Ideas - The Billionaire Age Pt 1 | How did we get here?

Episode Date: March 31, 2026

There are 19 centibillionaires and a growing list of 3,000 billionaires worldwide. So it might not surprise you that the richest one per cent possesses nearly half of the world’s wealth. History has never seen such an extreme concentration of wealth. Some economists argue the battle of the 21st century is between oligarchy and democracy. How did we get here? IDEAS begins a four-part documentary series The Billionaire Age.Guests in this episode:Ingrid Robeyns is a philosopher and economist. She is the chair in Ethics of Instutions at Utrecht University and the author of Limitarianism: The Case Against Extreme Wealth.Lucas Chancel is the co-director of The World Inequality Lab and a professor at the Paris School of Economics.Gabriel Zucman is also the co-director of The World Inequality Lab. He is a professor at the Paris School of Economics and the University of California, Berkeley.Nitin Bharti is an economist and lecturer at The University of Western Australia. He is the South and South Asia coordinator at the World Inequality Lab.Lars Osberg is an economics professor at Dalhousie University, in Halifax, Nova Scotia. His latest book is The Scandalous Rise of Inequality in Canada.Abigail Disney is an American film producer, philanthropist and social activist. She is a member of Patriotic Millionaires which advocates for higher taxes on the wealthy.Paul Krugman is an American economist and the winner of the 2008 Nobel Memorial Prize in Economic Sciences.Tim Wu is a Canadian/American legal scholar and a professor at Columbia Law School. He is also a contributing opinion writer at the New York Times. His latest book is The Age of Extraction: How Tech Platforms Conquered the Economy and Threaten Our Future Prosperity.Nick Hanauer is an American entrepreneur and venture capitalist. He co-authored his latest book with Joan Walsh and Donald Cohen, Corporate Bullsh*t: Exposing The Lies and Half-Truths that Protect Profit, Power and Wealth in America. And he hosts the podcast: Pitchfork Economics.Guido Alfani is a professor of economic history at Bocconi University, Milan, Italy. His latest book is As Gods Among Men: A History of the Rich in the West.

Hey there, eardrums. It's me, Gavin Crawford, host of the weekly CBC comedy news quiz, because news. The headlines are chock full of evil men, so this week I'm joined by two of the hosts of the evil men podcast, Chris Locke and James Hartnett, plus the wickedly witty, Alice Moran. We'll try to find some hope in the headlines, find out what's currently tanking Canada's happiness rating. Is it AI threatening our jobs, or do we just fear another World Series lost? I've got questions. The panel might not have answers, but they definitely have jokes. Join it on the fun by following Because News on Spotify, Apple Podcasts, or anywhere you download podcast for free. This is a CBC podcast. We really are in many ways an oligarchy now. The main risk is to see oligarchy overcome democracy.

That's the battle that we are here. It's the battle of the 21st century. I would like to argue that having a billion really... constitute a moral failure. Current billionaires also appear to be, you know, standing out. They concentrate more power, more wealth. The amount of wealth concentration that we observe is unique. There is no historical comparison.

Welcome to Ideas. I'm Nala Ayyad. There are more than 3,000 billionaires worldwide. The world's 12 richest billionaires, currently hold more wealth than the bottom 50% of people on earth. That's 12 people versus 4.2 billion. And within a decade, it's predicted the world will have at least five trillionaires. But the rise in extreme wealth is facing pushback. A Democratic socialist is now mayor of the financial capital of the world.

Billionaires have poured millions of dollars into this race because they say that we pose an existential threat. This is Zoran Mamdani in November 2025, just after being elected in New York City. And I am here to admit something. They are right. Essential threat to billionaires

who think their money can buy our democracy. And outrage against the unprecedented wealth and power of billionaires is spreading. Even a few at the top admit there is a problem. You probably don't know me, but I am one of those 0.01 percenters that you hear about and read about. And I am by any reasonable definition, a plutocrat. American entrepreneur and venture capitalist Nick Hanauer,

one of the earliest investors in Amazon. And tonight, what I would like to do is speak directly to other plutocrats, to my people, because it feels like it's time for us all to have a chat. In a TED talk he delivered back in 2014, he issued, a warning to his fellow plutocrats that they have a choice. Taxes, as in pay more, or face a major reckoning. So what do I see in our future today? I see pitchforks, as in angry mobs with pitchforks. Because while people like us plutocrats are living beyond the dreams of avarice, the other 99% of our fellow citizens are falling farther and farther behind.

Inequality is at historic highs today, and it's getting worse every day. And if wealth, power, and income continue to concentrate at the very tippy top, our society will change from a capitalist democracy to a neo-futalist rentier society, like 18th century France. That was, you know, France before the revolution and the mobs with the pitchforks. More than a decade after giving this warning, we asked Hanauer if he agrees that the battle of the 21st century is between oligarchy and democracy.

