This new edition of The No-Nonsense Guide to Globalization was released in January 2011 and is fully updated throughout. The forward, Table of Contents and Chapter 1 are available for The No-Nonsense Guide to Globalization on our website.
You can’t turn around in Mexico without adding a few pesos to the pockets of Mexican billionaire Carlos Slim Helú. The fingerprints of the 71-year-old magnate are everywhere in the country: take out a mortgage, pick up your smart phone, knock back a soft drink or buy a shirt in the ubiquitous Sanborn’s department store chain. It’s money in the bank for Señor Slim. According to a recent poll of the world’s wealthy in Forbes magazine Slim is the globe’s richest person, with a net worth of $74 billion. More than 60% of his fortune comes from his control of Latin America’s major cell phone operator, America Movil. Its shares rose 18% last year. Americans Bill Gates ($56 billion) and Warren Buffet ($50 billion) are next on the list. According to Forbes there are 1,210 billionaires in the world with a combined wealth of $4.5 trillion. This kind of money is beyond comprehension for most of us. These guys have more money than half of humanity. To put it into perspective: if Carlos Slim spent his fortune at the rate of a million dollars an hour, it would take him nearly 8 ½ years to run out of cash.
But what’s interesting about the Forbes list is not Slim’s rise to the top (he was there last year too) or the presence of Gates and Buffet, both of whom get their share of media coverage. The real story is the explosion of super wealthy in the developing world.
The trends I described in The No-Nonsense Guide to Globalization, the concentration of wealth at the top and the growing gap between the rich and the rest of us, have worsened in the West in recent years. And now a globalized economy has brought the same mushrooming inequality to the fast-growing economies of the developing world. Brazil, India, Russia and China accounted for 108 of the 214 new billionaires on the list and a quarter of the world’s billionaires are now from these four countries. China has 115 billionaires and Russia 101, according to Forbes. Most of the action is in the Asia Pacific region in the penumbra of China’s explosive growth. The area has 332 billionaires, up from 234 a year ago. Meanwhile the US has 10 more billionaires than a year ago but 56 fewer than in 2008.
The global economic meltdown of the past few years was caused by reckless financial speculation by banks and wealthy investors. By now that’s old news. But somehow we let them get away with it. We bailed them out with public funds and now, a few years later, the rich are firmly back in the saddle. CEO salaries are on the rise, global banks are making healthy profits, stock markets are booming. Yet the rich fend off tax increases while governments axe public spending and tell the rest of us to pull in our belts. We bailed out the rich and now we’re waiting for them to put their capital to work and bail us out? It’s the old trickle down model come back to haunt us. It doesn’t work, it never has.