The writer is chair of Rockefeller International
In 2010, amid the global boom in billionaire fortunes, I began combing the annual Forbes list for clues to which countries were most vulnerable to anti-rich populist revolts. When I last published the results in 2021, warnings were flashing red for France, where billionaire wealth was rising fast and concentrating in family firms such as LVMH, the luxury goods conglomerate.
Earlier this year, LVMH chair Bernard Arnault was a prime target of Paris protests when demonstrators rallying against pension reform stormed his headquarters. LVMH, which has nothing to do with pensions, has become a symbol of the new gilded age.
The 2023 Forbes list shows that, worldwide, billionaires are down slightly in numbers and wealth from the pandemic peaks but still up sharply over the past two decades. There were almost 500 billionaires worth a total of less than $1tn in 2000; now there are more than 2,500 worth over $12tn. Billionaires remain a potential protest target, particularly in countries where my warnings still flash red. Ironically, these include most prominently nations with deep socialist roots, including France, Sweden, Russia and India.
Focusing on leading markets — 10 developed and 10 emerging — my analysis measures changes in billionaire wealth as a share of gross domestic product. Then it calculates the share that is inherited rather than self-made, the share made by “bad billionaires” in rent-seeking industries like real estate, and the share made by “good billionaires” in productive industries like tech. The idea is that populist revolt is most likely to target wealth perceived as excessively large, unearned or unproductive.
France’s billionaire class coexists with the world’s heaviest spending welfare state. Billionaire wealth is rising faster there than in any other developed country in my top 10, nearly doubling over the past five years to 21 per cent of GDP. Inherited fortunes have always been vast in France and now account for 85 per cent of its billionaire wealth, twice the global average.
Sweden shares this mix of statist reputation and vast fortunes at the top: its billionaire wealth equals 24 per cent of GDP, nearly two-thirds of it inherited. No other developed countries screen as badly across the board. Japan shows no signs of billionaire bloat. The UK shows little sign, other than a relatively high share of “bad billionaire” wealth, which at 20 per cent of the total is 6 points higher than the developed country average.
In the US, an explosion of billionaire wealth in the early 2010s foreshadowed the rise of politicians who wanted to “abolish billionaires” or tax them heavily. In the past five years, billionaire wealth rose from 15 per cent to 18 per cent of GDP, and the resulting grievances are prompting president Joe Biden to push for new wealth taxes.
Among emerging markets, the 2023 analysis highlights two more nations with strong statist tendencies, India and Russia. In both, total billionaire wealth is at least 20 per cent of GDP — nearly double the average of other developing nations. Russia’s tycoons took a hit early last year from the war in Ukraine and the resulting sanctions. Many, though, have evaded deeper losses by transferring wealth to family or parking their yachts in friendly harbours.
Russia has also long been the country with the highest share of “bad billionaire” wealth and still is, at 62 per cent. India, however, ranks worst among the emerging top 10 markets for inherited share of billionaire wealth, at 60 per cent.
The least bloated billionaire classes are found in nations such as South Korea and Taiwan, where small states have relied on social and political pressure to restrain wealth inequality or in former socialist states like Poland, which has embraced capitalism. Poland’s billionaire wealth is just 3 per cent of GDP and none of it comes from rent-seeking industry and little from inheritance.
These results suggest that socialist tendencies may backfire by concentrating rather than spreading wealth. Increasing regulation favours big tycoons, who have the lobbyists and money to navigate an expanding thicket of rules. And since 2000, while governments have pumped money into their economies to keep growth alive, much of it wound up fuelling the rise in financial markets instead.
Since the 0.01 per cent own most of the financial assets, they gained the most, with billionaires gaining even more than millionaires. The world has its first 12-figure tycoons, and some of the biggest fortunes are now rising in countries with the biggest governments, like France. This should offer some cause for reflection to the many who believe the answer to the current ills of capitalism is an even more supportive government.