I 100% agree. I 100% agree. 100%. Yeah. Yeah. And oligarchy is winning. Ideas producer Mary Link with part one of her series, The Billionaire Age.

How did we get here? Did you see this coming, this sort of extreme? wealth, the extreme wealth that we're seeing the 0.01%, say, would you have predicted this 20 years ago we're going to be at this stage? If you'd ask me 20 years ago whether we would be here, the answer is probably yes, because we'd already seen an explosion of economic inequality of wealth at the top by the late 1990s. We were already, if you like, an obscenely unequal society by then. New York-based economist, a noble laureate, But if you'd ask me when I was growing up, if you'd asked me when I was going to graduate school in the 1970s, telling you with my age there, I would not have expected it.

This was, we were a middle class society once upon a time, and this sort of thing just didn't happen. It's been years in the making. Indeed, billionaire wealth has been skyrocketing since the 1980s. French economist Gabriel Zuckman. And it's one of the defining features of, of our time, this explosion of extreme wealth. The 1% is projected to own an astonishing two-thirds of all global wealth by 2030. To help counter this, Gabriel Zuchman is proposing a minimum tax on billionaires around the world, equal to 2% of their wealth annually.

In France, it's known as Le Zuckman Tax. An extreme concentration of wealth means an extreme concentration of power, the power to influence ideology, to buy media, to influence policymaking, the electoral process, everything. And so it conflicts just fundamentally without democratic ideals. As of March 26, the world is home to 19 centi billionaires, people who have a worth of $100 billion or more. But here's the thing. Concentrated wealth appears to have been the norm for most of human history, In the West, the harder, more empirical data goes back 700 years. Guido Alfone is a professor of economic history at Bocconi University in Milan, Italy,

and he's the author of As Gods Amongst Men, a history of the rich in the West. When we take these 7th centuries, we find only two phases during which wealth and equity really reduces by a large margin and remains relatively low. for a relatively long period of time. Okay, let that sink in. Only twice in the past 700 years of recorded history in the West was the pie more equally shared. Only twice. Once was a period that Paul Krugman earlier referenced

when the middle class was on the rise from the late 1940s through to the 1970s. And the other occurred six centuries back in the 14th century, with a black death. So the black death was the terrible pandemic of plague, which begins in the Mediterranean area in 1347 and last until 1352. And the black death in the Mediterranean area and in Europe, as far as we can tell, killed about half the population.

So you kill about half the people, half the workers. And so a very important way through which the black death induced a reduction in wealth inequality is by allowing for a very substantial increase in real wages. And, you know, a nice way of saying this is that by killing the workers, the Black Death gave to the workers who did survive, they gave them the opportunities to force their employers and the landowners to give them better conditions. So for a period, it's like the workers discovered they have, the knife in their hands and they are entirely willing to use it. But there was a pushback to the workers' demands by those in power, especially in European

city-states. And their attempts at resisting this. We find the introduction of these laws called in late in Contralaborators. So this translates to laws against the workers. And what this means is against the unreasonable requests of the workers. So the point is, you know, those who were in control of the city politics in that moment try to prevent the workers from exploiting the situation to get better wages, and they try to establish limits to what they can ask for. And the point is that this fails because workers, both in cities and rural areas,

understand very well that they can simply move to another place and get better conditions there. So all these attempts fail, and we observe in the records, an increase in real wages. And this allows more people, especially in the middling and lower strata, to acquire wealth, even for the first time. Maybe they are able to buy the house where they live, the house which they were renting from before, or a little bit of land, maybe not a field,

but just a small vegetable garden. And a kind of medieval middle class was born, the first of its kind in history. Now, of course, the Black Death killed a huge number of rich people as well, and that meant massive fortunes were suddenly being broken up. Properties were being fragmented, and some pieces of land were being sold off to the workers who now had more purchasing power. So the Black Death creates a low phase in wealth inequality,

which, according to the area, lasts for, say, 50 to 100 years. Until the 1% figured out a way to grab more. more of the pie again. One way to make sure concentrated wealth did not get diluted was to change inheritance rules. So the wealth would now go to the eldest son, unlike before when the state was shared equally among the children, sons and daughters. And so when the next plague came, and there were many more, the fortunes would stay intact. And also, international trade became a major economic force, so there was less need for workers on land. And so for the next 600 years, we return to a profound concentration of wealth at the very tippy top.

