Author: David Rothkopf
WASHINGTON, DC: Like nature, power also abhors a vacuum. On the global stage this has meant that thanks to weak or underdeveloped international institutions and a general lack of consensus as to how to manage this integrated and interdependent world, a superclass of elites is stepping in to fill the void. They pursue their agendas often unchecked by institutions representing the will of the people at large, operating with a freedom typically impossible in nation-states where the checks and balances of governance have evolved to help counteract the over-concentration of power in the hands of the few. What is more, the market-centric approaches regularly advocated by this private sector–dominated group seem to have resulted what may well be the most inequitable world in history, posing a palpable danger to international stability.
The power structure of a society is like any other product of its citizens, be it a city or a system of beliefs. It’s an artifact, a cultural fingerprint, one which distinguishes the society from past and future eras or from other civilizations and which can offer clues to the society’s rise and fall, the degree of order or chaos within it, and a sense of its collective priorities. Generally all citizens are touched by and help in creating the power structure and its internal dynamics through their actions, reactions or simply their tolerance of others’ actions.
Today’s global elite offers an excellent window into the forces shaping our era and hints at the tensions that may shape the decades ahead. These international elites form a group that shapes globalization more than any other and at the same time is a small, coalescing community that has globalized far more rapidly than any other. Members of the global elite have more in common with one another than they do with the men and women of their countries of origin, reflecting a growing cultural disconnect between this global community and counterparts back “home.” Comparatively fewer members of this elite derive their power from political sources than similar international elites did, even in the fairly recent past. By my reckoning, nearly two-thirds of the contemporary global elite – the superclass of 6,000 described in my recent book – derive power from private enterprises that have grown enormously and frequently rival states in terms of their influence and the resources at their disposal. In today’s world, for example, the top 250 companies have annual sales equivalent to about a third of global GDP. More than 100 companies report annual sales in excess of $50 billion dollars, whereas only 60 or so countries report an annual GDP in excess of $50 billion.
Even accounting for the fact that sales and GDP are apples and oranges in economic terms (the latter measuring value-added), this gives a useful thumbnail measure of comparative wealth. The people who control these institutions rival in power most officials of big governments and far outstrip those from small governments. Exxon Mobil, for example, had profits last year that were greater than the GDP of Bahrain and Yemen combined.
This concentration of power, another distinguishing characteristic of our modern elite, exists in all areas – political, military, business, financial and cultural. Of some 4,300 religions, only 20 have more than one million adherents, and only two have more than one billion. The 26 member states of NATO are responsible for 85 percent of all global defense spending, while one, the US, is responsible for more defense spending than all other nations put together.
Past elites were dominated by members who inherited power, and status was often linked directly to holdings of assets, notably land. Today’s elite draws more power from institutional affiliations and therefore is a more transient group, with members resigning, retiring or being dismissed from jobs and thus losing their influence. Networks have always played a role in enabling relationships among past elites, but thanks to modern travel and telecommunications, networks within this group cover far greater distances and enable alliances that touch far more people.
The requirement I used to define membership in the superclass is the ability to influence millions of lives across borders on a regular basis. Few people would have met such a standard even 100 years ago. I identified more than 6,000 individuals with comparative ease. But the exact size of the group was of far less interest than the changing nature of modern power and what that might imply. As a group, the 6,000 are unrepresentative of the global population at large: 94 percent are male, over 60 percent live on one side of the Atlantic or another, the average age is over 60 and, according to an analysis of a substantial sample, 30 percent went to one of just 20 universities.
Even as globalization and the spread of market mechanisms have reduced absolute poverty in the world and raised the bottom in many societies, this era’s elites preside over a system that is the most unequal in modern history. Inequality has grown within countries and among them. A century ago, the wealthiest nations were on average nine times richer than the poorest; today they are more than 100 times as rich. Only 30 years ago, the richest nation in the world had 88 times the wealth of the poorest; today it has more than 270 times the wealth. In the US, nearly all the benefits of growth in the past decade have accrued to the top 10 percent of society; while the top .01 percent has seen incomes grow 112 percent, the incomes of the bottom 90 percent grew by only 2 percent. The benefits of global growth accrue to fewer people. The richest 1,100 people in the world today have a net worth that’s almost double that of the 2.5 billion people earning the least.
