Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else – A Book Review

Recently I was given the chance to have a sneak peak preview of the incoming book hit of Penguin called “Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else” (by Chrystia Freeland). And I was impressed. Usually I rarely read books which kind of detour me from the big goal of becoming a better investor. However, this Penguin books release falls in the “invest in yourself” category. “Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else” is a book about the new global financial elite. And even more important, this book tells the stories of how these people got there and how they are maintaining they sweet number one spot, whilst the rest of the world… well, just advances slower.
The book is fascinating. It starts laying out the facts and the figures – we all know the number of billionaires, but we know very little beyond the topline of the yearly Forbes articles. “Plutocrats” goes beyond that of course and does the nice job of showing the context. Which brings me to my “strategic advantage” MBA course. The “Plutocrats” book brings back some nice learnings from there. What actually these super-rich people do is to exploit pockets of competitive advantage in their favor. What the plutocrats do is also to build fences (“barriers of entry”) around these strongholds in order to prevent other people entering their and dilluting their competitive advantage. What the MBA course said was that these strongholds suffer during the years a process of strategic decay. And naturally, the plutocrats must get smarter and smarter in finding new ways of increasing or even maintaining their fortunes. Which they do in very interesting ways…
“Plutocrats” is a fascinating story of the super-rich stories. The Penguin book has also some surprising conclusions. For example, the most striking one is that the richest people on planet are the most intelligent ones – over 70% hold doctoral degrees and they invest huge amounts of money into their family’s education. So forget about getting very rich unless you are (not “you think you are”!) very smart and worked hard very early in your lifetime.
Chrystia Freeland has also pulled quite a lot of documentation for the “Plutocrats” book. I was positively surprised by the large amount of economic theory thrown in – for example her discussion about the “trickle down economics” shows how modern economies are not necessarily more democratic. “Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else” after all is a book about the truth behind the wealth of the super-rich, not an publi image campaign for the super-rich. The book is also written in a fast paced manner – so I think that it deserves a place on your shelf and some amusing hours for your evenings when you get too tired to read technical analysis handbooks :).