In fact, this concentration hits a pinnacle at the turn of the 20th century during America's gilded age. You know, we often say that one of the, if not the richest man of all times was John D. Rockefeller in the 20th century with standard oil. And he was immensely rich, you know, the first billionaire in dollars. French economy. Lucas Chancel, co-director of the World Inequality Lab at the Parish School of Economics. But in fact, if we compare his wealth with how the rest of the population was rich at the time,

well, actually, global billionaires today are significantly richer than Mr. Rockefeller himself. So the top billionaires today are, of course, richer in pure nominal terms as compared to John D. Rockefeller. but they're also richer in terms of what they can purchase and what they can buy and how far away they are as compared to the rest of the population. So this is really a novelty of the past 20 years. Let me tell you what mystifies me a bit about the Gilded Age. Economist Paul Krugman. So we currently have a level of income and wealth inequality that is similar to what we had,

let's say, in the year 1900, which is a terrible thing. We should not. We were supposed to have matured past that kind of inequality, but we're back. What I find a little mystifying looking back is that as far as I can tell, the gilded age plutocrats did not try to destroy democracy. They corrupted it, for sure. There were lots of politicians on the take. There were lots of elections that were swung by what amounted to vote buying. But they never tried to say, oh, and let's eliminate the Constitution and let's empower federal agents to kidnap people off the street. Why are today's plutocrats so much worse, politically, so much worse as human beings than their predecessors? And I don't actually know the answer to that. But you believe they are?

Oh, they are. I mean, there was, you know, John D. Rockefeller was not a nice guy. A lot of negative stuff about him. And Andrew Carnegie actually kind of was somewhat a nice guy, but I don't think there's a Elon Musk-like figure in turn of the previous century, America. And these days there's lots of them. The tech bros and the Wall Street bros are just a species of malignant wealth that is something new in America.

And I haven't figured out why it's happening, but I certainly am really disturbed that it is happening. Do you know, Paul, I was going to call this, I'd be meaning to do the series for a few years now. And a few years ago, I was thinking of the title, which I'm not using now, the modern Medici's. But the Medici's, even though they were corrupt and, you know, with the Pope and the head of the bank and political,

I mean, they gave it the arts. They're just not the same level of bad guys, I would say. I'm sort of agreeing with you than the plutocrats up today. And they also had decent taste. Exactly. I think Lorenzo Domenici would be absolutely horrified to look at Trump's furnishings. And like the rich of Renaissance Europe, who were actually forced to give back to society or be exiled, the Gilded Ages Andrew Carnegie also gave back to society, albeit on a more voluntary basis.

A multi-billionaire by today's standards, Carnegie gave away nearly 90% of the United States. of his money before he died. This isn't to say that Carnegie was a complete saint, of course, especially when you look at how he attained his wealth in the first place. He was a famous union buster, and his workers often toiled 12-hour shifts, seven days a week, with one holiday per year on the 4th of July. And he was one of the Gilded Ages, so-called robber barons, who became astronomically rich through monopolies.

In Carnegie's case, Steele, J.P. Morgan and Finance, Cornelius Vanderbilt, Railways, and J.D. Rockefeller Oil. Rockefeller's Standard Oil Company, which was founded in 1870, controlled about 90% of domestic sales in the United States. In fact, Standard Oil is considered the world's first major industrial monopoly. Standard oil sold various petroleum products, and actually you can still make a lot of money that way if you look at Saudi Arabia. American Canadian lawyer Tim Wu teaches law. at Columbia University in New York. And I'm not going to deny that that has its own power.

But I think more powerful still is control over human attention and consciousness. Wu was a special assistant to President Biden and oversaw the federal government's antitrust policy, especially when it came to big tech monopolies. His work, along with that of others, led to the major antitrust cases before the court. today, which seek to break up or alter companies such as Google, Apple, Meta, and Amazon. Wu says our current plutocrats beat the Gilded Asia's tycoons in terms of power and control over society. You know, if you look at the average human in Canada today, I would say they have their face

buried in either a screen or a phone for the majority of the day when not eating or sleeping, although some people, even when eating and I don't know about sleeping. But in other words, if you think that control over human consciousness and intention is its own form of power, I think that there's nothing in the history of Standard Oil or, you know, J.P. Morgan's activities that has real precedent in today activities. And if you add artificial intelligence to the mixture, if you add the idea of, you know, harnessing the mega-farmes, full of servers and generating an intelligence which eventually becomes equal to or even surpasses human intelligence. You know, that becomes an entirely different kind of power and is different than the old-fashioned economic power of the Gilded Age. But one thing both errors share,

obscene displays of extreme wealth, Guido Alfane. The idea of conspicuous consumption was popularized, introduced by an American sociologist and economist, Thomstein-Weblin, at the turn of the 20th century. Thorstein Vedlin was a well-known critic of capitalism and author of The Theory of the Leisure Class, published in 1890. And he had in mind the kind of very visible consumption, which is typical, or at least some of those who belong to the top of the wealth in the context of the, of the American Guilded Age, the family, like the Morgans, of the, or the funder built. And Cospico's consumption is

basically a form of consumption in which the final end is to be seen consuming. It's a way of consuming which builds your social position. It's a way of consuming which is possible only for the very wealthy, And the point for Vablin is that in this game, they are kind of even forced to consume to these levels.