Such facts raise serious questions about the viability of the current global power structure, as most of history is littered with the story of elites that rise, over-reach and are brought down. But today, mechanisms to counterbalance these transnational actors have yet to emerge. Most countries are reluctant to cede sovereignty to the kind of global-governance mechanisms that might ensure that the future is shaped by the will of the many rather than that of the few. We have yet to reach the intellectual or philosophical threshold where we can even begin to question the widely accepted view, born of Western elites, that markets should be an ever less-fettered arbiter of the distribution of wealth, or champion an alternative to the failed policies of communism.
There is increasing evidence to suggest that high functioning markets, seeking efficiency as they do, favor enterprises of scale, which in turn puts more resources and power in the hands of fewer people, providing the broad benefits promised as their most important by-product at an unsatisfactorily slow rate. Yet markets offer great benefits, and governments to date have often been inefficient, corrupt or both. Supporting what is often deficient in order to manage the flaws of what is often super-efficient seems like a bad option, but there is no better one. We must begin to focus on how to innovate in the area of global governance with the same kind of creativity that we would expect of innovators in business, finance, science or the arts. But the first decades of the global era suggest a troubling phenomenon, and our tolerance of that phenomenon, our collaboration in accepting it, and the gross inequities that mark our era may well be seen in the future as one of the artifacts of our time by which history defines us all.
Review: Salon
In the first chapter of David Rothkopf's "Superclass: The Global Power Elite and the World They Are Making," the author quotes Mark Malloch Brown, a British minister of state and former deputy secretary-general of the United Nations, recalling what it was like to walk with his wife through a reception in New York for the World Economic Forum. The WEF puts on the famous annual meeting of business leaders, political figures, NGO heads, scientists and other movers and shakers, nicknamed after the small Swiss alpine town where it takes place, Davos. After crossing the room and shaking countless manicured hands in the process, the couple turned to each other and marveled that "we walk though the Davos party and know more people than when we're walking across the village green in the town we live in."
Brown is far from the only one who could tell such a tale. "Davos man" is an epithet coined by the conservative scholar Samuel Huntington to describe the very specific type that attends the conference. These are people who, as Huntington wrote, "have little need for national loyalty, view national boundaries as obstacles that thankfully are vanishing, and see national governments as residues from the past whose only useful function is to facilitate the elite's global operations."
Not everyone Rothkopf writes about in "Superclass" is a Davos man, but despite his efforts to remain impartial toward "the global power elite" he describes, you can tell that the elect milieu of the WEF gives him a palpable thrill. The book opens with a scene of the author making his way through the town's frozen streets, recognizing CEOs, oil company executives and Harvard professors on his way to a fondue restaurant. Suddenly, he's greeted effusively by a bestselling inspirational writer with whom he has been trading e-mail: Paulo Coelho, "an icon of the global literary scene"! (The literary scene? I don't think so, though Coelho certainly is a publishing phenomenon.)
Rothkopf's credible, if not especially original argument in "Superclass" is that over the past several decades a "global elite" has emerged whose connections to each other have become more significant than their ties to their home nations and governments. They schmooze regularly at conferences like Davos, go to the same schools, serve together on corporate and nonprofit boards, and above all do business with each other constantly -- to the point that they have become a kind of culture in themselves, a "class without a country," as Rothkopf puts it. Furthermore, these people are "the new leadership class for our era."
A former undersecretary of commerce in the Clinton administration and an officer in an assortment of "advisory" firms (including Kissinger Associates, run by former Secretary of State Henry Kissinger, and the consulting company Rothkopf himself founded, Garten Rothkopf), Rothkopf is an insider of sorts, well enough connected to sit in on meetings of power brokers without quite being one himself. He also writes Op-Eds on international affairs for major newspapers and is a visiting scholar at the Carnegie Endowment for International Peace, positions that require the display of some critical distance. "Superclass" isn't as condemnatory as Naomi Klein's anti-globalization manifesto "No Logo," let alone the conspiracy theorizing of "The Iron Triangle," Dan Briody's exposé of the Carlyle Group, but it doesn't merely fawn over its subjects, either.
Rothkopf announces that he and his researchers have identified "just over 6,000" people who match his definition of the superclass -- that is, who have met complicated (and vaguely explained) metrics designed to determine "the ability to regularly influence the lives of millions of people in multiple countries worldwide." These include heads of state and religious and military leaders -- even the occasional pop star, like Bono -- but the core membership is businessmen: hedge fund managers, technology entrepreneurs and private equity investors.
