Russia’s Billionaires Enter Global Ruling Class

A few weeks ago Forbes released its World’s Billionaire List. Most commentators have noted the increase in Chinese, Indian, and Russian presence on the list. This is not surprising. The three countries are some of the most economically robust countries in the world. China serves as the global center of cheap labor. India an increasing center of high tech and service. Russia the world’s oil and gas supplier. Taken together the three nations provide the pillars of a global economy—labor, communications, and fuel.

It is no wonder then that the global ruling class is reflecting these nations. Russia has 53 billionaires (two shy of Germany), of which 19 are new to the list. China has 20 (41 if you include Hong Kong), 13 of which are new. India has 36 with 14 newcomers. Billionaires are growing faster in Russia, China, and India than anywhere else in the world.

What does this mean for the global ruling class? As James Petras notes in his article “Meet the Global Ruling Class,” this surge in billionaires has come with increasing polarization of the world’s wealth. “The total wealth of this global ruling class,” he writes, “grew 35 per cent year to year topping $3.5 trillion, while income levels for the lower 55 per cent of the world’s 6-billion-strong population declined or stagnated. Put another way, one hundred millionth of the world’s population (1/100,000,000) owns more than over 3 billion people.” I’ll repeat that in case you didn’t get it: One hundred millionth of the world’s population own more than 3 billion people. So much for the rising tide lifting all boats.

Petras also makes some important observations about Russia’s billionaires. They are young. Most “accumulated” their wealth in their mid-20s. Few are members of the old Communist leaders. Despite Western media assertions about Putin moving against Russia’s oligarchs, “biographical evidence demonstrates that there is no rupture between the rise of the billionaires under Yeltsin and their consolidation and expansion under Putin.” And lastly, in response to Forbes‘ laughable assertions that these Russian billionaires were “self made,” Petras writes, “Of the top eight Russian billionaire oligarchs, all got their start from strong-arming their rivals, setting up ‘paper banks’ and taking over aluminum, oil, gas, nickel and steel production and the export of bauxite, iron and other minerals. Every sector of the former Communist economy was pillaged by the new billionaires: Construction, telecommunications, chemicals, real estate, agriculture, vodka, foods, land, media, automobiles, airlines etc..” Self-made indeed.

But perhaps most interesting is how Russia and Latin America compare in this regard. Latin American and Russian elites got their wealth not like Bill Gates, but essentially by seizing state industries privatized in neo-liberal privatization schemes:

In both Latin America and Russia, the billionaires grabbed lucrative state assets under the aegis of orthodox neo-liberal regimes (Salinas-Zedillo regimes in Mexico, Collor-Cardoso in Brazil, Yeltsin in Russia) and consolidated and expanded under the rule of supposedly ‘reformist’ regimes (Putin in Russia, Lula in Brazil and Fox in Mexico). In the rest of Latin America (Chile, Colombia and Argentina) the making of the billionaires resulted from the bloody military coups and regimes, which destroyed the socio-political movements and started the privatization process. This process was then even more energetically promoted by the subsequent electoral regimes of the right and ‘center-left’.

What is repeatedly demonstrated in both Russia and Latin America is that the key factor leading to the quantum leap in wealth ­ from millionaires to billionaires ­ was the vast privatization and subsequent de-nationalization of lucrative public enterprises.

It is no wonder Pierre-Joseph Proudhon said that “property is theft.”