And these displays of conspicuous consumption are social signifiers, signs that you are not just a superior social standing, but actually a superior being. I think one of the ideas that's important to understand in this ideology of wealth is a movement in the late 19th century known as social Darwinism, which believed that wealthy people in some ways were better than regular people, you know, that they had to be evolved into an advanced form of life. Tim Wu. And along the same lines, this movement believed that corporations were evolving into monopolies as opposed to having this sort of squabbling competition, that the future would all be about these magnificent companies, one per industry, scientifically.

organized and that was an evolutionary trait and that the smaller businesses, the small business people, normal people were essentially being eliminated in a process of survival of the fittest. And the reason I mentioned that is if you look carefully at the billionaires of our time, outside of sort of external progressivism, there is at the heart of it, this idea that, you know, something Darwinian is happening here. here that, you know, artificially intelligent, gigantic companies are hunting out there competitors and destroying them, you know, not unlike the way that you see this in nature itself. Therefore, by this theory, someone like Elon Musk, and maybe this is why he has so many children,

is an evolutionary process, and he's like the Ubermensch or the Superman. Some of this is explicit in Silicon Valley, is they're trying to create a race of supermen. who are the wealthy, who have extended lives and will rule the future over the rest of us who are kind of reduced to a more feudal-like existence. You're not to be dramatic or anything. No, I think it's actually... I mean, I read this stuff a lot, and there's a strong current of evolutionary theory in our current state of inequality.

Tell me just a bit about that. Sure. You know, if I look, take a figure like Mark Andresen, who's a wealthy venture capital, in Silicon Valley. He's written this thing called the tech manifesto, the tech optimist manifesto. And it's basically a borrowing of Nietzsche and ideas about a race of Superman who are going to seize the future along with artificial intelligence. And sort of naturally, these are the wealthy, the advanced, the educated. And it occasionally says it wants to help all of humanity. But if you read between the lines, it's pretty clear that you have a future dominated by the few, the wealthy, and in some ways the evolved, who are undertaking a different level of capability and can live forever, and will control an artificial intelligence which surpasses human abilities.

So as bad as things are now, I think they actually could get worse, if you could believe it, if these evolutionary prophecies come true. Here's a small but startling fact. The words millionaire and billionaire may sound about the same. But just think about this. Counting to one million would take how long? Want to guess? About 11 and a half days. Now guess how long it would take to count to a billion?

About 31 and a half years. This is ideas. I'm Nala Ayad. Hi, I'm Jamie Poisson, host of the Daily News podcast. front burner. I got this really cool note from a listener the other day. They wrote, I find myself torn between the desire to understand the world around me and the anxiety associated with the easily access barrage of terrible news. And yet, amidst the torrent, there lies a sweet spot called Frontburner. This is exactly why we make the show. So you don't

get swept away in a tide of overwhelming news. So follow Front Burner wherever you get your podcasts. We return now to part one of producer Mary Link's series, The Billionaire Age. How did we get here? The Gilded Age was defined by ostentatious displays of wealth, parties lasting days and costing millions in today's currency, diamond tiaras, and monster mansions with 70 or more rooms. But with World War I, it all came raining down on the Gilder. Gilded Ages parade. Early in the 20th century, the excesses of America's Gilded Age were becoming a societal flashpoint. People were angry that so much concentrated wealth lay in the hands of a few men

with huge monopolies. But in 2011, the U.S. Supreme Court took action, going after people like John D. Rockefeller and his energy behemoth, Standard Oil, which controlled about 90 percent of the market. The answer in the gilded age to the power of the great monopolies was antitrust, which was a new invention of the time. American Canadian legal scholar Tim Wu. And the idea behind it was essentially to rebalance the economy and make it fairer. The idea was that monopoly was a deviation from how the economy should be and was very bad for workers, small producers, and consumers. And the antitrust movement sought to break up the major trusts and had a great degree of success in that, trust being monopolist. So standard oil was broken in 35 pieces.

The American Tobacco Trust was broken up. Movie trust. Most of the trusts were broken. You often mentioned the writings of Lewis Brandeis, who was an associate justice of the Supreme Court of the U.S. from 1916 to 36. 1936, and he talked about what the right to life should mean. And he says the right to life should be understood as a right to live and not merely exist. Talk to me about that. Yes, Louis Brandeis is the guide we need for our age in many ways.

