GaWC Research Bulletin 93 |
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This Research Bulletin has been published in Geoforum, 35 (4), (2004), 401-407
THE RISE (AND RISE...) OF THE GLOBAL RICH'The richest 1% of people in the world received as much as the bottom 57%, or in other words, less than 50 million people received as much as 2.7 billion poor . The top 10% of the US population [25 million] has an aggregate income equal to income of the poorest 43% of people in the world [2 billion]' (Milanovic, 2002, 88-89). There has always been inequality in the distribution of wealth and income at both a national and global level. But what is becoming increasingly evident is that the wealth of the world is becoming more unevenly distributed, with the poorest segments of the world's population possessing a diminishing share of the world's wealth. Though methodologies designed to explore the distribution of the world's wealth are reliant on notoriously incomplete and often dubious data, there is general agreement that the world's income is becoming more unequal (see Smith, 1995 on measurements of social and spatial justice). For example, the Gini coefficient often used to indicate the extent of income disparities between nations (current standing at 0.71) is at its highest level in recent recorded history (UNDP, 2002). However, even this figure is based upon the assumption of equal income distribution within the world's nations, and fails to take account of the fact that disparities within nations are also becoming more pronounced (Bergesen and Bata, 2002). For instance, in percentage terms, after-tax income grew by an average of 157 per cent in the USA between 1979 and 1997 for the richest one percent of the population, but was effectively unchanged for those in the bottom fifth (Congressional Budget Office, 2001). Given these figures, it is perhaps not surprising that world income inequality between people (rather than countries) witnessed dramatic growth in the 1990s: while the richest ten per cent of the world's population had incomes that were seventy-nine times higher than those of the poorest ten per cent in 1980, their incomes were 120 times higher in 2000 (Bergesen and Bata, 2002). The issue of social and economic polarisation has accordingly never seemed so pressing. However, in contradistinction to the 'lost development decade' of the 1980s, when the income of the poorest dropped in relative and absolute terms, the major contributor of rising inequality on a global scale is currently not an absolute decline in the incomes of the poor, nor the increased significance of the 'poverty gap' between low and middle-income groups, but the widening chasm between 'high net worth individuals' and the rest. Statistics illustrative of this divide are legion (see Figure 1): there are now an estimated 7.2 million people with investable financial assets of more than one million dollars (a figure that rose by 12% in 2001); these assets currently exceed $27 trillion (a figure expected to rise by 50% in the next five years). These figures lead to the staggering conclusion that the top 0.25% of the world's population owns as much wealth as the other 99.75%. We will refer to this group as the super-rich: a group of high net worth individuals whose private wealth overshadows that of the majority (including even those with more than $100,000 investable assets, who the International Financial Services London (IFSL), 2002, refer to as the 'mass affluent'). The disparity between the incomes of 'high net worth individuals' and the majority of the world's population should not be surprising given the existence of a capitalist world system that thrives on inequality and exploitation. Nonetheless, commentators on both the Left and Right have remarked on this growing inequality, suggesting it raises serious questions about social cohesion (Castells, 1989; Hutton, 1995; Pahl, 2001). Some have even suggested that rising global inequality is a spur to terrorism, prompting attacks against those who symbolise the affluence that is denied to the majority. But neither the market nor the redistributive policies pursued by (some) nation-states seem able to prevent the rise and rise of the 'super-rich'. There are of course a number of reasons for this, not least of which is the ability of such super-rich individuals to manipulate the state and market to their own ends, often positioning themselves beyond the jurisdiction of nation-states (e.g. exploiting tax loopholes in offshore havens including the Cayman islands, Channel Islands and Luxembourg). But even onshore trading has become more attractive for high net worth individuals as personal and corporate tax rates have been cut in most countries of the world. Simultaneously, the established financial centres of London, New York, Singapore and Frankfurt have become increasing adept at serving the needs of high net worth individuals (IFSL, 2002), with market deregulation offering enhanced investment performance. Pahl (2001) argues that the extent to which the rich are constrained or enabled by social and fiscal policy is rarely explored, but this remains a crucial question if we are to make sense of inequality within and between societies. There thus appears to be a pressing case for rigorous and methodical exploration of the 'super-rich'. To date, however, such analyses have been lacking; the stock-in-trade of the policy-oriented social scientist instead being the 'deserving' poor, whose living and housing conditions have been documented ad infinitum, usually in the hope of designing ameliorative policies to mop up social problems. Being generous, Pahl (2001) suggests that some researchers feel an obligation to reach out to those less advantaged in society, they feel they can make a difference to their lives and (crucially) they find it easier to obtain research funding for work on poverty and exclusion. In contrast, it appears difficult to gain funding for research on the super-rich, with research councils understandably uncomfortable about work that might raise questions about the way the elite accrue wealth. There is also the issue of positionality in social science research, where academic researchers