Money alone doesn't cut the mustard. A fabulously wealthy widow living out the end of a quiet life isn't in the superclass; you must not only possess power, but also freely exercise it. Stephen Schwarzman, CEO of the Blackstone Group, is the paradigm: In addition to running a huge private equity firm, he sits on the boards of a half-dozen cultural foundations and belongs to a laundry list of forums and councils, including the WEF. (He also granted Rothkopf a lunch interview at the Four Seasons Grill Room, as the author takes pains to inform his readers.)
The pope is a member of the superclass, as is Osama bin Laden, who can undoubtedly claim influence over current international affairs, even if he sometimes lives in a cave. The Russian illegal arms dealer Viktor "Merchant of Death" Bout is a member, as are Rupert Murdoch and Bill Clinton, who, while no longer commander in chief of the world's remaining superpower, nevertheless heads the Clinton Global Intiative, a brand new dynamo in the area of international philanthropy.
Rothkopf's outlook on these players is roughly Clintonian. He believes in capitalism as an engine for prosperity, but he's leery of the free-market gospel that dictates that "market reforms" ought to be imposed on faltering economies whatever the social and political costs. "It is true," he writes, "that governments have been unable to do much of what they should do to improve the welfare of their people, and in a vast number of cases markets have done much more." But the "free-market" moniker is misleading, since such a thing doesn't really exist. All markets are tweaked by governments to some extent, and what the preachers of the free-market religion never acknowledge is that their own favorite case studies are surreptitiously finagled to benefit the already rich.
Taking a dinner party at the home of Chile's finance minister, Andres Velasco, as an example, Rothkopf describes his uneasy response to the oligarchs around him. He realizes that they embrace the market-oriented philosophy of the "Chicago Boys," Milton Friedman's University of Chicago disciples, but only so long as the attendant suffering is limited to Chile's lower classes. They quietly resist reforms that might nibble away at their iron control of the nation's industries. "While many of the most powerful people in the country embrace 'progress,'" Rothkopf observes of Chile, "they use their energy and political capital primarily on behalf of the changes that benefit them most directly. Elites in Chile have implicitly or explicitly resisted the changes that might create more competition, more entrepreneurship, more access to capital for the poor and middle classes." As a result, though Chile is touted as Latin America's great economic success story, profound inequities in its society have gone comparatively unchanged.
"Superclass" makes a case that today's elites are an improvement on those of the past: Instead of inherited aristocracy or sheer military might, power is more likely to go to the smart, ambitious and hardworking. Membership is fluid to an unprecedented extent, with new people muscling their way into the inner circle and slackers dropping out of the bottom all the time. Still, as Rothkopf points out, the ranks of this elite are overwhelmingly older males of European descent who graduated from prestigious Western colleges. Critics have been complaining for years that Davos is too Eurocentric, one reason why the Boao Forum for Asia was started for Eastern financial honchos in 1998.
Above all, like anybody else -- in fact, more than anybody else, given the obsessive, often narcissistic energy required of moguls, politicians and would-be messiahs -- these people are self-interested. However gifted, they should not be allowed to operate in a vacuum. The difficulty is that most of them exercise their power transnationally, while laws and regulations are confined within the borders of nation-states (which Rothkopf, in classic Davos-man style, regards as doomed). "We must resist the temptation to reflexively attack elites," he writes, since human societies need leaders and this is an able bunch, but elites ought to be more accountable to the millions of people whose lives they affect. Otherwise, as history (and the current upsurge in religious extremism) shows, they may provoke a violent and chaotic backlash.
Nevertheless, the likelihood of a world government forming to handle the situation is remote -- not while nation-states have any life left in them to defend their sovereignty. International institutions -- the U.N., especially, but also the IMF and the World Bank -- are weak, or weakening, and are hemorrhaging credibility. The answer, according to Rothkopf, is not global government, but "governance," fewer formal agreements and mechanisms among international entities. The registration and management of Internet domain names (via a collection of organizations) is one example of this sort of governance, orderly and helpful in a way you wouldn't automatically associate with Rothkopf's ominous-sounding definition of the term: "Fulfilling government roles with mechanisms" that "lack the full traditional power, authority or mandates of governments."