He was alive during a time in which the North American economy was transforming. And he could see that it was becoming a place that would be inhospitable. economically for many of its people. He saw the displacement of small producers, small business, reasonably sized enterprises, medium-sized, into these sort of faceless trusts that mainly benefited the financiers, people like J.P. Morgan or John Rockefeller.

And he could see in particular that the modern industrial state was creating working conditions that were incompatible with human happiness and human autonomy. Two things that are really focused on that I think we have almost forgotten about were overwork. He believed that you couldn't be a proper citizen of a country. If you were worked so hard, you didn't have enough time to leisure, to take time with your family, to read, to think. That is the source of the, to really live as opposed to exist.

He was very against, this was, I think, really a point we've forgotten. Inconsistent work, erratic work, you know, being on and off the job in the sense that he felt it created this insecurity. People weren't really able to know where their neck paycheck was coming from. And finally, you know, he really believed that we needed a lot of vacation time. He could see it all coming. He said that people should have at least, you know, a month off a year minimum. And he didn't foresee both members of the family working. Obviously, that's been good in some ways,

but that we've sort of just accepted that you have to have two working adults in every family is a big jump. No, he saw this all coming and saw it as a threat to democracy, honestly, that people would be so overworked and not have enough room to really be the kind of citizens you need in the Republic. So he's the guide I think we need right now, and he's a believer in a totally different kind of economy

that has a lot of wealth and is rich, but has it scattered and owned by a lot of different people and with people in charge of their own lives. But a thriving middle class would still be decades away. It starts to emerge around the time of World War II, a war that in itself is a stark lesson about concentrated wealth and the rise of authoritarianism when the German economy was in the hands

of an elite group of wealthy billionaires and their powerful monopolies. Tim Wu writes about this confluence in his book, The Age of Extraction. You quoted the celebrated American lawyer and antitrust enforcer from the 1930s and 40s, Thurman Arnold, in your latest book. And he said that Germany became organized to such an extent that a furor was inevitable had it not been Hitler.

It would have been someone else. Yes, I think the lesson linking the Danish, of over monopolization, over concentration, and the rise of authoritarian or fascist government is best learned from the example of Germany, although Italy is not too bad either. In the German example, you had a nation, the Weimar Republic, which allowed the full cartilization and eventual monopolization of its economy. The Germans believed that they were making progress. In fact, it was justified as a sort of progressive scientific evolution towards having every sector of the economy run by a single company. And the end result was that by the early 1930s or even by late 1920s,

all of German economic leadership was a group that could be gathered into a room. As you might predict, when the economic depression hit Germany, due to a loss of imports and exports and also finance problems, it crashed extremely hard. because you no longer had a decentralized economy, the Depression was maybe the worst in German history. And there was enormous chaos and a market for a leader who would promise to make Germany the power at once was and to reorganize industry and put everything right. Obviously, with the widespread suffering, there was a lot of receptivity to that message. But I think rather critically, because the German economy had been concentrated into a few hands when the German industrialists agreed that they

would support Hitler, both politically and also in terms of campaign foundations, there was little grounds for resistance. All you needed was the agreement of, you know, seven or eight people and all men, and in fact they had their own club. And I think, while not the only reason for the rise of Hitler and the Nazi Party, I think there was a lot of factors involved, including the depression and including other humiliations. That economic factor was a big part of it, and I think it shows the danger of concentrated economic power. Concentrated economic power can become political power, often naturally seeks to become political power. In our times, you see Elon Musk, after becoming wealthy, suddenly wanting to become a part of government, it repeats over and

over again is one of the most dangerous things to human livelihood that there is, the union between private power and public power. After World War II, there was a reckoning of wealth concentration in Germany and elsewhere in the West, economist Paul Krugman. When we try to talk about the history of inequality, the first thing that you need to know is that the middle-class society that we had, the one that I agree. grew up in, did not gradually evolve as the country developed economically and so on. It was created in a very short stretch of time. As of 1939, as far as we can tell, we were still an economy

almost as unequal as we were during the Gilded Age. But by the time, by 1946, 1947, we were a pretty middle-class country. It happened just in the space of a few years. years. And what happened, well, what happened was there was a lot of pressure for equalization for shared burdens during World War II. So it was the war and the controls that were established during the war, and also a public policy that strongly favored unions. And so we went from a economy of self-dealing CEOs and weak unions and a government that was really on the side of the wealthy to being a society in which all of the forces had reversed, where we had strong unions and there was a lot of outreach at CEOs who overpaid themselves and government favored a certain

degree of not fully quality, but equity in society. And lo and behold, just very quickly, we became a much more equal society. Both in North America but also in Europe, where we developed social democracies we developed welfare states. Belgium Dutch economist and philosopher Ingrid Robbins. We wanted to have the basically you could say the best of capitalism merged with the best of socialism. That was the idea of a mixed economy or the idea of welfare states. And in those years we both saw a quite striking increase in the standards of living and the opportunities of the middle classes and also reduction in poverty.