are always in a position of relative advantage over the poor. This power asymmetry privileges the academic researcher, despite efforts to create a level playing field (see also Kitchin and Hubbard, 1999). In contrast, the rich and wealthy are not so deferential, or accessible. It is easier and more convenient, with the added lustre of 'doing good', to study the poor rather than the rich. The net consequence is a dearth of studies on the super-rich and a serious lack of knowledge about the problems that their success causes for society at large: 'Whilst it is relatively easy to measure, analyse, and report on the form and pattern of the bruises in society, it is equally easy to ignore the fist that makes them. If we spend all our time on easily-funded bruise studies, we may be colluding with those concerned to keep the power of the fist unchanged' (Pahl, 2001, p. 883). The lack of academic scrutiny of the super-rich makes if difficult, if not impossible, to make meaningful conclusions about the processes that allow some to live in luxury and others to wallow in poverty. While we have many studies examining the plight of the poor, we have very few which expose the privilege of the rich. Following Pahl (2001), and building on the work of urban researchers such as Beaverstock et al, (2000), Castells (1989), Hannerz (1993) and Sklair (1997), this paper thus begins to identify a research agenda for exploring the lifestyles and geographies of the global super-rich. This is a research agenda concerned with documenting (and exposing) the way the power of the global super-rich is projected through the world, with their personal activity spaces and 'micro-networks' coming together at nodal points which are, accordingly, crucial in the articulation of a 'global space of flows'. The bedrock of our proposed research agenda is documenting the geography of these nodal points, and understanding how their global distribution shapes the trajectory of the global economy. But before we begin to describe the nature of this research agenda in more detail, it is essential to explore the distinguish between the global super-rich and the other groups who have been conceptualised as part of the capitalist elite. THE GLOBAL SUPER-RICH AND THE GLOBAL ELITEIn classic Marxist analysis, the elite were identified as those who owned the means of production (i.e. the non-labouring classes who exploited the labouring poor). In contrast, today it is the professional and managerial class who are often depicted as the beneficiaries of global restructuring and the transition from the Old to the New International Division of Labour (see Butler and Savage, 1995). This New International Division of Labour is seen to have emerged since the 1960s as the production strategies of major corporations have become ever-more 'footloose' and advanced producer services have developed a truly 'global reach' (Daniels, 1991). As geographers have repeatedly demonstrated, the one thing that leading global businesses now share is their dependence upon specialized knowledge (Thrift, 1997; 2000). In effect, state-of-the-art commodities are produced by bringing together different forms of expertise to meet the specific needs of clients. In order to be able to put together such packages, firms constantly call upon the expertise of their own employees as well as the trouble-shooters, consultants and policy-makers who cluster in 'world cities' like London, New York and Tokyo (see Sassen, 1995; 2001; Beaverstock et al, 2000). These knowledge-rich individuals thus constitute the 'epistemic communities' (Thrift, 1994) that are the crucial mediators and translators of the flows of information, capital, people and goods that circulate in the world. In describing the characteristics of the knowledge-elite that ensures the hegemony of the world capitalist system, Sklair (1997) suggests we may further divide these knowledge-rich individuals into four main fractions: 1 TNC executives and their local affiliates; 2 globalizing bureaucrats; 3 globalizing politicians and professionals; 4 consumerist elites (merchants and media). Of course, there is much overlap between these categories, each of which plays a distinct role in the perpetuation of the capitalist system (Sklair, 1997). As such, these groups can be seen as beneficiaries of the rise of global capitalism: they are the knowledge-rich (and asset-rich) individuals who obtain their power and influence by virtue of their pivotal role in managing the global economy. Yet to suggest these fractions are the principal beneficiaries of globalization is to suggest the key social divide in contemporary society is between a service class, conceptualised in a neo-Weberian sense as those in key managerial positions (particularly in the advanced producer services), and a servicing class of low-paid, low-skilled workers. This is the divide that concerns Castells (1989) when he talks of the increased differentiation of labour within two equally dynamic sectors of the economy: 'the information based formal economy' (characterised by white, university-educated workers) and the 'downgraded labor-based informal economy' (associated with minimally educated ethnic minorities). To demonstrate the existence of such occupational polarisation, Castells assembles a wealth of data from New York and Los Angeles showing the rising gap between incomes in the knowledge-rich and knowledge-poor workforce. But, as we have already hinted, the key divide that should concern us most is not that between the work-rich and work-poor (the divide that so preoccupies many writers on gentrification and urban restructuring) but that between a super-rich elite and the rest. It is therefore important to distinguish between two groups in the global elite: on the one hand, affluent 'global managers', and on the other, those ultra-high net worth individuals who may be described as the global super-rich (ISFL, 2002). One of the earliest acknowledgements of the existence of the super-rich was Thorstein Veblen's (1899) The Theory of the Leisure Class. Writing at a time of increased inequality and the amassing of personal fortunes in the USA, Veblen described a group of people he termed the