Open Your Eyes | October 26th, 2005 leaked Citigroup memo, titled ‘Equity Strategy, Plutonomy, Buying Luxury , Global Imbalances’
In the must read, October 26th, 2005 leaked Citigroup memo, titled ‘Equity Strategy, Plutonomy, Buying Luxury, Global Imbalances’ the fear of a potential backlash against the plutocracy is discussed at length: “Concentration of wealth and spending in the hands of a few, probably has its limits. What might cause the elastic to snap back? We can see a number of potential challenges to plutonomy. Potential change number three states: A third threat comes from the potential social backlash. To use Rawls-ian analysis, the invisible hand stops working. Perhaps one reason that societies allow plutonomy, is because enough of the electorate believe they have a chance of becoming a Plutoparticipant. Why kill it off, if you can join it? In a sense this is the embodiment of the “American dream”. But if voters feel they cannot participate, they are more likely to divide up the wealth pie, rather than aspire to being truly rich. Could the plutonomies die because the dream is dead, because enough of society does not believe they can participate? The answer is of course yes. But we suspect this is a threat more clearly felt during recessions, and periods of falling wealth, than when average citizens feel that they are better off. There are signs around the world that society is unhappy with plutonomy – judging by how tight electoral races are. But as yet, there seems little political fight being born out on this battleground.”
Read the report attached.