but we also saw a decrease in wealth inequality. One of the leaders of this new ideology was Franklin D. Roosevelt, who as the U.S. president, brought a series of economic, social, and political reforms in the 1930s called the New Deal, which included tax increases on the rich that continued throughout his presidency into the 1940s. French economist Gabriel Zuckman. It's a very interesting history. There is this famous speech by Franklin Roosevelt, in 1942, and he goes to Congress, and he says, look, I think that no American should have an income

after paying taxes of more than $25,000 of the time, you know, the equivalent of about $2 million today. Hence, I propose to introduce a 100% tax on all incomes above $25,000. Taxation is the only practical way of preventing the incomes and profits of individuals. and corporations from getting too high. And then, okay, Congress people, they'll be like a sternage, like 100%. That's really a lot. But they agree on 94%. That's why they vote.

And those quasi-confiscatory top marginal income tax rates remained in place not only during World War II, not only during the subsequent democratic administrations, under Truman, but also under Eisenhower, a Republican, president. So there was really a consensus. And even, you know, until Reagan, the top marginal income tax rate until 1980s was 70% or more. You know, the US was along with the United Kingdom, one of those countries who had mid-century used the tax system essentially in a very, very progressive manner to regulate inequality, to try to say, to create something close to a maximum legal

income. That's really the idea behind Roosevelt's speech. You know, the idea is not to generate revenue is to say this should not be acceptable in our democracy for people to earn just too much. It was not about revenue. It was about protecting democratic institutions against the power and the threats that extreme concentration wealth can pose. Similar policies in Western countries, including Canada, imposed higher tax. taxes on the wealthy, encouraged more investments in social welfare, and strengthened workers' rights, all of which helped create, again, for only the second time in 700 years, a great reduction in wealth inequality, and a strong middle class. Paul Krugman.

That lasted. What was really impressive was that, although it was the product of extreme conditions, it was the product of World War II and everything that went with that, it lasted for 30 plus years. Then it, that whole thing unraveled. Starting with the 1970s economic crisis in the West, largely caused by the 1973 OPEC oil embargo and the 1979 Iranian Revolution, making the price of oil quadruple. And all this resulted in stagflation, high unemployment, and high inflation. French economist Luca Chancel. So basically, 70s, oil shock. So basically, 70s oil shock. inflation, employment was not going as well as it used to go in the U.S. or in Europe. People who want to work but can't find jobs are part of today's other bad economic news.

The unemployment rate soared to 8.2% nationwide last month. How long I've been out of work since June the 20th of 73? Have you ever seen it this bad? Yes, during the Depression. There's also, you know, the end of reconstruction or a... of what some have called the golden age of growth in Western European nations, which was also benefiting North America, the U.S. and Canada. And so the economy is maybe not as flourishing as it was.

And some policymakers, helped by some very clever individuals and several economists, make the case that the reason of low growth or of an economy that's maybe not as good as before is because there are too many taxes and too much regulation in the economy. And this has been known very basically as the neoliberal turnaround. And that idea, which is only, you know, it's 50 years old, Milton Friedman and some other guys cooked that up in the 1970s, you know, there was no evidence for that. There was just something they said because it sounded good and it obviously benefited a small group of people that were mostly their friends. Venture capitalist and self-described plutocrat, Nick Hanauer. And the evil part, just to be clear about shareholder value max, isn't the idea

that making rich people richer is good for the society, that the evil part is that if you don't do it, it would be bad for everybody. That's the evil part. And, but, you know, for a bunch of obvious reasons, that idea was incredibly attractive to very powerful people. And they mobilized around that idea. And now we live in a world where people actually believe it's true in the same way that 2 plus 2 equals 4 is true. And it's not true. It's no more true than saying bedtime is 9 p.m. Yeah, it's a trickle down theory. Right. That the more the wealth make, their wealth is going to trickle down to the economy. And it's still, there are still economists out there and are certainly governments who believe that?

Well, absolutely believe that. And why do you think? Why do you think that there's such a hold on people, even for people that doesn't benefit? So there are two reasons why those ideas have such a hold on the world. The first is that that literally reflects what academic economists came to believe in the 60s, 70s, and 80s. And they taught in in schools. that the richer the rich get, the better off everyone will be. So Democrats and Republicans alike took the same Econ 101 courses, which by the way are still taught and learned these ideas as if they were fact. That's the first thing. So there's an element of this, which is non-nefarious. People were just wrong. But then when you hitch those ideas to the self-interest

of the richest and most powerful people in the world, and you weaponize those ideas into an ideological narrative like neoliberalism, that's where it gets evil, right? Because to be clear, the Chamber of Commerce, you know, they don't say things like tax cuts for the rich, great growth, or if you raise the minimum wage, it will kill jobs. They don't make those claims because they are true. They make those claims because they advance their interests, because they're the most effective narratives ever devised for keeping wages low and profits high, right? You've written that the idea that growth cannot happen without enriching a narrow class is a self-perpetuating idea. Can you expand on this more for me?