leisure class whose wealth freed them from the need for employment. Their consumption patterns were not so much connected to basic needs, as structured by the need to create what he described as a 'decorous' appearance. The leisure class was thus recognisable not by occupation or even ownership of the means of production but by their patterns of consumption. Of particular importance was conspicuous consumption, whereby the super-rich signalled their exemption from the need to work. Examples here include the construction of large holiday mansions and villas; the acquisition of arcane and redundant artefacts; an interest in elite sports and a tendency to accumulate a staff of servants, manservants, groundskeepers, grooms and the like to further signal their distance from the world of work. This marked them out as a distinctive group (as F. Scott Fitzgerald remarked, 'They are different from you and me', Ernest Hemingway replying, 'Yes - they have more money'). Veblen consequently regarded such acts of conspicuous consumption as essentially wasteful and excessive, a symbol of a pecuniary wealth distanced from the world of work (presaging Bourdieu's, 1984, work on the importance of cultural capital as a means of distinction). Veblen's analysis sets out some useful markers for looking at today's wealthy. While patterns of consumption may have changed, there is still the same need among the super-rich to create an appearance: while there may be very wealthy individuals who lead lives of studious asceticism, the majority continue to conspicuously consume. In this sense, their lifestyles are 'on display' to the rest of the world. While academic analysis may shun them, the super-rich preoccupy the popular press who scrutinize their consumption down to the tiniest details (so that, for example, magazines like Hello! and OK! may make a big deal of a celebrity spotted buying a sandwich or having a new haircut). This does not mean that the less affluent are incapable of developing their own leisure and consumption patterns, or that all people aspire to the lifestyles and fashions of the super-rich. Nonetheless, as Sklair (1997) identifies, the super-rich play an important symbolic role in the perpetuation of global capitalism, showing that it creates the possibility of a form of consumption based on profligacy and seemingly infinite choice. We might not all chose to emulate the lifestyles of the super-rich, but we all we would all like to have the choice to consume conspicuously. For such reasons, it is important to add a fifth group to Sklair's (1997) classification of the global elite: the global super-rich. After all, it is this group who has chiefly benefited from the opportunities for amassing personal wealth that globalization has provided. More than this, we want to suggest that they are key movers and shakers in the global economy: they can be conceptualised as a global ruling class whose reach and influence encompasses the entire capitalist system (Sklair, 1997). This particular elite, in effect, sets the world economy in motion: an economy that is subsequently attended to by a 'mass affluent' service class (including those who provide financial services for the super-rich). In turn, this managerial service class are serviced by a lower-paid, 'knowledge-poor' servicing class. However, in making the assertion that the super-rich need to be considered as pivotal to the articulation of the global economy, being at the heart of the nodes and networks that constitute contemporary (informational) society, we are making a host of assumptions about the overlap of the conspicuous lifestyles of the super-rich and the network of world cities that has been identified as crucial in controlling the global economy (Sassen, 1995). It is these assumptions that we set out to explore in the remainder of this paper. LOCATING THE SUPER-RICHIn the discussion above, it was proposed that there are a number of obvious reasons for the neglect of the super-rich in the social sciences. If we consider the dearth of work on the super-rich in geography, yet another reason becomes apparent: the lack of data available for 'locating' them. For example, it has been a long-standing criticism of official government statistics, in Britain and elsewhere, that there is inadequate information about income, with the Census of Population offering socio-economic (SEG) and social occupation by class (SOC) measures that are wholly inadequate for revealing the geographies of the super-rich. Similarly, data from the New Earnings Survey, Family Expenditure Survey and General Household Survey generally breaks down the population into income decile groups, which allows broad measures of social inequality (e.g. the income accruing to the richest and poorest 10%) but says nothing of the very richest. Instead, those wanting to map the geographies of the wealthy have been reliant on a number of unofficial sources, including the increasingly sophisticated and exhaustive data sets managed by market research and credit rating agencies. For example, data recently compiled by Experian (UK) has been used to reveal the geography of affluence at a postcode level, identifying particularly wealthy clusters of residence (Webber, 2002). The resulting publication - A Divided Britain? - confirms the growing social polarisation within British society. It suggests the wealthiest areas of Britain are mainly found in the 'stockbroker belt' of the southern Home Counties. South Buckinghamshire has the greatest number of residents in Experian's top financial category-21 percent are classified as millionaires, investors or higher rate taxpayers (the top 10 postcodes in this study being CR3 7, SL9 7, WD3 4, KT24 5 and SL9 8). More widely known, and potentially more useful for locating the super-rich, are the lists compiled by business monitors and newspapers, notably the Sunday Times Rich List (which lists the richest 1000 individuals in UK) and the Forbes 400 (drawn up by the US magazine targeting the elite business community). These lists are complemented by a multitude of lists documenting the richest 100 individuals in Europe, the richest 50 individuals in Latin America and so on. While the way these