family businesses such as LVMH, the luxury goods conglomerate.
Earlier this year, LVMH chief Bernard Arnault was a major target of the Paris protests when demonstrators against pension reform stormed his headquarters. LVMH, which has nothing to do with pensions, has become a symbol of the new Gilded Age.
The 2023 Forbes list shows that billionaires worldwide have declined slightly in numbers and wealth from the pandemic peaks but are still rising sharply over the past two decades. There were approximately 500 billionaires with a combined net worth of less than $1 trillion in the year 2000; Now there are more than $2,500 worth of more than $12 trillion. Billionaires remain a potential target of protest, particularly in countries where my warnings are still flashing red. Ironically, these most prominently include countries with deep socialist roots, including France, Sweden, Russia, and India.
Focusing on the leading markets – 10 developed and 10 emerging – my analysis measures changes in billionaire wealth as a share of GDP. Then you calculate the share that is inherited rather than self-created, the share that the “bad billionaires” get in rent-seeking industries like real estate, and the share that the “good billionaires” get in productive industries like technology. The idea is that a populist revolution is more likely to target wealth that is perceived as too much, unearned, or unproductive.
France’s billionaire class coexists with the world’s most spending welfare state. Billionaire wealth is rising there faster than any other developed country in the top 10, nearly doubling over the past five years to 21 percent of GDP. Inherited fortunes have always been huge in France and now account for 85 percent of a billionaire’s wealth, twice the global average.
Sweden shares this combination of the nation’s reputation and massive fortunes at the top: a billionaire’s fortune is worth 24 percent of GDP, and roughly two-thirds of it is inherited. No other developed country screens so poorly across the board. Japan shows no signs of billionaire inflation. The UK shows few signs, other than the relatively high share of “bad billionaire” wealth, which at 20 per cent of the total is 6 points higher than the developed country average.
In the United States, the explosion of billionaire wealth in the early 2010s spawned politicians who wanted to “cancele billionaires” or heavily tax them. In the past five years, the billionaire’s wealth has risen from 15 percent to 18 percent of GDP, and the resulting grievances have prompted President Joe Biden to push for new wealth taxes.
Among emerging markets, the 2023 analysis highlights two more countries with strong state trends, India and Russia. In both, the billionaire’s total wealth is at least 20 percent of GDP – nearly double the average for other developing countries. Russia’s business tycoons were hit early last year by the war in Ukraine and resulting sanctions. However, many evaded deep losses by passing the fortune on to the family or parking their yachts in friendly ports.
Russia has long been the country with the highest share of “bad billionaire” wealth and it still stands at 62 percent. However, India ranks worst among the top 10 emerging markets in terms of its inherited share of billionaire wealth, at 60 percent.
Less bloated billionaire classes are found in countries like South Korea and Taiwan, where small states relied on social and political pressures to curb wealth inequality or in former socialist countries like Poland, which embraced capitalism. The wealth of Poland’s billionaires is only 3 per cent of GDP and none of it comes from a rent-seeking industry and little inheritance.
These findings suggest that socialist tendencies may backfire by concentrating wealth rather than spreading it. Increased regulations favor business leaders, who have the lobby and money to navigate a growing jungle of rules. And since 2000, as governments have poured money into their economies to keep growth going, many of them have ended up fueling the rally in financial markets instead.
With the 0.01 percent owning the most financial assets, they made the most profit, with billionaires earning more than millionaires. The world has its first 12-figure tycoons, and some of the biggest fortunes are now rising in countries with the largest governments, like France. This should provide some reason for thought for many who believe the answer to the current ills of capitalism is more supportive government.