Yes. So that is a big idea from the post-war late 20th century. Tim Wu. That economic development, the development of wealth would inevitably require the creation of a concentrated wealthy class. There are many people who believed it, pushed it. I think it is a mythology. It follows from the logic, I guess you'd say, that you need to have wealth, disparity, and rewards in order to incentivize people to want to be rich in the first place and therefore have economic development. But, you know, that tiny germ of truth, which is, you know, that there are more incentives in a free market economy has been, you know,

the centimeter of truth has been used to take the entire meter stick and justify a kind of uncontrolled wealth concentration by a small group. I mean, they have reeducated the American public in a false and destructive way. Abigail Disney is a film producer, philanthropist, and social activist, and she's an heiress to part of the Disney fortune. She is also a member of the patriotic millionaires, an advocacy group based in several countries, Canada, United States, UK, pushing for higher taxes on themselves

and other high net worth individuals in order to combat wealth inequality. Disney remembers when the middle class began to come under attack in the 1970s. There were people who were old-school plutocrats who really thought that a good, healthy economy needed to have a handful of people. people at the way tippy top, and other people had to suffer. And so in the 1970s, they started to organize, and they organized. Boy, did they organize. And, you know, they launched into, if you go back and you read this thing called the Powell Memo, which you can Google. I did Google it.

The Powell memo, formerly called Attack on American Free Enterprise System, was a confidential document written in 1979 by Lewis F. Powell to the U.S. Chamber of Commerce, Powell was an American lawyer who wrote the memo in part to counter the consumer activism of Ralph Nader. Powell believed Nader was pushing the country towards socialism and therefore a threat to capitalism and corporate America. The document would go on to influence the creation of prominent conservative think tanks, such as the Powerful Heritage Foundation, who published Project 2025, a 900-page plan to reshape the U.S. federal government, according to right-wing policies. It's a remarkable document to read because he lays out a plan and you read it now and you

think, my God, they did everything and they succeeded at everything in this plan. And so it talks about going, for instance, after the universities, going after the judicial branch, going after education in public schools and making sure children thought a certain way about the economy, about the nature of what an economy is for. And I do think that the United States, States also has this very unfortunate history of chattel slavery. And if you look at the Industrial Revolution, when big titans started to emerge based on their business doings, both in Great Britain and the United States, in the United States, much of the foundations of that economy were built by free labor, a subsidy for labor. And after enslavement was made illegal,

What happened was that they still had an economy that depended on people to suffer for other people to get rich. And so that became the minimum wage worker or the worker who's just struggling to get by. I mean, I think people would swear on a stack of Bibles to you that there is no such thing as an economy without a significant number of people suffering. Luca Chancel. To go back to why was there this neoliberal turnaround in the 80s, it's really because, from, decades, in fact, some actors were extremely influential in making a majority of the population think and believe that there was no alternative. But this idea of there is no alternative, so Thatcher's big main political line, is politically constructed. Margaret Thatcher became

Prime Minister of the UK in 1979. And just before she resigned in 1990, she had this exchange with a Labour MP. I give way to the Honourable Gentleman. There is no out that the Prime Minister has in many ways achieved substantial success. There is one statistic that I understand is not however challengeable. And that is that over her 11 years, the gap between the richest 10% and the poorest 10% in this country has widened substantially. How can she say at the end of her chapter of British politics that she can justify many people in a constituency such as mine being relatively much poorer

much less well housed and much less well provided than it was in 1979. Surely she accepts that is not a record that she or any Prime Minister can be proud of. Mr. Speaker, all levels

of income are better off than they were in 1979 but what the Honourable Member is saying is that he were rather than the poor were poorer, provided the rich were less rich. So long as the gap is smaller, you do not create wealth and opportunity that way. You do not create a poverty-owning democracy that way.