estimates of net worth are compiled leaves some margin for error, in many ways they are useful barometer of the levels of wealth accruing to the very rich. Table 1 thus represents a best estimate of the world's 50 richest individuals, as compiled by Forbes magazine. From this, one can begin to obtain a picture of the 'geography' of the super-rich. Perhaps unsurprisingly, it is the high-income economies of the West who provide most names on the list, with North America accounting for 22 of the fifty, and Europe for another 13. Beyond this global core, the majority are drawn from the oil-rich states of the Middle East; there are no names on the list from Africa, South America, or for that matter Australasia. In many ways then, the geography of the super-rich seems to mirror the unequal share of wealth between the world's nations, with the larger high-income economies boasting the greater share of the world's super-rich (see also Figure 2). The limitations of such an analysis are, however, sharply etched. To provide a convincing analysis, it is obviously insufficient that we study the world's richest thousand, let alone the richest fifty; the global capitalist class is now much larger. Moreover, the idea that the super-rich dwell within a specific nation-state is a clearly outdated and flawed assertion. Instead, the global elite (i.e. both global managers and the global super-rich) must be regarded as transnational for three main reasons, as Sklair (1997) outlines. Firstly, its members tend to have an outward-oriented global outlook rather than inward-oriented national perspectives on a variety of issues. Nowhere is this truer than in the global outlook of TNC executives and CEOs, where key players inevitably have an interest in monitoring and intervening in the international business environment. This is well illustrated in the involvement of members of the global capitalist class in the efforts to secure the Free Trade Agreements that serve to benefit their particular business interests. Sklair (1997: 522) also cites the huge literature in the popular and academic business press on the 'making of the global manager' and the 'globalization of business and management', suggesting that this is a real phenomenon and not simply the creation of a few 'globaloney' mythmakers. Each fraction of the global capitalist class thus sees its mission as organizing the conditions under which its interests and the interests of the system as a whole (which usually coincide) can be furthered in the global sphere rather than the local. Second, it is evident that while members of the global elite may be over-represented in the core nations, they often consider themselves 'citizens of the world' as well as of their places of birth. Leading exemplars of this phenomenon listed by Sklair include Jacques Maisonrouge, French-born, who became in the 1960s the chief executive of IBM World Trade; the Swede Percy Barnevik who created Asea Brown Boverei, often portrayed as spending most of his life in his corporate jet; the German Helmut Maucher, CEO of Nestlé's far-flung global empire; David Rockefeller, said to be one of the most powerful men in the United States; and the 'legendary' Akio Morita, the founder of Sony. These examples serve to make the crucial point that state-centred statistics are wholly inadequate for documenting the geographies of the global elite: residence in a particular nation-state or possession of national-citizenship does not mean that the individual concerned has any particular allegiance to that nation, or that the individual has been brought up within a particular business culture. Third, it is apparent that the global elite must be regarded as transnational to the extent that they share similar global lifestyles. For Short and Kim (1999) the lifestyles of global managers present perhaps the clearest evidence that the shared consumption of similar goods and images is resulting in the creation of global lifestyles. Moving from city to city, the global managerial class characteristically occupies a series of corporate spaces designed for the international business traveller: international airports, business hotels, executive clubs, corporate health suites, restaurants and so on. The mobility of global managers is, however, eclipsed by that of the global super-rich. They are able to move easily from nation to nation by executive jet (rather than travelling by business class); they stay only in five-star hotels; they are able to access exclusive clubs and restaurants, they frequent ultra-expensive resorts in all continents, and collect the objet d'arts which can only be obtained in the most exclusive shops and auction houses. In short, their space-time routines centre on a globally-diffuse set of spaces regarded as 'the right places to see and be seen'. It is the nature of these spaces that we explore in our next section. LOCATING THE SUPER-RICHThe preceding discussion has begun to suggest that the global super-rich need to be conceptualised as a truly cosmopolitan faction of the global elite. Developing this argument, Bauman (2000) talks of the super-rich as the 'new cosmopolitans', suggesting that the fundamental consumption cleavage in contemporary society is between these 'fast subjects' who dwell in transnational space and those 'slow subjects' whose lives remain localised and parochial. The fast world is one consisting of airports, top level business districts, top of the line hotels and restaurants, chic boutiques, art galleries and exclusive gyms - in brief, a sort of glamour zone that is fundamentally disconnected from the life worlds of the vast majority of the world's population. Bauman thus equates power with mobility, echoing Massey's notion of unequal 'power-geometries' and the differential mobilities integral to global capitalism: 'Different social groups have distinct relationships to this differentiated mobility: some are more in charge of it than others; some initiate flows and movement, other's don't; some are more on the receiving end of it than others; some are effectively imprisoned by it' (Massey, 1993: 61). Of course, movement and mobility are relative, not absolute (Urry, 2001), and the issue here is that