How many billionaires are there after all?

In his book, The Age of American Capitalism, University of Chicago historian Jonathan Levy describes the era of capitalism we live in as an age of chaos: a time when capital has become freer, more fluid, and more volatile, constantly flowing in and out. booms and busts, as opposed to the stable order – and widespread prosperity – that characterized the industrial postwar economy. Levy began the story in 1981, the same year that Forbes thought of his list. This was the year in which the Federal Reserve, led by its chairman, Paul Walker, raised interest rates to 20 percent in order to put an end to inflation. Walker’s Federal Reserve succeeded, but the decision, Levy notes, had far-reaching consequences, accelerating America’s transition from commodity production to an unprecedented form of capitalism. The value of the dollar skyrocketed, making American exports even less attractive and imports even cheaper; many factories that remained profitable were closed because compared to the incredible return that money could make in such a high percentage environment, they were simply not profitable enough. As the Fed began to loosen its grip, public credit unleashed a speculative reward that benefited a newly empowered corporate class that felt little indebted to the workforce and deeply indebted to shareholders.

The economy usually grows when investment in productivity is made, but this expansion was different: Levy writes that it was “the only one registered, before or after, in which investment in fixed assets as a share of GDP decreased.” In other words, our industrialists have invested less in productivity things – ships, factories, trucks – while you make more money. In fact, they often tore these things up and sent them abroad; it was the age of corporate raiders who would make huge profits while leaving Americans jobless. You can see this, roughly speaking, as the birth of the Wall Street and Main Street divide: the separation of the financial industry from the “real” economy.

This transition to a highly funded post-industrial economy was aided by the Reagan administration, which deregulated banking, reduced the highest income tax rate from 70 percent to 28 percent, and turned to organized labor, a political scapegoat for the slow, inflationary economy of 70. years. Computer technology and the rise of the developing world would intensify and accelerate all these trends, turning the United States into something like the front crust of a globalizing economy. Equally important, the technological revolution has created new ways for entrepreneurs to amass huge fortunes: software is by no means cheap to develop, but requires fewer workers and less fixed investment, and can be replicated and shipped worldwide instantly and instantly. practically no price. Keep in mind that Ford Motors, the powerful headquarters of 20th-century capitalism, now employs about 183,000 people and has a market capitalization of nearly $ 68 billion; Google employs about 156,000 people and has a market capitalization of about $ 1.8 trillion. This new economy will be run by and for knowledge workers, who will make the most of the profits and therefore have more money to spend on services – a sector that will come somehow, but never completely, to replace production. transformation removed with.

“During the Reagan years,” Levy writes, “something new and distinctive emerged that has survived to this day: capitalism dominated by asset appreciation.” That is, an economy in which the rising price of assets – stocks, bonds, real estate – would be, somewhat counterintuitively, fuel for economic growth. It was a good time, in other words, to own a lot of assets. And owning assets is mostly what billionaires do.

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