In October 2005, Citigroup sent out a series of memos to their wealthiest investors which essentially celebrated the fact that some societies (including the US and UK) were no longer really democracies but plutonomies – countries controlled entirely by the top 1% of the population, who had more wealth than the bottom 95% combined.
Under “What Could Go Wrong?” they wrote:
“Our whole plutonomy thesis is based on the idea that the rich will keep getting richer. This thesis is not without its risks. For example, a policy error leading to asset deflation, would likely damage plutonomy. Furthermore, the rising wealth gap between the rich and poor will probably at some point lead to a political backlash. Whilst the rich are getting a greater share of the wealth, and the poor a lesser share, political enfrachisement remains as was – one person, one vote (in the plutonomies). At some point it is likely that labor will fight back against the rising profit share of the rich and there will be a political backlash against the rising wealth of the rich. This could be felt through higher taxation (on the rich or indirectly though higher corporate taxes/regulation) or through trying to protect indigenous laborers, in a push-back on globalization – either anti-immigration, or protectionism. We don’t see this happening yet, though there are signs of rising political tensions. However we are keeping a close eye on developments”.
Yes, those bits in italics aren’t from a member of Occupy London but someone working for Citigroup. And in the next breath they tell you protest doesn’t change anything…