While Thatcher was claiming in this exchange that all levels of income improved, in fact, during her 11 years in power, there was a record rise in income inequality. The amount of people living under the poverty line rose by near. nearly 50%. And across the pond, Thatcher had an economic soulmate. And certainly if you look at the United States, the real turning point in inequality,

you can see hints of rising inequality in the 70s, but it really explodes after 1980 when a guy named Ronald Reagan was elected. Economist Paul Krugman. And when corporations started feeling free to bust unions, or if they weren't actually breaking existing unions felt free to engage in whatever tactics they felt like, some of them

illegal, but nobody was enforcing the law to prevent unionization. And this removal of the outrage constraint on executive salaries, and maybe other things. So what? Financial deregulation was a big deal. So it was really mostly a change in the political environment. If we ask, did this have to happen? Certainly we had a big decline in manufacturing as a share of the economy, although that was probably inevitable. It's mostly not actually globalization and all of that. Most of the decline in manufacturing was just because technology was changing, the nature of the economy was changing. We were shifting to becoming a service economy. What did not have to happen was, was that the new sectors of the economy, the new giant firms, would be rapacious and non-unionized.

You know, we think of manufacturing jobs as having been good jobs because General Motors was the biggest company in the U.S. economy. It was also had the strongest union in the U.S. economy. Still has a union, not trivial, although they're weakened from what they used to be. These days, the biggest employers are companies like Walmart and Amazon. There's absolutely no reason why they couldn't be unionized, but they got big in the post-Ragan political environment when blocking the formation of unions was really easy for corporate management. Ronald Reagan significantly reduced taxes for higher income brackets.

From 70% to 50% in 1981, and then in 1986, he lowered them to 28% the lowest level of taxes for the rich since 1931. Then after 1980s, you see that there is reduction in the taxation. And this is prevalent everywhere globally, right? Economist Netan Paharty teaches at the University of Western Australia. And he's a South and Southeast Asia coordinator at the World Inequality Lab. Because of competition across countries, each country is sort of reducing their tax rates.

and it's the same story in the U.S., same story in European countries, and same story in India, where you see that after that, the tax rate started going down. So indeed, that has contributed in increase in the wealth. In the wealth of the top 1%. Canadian economist Lars Osberg remembers that shift as well. He's the author of The Scandless Rise of Inequality in Canada. At the time back in 1980, 81, there had been a long period of economic growth in Canada, but distributive shares had remained relatively constant.

And Canada, like other countries, had a thriving middle class. It was after 1980-1 that you saw this massive increase in the income share of the top 1%. So we certainly did not move in the direction of a more equal income distribution. We moved in the direction of more unequal income distribution. And it takes a long time for these changes in income distribution to ripple through the rest of the in their impacts. But I think we're seeing that now. Abigail Disney remembers signs of the 1980s that foreshadowed our current billionaire age.

Well, I moved to New York in 1984, and 1984 was, you know, the height of the Reagan administration. And Reagan had, you know, kind of unleashed a certain kind of attitude. One of his first speeches was the New York Stock Exchange. With tax reform and budget control, our economy will be free to expand to its full potential. Driving the bears back into permanent hibernation. That's our economic program for the next four years. We're going to turn the bull loose. And there's no more of a bro culture than the New York Stock Exchange or the commodities floor.

So, you know, the investment banking world is still dominated by men, but then it was even more dominated by men. And there was a kind of permission given. You know, when Nancy Reagan sort of denigrated her predecessor, Rosalind Carter, as being too frumpy and too homie, and she started having these really extravagant gowns and entertaining extravagantly and fixing up the White House to look very, very wealthy, they were importing an ideology in the form of style that was a new development. And so it burbled down into New York, and you started going to wedding receptions where there was gold in the food, you know, and you started, I mean, things were ridiculous really quickly. And so expensive watches, all the things that you use to display and to signal your power and your wealth were taken on as aspirational things. People wanted to signal wealth because they wanted to be wealthy and they were going to do whatever it took to get there.

I had a hedge fund manager friends say to me that he was there also when Wall Street was released in Gordon Gecko, who's the villain of the film, says, Greene, for lack of a better word, is good. That line was meant to get booze and hises, but in my theater in 1987 in New York City, which was filled with bros, Goldman Sachs Bros. There was an eruption of applause at that line. and my hedge friend said to me, I believe an animal spirit was unleashed on Wall Street at that time, and it's never been tamed. American Canadian legal scholar Tim Wu.

Why have we set up a system that allows individuals or companies to accumulate grossly more money than is possibly necessary for them to live, not alone that, but for them to buy or spend in their lifetimes? what kind of system is that? I think we have not fully appreciated the level of economic desperation that is found around the world today and the sort of collapse of a lot of dreams. And yeah, I think this next decade is a dangerous one for human civilization.

You just heard part one of a documentary series by ideas producer Mary Link called The Billionaire Age. Technical production, Emily Kiervasio and Pat Martin. Lisa Ayuso is the web producer of ideas, senior producer Nicola Luxchich. Greg Kelly is the executive producer of ideas, and I'm Nala Ayyed. For more CBC podcasts, go to cbc.ca.ca slash podcasts.