the majority feel increasingly immobile in contrast to the super-rich, who display increasingly global lifestyles. On this basis, Bauman argues that the most pressing divide in contemporary society is that between the new cosmopolitans and the rest. In making this claim, Bauman begins to move beyond the idea of the dual or two-speed city proposed by Castells (1989) to make a more fundamental claim about the existence of a two-speed world. In making his arguments about the disconnect between the new cosmopolitans and the rest of the population, Bauman (2000) seeks to reinforce his argument that consumption - whether conspicuous or otherwise - provides the fundamental locus for social identity. His arguments centre on the idea that in the consumer society, individuals are obliged to seek the security that the state once provided in the marketplace. This problematises any distinction of use/exchange/sign value, and in many ways renders Veblen's ideas about the leisure class obsolete. Nonetheless, it is interesting that Forbes magazine lists (presumably without irony) the commodities that the super-rich 'need' (Table 2). This suggests that the global super-rich remain as much defined by their consumption patterns and cultural habitus as their wealth per se, with the acquisition of a number of icons of global savoir faire (e.g. British motor cars, French wine, USA art, Italian clothing) marking off the super-rich as truly transnational (Short and Kim, 1999). Documenting the location of cosmopolitan consumption thus represents the first stage in tracing the 'micro-networks' and activity spaces of the super-rich which are pivotal to any understanding of globalisation. Interestingly, one can see that the commodities consumed by the super-rich, though varied in origin, are characteristically purchased/consumed in world cities. Although we need to be mindful that this is a list drawn up by US commentators, it remains significant that these key sites of consumption are predominantly located in London and New York, pointing to the particular significance of the 'NY-LON' nexus in the lives of the global super-rich. Nonetheless, it is too simple to suggest that the consumer geographies of the super-rich simply map onto the world cities that are the acknowledged centres of the global financial system, with high status tourist and consumer-oriented spaces like Mustique, Monaco, St Moritz and Cannes obviously playing a crucial role as playgrounds of the rich and famous (despite their evidential lack of importance as centres for the advanced producer services). In such cases, the primary lure of these spaces for the global rich is clearly conspicuous consumption, but this does not mean that these are spaces are insignificant in the articulation of global flows of all kinds (i.e. flows of goods, capital, information and people). But whether or not transnational consumption occurs in major world cities, it is clear that the distinctive consumer habits of the new cosmopolitans are played out in spaces that share certain characteristics. Central here is the air of exclusivity which is associated with the spaces of the super-rich. Given the fact that super-rich consumption is preoccupied with the importance of sign rather than use values, it is the space as much as the commodity that is consumed by the super-rich. An emphasis on style, presentation, and perfomance is part and parcel of the leisured consumption of the super-rich. They may live in the 'fast world', but the cultural tastes of the new cosmopolitans do not extend to fast food. When they eat at a restaurant, it is not so much a meal that is being consumed, but the experience of eating out in a space that can be best described in dramaturgical terms (i.e. where staff follow a carefully determined script and play out their choreographed roles in a 'theatre of dining'); as Bell and Valentine (1996) argue, in consumer society 'you are where you eat'. For example, it is illustrative that the super-rich eat in La Tour d'Argent, not McDonalds; do not simply buy clothes on Oxford Street in London, but frequent Saville Row; that they shop on Rodeo Drive, not the discount stores of South Central LA. Hence, Bauman (2000) latches onto the fact that super-rich consumption occurs in spaces that, by and large, exclude those who disturb the ambience of affluent, leisured consumption. This means that the super-rich may rest, work and play in world cities, but that they rarely have contact with the ordinary dwellers of the city: the metaphor of 'street people' versus 'air people' appears particular appropriate here, with the super-rich both physically and psychically distanced from the everyday rituals that are played out on the city's streets (as well as the dangers of urban life which are inevitably associated with streetlife). Accordingly, while the super-rich may move through through world cities, their cosmopolitan practices and lifestyles rarely break out of the exclusive transnational spaces which stand at the intersecting points of particular corporate, capital, technological, information and cultural lines of flow. These transnational spaces have profoundly marked the urban landscape of world cities, tranforming their social morphology in the process, so that districts like Knightsbridge, the Upper East Side or Passy d'Auteuil may effectively be described as super-rich enclaves (even if the super-rich don't dwell there for very long before moving on to one of their other homes). The super rich have therefore made an immense claim on world cities and have reconstituted many spaces of world cities in their own image. Surprisingly, their claim to the city is rarely contested, even though the costs and benefits to cities have barely been examined (Sassen, 2000). In part, this is because these spaces are often woven into the fabric of world cities in ways that belie their exclusive nature. Flusty (2001) alludes to this when he argues that the rich do not exclusively dwell in carceral spaces (as a cursory reading of the work of the LA school might suggest). After all, the rich do not enjoy consuming in spaces that look like fortresses, where security is omnipresent and where the less affluent are