Yikes! Rational as it may sound to set up such systems, they just aren't directly answerable to the populace at large -- they're undemocratic. Of course, as several of the superclass muckety-mucks Rothkopf talks to complain, most of the officials who are democratically selected by the masses don't really understand -- and perhaps aren't even capable of understanding -- the complex global issues that need to be negotiated. American congressmen, senators and even presidents know how to get elected by capitalizing on delusional fears of gay marriage and illegal aliens, but their constituents don't demand that they master high-level economic or scientific concepts. Chances are, the voters haven't even heard of those concepts, let alone formulated opinions on them. How can even the superclass be accountable to a public that can't (or won't) comprehend what they do?
Still, Rothkopf insists that elites ought to look out for the disadvantaged. "If the global decisions that take place out there only serve the powerful," he writes, "and many of the people making the decision are not elected or chosen by the people, the average person is going to recognize they have less influence. So it won't just be unfair, it will produce a backlash." One such "backlash" is the administration of Venezuela's Hugo Chavez, a leader characterized by Rothkopf as part of "the global network of antiglobalists." Chavez has made political theater out of taunting and thwarting the global elite. No wonder one of the book's chapter sections is titled "Is a Crisis Inevitable?"
Rothkopf's idea is that the superclass ought to be smart enough to foresee any such crisis and head it off by doing more to make the currently disenfranchised feel like "stakeholders" in the new global order. The superclass should recognize that "order and legitimacy are the allies of both business and those who seek social stability." Furthermore, I suppose, they should put pressure on fellow members who step out of line with this program. The upside to the "closely knit" connections between the globe's top players is that, like any community, they can use exclusion and ostracism to punish those who misbehave.
This is a tall order indeed. Of course, the power elite are not entirely indifferent to the world's problems. The Davos conference often spotlights issues like poverty in Africa and global warming, and high-profile charities such as the Bill and Melinda Gates Foundation and the Clinton Global Initiative suggest that at least some of the superclass feel obliged to step in where national governments have failed to do anything substantive. Deciding on how best to gentle the masses, how to settle on standards of global economic conduct and how to enforce those standards won't be easy, though. Fortunately for the superclass and anyone seeking to work with them, there are consulting companies like Garten Rothkopf ("an international advisory firm specializing in emerging markets investing and risk management related services") to turn to!
In the concluding pages of "Superclass" it becomes increasingly difficult to dispel the impression that you have just read what amounts to a 380-page business card. Many recent nonfiction books on "current affairs" are little more than that. Organized around a catchy concept and extensively researched by underlings, they win their authors jobs in think tanks and speaking engagements at corporate workshops and conferences -- all of which pay much, much more than anyone can expect to make on a book. There are a handful of important ideas in "Superclass," it's true, but many of them have been gleaned from other, more original thinkers. There are also a lot of facts and statistics, presumably gathered by Rothkopf's assistants.
The other thing that you'll find in "Superclass" is names, lots and lots of names. At times, Rothkopf's breathless citing of notables, accompanied by the banal details of their C.V.s and hobbies, made me waspish enough to mutter an old saying of indeterminate origins: Great minds talk about ideas, average minds talk about things and small minds talk about people. Yet, to be fair, people are among the things that Rothkopf has to offer his clients, specifically his knowledge of and acquaintances among the very superclass he celebrates and scolds. One thing "Superclass" assiduously demonstrates is that whatever the mistakes of the global elite, Rothkopf has been around to witness a few of them firsthand.
This explains why "Superclass" lacks the one thing that would probably guarantee it a spot on the bestseller list: the actual names of the 6,000 members of the superclass, as defined by Rothkopf's criteria. The list exists, Rothkopf assures his readers, but publishing it would be "an exercise in futility." CEOs lose jobs and retire, tycoons suffer financial setbacks and even get thrown in jail. Therefore, "the day after it was published," the list "would be obsolete."
Besides, Rothkopf sniffs, "publishing such a list immediately generates debate about who's in and who's out, and obscures the bigger issues involved." This shows a surprising degree of high-mindedness in a book that is significantly occupied with mini-profiles of the rich and powerful, whom they know, how they operate and where they eat lunch. If printing the list coarsens the conversation, then why compile it to begin with? If, as Rothkopf intimates, the list was a necessary part of the book's research yet publishing it would nevertheless be a detriment to the project, then why mention it at all? Why let drop the tantalizingly specific number of 6,000 names?
