Plutonomists to the rescue
As governments struggle to loosen liquidity lines and jump-start the global economy, one researcher says they could be overlooking an unlikely panacea to the volatile markets – the wealthy.
The wealthiest 1% of people in the US earn nearly a quarter of the nation’s income and account for a fifth of its consumption, according to research from Hong Kong-based Mirae Asset Securities. Ajay Kapur, global strategist at Mirae Asset Securities and author of the research, said: “This was a plutonomist’s recession, and likewise should be a plutonomist’s recovery.”
Even after falls in wealth last year, the world’s high-net-worth individual population had a combined fortune of $32.8 trillion (€21.9 trillion) at the end of 2008, according to research from Merrill Lynch and Capgemini. The figure is projected to grow to $48.5 trillion over the next four years.
Kapur, formerly global strategist at Citigroup, came up with the term plutonomy in 2005 to describe a country defined by large income and wealth inequality. According to the definition, the US is a plutonomy, along with the UK, Canada and Australia, although these will soon give way to emerging plutonomies such as China, India and Brazil.
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