forcibly removed by heavy-handed scurity guards. The exclusive nature of spaces of cosmopolitan consumption is generally more subtle than this. In effect, anyone can browse in Tiffanys or Bloomingdales, as long as one can put up with the withering or pitying glances of shop assistants. As the old adage goes; if you have to ask the price, you can't afford it. So while the super-rich can feel at home in these spaces, for the rest of us it is a logic of 'look but don't touch', bequeathing a logic of self-exclusion. It is the fact that super-rich spaces are often so visible and physically accessible to the palpably not-rich that makes them so intriguing. In many ways, the notion that cosmopolitan consumption thrives on this visibility reinforces the idea that super-rich lifestyles are conspicuous. Sometimes, this takes interesting forms; for example, when the super-rich make a play of their charitable works, donations to celebrity auctions and (remarkably) their claims to be green consumers (conspicuous asceticism?) Generally, however, there has been a spectacular rise in luxury consumption, with the consumption patterns of the global elite acting as a marker for those further down the income scale. Robert Frank (2000) describes the process as 'luxury fever', as consumption expectations are ratcheted up all the way down the income scale. The global elite are pushing up people's expectations and assumptions. In the US, for example, the average size of house has doubled, in square feet terms, in the past thirty years. In part it is a function of the positional nature of consumption. We consume in order to position ourselves relative to other people. Not only do the global elite raise the upper limit, everyone is thus forced to spend more just to keep up, but they also become the perceived benchmark, Juliet Schor's work, for example, shows that people are no longer keeping up with the people next door, but the people they see on television and magazines (Schor, 1998). In order to keep up with these raised consumption standards people are working harder and longer as well as taking out more debt. The increase in luxury consumption has raised consumption expectations further down the income scale, which in order to be funded has involved increased workloads and increased indebtedness. It is not so much keeping up with the Jones but 'keeping up with the Gates'. One of the key roles of new cosmopolitans, it seems, is to place themselves in the global shop window as examples of the success of the capitalist world system - as both key actors and beneficiaries of the network society. In Sklair's (1997) work, it is those in the cultural industries (i.e. the press, media and artists) that are perceived to do most in terms of legitimating the consumer ideology of consumerism. In fact, it is the global super-rich who probably do most to secure the cultural hegemony of capitalism, standing as a visible sign of the desirability of global mass consumption. Parading (and paraded) across the pages of publications as diverse as Vogue, Tatler, Hello!, OK!, Business Week, Wallpaper and Homes and Gardens (not to mention a million Sunday supplements), the super-rich and their spaces of consumption are thus key components of the global networks of which they are the beneficiaries. Clearly, the multiply-mediated consumption spaces of the super-rich matter, both culturally and economically, and stand as a projection of the power of the super-rich across the world. A TRANSNATIONAL ELITE?Exploring the consumption practices of the super-rich begins to highlight that they are best described as 'fast subjects' who dwell in what Castells (2000) terms the 'space of flows' rather than the 'space of places'. This demands that we take their transnational lifestyles seriously, and think about how their 'global reach' is implicated in the making of new global orders. In recent years, the assertion that we need to take transnational practices and networks of capital, labour, commodities and ideas seriously has been widespread as globalization becomes a key leitmotif across the social sciences. Within this literature, there has been considerable attention devoted to the heightened salience of migration in the contemporary world, with a particular focus on 'transnational communities'. Deemed as both 'the products of, and catalyst for, contemporary globalisation processes' (ESRC Transnational Communities Programme, 1998), these communities sit astride political boundaries and, in a very real sense, are neither here nor there. Hannerz (1993) describes four groups of people who fall within this definition, forming communities which may be desribed variously as diasporic, hybrid or nomadic. These are (1) 'transnational business' people, including the high-waged, highly skilled professional, managerial and entrepreneurial elites usually associated with finance, banking and business services (see Beaverstock and Boardwell, 2000); (2) 'Third World populations', comprising low-waged immigrants who occupy insecure niches in the unskilled or semi-skilled sectors of the urban service economy; (3) 'expressive specialists', who participate in the cultural scene in areas such as art, fashion, design, photography, film-making, writing, music and cuisine (Scott, 2000); and (4) 'tourists', whose transnational status is often ephemeral but who make up a major proportion of those who are living outside their 'home' space (Urry, 2001). We might then add another transnational community to Hannerz's list - the super-rich - who must be regarded as quite distinct from any of the four categories identities described by Hannerz, yet which share aspects of their transnational lifestyle. The fact such transnational communities exist highlights some major deficiencies in the existing theorisation of social change, which most political scientists have assumed occurs on a state by state basis. We can characterize this in terms of the explicit or implicit assumption that the nation-state acts as the container of social processes and that the nation is the appropriate scale for studying major social, economic and political processes. This 'embedded statism' (Taylor, 2000), is thus a key obstacle to a full