Sunday, October 04, 2009

The Plutonomy

n. An economy that is driven by or that disproportionately benefits wealthy people, or one where the creation of wealth is the principal goal.
[Blend of pluto- (wealth) and economy.]

Read (get past the beginning of) this dkos post.
The main fear Citigroup has is that since one person-one vote still obtains, the rich have only 1% of the vote, and that may eventually end the plutonomy.  Presumably there are corporate skunkworks to try to remedy the situation.

Citigroup Plutonomy Report Part 1
Oct 16, 2005
- The World is dividing into two blocs - the Plutonomy and the rest.   The U.S., UK, and Canada are the key Plutonomies - economies powered by the wealthy. Continental Europe (ex-Italy) and Japan are in the egalitarian bloc.
- Equity risk premium embedded in "global imbalances" are unwarranted.   In plutonomies the rich absorb a disproportionate chunk of the economy and have a massive impact on reported aggregate numbers like savings rates, current account deficits, consumption levels, etc.
This imbalance in inequality expresses itself in the standard scary "global imbalances". We worry less.
Posted by Arun at 12:44 PM

Comments (3)

Loading... Logging you in...
Dashboard | Edit profile | Logout
  • Logged in as
0 Vote up Vote down
Rajan P. Parrikar's avatar - Go to profile

Rajan P. Parrikar · 806 weeks ago

I saw Michael Moore's latest movie yesterday and this term figures in there, along with the Citibank report.
0 Vote up Vote down
Christos K's avatar

Christos K · 802 weeks ago

Actually, these kind of ruling are described by Aristotle, at 4th century B.C.. They called aristoracy (i.e. The noble - aristoi have the power) and timocracy (i.e. timi - price,value, those who has money have the power). Both lead to dictatorship
1 reply · active 802 weeks ago
0 Vote up Vote down
Arun's avatar

Arun · 802 weeks ago

The small difference is that human productivity was limited in Greek times- the aristocracy or timocracy had to operate by confiscating the production of other people. Today's plutonomy does not take away subsistence from people; rather they appropriate almost all the results in the gain in productivity. E.g., US GDP grew 3.5% in the 3rd quarter even while workers were losing jobs. Nor did the average worker get any gain in wages. That 3.5% presumably mostly went to the plutocrats.

Post a new comment

Comments by

Subscribe to: Post Comments (Atom)