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The in vogue economist Thomas Piketty wrote: ‘Inequality as such is not necessarily a bad thing, the central question is to know if it is justified, if it has its reasons.’
John Francis, as an economist and historian, saw the Fitzwilliams’ family wealth as justified, they had worked honestly for close to a century to build their bank. The same could not be said for Russian oligarchs, including Tarasov, who had acquired vast wealth by chance, in the opportunistic chaos that reigned in post-Soviet Russia and the collapse of its financial institutions. Once a semblance of order had returned, under the leadership of Boris Yeltsin and Vladimir Putin, the fortunes of the nascent oligarchs exploded, thanks to a system of cronyism and corruption - to the detriment of the Russian people.
What of the Kennedys and Bartons? There was no denying they had worked and diligently pursued gain, but were the rewards disproportionate to the effort expended? They had both benefited from a winner-take-all system; where inside information and huge bonuses permitted a privileged few to rise far above the crowd - to giddying heights.
A manager might earn a comfortable salary, perhaps a very comfortable salary, profit from the doubling or tripling of the value of his family home and retire comfortably, but men of the likes of Kennedy and Barton were in a class apart; they, for no other reason than chance, had increased their personal wealth by the hundred fold in the space of a few short years.
There was no denying that fortune had always played a role in the destiny of those who had risen to wealth, but in the twenty-first century inequality had become flagrant. The rich were disproportionately rich and the poor incommensurately poorer. The invention of a smart phone app could propel a young man to fortune overnight, or banker like Kennedy with a leveraged loan could acquire a prime property like his home in Cheney Walk, then watch while its value doubled or tripled in just two or three years.
Kennedy had seen the value of his shares and stock options in the bank quadruple in the euphoria that had overtaken the banking sector once the worse of the economic crisis had passed, enabling him to diversify his investments, one of which was the land and property he bought at knockdown prices in Ireland, transforming him into one of the biggest landowners in and around Limerick City.
The difference between salaried workers and top executives or directors was that the latter, to a large degree, fixed their own remuneration and bonuses. Cast iron contracts guaranteed lavish pension pots and, in the case of premature termination, extravagant severance compensation. One such top executive even received a reward for quitting Burberry’s, the luxury brand firm, to join Apple, a staggering diamond studded hello of sixty eight million dollars.
What more could she do for Apple given its already phenomenal planetary success? She had neither created Apple nor Burberry’s, she was nothing more than a super executive. It was a stunning example of how the reward system for top executives had become disconnected from reality.
In the case of INI Holding, its directors, under the influence of the extravagant life style of its new oligarch shareholder, had taken full advantage of the trend. Fitzwilliams had become complaisant, lowered his guard, as growth and profits rose in leaps and bounds. It was as if the rich rewards, approved by the board, for the bank’s key directors were a justification for his own extravagant compensation package. The same went for loans and other advantages, and besides, it was in keeping with current practices in a great number of the City’s banks and businesses.
New and old wealth enjoyed a period of rich pickings as was witnessed by the growth in the number of billionaires across the planet, their number had reached two thousand. The US and China counted four or five hundred each. Russia, with an economy the size of Spain’s, nearly one hundred, compared to the Iberian Peninsula’s nineteen. As for India, its one hundred billionaires would have certainly astonished Mahatma Gandhi; would he have felt his struggle for justice and equality had been for nothing in a land of such flagrant inequality?
Cornucopia Page 70