theorization of the super-rich as a transnational community. Here, Manuel Castells' explanatory theory of the 'network society' offers a more convincing analytical framework for exploring the geographies of the super-rich. Based on his tentative identification of the network as the key social form organising people in relationships of production, consumption, experience and power, Castells holds to the idea that we live in a network society, reproduced unevenly by 'flows of capital, flows of information, flows of technology, flows of organizational interaction, flows of images, sounds and symbols' (Castells 2000, p 418). As we have described, Castells has stressed that this network requires constant attention and mediation: hence the existence of a second layer in the 'space of flows': the world city network that provides the hubs and nodes around which the first layer of flows is organised. Developing this, Castells argues that the incessant movement of people in and through this world city network is a key characteristic of the Informational Age (see also Dicken et al, 2001). While Castells conceeds migration between states has long been characteristic of the global economy, he suggests this movement is now inevitably tied into the globalization of financial markets, transnational production networks, media systems etc (Castells, 2000). Accordingly, Castells suggests that the importance of transnational migration cannot be underestimated in the reproduction of these crucial nodes of translation, with the concentration of transnational migrant elites employed in world cities evidence of the need for international expertise to maintain global financial archiecture (see also Beaverstock and Boardwell, 2000). As the contemporary international service economy requires specialist professionals to be globally mobile to deliver intelligence, skills and knowledge to the point of demand, the development of a cross-border transnational migrant elite contributes to the production and consumption of the global city and its cultural and social relations. Hannerz's (1996) work on transnational connections in the city adds further weight to the argument that transnational elites are key constituents of the 'space of flows'. Drawing upon Castells' ideas, he stresses the importance of relationships and transnational flow, arguing that it is the transnational relationships of people that 'play major parts in the making of contemporary world cities' (Hannerz 1996, p. 129). By drawing upon Friedmann and Wolff, who note that 'transnational elites are the dominant class in the world city, and the city is arranged to cater to their life styles and occupational necessities' (Friedmann and Wolff, 1982, p. 322), Hannerz suggests that the transnational managerial elite are key agents of world city production. He argues that the key function of this transnational managerial elite is to support the global city's corporate and advanced producer economy. Thus, such labour is very highly-educated, highly-skilled and wealthy. Moreover, as many of these elites are from 'elsewhere' because they have hyper-mobile international careers and cosmopolitan cultural distinctiveness, they find it relatively easy to move between global cities with very little personal dislocation. As Hannerz (1996, p. 129) suggests, they 'stand a better chance than others to extend their habitats...into other locations.' In sum, Hannerz's interpretation tallies with Castells' reading of the network society as having three layers: the electronic impulses in networks, the places which constitute the nodes and hubs of networks, and the spatial organisation of cosmopolitan elites who perform key translation tasks in these networks. Yet in writing of the 'spatial organization of the dominant managerial elites (rather than classes)' (Castells, 2000, pp. 443-5), both Hannerz and Castells downplay the importance of the super-rich in commanding and controlling the world system, instead suggesting the key actants in world city networks are the service class. While the latter are certainly of significance in shaping the global space of flows, one might legitimately question their global outlook and transnationalism. In Castells' view, these service elites are 'global', unlike ordinary people who are deemed to be 'local'. But Beaverstock and Boardwell (2000) suggests the designation of service elites as truly global may be misleading, with many transnational elite workers forming 'personal micro-networks' that centre on the expatriate residential and leisure-orientated spaces characteristic of major world cities. In contradistinction, the super-rich inhabit a truly global set of spaces, often owning multiple residences, holiday homes and retreats. For such reasons, we wish to make a key distinction between a genuinely transnational faction of the global elite (the super-rich) and the global managers who are transnational in appearance, but rarely in practice. As such, the super-rich must be regarded as key actors in the articulation of the space of flows, their truly global presence and outlook fulfilling a de facto governance function (not least through the direct and indirect influence they might have on the charities, foundations, business organisations, think tanks, advisory councils, and corporate committees who influence fiscal and social policy at a global scale, not to mention the World Bank, IMF, OECD, WTO and agencies of the UN). Perhaps more so than any other group, it is the super-rich who shape the networks that lie at the heart of the global 'space of flows'. CONCLUSIONThis paper has suggested that has been a surprising lack of study of the world's super-rich. This omission is particularly surprising given the widening disparity between the incomes of the super-rich elite and those of the rest. However, it seems we currently know more about the poor than the exploitative classes who benefit from global process. Further, the few studies that have examined the global elite have tended to focus on the managerial classes, who, while affluent, lack the global outlook and mobility of the super-rich. As this paper has begun to suggest, to elide global managers with the global super-rich