Despite his demurrals, I'm sure there are at least a few conversations that Rothkopf would not regard as fatally cheapened by the sharing of his list of the rich and powerful. To the contrary, those conversations would no doubt be very expensive indeed, taking place between Garten Rothkopf and the clients who pay for its consulting services (which surely cost more than the $26 cover price of "Superclass"). In the end, this might be the most important message contained between the covers of "Superclass": David Rothkopf's got the list, and you know where to find him.
Review: SFgate
Look at the members of the boards of the top U.S. corporations, at the high-level appointees in government and at the list of invitees to the major global meetings, and the names quickly start repeating. Former Treasury Secretary Robert Rubin sits on the board of Citibank, former U.N. Ambassador Richard Holbrooke is on the board of giant insurer American International Group Inc., and former Undersecretary of Defense E.C. Aldridge is on the board of Lockheed Martin Corp., the biggest defense contractor in the United States. No wonder we've developed so many conspiracy theories about backroom dealings on the ski slopes of Davos and the conference rooms of K Street.
Though most such theories are far-fetched, there is valid concern over the close ties among our representatives in government and their friends in industry. And, as the current presidential campaigns attest, many voters are rightly concerned about the ethical implications of the revolving door between government and lobbies.
This elite is the subject of David Rothkopf's new book, "Superclass." He argues has it has transcended national borders to become a global class with "power that on an ongoing basis touches millions or billions of people." They are the chief executive officers of multinational corporations, the heads of nations and international organizations, the directors of international nonprofits and the leaders of worldwide religious movements. And by his count, out of a world population of 6 billion, there are 6,000 of them.
Rothkopf sets out to characterize this superclass by interviewing its members. He examines their inter-connections, what defines them as a whole, and what the emergence of this class "that is reshaping the planet" means for our future. One way he identifies members of the superclass is by their influence. "There are people who are on top and people who are not - and, among those who are on top, the few at the very top have hugely disproportionate influence."
The single largest group with such influence is business and financial leaders. Their decisions, Rothkopf says, affect "millions of workers, families, customers, and suppliers worldwide." What's more, they project their influence on political life as well, as politicians depend "on the ability of networks within companies and industries to raise the megaamounts they need" to win campaigns.
The world's biggest corporations - like Wal-Mart Stores Inc., Exxon Mobil Corp. and General Motors Corp. - certainly touch the lives of millions across the globe. But it seems naive to suggest that the person atop that corporation acts alone or even makes the majority of the decisions that actually have an effect. Those CEOs certainly receive extravagant salaries and live the high life of private jets and exclusive country clubs. But they face enormous constraints as the heads of unwieldy organizations, and more often than not react to investors, governments and customers rather than blaze new frontiers.
Moreover, Rothkopf vastly overestimates the political influence of the corporate elite. Aside from funding campaigns and lobbying in Congress here at home, he believes that companies wield extraordinary power over weaker developing countries. With the threat of taking much-needed jobs elsewhere, they force governments to relax labor and environmental laws, and to open to global markets, sometimes against the will of their citizens. Thus, he claims, "the era of the nation-state as we know it ... has ended."
But such accounts of the rise of corporate interests are by now so hackneyed as to be mere platitudes. Campaign-trail rhetoric aside, study after study of congressional lobbying finds no effect on how members of Congress actually vote. In fact, lobbies tend to fund legislators who already agree with them. And companies that donate to political campaigns tend to give to both sides of the aisle. Internationally, much as CEOs may have told Rothkopf otherwise, multinational corporations in fact tend to negotiate with governments rather than force their will upon them. As it turns out, it's neither easy nor cheap to relocate a factory, and many companies are too invested in local communities to move when they don't get their way.
In the end, one is left wondering whether there is anything to be gained from Rothkopf's idea of a superclass. What exactly do the head of Human Rights Watch, Kim Jong Il, the CEO of Toyota and Angelina Jolie have in common? They may all be influential in their own ways, but their influence is circumscribed, and their agendas conflicting.
Rothkopf sees the world as the superclass versus the rest, repeating historical cycles of elite overreach and popular backlash. But he fails to notice the contradictions within the elite, both outsiders (the Gandhis) and insiders (the Gores), whose influence emanates from opposition to other elites. It is tempting to look at our leaders for signs of new directions yet to come. But history should make us skeptical. The more influential changes are likely to come from a garage or a dorm room or a local soapbox than from a boardroom. {sbox}
Noam Lupu is a doctoral student of political science at Princeton University
Water Is Becoming a Growing Source of Conflict Between Countries 
