We show results for 23 countries-the five largest developed ones, the ten largest developing ones for which reliable data are available, and a selection of eight smaller ones where cronyism is thought to be a big problem. We use data from Forbes to calculate the total wealth of those of the world’s billionaires who are active mainly in rent-heavy industries, and compare that total to world GDP to get a sense of its scale. Our approach builds on work by Ruchir Sharma of Morgan Stanley Investment Management, Aditi Gandhi and Michael Walton of New Delhi’s Centre for Policy Research, and others. To test the claim that rent-seekers are on the rampage, we have created a crony-capitalist index. Many hedge-fund managers sniff that China is a house of cards built by indebted cronies. American libertarians fear an elite has rigged their country’s economy plenty of ordinary Joes reckon the government and Federal Reserve care more about Wall Street than Main Street. Common examples of rent-seeking (which may or may not be illegal) include forming cartels and lobbying for rules that benefit a firm at the expense of competitors and customers.Ĭlass warriors and free-market devotees alike are worrying about rent-seeking. In a world of perfect competition, rent would not exist. In technical terms, an economic rent is the difference between what people are paid and what they would have to be paid for their labour, capital, land (or any other inputs into production) to remain in their current use. But many of today’s tycoons are accused of making fortunes by “rent-seeking”: grabbing a bigger slice of the pie rather than making the pie bigger. Inventing a better widget, tastier snack or snazzier computer program is one thing. In her book “Plutocrats”, Chrystia Freeland argues that emerging markets are now experiencing their first gilded age, and rich countries their second, with the world’s wealthiest 1%, who benefited disproportionately from 20 years of globalisation, forming a “new virtual nation of Mammon”. Between 19 America began to regulate big business and build a social safety net.
Rockefeller industrialise the country-and accumulate vast fortunes, build palatial mansions and bribe politicians. AMERICA’S Gilded Age, in the late 19th century, saw tycoons such as John D.
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