is clearly dangerous. While the former are key actors in a global economy, charged with attending to the global flows that are channelled through the hubs and nodes of the global economy, here we have argued that the super-rich eclipse their importance. Contra Castells, we argue that it is this group, not global managers, that is truly transnational (hence constituting the third layer in Castells' 'space of flows'). Given the rising disparity of income witnessed at a global level, there is now a pressing need for studies that explore how the super-rich are able to manipulate global networks to their own advantage, and to study how their 'micro-networks' serve to articulate the global space of flows. In the long term, this might result in social and economic policies that attempt to curb the excessive wealth and profligacy of the super-rich, and result in a more socially just world (after all, even neo-liberal advocates suggest that the wealth accruing to the richest is socially and economically undesirable). In the short term, however, it seems essential that a number of more basic questions are addressed. These question include, amongst others, whether existing definitions of the super-rich (e.g. financial assets of more than one million dollars) are adequate, and whether the distinction between the global super-rich and global managers is sustainable empirically as well as theoretically. Investigating such issues raises a number of intriguing methodological challenges, with the mobile lifestyles of the super-rich obviously foreclosing a number of established research techniques. For example, there is certainly no reliable inventory of the world's super-rich (and, in any case, it needs to be conceded that a role call of high-worth individuals could generate a list some six million names long if one accepts the definition of the super-rich as those with assets of one million dollars plus). Given their transnational status, the super-rich represent elusive and slippery research subjects. But the challenge here is not solely methodological, with geographers' ability to adequately describe the geographies of a group who exceed traditional definitions of residence and nationality bought into question by the rising numbers of those who dwell in transnational space and time. For instance, it is apparent that political geography has traditionally explored issues relating to territorialism and the borders of the nation-state, but we are faced here with the need to describe the geographies of an elite for whom these territorial boundaries take on diminished importance. Yet without specification of the geographies of the super-rich, it seems that we will be unable to make little long-term progress in understanding (and perhaps mitigating) the obscene income inequality that blights global society. REFERENCESBeaverstock, J.V. & Boardwell, J.T. (2000). 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Kitchin, R. & Hubbard, P. (1999). Research, action and critical geography, Area, 31 (3) 195-199. Massey, D. (1993). Power geometry and a progressive sense of place. In Bird, J. et al (Eds) Mapping the future: local cultures, global change (pp. 59-69) London, Routledge. Milanovic, B. (2002). True world income distribution, 1988 and 1993: First calculated based on household surveys alone, The Economic Journal, 112, 51-92. Pahl, R. (2001). Market success and social cohesion, International Journal of Urban and Regional Research, 25 (4) 879-883. Sassen, S. (1995). On concentration and centrality in the global city. In: Knox, P.L. and Taylor, P.J. (eds) World cities in a world system (pp. 63-78) Cambridge, Cambridge University Press. Sassen, S. (2000). New frontiers facing urban sociology at the Millennium, British Journal of Sociology, 51 (1) 143-159. Sassen, S. (2001). Cracked castings - notes towards an analytics for studying transnational processes. In: Pries, L. (ed.) New transnational social spaces (pp. 187-207) London, Routledge.. Schor, J. (1998). The Overspent American, New York, Basic Books. Scott, A. (2000). The Cultural Economy of Cities, London, Sage. Short, J.R. and Kim, Y-H. (1999). Globalization and the city, Harlow, Longmans. Smith, D.M. (1995). Geography and social justice, Oxford, Blackwell. Smith, M.P. (2001). Transnational urbanism: locating globalization, Oxford, Blackwell. Taylor, P.J. (2000). World cities and territorial states under conditions of contemporary globalization, Political Geography, 19 (1) 5-32. Thrift, N. (1994). On the social and cultural determinants of international financial centres: the case of the City of London. In: Corbridge, S., Thrift, N. and Martin, R. (eds.) Money, power and space (pp. 327-355) Oxford, Blackwell. Thrift, N. (1997). The rise of soft capitalism, Cultural Values, 1 (1) 21-57. Thrift, N. (2000). Performing Cultures in the New Economy, Annals of the Association of American Geographers, 90 (4) 674-692. Transnational Communities Programme (1998) Programme brochure, Economic and Social Research Council, UK. UNDP (2002). UNU/WIDER - World Income Inequality Database, New York, United Nations. Urry, J. (2001). Mobilities, London, Routledge. Veblen, T. (1899) [1985]. A theory of the leisure class, London, Allen and Unwin Webber, M. (2002). A Divided Britain? Nottingham, Experian. NOTES* Department of Geography, Loughborough University, UK. ** Department of Geography, Syracuse University, New York, USA. Table 1: The world's richest individuals (Source: Forbes 400, October 2000; Forbes Global, July 2000)
(* indicates estimate of family wealth). Table 2: The items 'needed' by the rich (Source: http://www.forbes.com/2001/09/27/400.html)
*The annualized change in the consumer price index is 4.6%. **Based on currency exchange rates as of Aug. 31, 2001. ***This item was added to the index in 1978. All prices in dollars. Figure 1: Growth of high net worth individuals (Source: International Financial Services London, 2002)
Figure 2: Regional distribution of high net worth individuals (Source: IFSL, 2002)
Edited and posted on the web on 12th September 2002 Note: This Research Bulletin has been published in Geoforum, 35 (4), (2004), 401-407 |
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